Ukraine has launched a special legal and tax regime for the IT industry called “Diia.City,” Ukrainian President Volodymyr Zelensky announced at the Diia Summit on Feb. 8.
According to the president, a number of Ukrainian and foreign IT companies signed up for the scheme immediately after its launch.
“This is the digital capital of the electronic government,” Zelensky said.
“Diia.City is one of the best tax and legal regimes on the planet – on a planet that speaks the language of venture capital. We’re transforming Ukraine into a country of productive companies and startups.”
The Ukrainian president proclaimed that the IT sector’s share of Ukraine’s GDP would grow from 4% to 10% thanks to Diia.City.
At the same time, industry revenues will rise to $16.5 billion, the president said.
“This will make Ukraine the largest IT hub in Europe,” Zelensky said.
“Therefore, we want not only Ukrainian, but also foreign IT companies to be residents of Diia.City.”
The Verkhovna Rada, Ukraine’s parliament, on Dec. 14 passed a bill to launch Diia.City, which, among other things, establishes a new taxation scheme for IT companies.
Zelensky signed the bill into law on Dec. 18, thus giving the green light for the launch of Diia.City.
Ukraine launched the Diia (“Action” in Ukrainian) mobile application on Feb. 6, 2020, as part of the “State in a Smartphone” project, letting citizens access some state services and carry state-issued identification digitally, without needing a physical copy.
Ukraine’s Ministry of Digital Transformation believes the Diia app will handle all government services digitally within five years, and in three years, Ukraine will rank among the top three countries in the world in the field of open data.