Diia City is a unique legal and tax framework created specifically to stimulate the development of the IT industry in Ukraine. At Barbashyn Law Firm, we help companies not only obtain resident status but also make the most effective use of all the advantages of this regime.
Company formation in Ukraine
Starting a business in Ukraine involves a set of legal actions: choosing the legal form, preparing incorporation documents, state registration, and determining the tax model.
Despite the formal speed of the registration procedure, the decisions made at the initial stage directly affect the tax burden, the level of owners’ liability, and the stability of the corporate structure.
Advantages of registering a business in Ukraine
Digital state
Thanks to the “Diia” ecosystem, business registration and interaction with government authorities can be carried out online, which minimizes bureaucracy and saves time.
Optimal taxation
One of the most competitive regimes in Europe: from a 5% simplified tax rate for small businesses to a special regime where dividend taxation is 9%, with the possibility of reducing the rate to 0% under certain conditions.
Highly qualified human capital
Access to a large pool of talented professionals, especially in IT, engineering, and creative industries.
Access to EU markets
A convenient geographical location and free trade agreements make Ukraine an ideal hub for scaling business into the European market.
Speed of launch
The possibility to obtain legal entity status within 24 hours allows businesses to start operations extremely quickly.
Elements of English law
Implementation of Common Law instruments (convertible loans, options, warranties & indemnities) within the framework of Diia City.
Special regime Diia City
Why is Diia City considered one of the best IT regimes in the world?
Flexible tax system
Residents can choose between corporate income tax (18%) and a tax on withdrawn capital (9%), which significantly increases investment attractiveness.
Payroll tax benefits
Personal income tax (PIT) — 5%, social security contribution (SSC) — 22% of the minimum wage, and military levy — 5%. This allows for legal optimization of team-related costs.
English law instruments
The regime introduces mechanisms familiar to international investors, such as convertible loans, option agreements, NDAs, and NCAs (non-disclosure and non-compete agreements).
Gig contracts
A new form of cooperation that combines the flexibility of freelancing with social guarantees (vacation, sick leave), which is important for retaining talent.
Intellectual property protection
Clear legal regulation of IP ownership, including rights to created products (code, design, architecture).
State stability guarantees
The regime is guaranteed to remain unchanged for 25 years, protecting businesses from legislative volatility.
We provide:
Flexible tax system
Residents can choose between corporate income tax (18%) and a tax on withdrawn capital (9%), which significantly increases investment attractiveness.
Payroll tax benefits
Personal income tax (PIT) — 5%, social security contribution (SSC) — 22% of the minimum wage, and military levy — 5%. This allows for legal optimization of team-related costs.
English law instruments
The regime introduces mechanisms familiar to international investors, such as convertible loans, option agreements, NDAs, and NCAs (non-disclosure and non-compete agreements).
Gig contracts
A new form of cooperation that combines the flexibility of freelancing with social guarantees (vacation, sick leave), which is important for retaining talent.
Intellectual property protection
Clear legal regulation of IP ownership, including rights to created products (code, design, architecture).
State stability guarantees
The regime is guaranteed to remain unchanged for 25 years, protecting businesses from legislative volatility.
Ready to open a company in Ukraine? Let’s discuss your request.
Planning to start a business and want to understand which taxation model or corporate structure suits you best? Leave a request! We will analyze your goals, provide tailored recommendations, and calculate the full turnkey incorporation budget.
Fill out the form, and our lawyers will contact you to clarify the details.
FAQ
How long does it take to open a company?
Can a foreigner open a company in Ukraine?
Can the simplified taxation system be chosen immediately?
What are the main requirements for a company to join Diia City?
What is a gig contract and how is it beneficial for business?
Can a foreign company become a Diia City resident?
How long does it take to open a company?
State registration is completed within 24 hours from the moment the documents are submitted to the state registrar. However, the actual start of operations (opening a bank account, tax registration, obtaining licenses, if required) may take additional time.
Can a foreigner open a company in Ukraine?
Yes. Foreign citizens and foreign companies can be founders of a Ukrainian legal entity. In such a case, it is necessary to prepare properly executed and legalized documents, as well as disclose information about the ultimate beneficial owners
Can the simplified taxation system be chosen immediately?
Yes, provided that the established criteria regarding the amount of income and the type of activity are met. The application for choosing the simplified system must be submitted within the prescribed сроки after registration or immediately to the state registrar.
What are the main requirements for a company to join Diia City?
To become a resident, a company must meet several criteria: carry out the types of activities defined by law (IT development, EdTech, Fintech, etc.), have an average monthly remuneration for specialists of at least 1,200 euros, and have an average number of employees/gig specialists of at least 9 persons.
What is a gig contract and how is it beneficial for business?
A gig contract is a special form of a civil law agreement available only to Diia City residents. It combines the flexibility of freelancing (project-based work) with the social guarantees of classical employment (paid vacations, sick leave and maternity leave), while maintaining a low tax burden.
Can a foreign company become a Diia City resident?
A foreign legal entity cannot become a resident directly, however it can act as a founder of a Ukrainian company (LLC), which will subsequently apply to join the regime. This allows international groups to create R&D centers in Ukraine using all the tax benefits of Diia City.
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