Ukraine has launched “Defence City,” a legal and industrial framework intended to support the expansion of the country’s defense manufacturing sector.
The initiative establishes a state-regulated environment to facilitate production growth, attract investment, and coordinate oversight to meet national security requirements.
Following the launch, Kyiv formally designated Ukrainian firm SkyFall, one of the country’s largest drone manufacturers, as the first Defence City “resident,” making it eligible to operate under the new legal framework.
The firm is known for producing Vampire and Shrike drones, as well as interceptors designed to counter Shahed-type systems.
“We invite Ukrainian manufacturers to join Defence City and become part of a new industrial ecosystem that strengthens the state’s defense capability,” stated Ukrainian Defense Minister Denys Shmyhal.
Boosting Domestic Production
The initiative comes as efforts to negotiate a halt to the conflict with Russia continue without a clear breakthrough, prompting Kyiv to strengthen its domestic defense capacity.
To obtain Defence City resident status, companies must submit an application to the ministry of defense along with a required documentation package.
This includes proof of compliance with relevant legislation, financial and audit statements, and information confirming participation in state defense contracts.
If approved, a company is formally entered into the Defence City register, granting access to the regime’s provisions.
Companies admitted under the framework are eligible for a set of legally defined measures intended to support production continuity and expansion.
These include an exemption from corporate income tax when profits are reinvested in development, relief from land, property, and environmental taxes, and access to simplified customs procedures.
Additional measures cover protection of sensitive information and data, along with state support for relocating facilities and securing production sites when needed.
