Government passes package of decisions to launch Defence City on 5 January next year

Today, the Cabinet of Ministers passed a package of decisions to launch Defence City starting 5 January 2026. This was announced by Prime Minister Yulia Svyrydenko.

"50% of the weapons for our army are already being produced in Ukraine, and we are working to increase our capabilities. That is why we are creating Defence City — a special legal regime for the development of the defence ecosystem," the Prime Minister said.

The Head of Government explained what exactly was approved today:

1. Procedure for acquiring Defence City resident status: the procedure for maintaining the register, submitting and reviewing applications for resident status, and the methodology for calculating the share of defence income (qualified income) have been approved.

2. Control mechanisms: the procedure for controlling the use of tax-exempt profits has been established. It should be directed towards activities and the procedure for annual confirmation by residents of compliance with the requirements of the regime.

3. Protection of sensitive information. Residents will be eligible to submit an application to the Ministry of Defence and determine which public registers/information should be restricted for security reasons.

In addition, the Government has approved the procedure for relocating and increasing the security of the production facilities of Defence City residents.

"The Government's decision determines the methods of interaction among central and local authorities, financing, monitoring, and reporting. Regional military administrations must appoint persons responsible for coordination within a month, with overall coordination provided by the Ministry of Defence," said Yulia Svyrydenko.

According to her, funding for these measures has been envisaged in the 2026 State Budget.

"50% of the personal income tax paid by residents shall be credited to a special community budget fund for infrastructure and relocation support or measures to improve the security of production facilities. Manufacturers receive clear conditions for development and protection, and the state receives control and security mechanisms," the Prime Minister emphasised.

Yulia Svyrydenko thanked the Ministry of Defence for its consistent work on improving conditions for Ukrainian arms manufacturers.