Denys Shmyhal: Creating favourable conditions for Ukrainian arms manufacturers
Ukraine Government
Ministry of Defence of Ukraine, posted 21 August 2025 13:51
The Parliament has supported key draft laws on Defence City, a special legal regime to support domestic enterprises in the defence-industrial complex.
The aim of the special regime is to increase the production of modern Ukrainian weapons and military equipment, develop cutting-edge technologies, attract investment to the sector, and enhance the capabilities of the Defence Forces.
"Our primary goal is to fully equip the Defence Forces with everything they need, develop and improve our own weapons and equipment, and ensure the state's future security through a strong, capable army," said Minister of Defence Denys Shmyhal.
Participation in Defence City is open to defence-industrial complex enterprises that are strategically important to the state's defence capabilities, meet transparency requirements and other specified criteria, and have no ties to the aggressor state.
The main requirement is that the majority of an enterprise's revenue - 75% of qualified income (50% for the aircraft manufacturing sector) - must come from defence production.
"We are creating even more favourable conditions for our arms manufacturers, enabling them to scale up, be protected, and quickly and effectively supply the Ukrainian Defence Forces with the necessary weapons and military equipment," said Deputy Minister of Defence Anna Hvozdiar.
Defence City residents will benefit from several advantages, including exemption from profit tax until 2036, land and property taxes, environmental tax, simplified customs procedures during martial law and for one year after its end, and a simplified regime for the international transfer of defence products.
Detailed explanations of the benefits and restrictions will be published later.
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