The Cabinet of Ministers has approved a package of decisions to launch Defence City, a special legal regime for the development of the defence ecosystem. Prime Minister Yulia Svyrydenko announced this on social media after a government meeting.
Svyrydenko noted that currently about 50% of the weapons for the Defence Forces are already produced in Ukraine, and the state is working on further capacity building. Defence City is intended to create clear conditions for the development and protection of defence product manufacturers.
The government has approved the procedure for acquiring Defence City resident status, the procedure for maintaining the register, and the methodology for calculating the share of defence revenue. Mechanisms have also been established to control the use of tax-exempt profits, which should be directed towards the development of activities, and the procedure for annual confirmation of compliance with the requirements of the regime.
The issue of protecting sensitive information has been regulated separately – residents will be able to restrict access to certain public registers for security reasons. In addition, the procedure for relocating and increasing the security of production facilities has been approved, as well as mechanisms for interaction between central and local authorities, financing, monitoring and reporting. Overall coordination will be provided by the Ministry of Defence, and regional military administrations must appoint responsible persons within a month.
According to the Prime Minister, funding for these measures is provided for in the 2026 state budget. Half of the personal income tax paid by Defence City residents will be credited to a special community budget fund for infrastructure development, relocation support or increasing the security of production facilities.