The Ministry of Defense has submitted a package of regulations to the Government for consideration to launch a special legal regime, the Defence City. This will provide state support for defense enterprises.
Defence City is a legal environment to support defense manufacturers and decriminalize order disruption. The initiative replaces the old list of defense companies with a single Defence City Register, which will be managed by the Ministry of Defence. Resident companies will receive a special status and 10-year tax breaks. In particular, they will be exempt from income tax (subject to reinvestment), as well as property, land and environmental taxes.
«Defense City is a modern model for the development of the defense industry, which allows for a faster response to the needs of the front and attracts international investments. The main idea is simple: tax support in exchange for the development of production, modernization, new technologies and research,» said Defense Minister Denys Shmyhal.
He added that Defence City will promote the development of Ukraine’s leading defense industry enterprises and open «the way to joint production and technology transfer with our partners.»
The package of regulatory acts submitted by the Ministry of Defense should ensure the launch from January 5, 2026. Shmyhal noted that he expects the relevant decisions to be adopted at the next Government meeting.
IBA Annual Conference Toronto 2025, Tuesday 4 November
A thought-provoking session titled ‘Rebuilding Ukraine – opportunities for lawyers and their clients’ took place at the recent IBA Annual Conference in Toronto. Lasting over an hour, the session explored how the international legal community can play a pivotal role in shaping Ukraine’s legal system and supporting its sustainable post-war recovery.
The panel brought together a distinguished group of experts with thorough knowledge of Ukraine’s legal, economic and geopolitical landscape. Anna Babych, partner at AEQUO (Kyiv, Ukraine), chaired the session, guiding a discussion enriched by diverse perspectives. The speakers included Daniel Bilak of Kinstellar (Kyiv, Ukraine), who shared insights on governance, legislative reforms and his unique experience as a practitioner; Roman Dubczak from CIBC Capital Markets (Toronto, Canada), offering a financial and investment viewpoint; Zenon Potoczny of the Ukrainian World Congress (Etobicoke, Canada), emphasising global advocacy and diaspora engagement; and Roman Shimonov, CEO of Roshel Defence Solutions (Brampton, Canada), addressing the role of industry and security in the war (and future reconstruction) efforts.
The discussion centred on broader legal challenges and opportunities arising from Ukraine’s current challenges and future reconstruction efforts. The session’s chair has provided the following review:
‘I had the privilege of moderating the panel dedicated to Ukraine’s rebuild. The discussion brought together leading experts who are actively shaping Ukraine’s recovery. We explored how global business and legal communities can contribute to rebuilding a modern, resilient economy while supporting Ukraine’s long-term stability, with particular focus on Canada’s role and businesses in it.
A key focus of the conversation was the creation of a predictable, secure and investor-friendly environment. Panellists emphasised the importance of clear legal frameworks, risk-mitigation tools and international financial guarantees to attract both institutional and private capital. The discussion highlighted successful examples of early investments and underscored the crucial role of public-private partnerships in driving reconstruction at scale. In particular, the business case of Roshel, Canadian producer and importer of armoured vehicles into Ukraine and its business operations in the Ukrainian environment, demonstrated opportunities of the momentum and development of industrial capabilities in Ukraine at a larger scale.
Special attention was given to the rapidly developing defence and security industry, one of the fastest-growing sectors in Ukraine today. We addressed the unique regulatory, compliance and technological considerations involved, as well as the opportunities for international collaboration and innovation. The panel concluded that Ukraine’s recovery is not only about rebuilding infrastructure but also about strengthening strategic industries. Ultimately, Ukraine’s sustainable reconstruction is inseparable from the success of its defence sector, which ensures security, supports innovation, and creates the conditions necessary for the long-term economic growth of Ukraine and the whole Europe along with that trend.’
— Anna Babych, AEQUO, Kyiv
The session emphasised that Ukraine’s recovery is not only a political and economic challenge but also a legal one. Lawyers and law firms worldwide have a unique opportunity to contribute their expertise in creating a robust framework for justice, governance and sustainable development, while facilitating investment and economic development, which will be essential for rebuilding infrastructure and fostering growth.
As the world’s leading organisation for the legal profession, the IBA and its members are uniquely positioned to support Ukraine’s legal transformation. Through knowledge-sharing, capacity-building and advocacy for the rule of law, the IBA can help ensure that Ukraine’s reconstruction is grounded in strong legal principles. By mobilising expertise across jurisdictions and practice areas, IBA members can play a decisive role in shaping a fair, transparent and resilient legal system – one that not only addresses the immediate challenges of post-war recovery but also lays the foundation for long-term stability and growth.
As a Portuguese lawyer attending this session, I left deeply impressed and moved by the strength of the convictions shared by the panellists and inspired by their message of hope. In the midst of very difficult times, the resilience and determination of the Ukrainian people stand as a powerful reminder of the role that law – and those who practice it – can play in safeguarding justice and enabling recovery. This discussion was not only about legal frameworks and investment strategies; it was about courage, solidarity and the belief that rebuilding Ukraine is a collective responsibility. For me, it reaffirmed that the international legal community has the moral imperative to help Ukraine transform adversity into a foundation for lasting peace and prosperity.
The ProZorro system currently lacks the necessary functionality to conduct complex, multi-stage tenders.
The Ukrainian Cabinet of Ministers has updated Resolution No. 909 of 20 August 2021, which establishes the rules for holding tenders to select investors in public-private partnership (PPP) projects. This technical amendment aligns the resolution with the new Law on Public-Private Partnership, which came into force on 31 October 2025. The law stipulates that, from 1 January 2027, all tenders and competitive dialogue procedures must be conducted exclusively through the ProZorro electronic public procurement system.
According to the Ukrainian Ministry for Development of Communities and Territories, the ProZorro and ProZorro.Sales systems currently lack the necessary functionality to conduct tenders under the new law. The ministry expects the development of this technical solution and the launch of an electronic trading system for such tenders to be completed within the next 12 months.
The new law also requires the government and ministries to update all bylaws within a year. There are over 30 such documents, and full implementation of the law is impossible without adapting them.
Currently, international partners, including the EBRD, the IFC, and the World Bank, are involved in the drafting of these acts. They are providing expert and technical support to the Ministry for Development of Communities and Territories and the Ministry of Economy.
The first PPP project being prepared by the ministry concerns the container terminal at Chornomorsk Port. It will be conducted using the competitive dialogue procedure, which is in two stages: prequalification and selection of the best proposal.
Prequalification will ensure that only investors with proven experience in managing large-scale infrastructure facilities and sufficient financial capacity are eligible to take part in the tender. Companies under sanctions, registered in offshore jurisdictions, undergoing bankruptcy proceedings, or linked to the aggressor state will not be eligible.
A tender commission, including representatives from relevant ministries, the local Chornomorsk community, and trade unions, will then determine the best proposal.
The EBRD and the IFC have already engaged leading international advisors to help prepare the tender documentation. According to the ministry, this will ensure a transparent process and compliance with the best global practices.
As previously reported, the Ministry for Development of Communities and Territories held a meeting of the tender commission in November to select an investor for PPP projects involving two terminals at the Chornomorsk port. During the meeting, commission members approved a draft instruction for prospective participants. The document outlines the key requirements, the participation rules, and the application submission procedures.
The final version of the instruction, which will be included in the tender documentation, was also approved. In addition, the commission reviewed and approved amendments to the strategy for implementing and conducting the concession tender under the competitive dialogue procedure.
The updated strategy incorporates proposals from commission members and consultants engaged by international financial institutions, and it clarifies the stages of the project’s further implementation.
According to First Deputy Prime Minister and Minister of Digital Transformation Mykhailo Fedorov, Ukraine accounts for one-third of all early-stage DefenceTech investments in Europe.
Ukraine — the European leader in early-stage DefenceTech
Dealroom reports that DefenceTech companies across Europe and the United Kingdom raised a combined $200 million in early-stage funding (Pre-seed, Seed, Series A) in 2025.
Ukrainian startups have become the key beneficiaries of this growth:
the number of deals has more than tripled since 2022;
the average round size increased from $200,000–400,000 to $2.5–5 million;
interest from U.S., U.K., Polish, and Baltic investors has surged due to the proven battlefield effectiveness of Ukrainian technologies.
Highest-funded Ukrainian DefenceTech companies in 2025
According to Fedorov, the largest rounds were raised by:
Swarmer — $15 million (autonomous FPV drone swarms);
Tencore — $3.74 million (UAV detection and tracking systems);
Dropla — $2.75 million (software for UAV command, control, and unit coordination);
Teletactica — $1.5 million (next-generation radio systems and situational awareness tech);
M-fly — $1.3 million (tactical VTOL drones);
Norda Dynamics — $1 million (sensors and control modules for precision weapons).
Additional insights
Several Ukrainian DefenceTech solutions are already scaling abroad, including to NATO countries such as the U.S., Poland, and Lithuania.
According to Defence iQ, Ukrainian DefenceTech is among the top three fastest-growing DefenceTech ecosystems globally, alongside the U.S. and Israel.
The Ministry of Digital Transformation estimates that more than 200 Ukrainian companies operate in drones, robotics, AI, electronic warfare, and tactical systems.
Brave1 — the largest angel-stage DefenceTech investor in Ukraine
Fedorov emphasized that the government-backed Brave1 initiative remains the largest early-stage investor in Ukrainian DefenceTech. Since its launch, the platform has:
funded over 360 projects,
awarded more than $7 million in grants,
helped dozens of teams obtain certification, achieve production standards, and enter international markets.
The government is also strengthening cooperation with venture funds, including Polish and Estonian investors and several U.S. family offices.
Development of the startup ecosystem
The Ukrainian Startup Fund (USF) was established in 2019. Before the full-scale invasion, it invested $8.2 million in 352 teams, mostly through grants of $25,000–50,000.
After February 2022, the fund shifted entirely to DefenceTech, launching a grant program of up to $35,000 for defence and dual-use solutions in 2023–2024.
In 2024, USF partially resumed support for civilian innovation: the total budget of the renewed program is $2.5 million.
Market insights
According to the Ministry of Digital Transformation, Ukraine has 60 startups per 1 million people, compared with the European average of more than 500.
At the same time, Ukraine shows the fastest growth in Europe in the DefenceTech sector.
Norway’s Ukraine Investment Fund, managed by Norfund, is investing USD 15 million in the Rebuild Ukraine Fund (REBUF), managed by Dragon Capital, to help address the shortage of equity capital for Ukrainian businesses.
The ongoing war has severely constrained investment activity, leaving small and medium-sized enterprises (SMEs) without the resources needed to grow, create jobs, and contribute to Ukraine’s economy. SMEs are employing over 60% of the workforce in Ukraine.
The Rebuild Ukraine Fund targets a total size of USD 250 million and will focus on majority investments in resilient businesses across sectors such as consumer goods, healthcare, manufacturing, and technology.
“As in Norway, small and medium-sized enterprises form the foundation of Ukraine’s economy. This investment strengthens these businesses, enabling job creation, resilience, and reconstruction during wartime,” says Åsmund Aukrust, Norway’s Minister of International Development.
Norfund’s investment will be part of the fund’s first close, alongside commitments from other European development finance institutions including IFC and EBRD. Together, these contributions will help mobilize additional international capital and strengthen Ukraine’s private sector.
“By providing growth capital to these businesses, we are supporting job creation, innovation, and the rebuilding of critical supply chains. With a dedicated team on the ground and a strategy built for wartime conditions, REBUF will support companies with strong local roots and growth potential,” says Tellef Thorleifsson, CEO of Norfund.
Dragon Capital’s track record and deep local presence make it a great choice for a trusted partner for Norfund in Ukraine.
“The reconstruction of Ukraine depends on companies that continue to operate and invest despite the war. Partnership with Norfund allows Dragon Capital to direct more capital to businesses that are developing new products, expanding capacity, and strengthening local industries. We appreciate the trust of international partners and remain focused on turning it into long-term, practical results for the Ukrainian economy”, says Tomáš Fiala, Founder of Dragon Capital.
This is the second investment made under Norfund’s Ukraine Investment Mandate, which aims to support high-risk, high-impact investments that contribute to the country’s resilience, reconstruction, and long-term integration with European markets.
“Norway’s support for Ukrainian businesses is also an investment in freedom, democracy and economic resilience. By helping sustain economic activity, we strengthen Ukraine’s ability to withstand the aggression and to shape its own future,” says Minister Aukrust.
Norfund is the Norwegian Investment Fund for developing countries with a mission to create jobs and improve lives by investing in businesses that drive sustainable development. Owned and funded by the Norwegian Government, Norfund is the Government’s most important tool for strengthening the private sector in developing countries and reducing poverty. Norfund’s committed portfolio amounts to USD 3.8 billion Since December 2024, Norfund has also managed a separate Norwegian Ukraine Investment Fund. For more details, please visit: www.norfund.no
During 2025, Ukrainian defense tech startups managed to attract more than $105 million from investors.
This was reported on Telegram by First Deputy Prime Minister – Minister of Digital Transformation Mykhailo Fedorov.
According to Fedorov,
“Today the Brave1 defense cluster is the largest angel investor in Ukraine. Thanks to cooperation with it, more than 50 Ukrainian defense tech companies during the current year managed to raise over $105 million from foreign funds, which accounts for a third of all early-stage investments in Europe in the field of defense technologies”
Currently, domestic companies manage to close rounds of $2.5–5 million.
According to operational data, from January to November 2025, Ukrzaliznytsia transported 26.44 million tons of grain, of which 23.3 million tons were for export.
Valeriy Tkachov, Deputy Director of the Commercial Department of Ukrzaliznytsia, reported to Rail.insider:
“Over the first 11 months of this year, a total of 26.445 million tons of grain were transported (28% less than the same period last year). Of this, 23.3047 million tons were sent for export, 26% lower than last year,” the statement said.
In November alone, 2.91 million tons of grain were transported, 16% more than in October, but 1.4% less than in November 2024. In the export direction, 2.57 million tons were shipped, 23% more than in October, but 0.3% less than in November 2024.
Grain shipments to ports accounted for 92% of the total.
The Ukrainian Sea Ports Authority reports, Ukraine-EU business summit discussed restoration of Ukraine through the prism of European reindustrialization.
At the panel discussion dedicated to the port industry development, USPA Chairman Oleksandr Semyrga presented a vision for restoration and modernization of Ukrainian port infrastructure both in wartime and in the long-term prospect.
He focused on development of the Danube ports as strategic multimodal hubs, as well as the need to restore damaged infrastructure of the Greater Odesa ports.
Oleksandr Semyrga emphasized, “Today, it is important to build-up sustainable partnership and to strengthen cooperation with the international community. Jointly with restoration of infrastructure, we are creating foundation for a modern, competitive and innovative port system of Ukraine”.
In particular, the USPA confirmed its readiness to implement investment projects in the framework of public-private partnerships, concession mechanisms and with the support of international financial organizations.
Special attention was drawn to integration of Ukrainian ports into the TEN-T network aimed to strengthen transport sustainability of Europe.
It should be noted that at the seminar “Investments in Ukrainian Ports: Strengthening the Role as Intermodal Hubs” the delegates presented a list of specific initiatives with high degree of preparation that can be implemented in the short-term prospect.
According to the official page of the Ministry of Finance of Ukraine, Olga Zykova, Deputy Minister of Finance of Ukraine, met with representatives of the French Development Agency (AFD): the Regional Director for European Enlargement and Neighbourhood Mathieu Vasseur, and the Head of the AFD Office in Ukraine Axelle Nos.
The parties reviewed the agency’s current portfolio in Ukraine and priorities for further financing. Olga Zykova expressed gratitude to AFD for supporting the restoration of critically important sectors of the Ukrainian economy, particularly for projects aimed at municipal development.
Currently, AFD is focused on supporting projects for municipal and state-owned enterprises’ development, providing technical assistance, and plans to increase support to the private sector. The key sectors of activity include: health care, water supply, urban mobility, housing and utilities, energy, and transport.
According to the official page of the Ministry of Finance of Ukraine, Olga Zykova, Deputy Minister of Finance of Ukraine, met with representatives of the French Development Agency (AFD): the Regional Director for European Enlargement and Neighbourhood Mathieu Vasseur, and the Head of the AFD Office in Ukraine Axelle Nos.
The parties reviewed the agency’s current portfolio in Ukraine and priorities for further financing. Olga Zykova expressed gratitude to AFD for supporting the restoration of critically important sectors of the Ukrainian economy, particularly for projects aimed at municipal development.
Currently, AFD is focused on supporting projects for municipal and state-owned enterprises’ development, providing technical assistance, and plans to increase support to the private sector. The key sectors of activity include: health care, water supply, urban mobility, housing and utilities, energy, and transport.
Additionally, the parties exchanged views on coordinating AFD’s efforts with other international financial institutions – notably the European Investment Bank (EIB) and the European Bank for Reconstruction and Development (EBRD), which are already implementing support and recovery projects in Ukraine.
The Representation of the French Development Agency began its work in Ukraine in 2024. To facilitate the activities of the Representation, an agreement was concluded between the Governments of Ukraine and France. Currently, 10 national and 3 regional projects are being implemented with a total cost of over EUR 45 million across 6 economic sectors. In 2024-2027, AFD plans to implement projects in Ukraine for a total amount of EUR 450 million – including EUR 50 million in grants and EUR 400 million in loan funds.
On 8 December, the Minister of Economy, Environment and Agriculture of Ukraine met with the Ambassador of the Czech Republic to Ukraine, Luboš Veselý, who has held his post since this autumn. Deputy Ministers Andriy Teliupa and Dariia Marchak also took part in the meeting, while the foreign side was represented by officials of the Embassy of the Czech Republic in Ukraine.
The participants discussed possible financial instruments to encourage Czech investors in Ukraine, which could be made available through cooperation under an intergovernmental agreement mechanism. Czech companies are already active in Ukraine’s energy sector and are interested in participating in various projects, including nuclear energy, gas and oil extraction. Among the promising areas is privatization, including partial privatization.
“Czechia has successful experience managing energy assets in which the state remains the owner but attracts private capital. Czech partners are ready to provide Ukraine with technical expertise on this matter. In addition, we expect a visit from a Czech government delegation next year. We hope to deepen cooperation, which is already practical and substantial,” noted Oleksii Sobolev.
Representatives of major Czech businesses will also visit Ukraine. In particular, a visit to the Dnipropetrovsk region, which is supported by Czechia, is being planned.
The parties also discussed the possibility of launching a mechanism for direct financing of reconstruction projects in Ukraine through the Czech Development Bank (NRB). The creation of a tool similar to the one that already exists with Poland’s BGK is being considered.
Another important topic discussed during the meeting was industrial recovery. Czech manufacturers have strong expertise in hydropower and mechanical engineering and are ready to supply necessary equipment for repairing Ukrainian hydropower plants and thermal power stations. They also discussed the format of an “Industrial Ramstein” – a cooperation model that would not only provide equipment to Ukrainian enterprises but also create joint production chains.
One of the next steps will be Ukraine’s participation in the MSV industrial exhibition in Brno, which may result in contracts in this sector. MSV is an annual technology exhibition for mechanical engineering in Central Europe. It showcases all key sectors of mechanical engineering and electrical engineering, with a primary focus on manufacturing and production digitalization. The exhibition also includes a business program featuring specialized conferences, seminars and workshops on current technical, commercial and economic topics.
