31 in May, 63 now: Ukraine’s arms makers pile into a regime of tax breaks and shielded data
The 32 firms that joined since May bring under a quarter of the early members’ average weapons revenue, by Euromaidan Press calculations.
Ukraine's Defense City, a special support regime for arms makers, has expanded to include 63 member companies as of October 19, 2023, more than doubling since late May 2023 according to the Defense Ministry. This increase brings an average company revenue of $15 million, compared to the $64 million average of the initial 31 companies.
Ukraine already relies heavily on domestic production, with over 75% of its 2025 weapons budget allocated to local manufacturers. The majority of new weapon models authorized since the start of 2026 have been designed in Ukraine, accounting for 892 out of 1,000 models approved. Defence City aims to increase production capacity by attracting smaller firms, as evidenced by the influx of new members.
Companies joining Defence City are required to disclose their qualified income, derived from weapons and military equipment sales, and must file their defense contracts from the previous year. The regime offers profit-tax breaks, customs incentives, state support for plant relocation and protection, simplified defense export procedures, and eligibility for critical defense industry designations.
This allows companies to defer up to 100% of staff liable for military service from the draft. To join Defence City, companies must meet legal requirements and submit an application with supporting documents. The ministry grants the status through a ministerial order within 10 working days.
Written by urgent.news from Euromaidan Press's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
