Ukraine may soon introduce a dedicated legal framework Defence City to support domestic defence manufacturers and facilitate the export of military and dual-use technologies. A comprehensive package of draft laws enabling this regime has already been submitted to the Parliament.
The initiative envisions the creation of a closed registry of designated “Defence City” residents, to be maintained by the Ministry of Defence. This status would be granted to selected defence-sector companies, with access to the registry and related reporting kept confidential.
Companies that become Defence City residents will benefit from a range of incentives, including:
simplified export controls for military and dual-use technologies;
simplified customs procedures;
special currency control rules from the National Bank of Ukraine;
support for relocating production facilities.
Moreover, Defence City residents will benefit from tax incentives valid until January 1, 2036, including:
full exemption from corporate income tax, provided the profit is reinvested;
abolition of land tax;
exemption from real estate tax;
waiver of the environmental fee.