IT business

What is Diia.City, and is it right for a foreign IT company?

Published 13 August 2026 · facts checked against the primary sources on 2026-08-08 · Ukraine For ALL, Kyiv

The regime was created by Law of Ukraine No. 1667-IX of 15 July 2021. It runs for no less than 25 years from the day the first resident was entered in the register, and across those 25 years the state guarantees that the conditions cannot be tightened (Art. 3). On 13 August 2026 the official Diia.City site reported 4,577 active residents.

Who can become a resident?

A resident must be a legal entity registered in Ukraine, carrying out at least one activity from the statutory list, and meeting three quantitative tests continuously (Art. 5(1)). A company registered abroad is expressly barred (Art. 5(2)(1)).

The three tests, measured from the calendar month after the month status is granted:

Note the wording. The €1,200 is an average across the payroll rather than a floor under every contract: total remuneration paid in the month is divided by the number of employees and gig-specialists who actually received a payment that month (Art. 1(12)).

The listed activities (Art. 5(4)) cover software development and testing including games, software and game publishing, online delivery of software products, IT education, data processing and web portals, R&D in information and communication technologies, marketing campaigns and advertising services delivered through software developed with the resident's participation, esports, virtual-asset services, cybersecurity, robotics, and any other activities the Cabinet of Ministers may add.

Who is blocked from entry?

Article 5(2) lists thirteen disqualifiers. Those that matter to foreign-owned structures: direct or indirect ownership by a state recognised by Parliament as an aggressor state, or by its companies or citizens; 25% or more held from FATF-listed non-cooperative jurisdictions; sanctions; undisclosed beneficial owners. Also barred: non-profits, bankruptcy, liquidation, and tax debt above ten minimum wages outstanding over 30 days.

The aggressor-state bar has one exception that decides real cases. It does not apply where the stake is held through a company whose shares trade on organised capital markets included in a list approved by the Cabinet of Ministers, unless that company is itself registered under the law of the aggressor state (Art. 5(2)(5), as amended by Law No. 4113-IX of 4 December 2024).

Is there a route for a small startup?

Yes. A company registered no earlier than 24 months before it applies may hold resident status without meeting the €1,200 and nine-person tests, but only until 31 December of the year following the year it obtained status (Art. 5(3)). It must still meet the activity and 90% income tests, and stay within the revenue ceiling set for group-three single-tax payers.

How is a resident taxed?

A resident chooses between ordinary corporate profit tax at 18% and a special "tax on withdrawn capital" at 9%, charged only when money leaves the company in one of the listed ways (Tax Code, paras. 136.8 and 141.9-1). Payroll is where the real difference lies.

• Corporate: 9% on distributions, meaning dividends, returns of contributions, interest and royalties to certain recipients, free transfers, and payments to non-residents (para. 141.9-1.2).
• Personal income tax: 5% on salary, gig-contract remuneration and author's remuneration paid by the resident (para. 170.14-1.2, referring to para. 167.2). In the month status is acquired, the ordinary 18% still applies.
• Ceiling: the 5% rate covers annual income up to the equivalent of €240,000 at the NBU rate on 1 January. Above that, the individual declares the excess and pays 18% themselves (para. 170.14-1.3).
• Military levy: 5% for individuals (subsection 16-1, Section XX), falling back to 1.5% from 1 January of the year after the third calendar year following the end of martial law.
• Social contribution: the general rate is 22% (Law No. 2464-VI, Art. 8(5)), but a compliant resident pays the minimum insurance contribution, 22% of the minimum wage, on both salary and gig remuneration (Art. 8(14-1)). At the 2026 minimum wage of UAH 8,647 (Law No. 4695-IX, Art. 8), that is UAH 1,902.34 per person per month, whatever they earn.
• Dividends: left out of the individual's taxable income only if the payer is a Diia.City resident on the 9% withdrawn-capital tax and has paid no dividends on shares or other corporate rights for two consecutive calendar years (para. 170.5.5). A resident that stayed on the ordinary 18% profit tax does not get this.

One carve-out: a resident that simultaneously holds Defence City status gets neither the 5% rate nor the minimum contribution.

Does Diia.City still get my staff reserved from mobilisation?

Since 2 June 2026 residency on its own stopped being enough. Reservation runs through "critically important enterprise" status, and until that date simply being a Diia.City resident was one of the qualifying criteria (criterion 7 of the Criteria approved by CMU Resolution No. 76 of 27 January 2023).

CMU Resolution No. 692 of 30 May 2026, published and in force on 2 June 2026, rewrote that criterion. A Diia.City resident now also has to meet Art. 5(1)(2) of Law No. 1667-IX, the €1,200 average, proven by its payroll tax and social contribution filings for the last six calendar months. Two further points decide most applications. A commercial company needs three or more criteria in total, and two of them are mandatory: no tax debt, and average accrued pay for the last calendar month of at least three national minimum wages, a multiplier raised from 2.5 to 3 by the same resolution, so UAH 25,941 in 2026.

Decisions already granted do not simply roll over. They expire no later than 1 September 2026, unless the company filed the pay certificate and the accompanying tax filings by 10 August 2026, in which case the decision runs its original term (Resolution No. 692, para. 2(1), as amended by CMU Resolution No. 862 of 1 July 2026). This is wartime law and it changes more often than anything else on this page. Check the text in force on the day you act.

What is a gig contract, in practice?

A gig contract is a civil-law contract created by Law No. 1667-IX that sits between employment and freelancing. It is written or electronic, and a civil contract is not a gig contract unless it says so expressly (Art. 17). What the statute fixes by default:

• Economic intellectual property rights in anything created under the contract belong to the resident, from the moment after creation, unless the contract says otherwise (Art. 24).
• Working time is capped at 8 hours a day and 40 a week, with 17 working days of paid annual break after six continuous months (Art. 21). "Annual break" is the statute's own term; a gig-specialist is not an employee and does not take leave.
• Either side may walk away on 30 calendar days' notice, or three days during the first three months (Art. 18(4)–(5)).
• Sick pay and maternity leave apply: at least 70 days before the expected birth date and 56 after (Art. 22).
• A non-compete must be paid, in writing, and cannot run longer than 12 months after the relationship ends (Art. 27).

Lose resident status and gig contracts terminate on the last day of the third calendar month after the register entry (Art. 18(8)).

What does the company owe after it joins?

Compliance is continuous, and it is audited. Two filings go to the Ministry of Digital Transformation, which decides applications, keeps the register and runs the checks (CMU Resolution No. 856 of 18 September 2019).

1. Initial compliance report, due by the last day of the sixth calendar month after status was acquired, covering the first three full months, with an independent auditor's opinion attached (Art. 13(2)). Residents that came in under the startup route (Art. 5(3)) do not attach an opinion to the initial report. The Ministry may request one within 15 working days if the report diverges from the filed financial statements, and it is then due in 60 days.
2. Annual compliance report, due by 1 June each year for the previous calendar year, also with an auditor's opinion (Art. 13(3)).

The opinion must come from an audit entity entitled to perform statutory audit of financial statements (Art. 13(5)). Your bookkeeper cannot sign it.

Where people get stuck

The €1,200 test is monthly, and failure is retroactive. Miss the remuneration or headcount test in a given month and the company must self-assess personal income tax at 18% on its specialists' income for that month, paying the difference at its own expense (para. 170.14-1.5). The same month also loses the minimum social contribution: it is recalculated at the ordinary 22% of the real base, because the reduced contribution applies only to a month in which the resident met the pay test, the headcount test and the no-tax-debt condition (Art. 8(14-1), Law No. 2464-VI, referring to Art. 5(1)(2), Art. 5(1)(3) and Art. 5(2)(10) of Law No. 1667-IX). For nine specialists on real salaries, the contribution recalculation usually costs more than the income tax. A quiet January reappears as a tax bill.

Paying single-tax contractors becomes taxable. Money paid to single-tax payers for goods, works or services above 20% of the previous year's total expenses is subject to the 9% tax (paras. 135.2.1.15 and 141.9-1.2.12, for periods from 1 January 2024). Companies that run a large roster of self-employed contractors usually notice the threshold only after they have crossed it.

Moving your own money abroad is a distribution. Transferring funds from the resident's Ukrainian accounts to its own accounts opened abroad is taxable under the 9% regime (para. 141.9-1.2.13).

The 90% test breaks on side revenue. Qualifying income is net revenue from the listed activities plus royalties (Art. 1(5)). Hardware resale, unrelated consulting or rental income counts against you.

Late reporting costs status. Missing the compliance report or the auditor's opinion by more than 20 working days is a stand-alone ground for losing resident status (Art. 9(1)(4)).

FAQ

Can my German or US company become a Diia.City resident? No. Only a legal entity registered in Ukraine can. The usual route is a Ukrainian subsidiary owned by the foreign holding, subject to the ownership bars in Art. 5(2). Setting one up is a separate procedure: see how does a foreigner register a company in Ukraine?

How long does the application take? Ten working days. If the body neither returns nor refuses the application in that period, the decision is deemed made, and the register entry follows by the 11th working day (Art. 7).

Must a resident switch to the 9% tax? No. That regime is optional; a resident can stay on the ordinary 18% corporate profit tax and still get the payroll treatment. One thing it does not get is the dividend exemption. Para. 170.5.5 works only where the paying company is a Diia.City resident on the 9% withdrawn-capital tax, so a resident on 18% cannot pass dividends to its individual shareholders free of personal income tax.

What does one specialist cost in taxes? Withheld from the specialist: 5% personal income tax plus 5% military levy. Paid by the company: the social contribution at 22% of the minimum wage, UAH 1,902.34 a month in 2026, rather than 22% of the real salary.

Does resident status protect my developers from mobilisation? Since 2 June 2026 residency by itself stopped being enough. See the reservation section above: residency is now only one criterion of three, and it comes with its own pay test.