The Verkhovna Rada has created Defence City, a special legal regime for defence business

The Verkhovna Rada, with 260 votes in favour, has adopted bills No. 13420 and No. 13421, which introduce a new legal regime for Defence City. It will remain in effect until 2036, or until Ukraine joins the EU.

Residents of Defence City will receive tax benefits, including exemption from income tax on the condition of reinvestment, as well as from land, property, and environmental taxes if the facilities are used for production.

For defence industry manufacturers, customs procedures and the regime for the international transfer of defence products will also be simplified, while the state will provide special conditions for the relocation and protection of production facilities.

Enterprises of strategic importance to the country’s defence capability that produce military products — from weapons, equipment, and ammunition to electronic warfare systems and unmanned aerial vehicles — and that also meet transparency requirements and other specified criteria will be eligible to participate in Defence City.

The purpose of Defence City is to create favourable conditions for domestic arms manufacturers, increase the production of modern weapons and equipment, attract investment, and strengthen the state’s defence capabilities.

Defender previously reported on the amendments proposed by the Ukrainian Council of Gunsmiths for the second reading of the draft laws.