Over the past few years, the Ukrainian technology sector has demonstrated impressive adaptability. Despite global economic turbulence and internal challenges, the IT sector remains a cornerstone of the country’s export potential. The state has offered businesses not merely a platform for operations, but a fully-fledged digital jurisdiction. The Diia.City regime has become a key instrument enabling companies to reach a new level of transparency and investment attractiveness.

 

This is not merely a list of benefits, but a comprehensive ecosystem designed to make Ukraine the most attractive IT hub in Central and Eastern Europe. Today, the question of how to obtain Diia.City residency is becoming relevant not only for local startups but also for international businesses seeking to structure their presence in the region. By using the support of AA Lawrange, you do not have to worry about the nuances of the process – we will take care of everything: from preparing the initial documentation to passing the annual audit, so that your business receives the maximum benefits from residency.

 

What Is Diia.City and Who Is It Relevant For

Diia.City is a unique experimental regime operating at the intersection of tax, labor, and civil law. Its main goal is to create a “digital state within a state,” where clear rules of the game apply and are integrated into the international legal framework. The regime offers companies an alternative to the traditional model of operating through private entrepreneurs (sole proprietors), allowing the legalization of labor relations without excessive tax burden.

 

For your information! The Diia.City regime for the IT industry in Ukraine officially launched on February 8, 2022. Its legal foundation is Law No. 1667-IX. 

 

In 2026, the opportunity to benefit from the Diia.City regime is important for those planning to enter international stock markets and/or attract venture investments. Transparency of the ownership structure and official contracts with specialists are critical requirements for foreign investors. Resident status confirms that the company operates within a legal framework recognized at the international level, including elements of English law.

 

Who Should Consider Diia.City Residency

Diia.City residency is an optimal choice both for existing businesses with established processes and for startups with ambitions of rapid growth and attracting investment.

 

The question of how to become a Diia.City resident may be relevant for the following players:

  • large outsourcing companies – thanks to Diia.City, they can abandon complex schemes involving hundreds of sole-proprietor contractors in favor of gig contracts, while maintaining competitive service costs;
  • product companies – for them, protection of IP rights (intellectual property) is critically important, and Diia.City provides appropriate tools for registering rights to the legal entity;
  • growth-stage startups – when the team expands and there is a need for options for key employees and formalization of relationships for future investment rounds;
  • R&D centers – international companies opening development centers in Ukraine receive a clear tax model similar to those used in jurisdictions such as Cyprus or Poland, but with lower operating costs.

 

Tax and Legal Advantages for Diia.City Residents

When considering how to legally conduct an online business, taxation inevitably comes into focus. The Diia.City regime is one of the most beneficial solutions for reducing the tax burden. In addition, it offers a number of other advantages.

 

The main advantages include:

  • simplified taxation of labor – for specialists, a personal income tax rate of 5% applies (instead of 18%), the unified social contribution is paid at 22% of the minimum salary, which significantly saves funds in case of high salaries, and the military levy amounts to 5%;
  • flexible corporate taxation – companies may choose between 18% corporate income tax on general grounds and 9% tax on withdrawn capital (TWC). The TWC allows reinvestment of profits into business development without paying tax until dividends are distributed;
  • alternative model of hiring specialists – in addition to employment agreements or cooperation with sole proprietors, GIG contracts are available, combining tax advantages and basic social guarantees;
  • English law instruments – residents have access to convertible loans, options (Option & ESOP), warranties, etc.;
  • intellectual property protection – rights to IP objects created by employees belong by default to the employing company.

 

For your information! Diia.City residents are provided protection against unlawful pressure from law enforcement and regulatory authorities. In particular, the legislation provides certain safeguards against unjustified inspections and searches.

 

Main Criteria for Joining Diia.City

The issue of how to obtain Diia.City resident status must be studied very carefully, as it is not automatically available to every IT company. The law clearly defines filters that exclude non-core businesses and companies with questionable reputations. The criteria must be maintained throughout the entire period of residency.

 

For your information! Joining Diia.City is voluntary. The key requirements are divided into positive ones (which must be met) and negative ones (“anti-criteria,” which must be absent).

 

Areas of Activity

A company must carry out one or more qualified types of activities defined by law. These include software development, testing, IT system support, design, IT education, cybersecurity, R&D, digital marketing, robotics, hosting, work with virtual assets, as well as new areas such as BioTech, DefenseTech (relevant in 2026), and aviation technologies. The main economic activity code must clearly correspond to this list.

 

Staff and Remuneration

The average salary must be no less than 1,200 euros (in equivalent) per employee/gig specialist. The calculation is carried out monthly. The number of personnel must be at least nine persons. These may be either regular employees under the Labor Code or gig specialists under contract.

 

Share of Income

At least 90% of the company’s total income must be derived from qualified types of activities. This rule begins to apply from the first three months after obtaining the status and must be complied with annually. Such a requirement prevents the regime from being used as a “tax haven” by trading or financial companies that have only a small IT department.

 

Absence of “Anti-Criteria”

Companies that cannot obtain Diia.City resident status include those that:

  • are registered abroad (only a Ukrainian legal entity may be a resident);
  • carry out prohibited types of activities;
  • have among their owners a state recognized as an aggressor or persons under sanctions;
  • have a state/municipal share in the charter capital of ≥25%;
  • have non-profit status;
  • have been declared bankrupt or have significant tax debt;
  • are in the process of termination.

 

Step-by-Step Process for Obtaining Diia.City Resident Status

The algorithm for registering a resident in Diia.City is one of the simplest in the world among similar procedures. The entire process takes place online, which minimizes corruption risks. The whole procedure – from submitting the application to receiving the regulator’s decision – takes up to 10 business days.

 

Company Registration in Ukraine

The first step is registering a business in Ukraine. For startups, it is important that no more than 24 months have passed since the date of state registration.

 

Important! When registering a legal entity (LLC), attention should be paid to ensuring that the charter allows for the use of the new Diia.City instruments. It is also necessary to make sure that the information about ultimate beneficial owners (UBOs) in the Unified State Register is up to date and transparent.

 

Preparation and Verification of Compliance with Requirements

Before submission, it is necessary to review the company’s financial statements. If it is a startup, it should be ensured that the income for the previous year does not exceed the limit for “simplified” entry. This stage often includes an internal audit and preparation of the first gig contracts.

 

Submission of the Application via the Portal (Online Form)

The application is submitted exclusively in electronic form via the official Diia.City portal or by email to the Ministry of Digital Transformation. A qualified electronic signature is required for submission.

 

Step-by-step, the process is as follows:

  1. Authorization using the head’s qualified electronic signature.
  2. Completion of the form (name, EDRPOU code, types of economic activity).
  3. Providing an assurance of compliance with all requirements.
  4. Requesting transition to the special taxation regime.

 

Waiting for the Decision

The Ministry of Digital Transformation reviews the application within 10 business days. This process often takes place faster due to automated verification through state registers. If there is no refusal within 10 days, the company is entered into the register of residents under the principle of “tacit consent.”

 

Transition to Resident Status

From the date the entry is made in the Diia.City register, the company officially acquires resident status. By a separate application, it may immediately choose the special taxation regime (9% tax on withdrawn capital). It is important to ensure that the tax authority receives the relevant notification. As an official resident, the company may use all the advantages of the Diia.City regime.

 

List of Required Documents for Obtaining Diia.City Residency

Before obtaining Diia.City residency, it is necessary to prepare important documents. Although digitalization has eliminated the need to submit stacks of papers to the ministry, an internal documentary base is critical for passing inspections and obtaining an annual independent auditor’s opinion. The documents confirm that the company meets the established criteria.

 

Order a consultation

Company Charter Documents, Registration in Ukraine

The package must include:

  • a current extract from the Unified State Register;
  • the charter containing qualified types of activities (preferably adapted to the provisions of Law No. 1667-IX);
  • documents confirming the director’s authority;
  • other registration documents.

 

Reports, Plans, and Projects Confirming IT Activity

Documents describing the company’s activities may be required: agreements with clients clearly specifying the nature of services (for software development or provision of IT services), acts of completed works with detailed descriptions of services, technical specifications, project descriptions, architectural plans of software products, development roadmaps, invoices confirming receipt of foreign currency revenue, etc.

 

Employees’ CVs, Contracts, and Salary Calculations

This is the foundation of compliance with the criteria. Each contract must be legally verified. Records of accrued payments must be maintained in order to confirm at any time the average remuneration amounting to 1,200 euros. Otherwise, it will be difficult to prove that the company has fulfilled all the conditions established by law.

 

Preparation for Submission of the Application

It is recommended to ensure in advance the completeness and accuracy of all data in order to avoid the return of the application without consideration. All data regarding the ownership structure must be collected. If there are foreign companies in the ownership chain, documents confirming their legality and the absence of connections with sanctioned countries should be prepared.

 

For your information! Data confirming the absence of criminal records of management and beneficiaries may be required (in some cases this may be necessary for internal compliance). It is also advisable to verify that the company is not listed in debtor registers.

 

Common Mistakes or What to Pay Attention To

Many companies face problems due to inattention to detail. For example, if it concerns a foreign company, at the preparation stage it is advisable to carefully study how a non-resident can open a business in Ukraine and consult with relevant specialists.

 

Among the most common problems/errors:

  • incorrect types of economic activity in the charter – the activities specified in the charter must strictly correspond to the qualified types defined by the Diia.City law; if the company receives income from activities not specified in the register, such income is not considered qualified and this may lead to loss of status;
  • errors in document preparation – inaccuracies in the application or an incomplete set of documents will result in return without consideration and delay of the process;
  • late submission of the report – within 6 months after entry, the company must submit the “Initial Compliance Report” confirmed by an auditor; missing this deadline is a direct path to loss of status;
  • non-compliant income structure – accidental receipt of significant income from lease or sale of assets may violate the “90% IT income” proportion;
  • number of personnel – if exactly 9 persons are employed and one employee resigns, there is only a short period to find a replacement; otherwise, the company ceases to meet the requirements;
  • tax debt – even a technical debt of several hryvnias due to a bank error may become grounds for forced exclusion from the register; it is advisable to regularly check the status of settlements with the budget in the taxpayer’s electronic cabinet;
  • lack of monitoring after entry – resident status requires continuous compliance with requirements; the company is obliged to annually submit a compliance report; ignoring this leads to loss of residency;
  • untimely audit – residents are obliged to submit an independent auditor’s opinion; forgetfulness in this matter is one of the most common reasons for exclusion from the register.

 

Legal Assistance of Lawrange

The risk of mistakes during registration or conducting activities in Diia.City may cost a company millions in saved taxes. AA Lawrange specializes in supporting technology businesses. We help not only to become a Diia.City resident, but also to build a secure legal model of your business on a turnkey basis.

 

It should be understood that the business registration process is only the tip of the iceberg. The real challenges begin when restructuring the company’s internal processes to meet new standards. Legal assistance from Lawrange includes:

  • full support of the entry procedure (analysis, preparation, submission);
  • development of individual gig contracts and NDA/NCA agreements;
  • tax planning and structuring of dividend payments;
  • preparation for annual compliance and audit;
  • communication with the Ministry of Digital Transformation and the State Tax Service.

 

We know how to become a Diia.City resident for a company engaged in IT development, taking into account all legislative updates of 2025–2026.

 

Conclusions

Diia.City has become the de facto standard for Ukrainian IT. It is a path to capitalization, transparency, and global competitiveness. Obtaining Diia.City residency allows a business to leave the “gray zone” and focus on the product rather than tax risks. Despite certain bureaucratic requirements and the need for regular reporting, the benefits in the form of tax savings and protection of intellectual property rights are undeniable.

 

The key to success is thorough preparation, a clear understanding of all legislative requirements, and strict compliance with them after obtaining the status. Diia.City offers a stable and predictable environment for the long-term development of technology companies in Ukraine.

 

FAQ

What is Diia.City in simple terms?

It is a special “club” for the IT business where taxes are 3–4 times lower than under the general taxation system, and the operating rules are clear to Western investors.

 

Who cannot become a Diia.City resident?

Foreign companies, individual entrepreneurs (sole proprietors), non-profit organizations, enterprises with a state share, bankrupt entities, or those with significant tax debts cannot become residents.

 

How to exit Diia.City residency?

Exit may be voluntary (by submitting the relevant application) or compulsory in case of loss of compliance with the criteria. A record of the loss of status is entered into the Diia.City register.

Popular services