The Ministry of Defense has submitted a package of regulations to the Government for consideration to launch a special legal regime, the Defence City. This will provide state support for defense enterprises.
The Ministry of Defense has submitted a package of regulations to the Government for consideration to launch a special legal regime, the Defence City. This will provide state support for defense enterprises.
Defence City is a legal environment to support defense manufacturers and decriminalize order disruption. The initiative replaces the old list of defense companies with a single Defence City Register, which will be managed by the Ministry of Defence. Resident companies will receive a special status and 10-year tax breaks. In particular, they will be exempt from income tax (subject to reinvestment), as well as property, land and environmental taxes.
«Defense City is a modern model for the development of the defense industry, which allows for a faster response to the needs of the front and attracts international investments. The main idea is simple: tax support in exchange for the development of production, modernization, new technologies and research,» said Defense Minister Denys Shmyhal.
He added that Defence City will promote the development of Ukraine’s leading defense industry enterprises and open «the way to joint production and technology transfer with our partners.»
The package of regulatory acts submitted by the Ministry of Defense should ensure the launch from January 5, 2026. Shmyhal noted that he expects the relevant decisions to be adopted at the next Government meeting.
Recall that in the summer, the technology sector business association Diia.City United called for significant revisions to the Defence City legislative package before the second reading. According to its members, it did not take into account the interests of companies operating in the field of defense technologies, dual-use software, and R&D.
