The Verkhovna Rada has adopted in the second reading bills No. 13420 and No. 13421, which form the basis of the state initiative Defence City, aimed at supporting and developing the Ukrainian defense industry. According to the new laws, a Register of Defence City Residents will be established in Ukraine, overseen by the Ministry of Defense.
This is reported by Finway
New Opportunities for Defence City Participants
Companies wishing to obtain the status of Defence City residents must ensure that at least 75% of their qualified income is generated in the defense industry, while for aircraft manufacturing companies, this requirement is at least 50%.
A special legal regime for Defence City residents will be in effect until January 1, 2036. It provides a number of significant advantages for manufacturers:
- Exemption from profit tax and a number of other mandatory payments, provided that the income is reinvested.
- Simplification of customs clearance and export control procedures.
- Introduction of special conditions for currency supervision and financial operations from the National Bank of Ukraine.
- State support for the relocation and protection of production facilities.
Increased Funding for Defense Innovations
As part of this initiative, the parliament has also decided to significantly increase funding for the creation and testing of technological innovations used on the battlefield. In particular, approximately 2.77 billion hryvnias will be allocated for grants to weapon developers under the Brave1 program. An additional 1.42 billion hryvnias has been allocated for testing special defense means, and 69.4 million hryvnias will go towards enhancing the cybersecurity of the Diia platform.
The documents provide for the establishment of a Register of Defence City Residents, which will be maintained by the Ministry of Defense. Participants will be able to obtain special status provided that the share of their qualified income is at least 75% of the total (for aircraft manufacturing – at least 50%).