Diia.City is a unique legal and tax framework established in Ukraine to foster the development of the IT industry. The Diia.City web platform aims to transform Ukraine into a leading European IT hub by providing resident companies with special tax benefits, flexible employment options, and robust intellectual property protections.

A Game-Changer for Ukraine’s Digital Economy

Diia.City aims to create one of the world's most favorable environments for the growth of technology businesses in Ukraine. Historically, Ukraine has had strong technological potential. However, before the launch of Diia.City, there were no suitable conditions for the development and scaling of tech companies within the country. As a result, many well-known startups and companies founded by Ukrainians had to seek opportunities in other jurisdictions with better access to investment and growth prospects. Diia.City is designed to change this by providing tech companies with the necessary tools to scale and thrive in Ukraine. The Ministry of Digital Transformation of Ukraine is the primary public organization responsible for the Diia.City web platform.

Diia.City is a game-changer for Ukraine’s tech-driven economic strategy, providing a seamless web platform for residency applications and strengthening Ukraine’s position as a global technology hub. A key advantage of Diia.City is regulatory stability, with business conditions legally guaranteed for 25 years under Ukrainian law. Additionally, the Diia.City web platform streamlines business registration for IT companies, enabling fully remote onboarding without the need for physical paperwork or in-person visits. As of today, over 1600 companies have obtained residency through the web platform, collectively employing more than 100.000 specialists, which accounts for 70% of Ukraine’s IT industry. Notably, Diia.City residents have $450 million in taxes in 2024 alone, bringing total tax revenues to $750 million since 2022. Among resident professionals, 60% are employed under labour contracts, 35% under gig contracts, and 5% are self-employed. 

The web platform also provides a user-friendly interface for submitting applications, signing contracts digitally, and managing company documentation online. To comprehend the legal framework governing the Diia.City special regime, particularly the web platform, Ukraine’s government adopted several key laws to support this effort.

A New Era for Tech Development

The technical part of the Diia.City deployed on the Diia web platform enabling business operations through:

• Secure e-signature authentication for digital transactions
• Automated online application processing
• Online submission of reports on compliance with residency criteria
• Integrated communication and technical support.

Furthermore, Diia.City ensures secure IP ownership registration and incorporates open-source components, for instance, contract management tools and legal APIs, enabling customization and scalability to meet evolving industry needs.

A data exchange system enables seamless interaction between registries and government agencies, Diia automatically retrieves all necessary company information by sending a request to the Unified State Register of legal entities, individual entrepreneurs, and public organizations. The platform incorporates robust online reporting capabilities that allow both businesses and government agencies to monitor performance in real time, generate automated reports, and analyze data for informed decision-making. Moreover, the solution leverages advanced digital identity systems, including secure digital IDs and electronic signatures, to ensure reliable authentication and streamline interactions with public services.

Benefits for users

Easy and swift acquisition of Diia.City resident status via the web platform for tech companies, granting access to essential tools for growth and scaling. Becoming a Diia.City resident unlocks numerous advantages for IT companies, including: 

• Favourable tax regime that defines a 5% personal income tax; social security fee (22% of the minimum wage) and 5% military tax; 
• The opportunity to opt to pay tax: 9% exit capital tax or 18% income tax;
• A choice of the employment model that is the most suitable;
• Hiring talent as contractors (sole entrepreneurs) or GIG workers, a classification available only in Diia.City;
• Signature employment contracts under the Labor Code that guarantee employee transparency and legal security matching low tax rates;
• No exposure to the reassessment of payroll taxes or penalties related to misclassified employment relationships;
• Tax burden comparable to industry standards, ensuring financial efficiency and more.

Stakeholder Involvement

The implementation of the Diia.City web platform was driven by strong public-private collaboration. The Ministry of Digital Transformation of Ukraine positioned the platform as a catalyst for IT sector growth and foreign investment, while the Verkhovna Rada enacted fiscal and labor policies to support its adoption. The State Tax Service of Ukraine played a crucial role in ensuring seamless integration of automated tax reporting within the web platform. In parallel, leading Ukrainian IT firms, including EPAM, SoftServe, Sigma Software, NIX, and AltexSoft, and many more, as well as business associations IT Ukraine Association, Lviv IT Cluster, Kharkiv IT Cluster etc. were instrumental in shaping Diia.City’s regulatory and operational framework. As long-standing members of industry associations, they provided expert insights and strategic recommendations to refine the initiative.

Rollout Strategy

The Diia.City web platform was deployed through a phased implementation strategy, ensuring a balance between regulatory stability and technological refinement. In mid-2021, the Government of Ukraine introduced the Diia.City special legal regime, designed to strengthen the IT sector and drive innovation-led growth. The legal framework was established with the adoption of the Diia.City Law in July 2021, followed by a December 2021 resolution that formally outlined the company registration process under this regime. To facilitate a smooth transition, the Ministry of Digital Transformation provided ongoing advisory support, assisting companies with compliance and addressing inquiries arising during regulatory audits. In parallel, its collaboration with the State Tax Service of Ukraine ensured full adherence to tax reporting and employment policies. By mid-2022, the Diia.City web platform transitioned into full-scale national deployment, accompanied by a comprehensive onboarding initiative and widespread awareness campaigns across Ukraine, driving mass adoption and industry participation.

Core Technological Components

The Diia.City web platform integrates state-of-the-art technologies to foster an efficient IT ecosystem. The mapping of the technological component include:

• GovCloud Ukraine, a secure government cloud environment
• Digital identity verification and e-signatures, particularly Diia.Signature or BankID
• End-to-end encryption for all transactions and contracts
• Blockchain to track contracts and ensure anti-fraud protection.

Security and Data Management

The solution incorporates robust cybersecurity measures and complies with international data protection standards. The Diia.City web platform adheres to data protection laws, for example, the Law 'On Personal Data Protection', ensuring user consent, data transparency, and legal basis for processing. Moreover, all content at the web platform is available under license Creative Commons Attribution 4.0 International license unless otherwise noted.

Scalable Platform for the Tech Industry 

The Diia.City web platform can be extended to other states, and its model is positioned for potential adaptation to create a similar digital business ecosystem. Across Ukraine, Diia.City is tailored specifically for IT companies specialized in: software development and testing, including GameDev, publishing and distribution of software, in particular SaaS, training in computer literacy, programming, testing, and technical support of software, cybersecurity, R&D, digital marketing using software developed by residents, supply of services related to the circulation of virtual assets, robotics; cloud technologies and so on.