Financial Monitoring of Sole Proprietors (FOP) in 2025: How the System Works

Financial monitoring of entrepreneurs in Ukraine is not a whim of banks or an excessive form of control — it is a state mechanism designed to combat shadow income, tax evasion, and money laundering. Banks analyze all suspicious or unusual transactions, and the information obtained during such checks may be shared with the State Financial Monitoring Service and the State Tax Service. For many sole proprietors, these bank inquiries come as a surprise, but they are a direct consequence of legal requirements and risk-assessment procedures that oblige banks to react to every potentially risky operation. At the same time, financial monitoring encourages entrepreneurs to keep transparent records, file reports on time, and avoid mixing personal and business funds — ultimately improving financial discipline and strengthening the stability of the entire economic system.

Enhanced monitoring applies not only to large sums but also to operations that may seem insignificant at first glance: regular small transfers between personal and business cards, atypical incoming payments, transactions without clear economic logic, cash withdrawals that do not match the scale of activity, or payments that do not correspond to registered business activities (KVED). Banks pay particular attention to online activities and income from foreign platforms — marketplaces, freelance services, platforms for content creators. Such payments almost always require documentary confirmation: invoices, contracts, statements, acts of service delivery, and sometimes even official translations. Banks must be able to verify the origin of funds and the economic substance behind each transaction. They assess not only the amount but also behavioural risks — payment patterns, the source of funds, and consistency with declared business activity.

Within financial monitoring, the bank may request any documents necessary to clarify the nature of a transaction. This is where problems most often arise: missing or improperly drafted contracts, mismatched business activity codes, payments from individuals “without description,” work with foreign platforms without documentation, or mixing personal and business funds. All this may lead to temporary blocking of transactions or even the entire account — always a critical situation for an entrepreneur. Banks evaluate risks comprehensively: they review account history, regularity of payments, origins of income, and whether actual revenue matches what is declared.

For a sole proprietor who maintains poor accounting practices, financial monitoring becomes an obstacle; for one who keeps records systematically and transparently, it is a routine formality.

To minimize risks, an entrepreneur should prepare in advance: store transaction history, statements, contracts, acts of service delivery, correspondence with clients, and payment confirmations from foreign platforms. One of the most common triggers for bank inquiries is incorrect or outdated KVED codes, so choosing them correctly is crucial. It is also important not to accept payments on personal bank cards, to keep business and personal finances strictly separate, and to submit tax declarations on time. A well-prepared set of documents is the best protection against account blockages and a clear signal to the bank about the transparency of the entrepreneur’s activities.

In more complex cases, when the bank has already suspended transactions or transferred information to regulatory bodies, the right strategy becomes essential. The entrepreneur should act carefully: respond to bank requests, prepare well-reasoned explanations, maintain constructive communication, and involve a lawyer if needed. Legal support helps minimize the risk of account blocking, avoid fines, and dispel unfounded suspicions. A lawyer can also help verify compliance of transactions with legislation and prepare documentation in a way that increases bank trust and reduces the frequency of future checks.

Financial monitoring is an integral part of the modern financial system and a mechanism designed to protect the state from illicit financial operations. For entrepreneurs who work transparently and maintain proper documentation, it is not a threat but a standard procedure that is easy to pass with the right preparation. For those who ignore rules, mix personal and business funds, or operate without proper documentation, financial monitoring becomes a constant source of problems. Transparent accounting, timely declarations, and qualified legal support remain the best strategy to protect the entrepreneur and ensure financial stability.