The relocation of Ukrainians abroad remains an extremely relevant topic that requires careful financial planning. It is important not only to change the country of residence but also to correctly structure and legalize one's capital.
In this material, based on conversation With Xpaid CEO Oleksiy Rud and financial planner Anna Zarebchan, key aspects of financial literacy, investments, and tax changes were discussed to achieve maximum profit with minimal risk.
- Relocation preparation
Financial planning should ideally start in advance if the move is well-considered.
Expense Calculation and Financial Cushion
The first step is to assess the country you plan to move to and future expenses. You need to determine how much money will be needed for the move and adaptation.
- Initial costs
They are usually larger than monthly payments. For example, in countries like Spain, France, or Portugal, it's often required to pay for housing for six months or a year in advance. In Poland, it might be the first and second months.
- Budgeting
Expenses in Ukraine need to be recalculated to expenses in the country of relocation (e.g., cost of renting a similar class apartment, kindergarten, groceries) and multiplied by 6 or 12 months.
- Airbag
It is necessary to form a financial cushion for 6-12 months – an approximate period needed for adaptation and finding your footing in a new country.
- Insurance
It is recommended to definitely purchase medical insurance, as private healthcare abroad is expensive.
Currency structure and investment portfolio
When moving to Europe, it's better to have euros in cash. Using dollars in Europe is not profitable due to expensive transfers, problems with crediting accounts, and unfavorable exchange rates.
Regarding investments:
- ETF funds
If you plan to move to the EU, it is better to change your portfolio structure in advance by switching from American funds to Irish accumulating ETFs. This will help avoid complications with filing your tax return in the new country. A globally passive investor invests in the whole world, but the currency for expenses should be in euros.
Tax and banking nuances
- Message
In the event of a change in tax residency, you must notify all financial institutions (e.g., Interactive Brokers) within 30 days.
- Bills
It's worth closing the maximum number of unnecessary accounts in Ukrainian banks.
Legal capital transfer and the role of cryptocurrency
The optimal time for transferring money requires preparation. Due to Ukrainian bank limitations (limits), capital movement can be complicated, sometimes taking up to six months for significant sums ($50–60 thousand through 3–5 banks).
Optimal moment and preparation
Preparation for the money transfer should be done a month in advance. During this time, the origin of all funds is verified, and crypto accounts and accounts in payment institutions (e.g., Revolut) are opened. The exchange itself can take place within a day when the infrastructure is ready.
Cryptocurrency as a transfer instrument
Xpaid helps you legally move capital using cryptocurrency.
- Liquidity
Cryptocurrency (especially stablecoins pegged to currencies like USDT, USDC) is a more liquid store of value than the euro, and it's easier to exchange for regular money almost anywhere in the world.
- Legality
It is important to buy crypto correctly and prepare documents. There are licenses in the EU that allow for the legal exchange of crypto for euros (for example, licenses in Poland and Lithuania).
- Avoiding double taxation
If funds have been taxed in Ukraine (e.g., from property sales, sole proprietor income, dividends), they can be withdrawn via stablecoins (which are not volatile) and exchanged for euros in Europe without paying transfer taxes.
Xpaid Transfer Process (Algorithm)
- Source of funds
The client has a legally obtained and taxed amount (e.g., from the sale of real estate in Ukraine).
- Buying crypto
In Ukraine, cryptocurrency is bought with cash (as operations in Ukraine are currently not regulated, but also not prohibited).
- Open account
Xpaid opens an account for the client in a payment institution (for example, through Lithuania).
- Exchange and transfer
A legal contract for the exchange of crypto for euros is being signed. The client transfers Xpaid crypto, and Xpaid transfers euros to an open account.
- Usage
The client can use these euros for a bank transfer (SEPA) to the real estate seller or for investment purposes. Xpaid works with large capital sums, from EUR 50,000 and up to millions, subject to confirmation of origin.
Why do banks refuse Ukrainians
EU banks often refuse to open accounts (especially in Western Europe) or block accounts due to issues with money laundering.
- Cash
If cash was not declared at the border, even if legally obtained (e.g., from selling a car or apartment), banks may refuse to accept it. Even small amounts (less than €10,000) can be rejected.
- Control
In Europe, it is important to work according to European rules. Banks have automatic control systems. The Polish tax office has 5 years to verify the origin of funds.
- Crypto and banks
Almost all banks do not work directly with crypto, often listing it as a prohibited transaction. Companies like Xpaid serve as an intermediary layer so that after exchanging crypto for euros, funds arrive in a bank account without further questions.
Investments and tax incentives in the EU (after arrival)
After relocating, it is important to adapt the investment strategy to the new jurisdiction.
1. Investment changes
- ETF
We are changing American dollar funds to Irish funds in euros. It is not necessary to sell American ETFs, but remember that dividends received from them will be taxed according to the rules of the new country.
- Local Tools (Poland Example):
- Government bonds
Available to residents and non-residents. Recommended for short-term purposes or as a safety cushion, as they offer better long-term returns (6-7% annually) compared to deposits, whose rates are rapidly decreasing.
- Pension accounts (IKZE/IKE)
Tax benefits are provided for passive investing. For example, through an ISA,% capital gains tax is not paid when funds are withdrawn after age 60. There is also the possibility to deduct the amount of investments from annual income.
- Special tax conditions
Different countries have unique benefits: in the Czech Republic, if investments are held for over three years, capital gains tax can be zero; in Bulgaria, no tax is paid if investing through purely European exchanges (Germany, Amsterdam, but not Britain).
- Best tax jurisdictions
Depends on the goals. For example, Portugal, under a certain NHR status, can provide zero tax on dividends.
2. Alternative Tools
- Real estate
Buying real estate is possible without a loan. However, cash payments are limited (e.g., up to €15,000 in Poland), and legally sourced funds that have undergone bank verification are required.
- Business/Franchise
Popular among Ukrainians. This is active investing that requires a high entry threshold, significant risks, and the mandatory involvement of licensed translators for interaction.
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Key takeaway
Relocation planning, capital structuring, and investment decisions are individual. To minimize risks and ensure legality, it is necessary to:
- Estimate expenses in advance and build a safety cushion.;
- Tax funds in Ukraine before transferring to the EU;
- Use legal tools (e.g., through crypto operators) to transfer large sums, avoiding cash and bank control issues;
- Adapt the investment portfolio to European jurisdiction, using Irish ETFs and local preferential instruments.
For precise recommendations, especially regarding tax residency, you should consult a tax advisor who will provide an individual interpretation of your situation.
