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Publication date: 20.05.2024
Lawyer
Diia.City: Ukrainian IT innovators shaping the digital future
### Achievements, prospects and economic benefit
The IT sector of Ukraine is rapidly transforming, and Diia.City is at the epicenter of this revolution. This unique legal and tax regime has become a haven for technology companies, fostering innovation and economic growth. Thanks to the high level of resident satisfaction and significant contribution to the national economy, Diia.City is ready to lead Ukraine into a prosperous technological future.
### High satisfaction and key benefits
According to a recent survey by the NGO "Diia.City United", 98% of Diia.City residents are satisfied with the ecosystem. This high approval rating highlights the effectiveness of the platform in meeting the needs of its members. One of the features is preferential tax rates, which 94.2% of respondents noted as a significant advantage. The option of switching to the tax on withdrawn capital (PnVK) is particularly popular - almost 60% of companies choose this taxation regime. More than 40% of these companies believe that PnVK will allow them to reinvest profits into their business, stimulating further growth and innovation.
### Growing awareness and interest
The Diia.City project is gaining popularity in the Ukrainian IT community, 73.3% of IT companies are aware of the initiative. Of these, 33.3% are considering joining in the future, and 25.9% are already preparing to become residents. This growing interest means a wider acceptance and recognition of the benefits that Diia.City offers to the technology industry.
### Google for Startups Ukraine Support Fund
To further support Ukrainian innovations, Google has launched a new stage of the Ukrainian Startup Support Fund. This $10 million fund aims to help Ukrainian companies scale up and lay the foundation for post-war economic recovery. Eligible startups can apply for grants of up to $100,000 and receive additional mentoring support from Google. Additionally, they can receive up to $350,000 in Google Cloud credits to streamline their operations. This initiative prioritizes projects that use artificial intelligence to solve social problems, emphasizing the role of technology in societal development.
### Monobank: a success story in taxation
Neobank Monobank is an example of the positive impact of the Diia.City tax system. In 2023, Monobank paid ₴1.032 billion in taxes, becoming the largest taxpayer among Diya.City residents. Co-founder Oleh Horohovsky emphasized the importance of compliance with tax legislation for economic stability and independence. Diia.City's taxation system, including 5% personal income tax, 1.5% military levy, as well as 9% on withdrawn capital or 18% on profits, is considered one of the best for technology businesses in the world.
### Opportunities for global expansion
Diia.City also provides an opportunity for Ukrainian startups to enter the global market. The SelectUSA Investment Summit, scheduled for June 23-26, offers Ukrainian technology companies a platform to communicate with industry experts, investors and potential partners. To participate, startups must meet certain criteria, including plans to enter the US market within the next 2-3 years and a commitment to innovation.
### Tax on withdrawn capital: a revolutionary mechanism
Tax on withdrawn capital (PnVK) is a revolutionary aspect of the Diia.City tax system. This encourages companies to reinvest their profits rather than withdraw them, thus promoting growth and development. Already 451 resident companies have switched to PnVK, using the saved funds to improve their products, improve team working conditions and create research centers. This mechanism not only stimulates individual enterprises, but also contributes to the overall economic stability and growth of Ukraine.
### Conclusion
Diia.City is more than just a business environment; it is a catalyst for the Ukrainian technology industry. By providing a favorable tax regime, supporting innovation and promoting global connections, Diya.City is turning Ukraine into a competitive player on the global technology stage. The achievements of its residents, combined with strategic initiatives such as the Google Support Fund for Startups in Ukraine and opportunities such as the SelectUSA Investment Summit, highlight the dynamic and prosperous future that awaits Ukraine's IT sector.
