The Diia City United business union has issued a statement regarding the special regime "Defence City". The union welcomes the idea of creating special conditions for the development of the defense-technological sector and the corresponding legislative initiative, but believes that the draft laws should be finalized before the second reading and suggests paying attention to 5 aspects, UNN writes.
Details
The Diia City United business union, which includes over 140 IT companies and funds, considers it necessary to finalize the Defence City package of draft laws before the second reading, specifically regarding guarantees for a wider range of companies, a transparent controlled export system, data protection for defense companies, unification of customs benefits, and legal immunity for defense businesses.
Detailing the first proposal, Diia City United participants insist that all defense-technology companies should be included in the Defence City regime – regardless of their tax status or registration form.
This includes businesses that produce dual-use goods or software, including that which is monetized through royalties, companies engaged in research and development (R&D), and Diia City residents working in the field of defense or dual-use technologies
Limiting access to benefits only to a specific category of residents, according to Diia City United, creates a risk of market fragmentation and loss of potential for scaling innovations.
In addition, the union calls for the creation of a full-fledged digital system of controlled exports, which will ensure predictability, transparency and promote the entry of Ukrainian developers into international markets, particularly in NATO and EU countries.
No less important is the protection of sensitive information about companies operating in the defense sector. This refers to restricting access to public registers that may contain data that increases the risks of sabotage or cyber threats.
Regarding customs regulation, Diia City United insists on unifying approaches: all companies involved in the creation of critical technologies must have equal access to simplified procedures and rapid import of necessary components.
If a company creates critical technology, it needs quick access to components. Belonging to a register should not be an obstacle
Separately, the business community expressed support for the provision on restrictions regarding unfounded criminal proceedings against defense companies, emphasizing that legal immunity in wartime is a matter of protecting critical industries and the stability of state defense orders.
Let's add
The need to finalize the initiative to create Defence City is also emphasized by representatives of the aviation industry. They warn about the risk of excluding their sector from the circle of potential Defence City residents – despite its critical role in supporting, repairing, and modernizing the aviation fleet operated by the Ukrainian military. Industry experts point out that the current version of the draft laws effectively limits the participation of most aircraft manufacturing and aircraft repair enterprises, as it requires that the share of defense products be at least 90% of the revenue structure. However, even industry flagships – such as SE "Antonov", "Motor Sich", and other private contractors of state contracts – do not meet these criteria and may remain outside the Defence City initiative.
The Aerospace Association of Ukraine insists on the direct inclusion of the aircraft manufacturing industry in the draft laws from the Defence City package. The President of the Association, Viktor Popov, explained in comments to UNN that since January 1, 2025, aircraft manufacturing enterprises have lost state support, and the new initiative is a chance for them to receive the benefits and preferences necessary for the normal functioning and development of the industry.
Recall
On July 16, the Verkhovna Rada of Ukraine adopted in the first reading three key draft laws aimed at introducing a special legal regime, Defence City, to support the domestic defense-industrial complex. The documents provide for tax, customs, and budget benefits for participants of the special regime – until 2036.
This includes exemption from income tax provided that profits are reinvested, abolition of land, environmental taxes, and real estate tax, simplification of customs clearance and export control,
On the eve of the vote, experts emphasized that these are only the first steps in creating a systemic mechanism for supporting strategic industries, which Ukraine has long needed.