Business news from Ukraine

Spain plans to cancel visa program in exchange for real estate investments

The Spanish government intends to cancel the program that provides foreigners with “golden visas” in exchange for real estate investments, the Financial Times reports, citing a statement by Spanish Prime Minister Pedro Sanchez.

Currently, citizens of non-EU countries can obtain a Spanish residence permit for a period of three years by investing at least EUR 500 thousand in real estate in the country.

The abolition of the program will improve the situation with the availability of housing in Spain, Sanchez said.

“Currently, 94 out of 100 of these visas are issued for real estate investments in large cities that are already facing a very difficult market. Those who already live there, work and pay taxes, can hardly find decent housing,” the prime minister said.

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AMCU allows MasterCard and Visa to reduce interchange rate to 0.7%

The Antimonopoly Committee of Ukraine has granted permission to MasterCard Europe S.A. and Visa International Service Association to reduce the amount of domestic interchange fees (interchange rate) paid by an acquirer to an issuer in Ukraine from 0.9% to 0.7% for the period of war.

“The planned changes in concerted actions are aimed at establishing an effective and balanced ceiling on interchange rates, taking into account the interests of all market participants under martial law,” the AMC commented on its decision of 5 October.

The Committee expects that these changes will allow retail chains to maintain the current price level for consumers, as well as contribute to the development of small and medium-sized entrepreneurs and the overall economic development of Ukraine.

The agency clarified that the 0.7% rate will be effective “not earlier than the next business day after 14 calendar days after the date of receipt of the Committee’s authorization until the next business day after 30 calendar days from the date of termination or cancellation of martial law.”

It is noted that after this period, MasterCard and Visa will return to the 0.9% rate agreed with the AMCU before the war.

“The introduction of a further reduction in the interbank commission is an attempt by government agencies and other industry representatives to respond to a request for assistance to retailers who have suffered significant economic losses caused by the war,” the AMCU said.

As reported, a memorandum signed in May 2021 between MasterCard, Visa and the NBU provided for the interchange rate to be set at 1.2% from July 1, 2021, and its gradual reduction, in particular from July 1, 2023, from 1% to 0.9%.

However, during the war, the rate was first reset to zero and then gradually increased to 0.7%. The decision of Visa and MasterCard to return it to 0.9% on July 1 this year was sharply criticized by retailers. The largest banks in the market – PrivatBank, Oschadbank and Raiffeisen Bank – for their part, kept acquiring rates for their clients unchanged (approximately 1.3-1.5%), but called on MasterCard and Visa to support this initiative and cancel the interchange rate increase from July 1, 2023 to 0.9%.

However, Oschadbank noted that “if payment systems do not reduce the interchange rate within one to two months, the bank will reconsider its decision.”

According to the NBU, the share of payment terminals of PrivatBank, Oschadbank and Raiffeisen Bank at the beginning of the year was 60.4%, 19.6% and 7.6%, respectively.

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Largest operators of payment systems want to raise commissions on card transactions

Payment system operators Visa Inc. and Mastercard Inc. plan to increase the fees charged to retailers when their customers pay for purchases with bank cards, Bloomberg reports, citing documents in its possession.

Visa’s fee hike for online transactions will start in October and will affect credit, debit and prepaid cards in April. In the case of Mastercard, the increase will also start in October.

Industry consulting firm CMSPI estimates that the annual amount of fees paid by retailers could increase by more than $500 million as a result.

Although the fees are set by Visa and Mastercard, the bulk of the fees are collected by the banks that issue the cards. While the fees are small, retailers’ costs to pay them have risen in recent years as more shoppers use credit cards, which carry higher fees than debit cards.

Retailers shift at least some of these costs to consumers by raising prices. Small businesses often offer discounts to customers who pay with debit cards or cash.


China resumes issuing tourist visas to foreign nationals

China resumes issuing tourist visas to foreign nationals from March 15, the consular service of China’s Ministry of Foreign Affairs said.
“Chinese consulates abroad will resume issuing all categories of visas to foreigners starting Wednesday, March 15. The decision was made to further facilitate border crossings,” said a message posted Tuesday on WeChat.
In addition to resuming new visas, entry will be allowed for visas issued before March 28, 2020, that have not expired.
“The new visa policy will also allow the resumption of visa-free travel for tourists to Hainan Island, passengers arriving on cruise ships to Shanghai, and tourist groups from Hong Kong, Macau and ASEAN (Association of Southeast Asian Nations) countries to the country’s southern regions,” the statement said.
On the sites of Chinese embassies of some countries, including the U.S. and France, there were reports on the resumption of visas for foreign nationals.
China lifted entry and exit restrictions imposed because of the coronavirus pandemic as of Feb. 6.
China welcomed 65.7 million foreign tourists in 2019.

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Georgia allows Ukrainian citizens to stay on its territory for two years without visa

The Georgian government has allowed Ukrainian citizens to enter and stay on its territory for two years without having to apply for a visa.
The corresponding decree was published on the official website of the Legislative Herald of Georgia.
Document No. 81, adopted on February 24, 2023, amends the Georgian government’s resolution of June 5, 2015 “On approving the list of countries whose citizens can enter Georgia without a visa.”
According to the amendments, from now on citizens of Ukraine have the right to enter Georgia without a visa and stay in Georgia for a full two years.
The document was signed by the Prime Minister Irakli Garibashvili. It enters into force from the day of its promulgation.


Visa became resident of Dia City

International payment system Visa became a resident of the special legal and tax regime “Dia City”.
“Diya City” residency will allow the company to enjoy the best legal and tax conditions in Europe. It will also deepen cooperation with the Ukrainian IT sector and accelerate the development of the cashless economy of Ukraine,” wrote Deputy Prime Minister and Minister of Digital Transformation of Ukraine Mikhail Fedorovv in his Telegram channel.
He noted that the company’s Ukrainian office has about 140 employees responsible for the development of payment technologies in 17 countries.
“The Kiev office of Visa is a sub-regional hub whose team is responsible for the support and development of business in 17 countries. Ukraine has always been and is our priority. As well as a reference point for many other markets, even from other subregions, given the technological, innovative and rapid dynamics of the banking sector, e-commerce, IT-industry, cashless payments and digital infrastructure in our country,” Denis Kazvan, head of corporate communications at Visa, commented on his Facebook page when Visa joined “Dia City”.
He noted that in times of war, digitalization and innovation only accelerate in fruitful work with banks, businesses, fintech and the government.

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