diff --git a/app/code/Magento/Checkout/Block/Cart/LayoutProcessor.php b/app/code/Magento/Checkout/Block/Cart/LayoutProcessor.php
index a492002b0a5a5..a042c41634bcb 100644
--- a/app/code/Magento/Checkout/Block/Cart/LayoutProcessor.php
+++ b/app/code/Magento/Checkout/Block/Cart/LayoutProcessor.php
@@ -85,14 +85,14 @@ public function process($jsLayout)
                 'visible' => true,
                 'formElement' => 'select',
                 'label' => __('Country'),
-                'options' => $this->countryCollection->loadByStore()->toOptionArray(),
+                'options' => [],
                 'value' => null
             ],
             'region_id' => [
                 'visible' => true,
                 'formElement' => 'select',
                 'label' => __('State/Province'),
-                'options' => $this->regionCollection->load()->toOptionArray(),
+                'options' => [],
                 'value' => null
             ],
             'postcode' => [
@@ -103,6 +103,13 @@ public function process($jsLayout)
             ]
         ];
 
+        if (!isset($jsLayout['components']['checkoutProvider']['dictionaries'])) {
+            $jsLayout['components']['checkoutProvider']['dictionaries'] = [
+                'country_id' => $this->countryCollection->loadByStore()->toOptionArray(),
+                'region_id' => $this->regionCollection->addAllowedCountriesFilter()->toOptionArray(),
+            ];
+        }
+
         if (isset($jsLayout['components']['block-summary']['children']['block-shipping']['children']
             ['address-fieldsets']['children'])
         ) {
diff --git a/app/code/Magento/Checkout/Block/Checkout/AttributeMerger.php b/app/code/Magento/Checkout/Block/Checkout/AttributeMerger.php
index 1882d88e04a8b..e7686e4bea58b 100644
--- a/app/code/Magento/Checkout/Block/Checkout/AttributeMerger.php
+++ b/app/code/Magento/Checkout/Block/Checkout/AttributeMerger.php
@@ -192,6 +192,15 @@ protected function getFieldConfig(
             'visible' => isset($additionalConfig['visible']) ? $additionalConfig['visible'] : true,
         ];
 
+        if ($attributeCode === 'region_id' || $attributeCode === 'country_id') {
+            unset($element['options']);
+            $element['deps'] = [$providerName];
+            $element['imports'] = [
+                'initialOptions' => 'index = ' . $providerName . ':dictionaries.' . $attributeCode,
+                'setOptions' => 'index = ' . $providerName . ':dictionaries.' . $attributeCode
+            ];
+        }
+
         if (isset($attributeConfig['value']) && $attributeConfig['value'] != null) {
             $element['value'] = $attributeConfig['value'];
         } elseif (isset($attributeConfig['default']) && $attributeConfig['default'] != null) {
@@ -341,11 +350,11 @@ protected function getCustomer()
      * @param string $attributeCode
      * @param array $attributeConfig
      * @return array
+     * @SuppressWarnings(PHPMD.UnusedFormalParameter)
      */
     protected function getFieldOptions($attributeCode, array $attributeConfig)
     {
-        $options = isset($attributeConfig['options']) ? $attributeConfig['options'] : [];
-        return ($attributeCode == 'country_id') ? $this->orderCountryOptions($options) : $options;
+        return isset($attributeConfig['options']) ? $attributeConfig['options'] : [];
     }
 
     /**
@@ -353,6 +362,7 @@ protected function getFieldOptions($attributeCode, array $attributeConfig)
      *
      * @param array $countryOptions
      * @return array
+     * @deprecated
      */
     protected function orderCountryOptions(array $countryOptions)
     {
diff --git a/app/code/Magento/Checkout/Block/Checkout/DirectoryDataProcessor.php b/app/code/Magento/Checkout/Block/Checkout/DirectoryDataProcessor.php
new file mode 100644
index 0000000000000..4a02ebbd079a4
--- /dev/null
+++ b/app/code/Magento/Checkout/Block/Checkout/DirectoryDataProcessor.php
@@ -0,0 +1,146 @@
+<?php
+/**
+ * Copyright © 2016 Magento. All rights reserved.
+ * See COPYING.txt for license details.
+ */
+namespace Magento\Checkout\Block\Checkout;
+
+use Magento\Directory\Helper\Data as DirectoryHelper;
+use Magento\Store\Api\StoreResolverInterface;
+
+/**
+ * Directory data processor.
+ *
+ * This class adds various country and region dictionaries to checkout page.
+ * This data can be used by other UI components during checkout flow.
+ */
+class DirectoryDataProcessor implements \Magento\Checkout\Block\Checkout\LayoutProcessorInterface
+{
+    /**
+     * @var array
+     */
+    private $countryOptions;
+
+    /**
+     * @var array
+     */
+    private $regionOptions;
+
+    /**
+     * @var \Magento\Directory\Model\ResourceModel\Region\CollectionFactory
+     */
+    private $regionCollectionFactory;
+
+    /**
+     * @var \Magento\Directory\Model\ResourceModel\Region\CollectionFactory
+     */
+    private $countryCollectionFactory;
+
+    /**
+     * @var StoreResolverInterface
+     */
+    private $storeResolver;
+
+    /**
+     * @var DirectoryHelper
+     */
+    private $directoryHelper;
+
+    /**
+     * @param \Magento\Directory\Model\ResourceModel\Country\CollectionFactory $countryCollection
+     * @param \Magento\Directory\Model\ResourceModel\Region\CollectionFactory $regionCollection
+     * @param StoreResolverInterface $storeResolver
+     * @param DirectoryHelper $directoryHelper
+     */
+    public function __construct(
+        \Magento\Directory\Model\ResourceModel\Country\CollectionFactory $countryCollection,
+        \Magento\Directory\Model\ResourceModel\Region\CollectionFactory $regionCollection,
+        StoreResolverInterface $storeResolver,
+        DirectoryHelper $directoryHelper
+    ) {
+        $this->countryCollectionFactory = $countryCollection;
+        $this->regionCollectionFactory = $regionCollection;
+        $this->storeResolver = $storeResolver;
+        $this->directoryHelper = $directoryHelper;
+    }
+
+    /**
+     * Process js Layout of block
+     *
+     * @param array $jsLayout
+     * @return array
+     */
+    public function process($jsLayout)
+    {
+        if (!isset($jsLayout['components']['checkoutProvider']['dictionaries'])) {
+            $jsLayout['components']['checkoutProvider']['dictionaries'] = [
+                'country_id' => $this->getCountryOptions(),
+                'region_id' => $this->getRegionOptions(),
+            ];
+        }
+
+        return $jsLayout;
+    }
+
+    /**
+     * Get country options list.
+     *
+     * @return array
+     */
+    private function getCountryOptions()
+    {
+        if (!isset($this->countryOptions)) {
+            $this->countryOptions = $this->countryCollectionFactory->create()->loadByStore(
+                $this->storeResolver->getCurrentStoreId()
+            )->toOptionArray();
+            $this->countryOptions = $this->orderCountryOptions($this->countryOptions);
+        }
+
+        return $this->countryOptions;
+    }
+
+    /**
+     * Get region options list.
+     *
+     * @return array
+     */
+    private function getRegionOptions()
+    {
+        if (!isset($this->regionOptions)) {
+            $this->regionOptions = $this->regionCollectionFactory->create()->addAllowedCountriesFilter(
+                $this->storeResolver->getCurrentStoreId()
+            )->toOptionArray();
+        }
+
+        return $this->regionOptions;
+    }
+
+    /**
+     * Sort country options by top country codes.
+     *
+     * @param array $countryOptions
+     * @return array
+     */
+    private function orderCountryOptions(array $countryOptions)
+    {
+        $topCountryCodes = $this->directoryHelper->getTopCountryCodes();
+        if (empty($topCountryCodes)) {
+            return $countryOptions;
+        }
+
+        $headOptions = [];
+        $tailOptions = [[
+            'value' => 'delimiter',
+            'label' => '──────────',
+            'disabled' => true,
+        ]];
+        foreach ($countryOptions as $countryOption) {
+            if (empty($countryOption['value']) || in_array($countryOption['value'], $topCountryCodes)) {
+                array_push($headOptions, $countryOption);
+            } else {
+                array_push($tailOptions, $countryOption);
+            }
+        }
+        return array_merge($headOptions, $tailOptions);
+    }
+}
diff --git a/app/code/Magento/Checkout/Block/Checkout/LayoutProcessor.php b/app/code/Magento/Checkout/Block/Checkout/LayoutProcessor.php
index 1b2c744419891..f7472aadaf765 100644
--- a/app/code/Magento/Checkout/Block/Checkout/LayoutProcessor.php
+++ b/app/code/Magento/Checkout/Block/Checkout/LayoutProcessor.php
@@ -7,7 +7,11 @@
 
 use Magento\Checkout\Helper\Data;
 use Magento\Framework\App\ObjectManager;
+use Magento\Store\Api\StoreResolverInterface;
 
+/**
+ * Class LayoutProcessor
+ */
 class LayoutProcessor implements \Magento\Checkout\Block\Checkout\LayoutProcessorInterface
 {
     /**
@@ -35,6 +39,16 @@ class LayoutProcessor implements \Magento\Checkout\Block\Checkout\LayoutProcesso
      */
     private $checkoutDataHelper;
 
+    /**
+     * @var StoreResolverInterface
+     */
+    private $storeResolver;
+
+    /**
+     * @var \Magento\Shipping\Model\Config
+     */
+    private $shippingConfig;
+
     /**
      * @param \Magento\Customer\Model\AttributeMetadataDataProvider $attributeMetadataDataProvider
      * @param \Magento\Ui\Component\Form\AttributeMapper $attributeMapper
@@ -146,6 +160,16 @@ public function process($jsLayout)
                 $elements
             );
         }
+        if (isset($jsLayout['components']['checkout']['children']['steps']['children']['shipping-step']['children']
+            ['step-config']['children']['shipping-rates-validation']['children']
+        )) {
+            $jsLayout['components']['checkout']['children']['steps']['children']['shipping-step']['children']
+            ['step-config']['children']['shipping-rates-validation']['children'] =
+                $this->processShippingChildrenComponents(
+                    $jsLayout['components']['checkout']['children']['steps']['children']['shipping-step']['children']
+                    ['step-config']['children']['shipping-rates-validation']['children']
+                );
+        }
 
         if (isset($jsLayout['components']['checkout']['children']['steps']['children']['shipping-step']
             ['children']['shippingAddress']['children']['shipping-address-fieldset']['children']
@@ -163,6 +187,26 @@ public function process($jsLayout)
         return $jsLayout;
     }
 
+    /**
+     * Process shipping configuration to exclude inactive carriers.
+     *
+     * @param array $shippingRatesLayout
+     * @return array
+     */
+    private function processShippingChildrenComponents($shippingRatesLayout)
+    {
+        $activeCarriers = $this->getShippingConfig()->getActiveCarriers(
+            $this->getStoreResolver()->getCurrentStoreId()
+        );
+        foreach (array_keys($shippingRatesLayout) as $carrierName) {
+            $carrierKey = str_replace('-rates-validation', '', $carrierName);
+            if (!array_key_exists($carrierKey, $activeCarriers)) {
+                unset($shippingRatesLayout[$carrierName]);
+            }
+        }
+        return $shippingRatesLayout;
+    }
+
     /**
      * Appends billing address form component to payment layout
      * @param array $paymentLayout
@@ -314,4 +358,34 @@ private function getCheckoutDataHelper()
 
         return $this->checkoutDataHelper;
     }
+
+    /**
+     * Get active carriers list.
+     *
+     * @return array
+     * @deprecated
+     */
+    private function getShippingConfig()
+    {
+        if (!$this->shippingConfig) {
+            $this->shippingConfig = ObjectManager::getInstance()->get(\Magento\Shipping\Model\Config::class);
+        }
+
+        return $this->shippingConfig;
+    }
+
+    /**
+     * Get store resolver.
+     *
+     * @return StoreResolverInterface
+     * @deprecated
+     */
+    private function getStoreResolver()
+    {
+        if (!$this->storeResolver) {
+            $this->storeResolver = ObjectManager::getInstance()->get(StoreResolverInterface::class);
+        }
+
+        return $this->storeResolver;
+    }
 }
diff --git a/app/code/Magento/Checkout/Test/Unit/Block/Cart/LayoutProcessorTest.php b/app/code/Magento/Checkout/Test/Unit/Block/Cart/LayoutProcessorTest.php
index 95ffed86cbb35..5eabb6c9c86a4 100644
--- a/app/code/Magento/Checkout/Test/Unit/Block/Cart/LayoutProcessorTest.php
+++ b/app/code/Magento/Checkout/Test/Unit/Block/Cart/LayoutProcessorTest.php
@@ -69,7 +69,7 @@ public function testProcess()
         $this->countryCollection->expects($this->once())->method('loadByStore')->willReturnSelf();
         $this->countryCollection->expects($this->once())->method('toOptionArray')->willReturn($countries);
 
-        $this->regionCollection->expects($this->once())->method('load')->willReturnSelf();
+        $this->regionCollection->expects($this->once())->method('addAllowedCountriesFilter')->willReturnSelf();
         $this->regionCollection->expects($this->once())->method('toOptionArray')->willReturn($regions);
 
         $layoutMerged = $layout;
@@ -77,7 +77,12 @@ public function testProcess()
         ['address-fieldsets']['children']['fieldThree'] = ['param' => 'value'];
         $layoutMergedPointer = &$layoutMerged['components']['block-summary']['children']['block-shipping']
         ['children']['address-fieldsets']['children'];
-
+        $layoutMerged['components']['checkoutProvider'] = [
+            'dictionaries' => [
+                'country_id' => [],
+                'region_id' => [],
+            ]
+        ];
         $elements = [
             'city' => [
                 'visible' => false,
diff --git a/app/code/Magento/Checkout/Test/Unit/Block/Checkout/DirectoryDataProcessorTest.php b/app/code/Magento/Checkout/Test/Unit/Block/Checkout/DirectoryDataProcessorTest.php
new file mode 100644
index 0000000000000..c84fac464c047
--- /dev/null
+++ b/app/code/Magento/Checkout/Test/Unit/Block/Checkout/DirectoryDataProcessorTest.php
@@ -0,0 +1,114 @@
+<?php
+/**
+ * Copyright © 2016 Magento. All rights reserved.
+ * See COPYING.txt for license details.
+ */
+namespace Magento\Checkout\Test\Unit\Block\Checkout;
+
+class DirectoryDataProcessorTest extends \PHPUnit_Framework_TestCase
+{
+    /**
+     * @var \Magento\Checkout\Block\Checkout\DirectoryDataProcessor
+     */
+    protected $model;
+
+    /**
+     * @var \PHPUnit_Framework_MockObject_MockObject
+     */
+    protected $countryCollectionFactoryMock;
+
+    /**
+     * @var \PHPUnit_Framework_MockObject_MockObject
+     */
+    protected $countryCollectionMock;
+
+    /**
+     * @var \PHPUnit_Framework_MockObject_MockObject
+     */
+    protected $regionCollectionFactoryMock;
+
+    /**
+     * @var \PHPUnit_Framework_MockObject_MockObject
+     */
+    protected $regionCollectionMock;
+
+    /**
+     * @var \PHPUnit_Framework_MockObject_MockObject
+     */
+    protected $storeResolverMock;
+
+    /**
+     * @var \PHPUnit_Framework_MockObject_MockObject
+     */
+    protected $directoryDataHelperMock;
+
+    protected function setUp()
+    {
+        $this->countryCollectionFactoryMock = $this->getMock(
+            \Magento\Directory\Model\ResourceModel\Country\CollectionFactory::class,
+            ['create'],
+            [],
+            '',
+            false
+        );
+        $this->countryCollectionMock = $this->getMock(
+            \Magento\Directory\Model\ResourceModel\Country\Collection::class,
+            [],
+            [],
+            '',
+            false
+        );
+        $this->regionCollectionFactoryMock = $this->getMock(
+            \Magento\Directory\Model\ResourceModel\Region\CollectionFactory::class,
+            ['create'],
+            [],
+            '',
+            false
+        );
+        $this->regionCollectionMock = $this->getMock(
+            \Magento\Directory\Model\ResourceModel\Region\Collection::class,
+            [],
+            [],
+            '',
+            false
+        );
+        $this->storeResolverMock = $this->getMock(
+            \Magento\Store\Api\StoreResolverInterface::class
+        );
+        $this->directoryDataHelperMock = $this->getMock(
+            \Magento\Directory\Helper\Data::class,
+            [],
+            [],
+            '',
+            false
+        );
+
+        $this->model = new \Magento\Checkout\Block\Checkout\DirectoryDataProcessor(
+            $this->countryCollectionFactoryMock,
+            $this->regionCollectionFactoryMock,
+            $this->storeResolverMock,
+            $this->directoryDataHelperMock
+        );
+    }
+
+    public function testProcess()
+    {
+        $expectedResult['components']['checkoutProvider']['dictionaries'] = [
+            'country_id' => [],
+            'region_id' => [],
+        ];
+
+        $this->countryCollectionFactoryMock->expects($this->once())
+            ->method('create')
+            ->willReturn($this->countryCollectionMock);
+        $this->countryCollectionMock->expects($this->once())->method('loadByStore')->willReturnSelf();
+        $this->countryCollectionMock->expects($this->once())->method('toOptionArray')->willReturn([]);
+        $this->regionCollectionFactoryMock->expects($this->once())
+            ->method('create')
+            ->willReturn($this->regionCollectionMock);
+        $this->regionCollectionMock->expects($this->once())->method('addAllowedCountriesFilter')->willReturnSelf();
+        $this->regionCollectionMock->expects($this->once())->method('toOptionArray')->willReturn([]);
+
+        $this->assertEquals($expectedResult, $this->model->process([]));
+    }
+}
diff --git a/app/code/Magento/Checkout/Test/Unit/Block/Checkout/LayoutProcessorTest.php b/app/code/Magento/Checkout/Test/Unit/Block/Checkout/LayoutProcessorTest.php
index 1351213f990b5..95aed9b56afc3 100644
--- a/app/code/Magento/Checkout/Test/Unit/Block/Checkout/LayoutProcessorTest.php
+++ b/app/code/Magento/Checkout/Test/Unit/Block/Checkout/LayoutProcessorTest.php
@@ -17,6 +17,8 @@
 /**
  * LayoutProcessorTest covers a list of variations for
  * checkout layout processor
+ *
+ * @SuppressWarnings(PHPMD.CouplingBetweenObjects)
  */
 class LayoutProcessorTest extends \PHPUnit_Framework_TestCase
 {
@@ -45,6 +47,11 @@ class LayoutProcessorTest extends \PHPUnit_Framework_TestCase
      */
     private $layoutProcessor;
 
+    /**
+     * @var MockObject
+     */
+    private $storeResolver;
+
     protected function setUp()
     {
         $objectManager = new ObjectManager($this);
@@ -79,8 +86,11 @@ protected function setUp()
             $this->attributeMerger
         );
 
+        $this->storeResolver = $this->getMock(\Magento\Store\Api\StoreResolverInterface::class);
+
         $objectManager->setBackwardCompatibleProperty($this->layoutProcessor, 'checkoutDataHelper', $this->dataHelper);
         $objectManager->setBackwardCompatibleProperty($this->layoutProcessor, 'options', $options);
+        $objectManager->setBackwardCompatibleProperty($this->layoutProcessor, 'storeResolver', $this->storeResolver);
     }
 
     /**
diff --git a/app/code/Magento/Checkout/etc/frontend/di.xml b/app/code/Magento/Checkout/etc/frontend/di.xml
index 6fb9058c3b768..69ed33721740d 100644
--- a/app/code/Magento/Checkout/etc/frontend/di.xml
+++ b/app/code/Magento/Checkout/etc/frontend/di.xml
@@ -55,6 +55,7 @@
             <argument name="layoutProcessors" xsi:type="array">
                 <item name="addressFormAttributes" xsi:type="object">Magento\Checkout\Block\Checkout\LayoutProcessor</item>
                 <item name="totalsSortOrder" xsi:type="object">Magento\Checkout\Block\Checkout\TotalsProcessor</item>
+                <item name="directoryData" xsi:type="object">Magento\Checkout\Block\Checkout\DirectoryDataProcessor</item>
             </argument>
         </arguments>
     </type>
diff --git a/app/code/Magento/Directory/Model/ResourceModel/Region/Collection.php b/app/code/Magento/Directory/Model/ResourceModel/Region/Collection.php
index 718e0c0223d76..3fdb20165d4be 100644
--- a/app/code/Magento/Directory/Model/ResourceModel/Region/Collection.php
+++ b/app/code/Magento/Directory/Model/ResourceModel/Region/Collection.php
@@ -9,6 +9,14 @@
  */
 namespace Magento\Directory\Model\ResourceModel\Region;
 
+use Magento\Directory\Model\AllowedCountries;
+use Magento\Framework\App\ObjectManager;
+use Magento\Store\Model\ScopeInterface;
+
+/**
+ * Class Collection
+ * @SuppressWarnings(PHPMD.CouplingBetweenObjects)
+ */
 class Collection extends \Magento\Framework\Model\ResourceModel\Db\Collection\AbstractCollection
 {
     /**
@@ -30,6 +38,11 @@ class Collection extends \Magento\Framework\Model\ResourceModel\Db\Collection\Ab
      */
     protected $_localeResolver;
 
+    /**
+     * @var AllowedCountries
+     */
+    private $allowedCountriesReader;
+
     /**
      * @param \Magento\Framework\Data\Collection\EntityFactory $entityFactory
      * @param \Psr\Log\LoggerInterface $logger
@@ -89,6 +102,40 @@ protected function _initSelect()
         return $this;
     }
 
+    /**
+     * Return Allowed Countries reader
+     *
+     * @return \Magento\Directory\Model\AllowedCountries
+     * @deprecated
+     */
+    private function getAllowedCountriesReader()
+    {
+        if (!$this->allowedCountriesReader) {
+            $this->allowedCountriesReader = ObjectManager::getInstance()->get(AllowedCountries::class);
+        }
+
+        return $this->allowedCountriesReader;
+    }
+
+    /**
+     * Set allowed countries filter based on the given store.
+     * This is a convenience method for collection filtering based on store configuration settings.
+     *
+     * @param null|int|string|\Magento\Store\Model\Store $store
+     * @return \Magento\Directory\Model\ResourceModel\Region\Collection
+     */
+    public function addAllowedCountriesFilter($store = null)
+    {
+        $allowedCountries = $this->getAllowedCountriesReader()
+            ->getAllowedCountries(ScopeInterface::SCOPE_STORE, $store);
+
+        if (!empty($allowedCountries)) {
+            $this->addFieldToFilter('main_table.country_id', ['in' => $allowedCountries]);
+        }
+
+        return $this;
+    }
+
     /**
      * Filter by country_id
      *
diff --git a/app/code/Magento/Directory/Test/Unit/Model/ResourceModel/Region/CollectionTest.php b/app/code/Magento/Directory/Test/Unit/Model/ResourceModel/Region/CollectionTest.php
index 59c054b00a5f9..5c09ab119295a 100644
--- a/app/code/Magento/Directory/Test/Unit/Model/ResourceModel/Region/CollectionTest.php
+++ b/app/code/Magento/Directory/Test/Unit/Model/ResourceModel/Region/CollectionTest.php
@@ -6,6 +6,7 @@
 namespace Magento\Directory\Test\Unit\Model\ResourceModel\Region;
 
 use Magento\Directory\Model\ResourceModel\Region\Collection;
+use Magento\Directory\Model\AllowedCountries;
 use Magento\Framework\DB\Adapter\Pdo\Mysql;
 use Magento\Framework\DB\Select;
 use Magento\Framework\Model\ResourceModel\Db\AbstractDb;
@@ -15,7 +16,14 @@
 use Magento\Framework\Locale\ResolverInterface;
 use Magento\Framework\DataObject;
 use Psr\Log\LoggerInterface;
+use Magento\Framework\TestFramework\Unit\Helper\ObjectManager;
+use PHPUnit_Framework_MockObject_MockObject as MockObject;
 
+/**
+ * Class CollectionTest
+ *
+ * @SuppressWarnings(PHPMD.CouplingBetweenObjects)
+ */
 class CollectionTest extends \PHPUnit_Framework_TestCase
 {
     /**
@@ -23,15 +31,22 @@ class CollectionTest extends \PHPUnit_Framework_TestCase
      */
     private $collection;
 
+    /**
+     * @var MockObject
+     */
+    private $allowedCountries;
+
     protected function setUp()
     {
+        $objectManager = new ObjectManager($this);
         $entityFactoryMock = $this->getMock(EntityFactory::class, [], [], '', false);
         $loggerMock = $this->getMock(LoggerInterface::class);
         $fetchStrategyMock = $this->getMock(FetchStrategyInterface::class);
         $eventManagerMock = $this->getMock(ManagerInterface::class);
         $localeResolverMock = $this->getMock(ResolverInterface::class);
         $connectionMock = $this->getMock(Mysql::class, [], [], '', false);
-        $resourceMock = $this->getMockForAbstractClass(AbstractDb::class,
+        $resourceMock = $this->getMockForAbstractClass(
+            AbstractDb::class,
             [],
             '',
             false,
@@ -39,6 +54,7 @@ protected function setUp()
             true,
             ['getConnection', 'getMainTable', 'getTable', '__wakeup']
         );
+        $this->allowedCountries = $this->getMock(AllowedCountries::class, [], [], '', false);
 
         $selectMock = $this->getMock(Select::class, [], [], '', false);
         $connectionMock->expects($this->any())->method('select')->will($this->returnValue($selectMock));
@@ -54,6 +70,12 @@ protected function setUp()
             $connectionMock,
             $resourceMock
         );
+
+        $objectManager->setBackwardCompatibleProperty(
+            $this->collection,
+            'allowedCountriesReader',
+            $this->allowedCountries
+        );
     }
 
     public function testToOptionArray()
@@ -98,4 +120,14 @@ public function testToOptionArray()
 
         $this->assertEquals($expectedResult, $this->collection->toOptionArray());
     }
+
+    public function testAddAllowedCountriesFilter()
+    {
+        $allowedCountries = [1, 2, 3];
+        $this->allowedCountries->expects($this->once())->method('getAllowedCountries')->with(
+            \Magento\Store\Model\ScopeInterface::SCOPE_STORE,
+            null
+        )->willReturn($allowedCountries);
+        $this->assertEquals($this->collection->addAllowedCountriesFilter(), $this->collection);
+    }
 }
diff --git a/app/code/Magento/Ui/view/base/web/js/form/element/select.js b/app/code/Magento/Ui/view/base/web/js/form/element/select.js
index 1887639c8d031..4567bba1d017a 100644
--- a/app/code/Magento/Ui/view/base/web/js/form/element/select.js
+++ b/app/code/Magento/Ui/view/base/web/js/form/element/select.js
@@ -105,7 +105,9 @@ define([
     return Abstract.extend({
         defaults: {
             customName: '${ $.parentName }.${ $.index }_input',
-            elementTmpl: 'ui/form/element/select'
+            elementTmpl: 'ui/form/element/select',
+            caption: '',
+            options: []
         },
 
         /**
@@ -127,28 +129,6 @@ define([
             return this;
         },
 
-        /**
-         * Parses options and merges the result with instance
-         *
-         * @param  {Object} config
-         * @returns {Object} Chainable.
-         */
-        initConfig: function (config) {
-            var options = config.options,
-                captionValue = config.captionValue || '',
-                result = parseOptions(options, captionValue);
-
-            if (config.caption) {
-                delete result.caption;
-            }
-
-            _.extend(config, result);
-
-            this._super();
-
-            return this;
-        },
-
         /**
          * Calls 'initObservable' of parent, initializes 'options' and 'initialOptions'
          *     properties, calls 'setOptions' passing options to it
@@ -160,7 +140,7 @@ define([
 
             this.initialOptions = this.options;
 
-            this.observe('options')
+            this.observe('options caption')
                 .setOptions(this.options());
 
             return this;
@@ -209,7 +189,7 @@ define([
                 return option && option.value;
             }
 
-            if (!this.caption) {
+            if (!this.caption()) {
                 return findFirst(this.options);
             }
         },
@@ -254,14 +234,20 @@ define([
          * @returns {Object} Chainable
          */
         setOptions: function (data) {
-            var isVisible;
+            var captionValue = this.captionValue || '',
+                result = parseOptions(data, captionValue),
+                isVisible;
+
+            this.indexedOptions = indexOptions(result.options);
 
-            this.indexedOptions = indexOptions(data);
+            this.options(result.options);
 
-            this.options(data);
+            if (!this.caption()) {
+                this.caption(result.caption);
+            }
 
             if (this.customEntry) {
-                isVisible = !!data.length;
+                isVisible = !!result.options.length;
 
                 this.setVisible(isVisible);
                 this.toggleInput(!isVisible);
@@ -301,7 +287,7 @@ define([
          * @returns {Object} Chainable.
          */
         clear: function () {
-            var value = this.caption ? '' : findFirst(this.options);
+            var value = this.caption() ? '' : findFirst(this.options);
 
             this.value(value);
 
diff --git a/dev/tests/js/jasmine/tests/app/code/Magento/Ui/base/js/form/element/select.test.js b/dev/tests/js/jasmine/tests/app/code/Magento/Ui/base/js/form/element/select.test.js
index db5855b0a692b..5d75b8c595366 100644
--- a/dev/tests/js/jasmine/tests/app/code/Magento/Ui/base/js/form/element/select.test.js
+++ b/dev/tests/js/jasmine/tests/app/code/Magento/Ui/base/js/form/element/select.test.js
@@ -121,7 +121,7 @@ define([
                     {
                         value: 'valLast'
                     }];
-                model.caption = false;
+                model.caption('');
                 expect(model.normalizeData('')).toEqual('valFirst');
             });
         });