Mykola Sirenko

Lawyer

E-mail

sirenko@prikhodko.com.ua

Phone numbers

Expert in corporate and international corporate law. Has extensive experience in supporting the acquisition of financial licenses in Ukraine, as well as business incorporation in the EU, the United Kingdom, Switzerland, the UAE, and key Asian jurisdictions.

Registration of factoring company

Factoring as a financial and legal instrument occupies an important place in the system of financing working capital of business entities and is increasingly used in Ukraine as an alternative to classic lending. At the same time, factoring activity belongs to regulated financial services and requires careful legal structuring. That is why engaging professional legal support from the “Prikhodko and Partners” team minimizes regulatory risks, prevents typical errors at the licensing stage and ensures consistent compliance of the financial company’s activities with the current requirements and approaches of the NBU.

Legal nature of factoring and its regulation

From a legal point of view, factoring is characterized as a complex legal mechanism that combines several independent but interrelated legal institutions, namely:

Financing against the assignment of a monetary claim, which consists in the provision of funds by the factor to the client in exchange for the right to claim against the debtor, which gives rise to specific legal obligations of a financial nature.
The transfer of the rights of the creditor to a third party (replacement of the creditor in the obligation), as a result of which the factor acquires all or part of the property rights of the original creditor within the limits and on the terms specified in the factoring agreement and current legislation.
Elements of receivables management, which include the administration of monetary claims, control over their repayment terms, interaction with debtors, as well as measures to collect and minimize credit risks.
Tax and regulatory aspects related to the qualification of factoring transactions for taxation purposes, compliance with financial legislation, as well as the implementation of financial monitoring, risk management and compliance procedures.

The regulatory and legal framework for regulating factoring in Ukraine is formed by the following key acts:

The Civil Code of Ukraine, which defines the general principles of the law of obligations, the legal regime of assignment of claims and special provisions regarding the factoring agreement.
The Law of Ukraine “On Financial Services and Financial Companies”, which establishes factoring as a type of financial service and establishes requirements for entities providing it.
Regulatory and legal acts of the National Bank of Ukraine, which regulate licensing, state supervision, reporting, prudential standards and risk management of financial companies.
Legislation in the field of financial monitoring and compliance, which establishes mandatory requirements for identifying and verifying clients, assessing risks and preventing the legalization of proceeds from crime.

Get advice on registering a factoring company

Who has the right to provide factoring services?

Factoring in Ukraine can be carried out only if clearly defined legislative requirements are met. In particular:

only a financial institution (company) licensed by the NBU can be the subject of service provision;
it is necessary to meet the NBU requirements for the ownership structure, capital and business reputation;
a set of internal policies and procedures is mandatory.

It will also be useful: SUBSCRIBER SERVICE OF LEGAL ENTITIES

The procedure for starting factoring activities: a legal algorithm

To start factoring activities, it is necessary to go through a number of sequential steps:

Business structuring: choosing the optimal organizational and legal form; analysis of the ownership structure; assessment of regulatory restrictions.
Preparation of corporate documents: charter taking into account the requirements of financial legislation; internal regulations and regulations.
Development of mandatory policies, in particular: risk management policies; AML/CFT policies; due diligence procedures for clients; procedures for interaction with debtors.
Communication with the NBU and inclusion in the register.

To reduce the time it takes to launch operations, you can also purchase a ready-made company with the appropriate structure and documentation, which can significantly speed up your entry into the market.

Lawyers of “Prikhodko and Partners” provide comprehensive support for this process, allowing the client to focus on the commercial component of the business.

Factoring agreement as a source of major risks

Practice shows that most problems in factoring activities arise due to improper contractual design. The most critical aspects are the following:

unclear definition of the subject of assignment;
absence of a mechanism for confirming the validity of the claim;
incorrect regulation of the client’s liability;
violation of the procedure for notifying the debtor;
risk of factoring being reclassified as a loan.

The law firm “Prikhodko and Partners” develops and supports factoring agreements taking into account judicial practice, the positions of the regulator and tax risks, which significantly increases the legal stability of operations.

Pitfalls of factoring activities

Among the most common problems faced by factoring companies, it is worth highlighting:

regulatory risks: NBU inspections; application of enforcement measures; risk of license revocation;
compliance risks: improper identification of clients; violation of financial monitoring requirements; sanction restrictions;
legal risks: challenging the validity of the assignment; disputes with debtors; problems of proof in debt collection.

Our team will help minimize risks, avoid typical mistakes and ensure that your company’s activities comply with current legislative requirements and NBU regulations.

Find out the cost of supporting the registration of a factoring company

Legal support for factoring activities by “Prikhodko and Partners” includes:

legal audit of the business model and financial flows;
support for the creation and licensing of a financial company;
development of internal policies and procedures;
preparation and adaptation of factoring agreements;
support for NBU inspections;
representation of interests in litigation;
consulting on tax and compliance issues.

Such a comprehensive approach allows clients not only to meet the requirements of the law, but also to build a stable and scalable factoring business model.

Thus, Factoring in Ukraine is a promising, but at the same time highly regulated type of financial activity. Its effective and safe implementation is possible only with a deep understanding of the legal nature of operations, compliance with the requirements of the regulator and proper legal support. It is a systematic approach to the legal structuring of the factoring business that allows you to turn it into a stable and profitable financing instrument.

Calculate the cost of services

1 question

Do you already have a registered company?

Yes

2 question

Have you previously received a license from the NBU to provide financial services?

Yes

3 question

Does your company consider the need for ongoing legal support after obtaining a license?

Yes

Successful cases on the topic: