Diia.City — Ukraine's Wartime Legal & Tax Regime to Retain Tech Talent

Diia.City is a special legal and tax regime for Ukraine's IT sector, created by a law that took effect on 1 January 2022 and opened for company registration in February 2022 — days before the full-scale Russian invasion. Companies that register as Diia.City residents gain access to a flat 5% personal income tax rate for employees and 'gig' contractors (plus a reduced social security contribution and 1.5% military tax), replacing Ukraine's standard tax treatment, in an explicit bid by the Ministry of Digital Transformation to keep tech employers and their staff in the country despite the war.

The regime has scaled through the war: resident company registrations reached 2,844 by 2025, roughly double the prior year's figure. The wider IT sector employed an estimated 303,000 specialists and generated $6.4–7.48 billion in exports/turnover in 2024, with 88% of technical specialists at Middle level or above — evidence that a substantial, experienced workforce has been retained despite the conflict, even as overall sector turnover fell 5.3% for a second consecutive year.

Independent 2024–2025 industry research (IT Research Ukraine, cited by Sifted and TechUkraine) complicates the retention narrative: 48% of developers say they are considering emigrating, roughly 75% of IT companies have had staff mobilised into the military, and about 18,000 specialists hold conscription deferments tied to their employment. Diia.City appears to have helped stabilise the formal tech sector's finances and headcount, but has not eliminated the underlying flight risk driven by the war itself.

Read the full analysis: https://digitalstate.gov.ua/news/it-outsourcing/ukraines-it-powerhouse-2024-from-resilience-to-global-reach