PRESS RELEASE : The launch of “Diia City” will allow Ukraine to become the largest IT hub in Europe – President

The press release issued by the President of Ukraine on 8 February 2022.

The launch of the Diia City space will make Ukraine attractive for IT companies and startups, which will help our country become the largest IT hub in Europe. This was emphasized by President Volodymyr Zelenskyy during his speech at the third Diia Summit in Kyiv.

“We are transforming Ukraine into a country of IT companies and startups. Thanks to Diia City, the share of IT in our country’s GDP will increase from 4% to 10%, and the industry’s revenues will grow up to $ 16.5 billion. This will allow Ukraine to become the largest IT hub in Europe,” he said.

We are launching Diia City. This is one of the best tax and legal regimes on the planet, where the language of venture capital investment is spoken,” he added.

Volodymyr Zelenskyy noted that the Ukrainian government seeks to build the most convenient state in the world in terms of public services. That is why the government is currently working to ensure that talented Ukrainians and foreigners from all over the world, the technology business that is shaping the digital economy, come to work on the Ukrainian market.

“People are the most important thing in every country, and talented people are the basis of every economy,” Volodymyr Zelenskyy said.

“That’s why we want not only Ukrainian, but also foreign IT companies to become residents of Diia City. And, as far as I know, both the first and the second will join Diia City today. Well-known, leading Ukrainian and foreign companies,” the President said.

The Head of State also announced the intention to conduct an electronic census in 2023 jointly with Аррle.

“We are developing a model of electronic customs. We strive to make Ukraine a global IT hub. A leader in innovation and technology. Today it does not sound so fantastic, right? And after the launch of this initiative, it will be quite achievable,” Volodymyr Zelenskyy stated.

Diia City is a special legal and tax regime that creates favorable conditions for the development of IT business, as well as introduces a set of incentives for Ukraine to become a high-tech digital state.

Basic principles of functioning: voluntary entry, freedom of activity (all residents have the right to choose forms of cooperation with third parties), non-interference of the state, presumption of legality of residents, stability (special regime is introduced for at least 25 years), extraterritoriality – the regime will operate in any corner of the country.

Components of “Diia City”: favorable tax system – income tax of 18% or distributed profit tax of 9%, UST at the level of 22% of the minimum wage, personal income tax of 5% and military tax of 1.5%; flexible forms of cooperation with IT specialists – gig contracts that combine the benefits of freelance and social guarantees; guarantees of intellectual property protection; elements of English law that facilitate access to investment; guarantees of protection of the person and property from illegal intervention of security officers.

Joining Diia City is voluntary. The special regime will operate in parallel with the current conditions of IT development. Thanks to Diia City, IT companies will pay lower taxes, be able to build a transparent corporate structure and have better access to investment.