Defence City: Consolidating the Ukrainian Defence Industry
With the latest arms producers joining the regime, the residents’ combined qualified income – revenue from arms sales – has reached UAH 89.7 billion.
“The expansion of Defence City shows the strong demand among Ukrainian manufacturers for practical government support tools. This platform is becoming a hub that consolidates the defence sector, strengthening the industry and opening up broader prospects for growth and export,” noted Anna Gvozdiar, Adviser to the Minister of Defence of Ukraine.
Defence City residents enjoy a range of practical advantages that help them scale up their defence production.
Defence City Preferences
The Government offers special conditions to defence manufacturers within Defence City. These include:
- Exemption from corporate income tax – provided that freed up funds are reinvested into production and technology development.
- Streamlined customs procedures – a dedicated customs regime for component and equipment imports and production operations.
- Exemption from land and environmental taxes – reducing the operational burden on manufacturing sites.
- Currency liberalisation enablers – supporting access to international financing and tailored currency mechanisms for residents.
- Protection of sensitive company information – restricting access to the Residents Register and minimising disclosures that are likely affect production security.
- Service and advisory support via the Ministry of Defence – assisting residents with applying the regime, liaising with government bodies, and implementing statutory support mechanisms.
- Support for relocation and enhanced protection of production facilities – establishing dedicated mechanisms for moving and deploying manufacturing operations.
- Streamlined defence exports – enabling manufacturers to export military goods without requiring separate authorisation.
- Additional opportunities for military exemption – residency in Defence City qualifies an enterprise as critical within the defence sector, enabling exemption for up to 100% of employees liable to military service.
Follow this link to the earlier MoD guidance on how arms manufacturers can obtain Defence City residency and the advantages it provides.