Long-term money in the economy: NSSMC is working on the introduction of individual investment accounts in Ukraine

Despite the war and unprecedented economic challenges, the financial sector of Ukraine is working «for the future». Individuals will soon be able to have personal investment accounts. This tool will help attract long-term investments in the economy, especially relevant for post-war reconstruction, and will also provide citizens with tax advantages for investing their own savings.
The practice of citizens accumulating savings on personal accounts is widespread in Western countries, in particular, the USA, Canada, Britain, the EU, etc. Draft Law No. 8111, registered in the Verkhovna Rada of Ukraine at the beginning of October, is intended to introduce the relevant instrument in Ukraine on Amendments to the Tax Code of Ukraine and Other Laws of Ukraine on Stimulating the Participation of Citizens in Investment Activities.
The National Securities and Stock Market Commission, as one of the interested state bodies, has already reviewed this draft law and provided comments. The regulator generally supports the proposed text of the document, provided that its individual norms are revised.
Innovations will allow to stimulate the flow of private investments in the development of the economy for a long period. Any individual will have the opportunity to open a personal account – medium-term (up to 3 years) or long-term (up to 7 years) to invest their own savings. The service of opening an account, maintaining it, acting as a tax agent will be performed by an investment firm. A key feature of investment accounts is the tax benefits. Subject to compliance with all requirements for the functioning of the account (validity period, not exceeding the limit of the amount of storage, withdrawal not earlier than the established period), the owner is exempt from taxation of profit received from operations on these accounts.
It is also important to note that funds on individual accounts will actively «work». An investment firm in the interest of the owner will be able to invest them in reliable instruments of the capital market. At the first stage, these can be: municipal, corporate bonds, shares traded on the stock exchange, bank certificates of deposit, open investment funds (specialized, diversified).
«We consider investment accounts as a promising financial direction that will be of interest to a very wide range of investors. Especially for those who previously did not dare to enter the capital markets. A simple procedure for opening and closing an account will apply. In addition, it will be possible to transfer it for service from one investment firm to another. The zero tax rate will give the investor the opportunity to independently choose between the instruments in which to invest, taking into account their nature and riskiness, and the tax component was the same», says Yurii Boiko, a Сommissioner of the NSSMC.
Thus, the state, business, and citizens (account holders) benefit from the introduction of investment accounts. The state will receive «long money», which will contribute to the filling of capital markets with liquidity. The business will receive support and resources for development through investment in their securities. And citizens are a reliable tool for investing their own savings.