“Dormant” Sole Proprietorships, New Limits, and Financial Monitoring: What Will Change for Businesses Starting in 2026? Commentary by Daria Lazareva, Counsel at ETERNIX LLP

The banking sector has signed an updated version of the Memorandum on Transparency in the Payment Services Market, introducing enhanced monitoring of certain categories of clients. Particular attention will be given to newly registered individual entrepreneurs (FOPs), entrepreneurs resuming business activities after a prolonged period of inactivity, as well as legal entities displaying characteristics of so-called “shell companies.”

At the same time, it is important to understand that the concept of a “dormant FOP” does not exist under Ukrainian legislation and has no official legal definition. No public authority maintains a corresponding register or formally assigns such a status. In practice, risk assessments will be carried out by banks as part of their internal financial monitoring procedures, including through automated transaction monitoring and analysis systems.

If limits or other restrictions are imposed, a client has the right to request an explanation from the bank and provide documents confirming the legitimacy of their business activities, the source of funds, and the need to conduct transactions in the relevant amounts. Where necessary, the bank’s decision may be challenged before the National Bank of Ukraine or in court.

The primary objective of these new mechanisms, however, is not to restrict legitimate businesses, but to strengthen the risk-based approach and combat fraudulent schemes, money laundering, and the use of so-called “money mules.” This approach is consistent with European financial monitoring standards, where financial security and the prevention of illicit financial transactions remain key priorities.