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Today, a new technological giant is emerging in Ukraine — the defense-industrial complex. To support those creating weapons and equipment for our victory, the state has launched Defence City. This is a special legal and tax regime (effective until 2036) offering conditions that were previously only a dream.
At AUDIT INVEST, we have analyzed every legal nuance to help your business become part of this ecosystem.
What is Defence City in simple terms?
It is a “safe harbor” for manufacturers of weapons, UAVs, electronic warfare (EW) systems, and military equipment. By becoming a resident, you gain more than just a status — you gain real financial resources to expand production.
5 Key “Bonuses” for Your Company:
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0% Corporate Income Tax: You pay no tax if you direct these funds toward business development (purchasing equipment, developing new technology models, or repairing workshops).
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No Property or Land Taxes: You are exempt from local taxes on production buildings and the land beneath them.
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Environmental Tax — Cancelled: Full exemption from payments for emissions and production waste.
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Customs “Green Corridor”: Simplified export and import processing. Moreover, you can export defense goods without permission from the State Export Control Service.
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Maximum Secrecy: Data about your company is hidden from public registries, and the state is obligated to assist with relocation and the protection of your facilities.
Who Can Become a Resident?
The main criterion is “Qualified Income.” Your revenue from the sale of defense goods or services must constitute:
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75% of total income (for most companies);
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50% (for aircraft manufacturing enterprises).
Important: If you are a sub-contractor helping to fulfill a defense order — your income is also considered qualified!
Where Do the Risks Hide? (This is where we step in)
Tax incentives come with great responsibility. Requirements for residents are strict:
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Dividend Ban: Profits must go toward development, not into the owners’ pockets (except for state-owned enterprises).
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Annual Report: By June 1st each year, you must submit a report to the Ministry of Defense.
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Mandatory Audit: Your report must be verified by an independent auditor from an audit firm authorized to perform mandatory audits of financial statements for entities of public interest.
The Price of an Error:
If you miscalculate the income share or misuse profits, your status will be revoked, and taxes will be reassessed with heavy penalties.
Why Enter Defence City with AUDIT INVEST?
The legislation regarding Defence City is new and complex. To allow you to focus on advanced technologies, we take over all paperwork and financial control.
We will help you:
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Verify Readiness: Assess if you meet the criteria (75% income) and ensure there are no obstacles to registration.
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Onboarding Support: Conduct the initial audit required for entry.
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Annual Audit: Our specialists are authorized to perform mandatory audits and will guide you through this process.
Don’t delay growth for later. Defence City is a chance to make your business more powerful today.
Interested in becoming a Defence City resident?
Contact the experts at AUDIT INVEST for your initial consultation! We know how to provide comprehensive protection and compliance for your defense business.
