“To ensure that nobody gets any doubts about the effectiveness of the Diia.City, we will work to provide data that no one could refute on the impact of the legal regime on the economy and attracting investments.”
Advater Group conducted a study in early 2024 involving 171 current and 54 potential Diia.City residents. The study aimed to identify the advantages of Diia.City that current companies utilize and that could attract new businesses. It focused on assessing a tax model chosen by Diia.City residents, whether special tax conditions justified respondents’ expectations, and what the main priorities of companies are for the future within residency.
“I am confident that the results of the study will help us understand and address the main requests and challenges of the residents, clearly define the main priorities of work, and further harmonize cooperation between the state and the technological business,”
noted Natalia Denikeieva, Director of IT industry development directorate at the Ministry of Digital Transformation of Ukraine, during an event marking the second anniversary of launching Diia.City.
Survey Results: 98% of Diia.City Residents Satisfied with Special Tax and Legal Space
According to the survey, 98% of Diia.City residents are satisfied with the regime: 52% reported being completely satisfied, while 46.2% are more satisfied than dissatisfied. Currently, among regime users, 76% are established businesses and 24% are startups.
93% of companies operating under the special tax conditions indicated that their expectations were met. In particular, the main advantage of using such a tax model was the ability to reinvest profits in business development and reduce tax burden.
As for potential Diia.City residents, one-third of them are involved in scientific activity and technological works. Among the key advantages that could persuade such businesses to join the regime are fixed conditions for 25 years, low tax rates, and guaranteed intellectual property rights protection.
74.1% of respondents indicated that upon joining the regime, they would utilize special tax conditions. In particular, companies plan to apply for:
- 0% on the income of individuals as dividends accrued by a resident company, provided that they are paid no more than once in a 2-year term;
- tax on the remuneration of GIG specialists and employee salaries at a rate of 5% + 1.5% military tax, and social security fee at 22% of the minimum wage.
Representatives of companies participating in the survey also shared their thoughts on what aspects of Diia.City’s work should be changed or improved. Specifically, they suggested considering easy-access (via messengers) tax consultations for potential residents, employee reservations, business trips, and increasing communication.
Diia.City provides a unique tax and legal space for IT business making it easier and less expensive to manage and operate your business
Diia.City was launched in early 2022 by the Ministry of Digital Transformation of Ukraine and the IT sector. During this time, over 830 companies have joined the regime, employing more than 62,000 employees. These companies include over 100 defense-tech companies directly contributing to Ukraine’s victory. Diia.City residents paid 8.5 billion UAH in taxes in 2023. For comparison, in 2022, this number corresponds to about 4 billion UAH.
