Ukraine has officially opened a new page in the development of the military-industrial complex. Defence City is moment X for the Ukrainian Tech sector. This is a special legal and tax regime, which offers manufacturers of weapons and military technologies conditions that did not exist before on the global market. This is not just another initiative, but rather a strategic "virtual zone" (by analogy with the successful Diia.City) that will operate until 2036 or until the moment of joining the EU.
Defence City operates based on Law No. 4577-IX, which introduces a true revolution in the finances of defense enterprises. Residents of the regime receive the right to full tax holidays — 0% income tax, on the condition that these funds will be reinvested in the development of production. Additionally, business is exempted from the payment of VAT and import duty on components, which allows for a significant reduction in the cost price of Ukrainian weapons and makes them competitive on a global level.
In the conditions of full-scale war, the protection of the manufacturers themselves is critically important. Defence City introduces a unique opportunity to hide data about the location of capacities in state registers.
The Law of Ukraine "On National Security" regulates the procedure for acquiring resident status; thus, it is available for Ukrainian legal entities whose activity is focused on the creation of weapons, equipment, or specialized software. The main criterion — the share of "defense" income must constitute no less than 75% of the company's total turnover. The state has established clear "red lines" for residency: no offshore connections, absence of Russian capital, and an impeccable reputation in the use of budget funds.
The procedure for entering the regime is simplified as possible and is based on the principle of submitting an application through the Ministry of Defense of Ukraine. The decision on granting resident status is made within 10 working days. At the same time, the status requires high responsibility: an annual audit and transparent reporting on the fulfillment of defense contracts.
Our legal team is ready to provide full support for the procedure for obtaining Defense City resident status — from the initial selection of an auditor to the final submission of applications, guaranteeing efficiency, clarity, and high quality of execution at each level.