February 9, 2023
Minister for Virtual Transformation Mykhailo Fedorov speaks right through the Diia Summit in Kyiv on Feb. 8, 2022. (Fb/Mykhailo Fedorov)

On Feb. 8, the Diia Town, a unique felony and tax regime for IT companies, got here into drive.

With Diia Town, the federal government desires to lift the percentage of the IT sector within the nation’s gross home product to ten% from the present 4%. 

As of Feb. 11, 3 days after the release, 52 firms had carried out to enroll in Diia Town.

The most effective-known candidates had been: the U.Ok.-based banking tech startup Revolut, synthetic intellegence (AI) investor Roosh, Ukrainian safety formula maker Ajax, Ukrainian AI startup Reface, and Fintech Band, the corporate in the back of Monobank, a well-liked mobile-only financial institution.

“We wish to put money into Ukraine, we wish to create jobs right here,” stated Dmitry Strelchuk, Revolut’s operations supervisor, right through the Diia Town release day, welcoming the brand new rules.

Along with the particular financial regime, officers introduced the release of a fund that can duvet part the price of on-line classes for IT consultants.

“One of the vital global’s perfect tax programs is now to be had for small startups in addition to large IT firms at any location throughout Ukraine,” stated Minister for Virtual Transformation Mykhailo Fedorov, the primary suggest of Diia Town. “Gifted builders will be capable of put in force their concepts right here, at house.”

Named by means of President Volodymyr Zelensky “a virtual capital of the digital state,” the Diia Town is predicted to triple IT business income from the present $6.8 billion in the following couple of years, placing Ukraine some of the biggest IT hubs in Europe. The federal government pledges to stay the tax regime in drive for 25 years.

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“Diia Town is not just about making industry, but additionally about other people, as essentially the most precious asset,” Andriy Oksenyuk, leader monetary officer at Ciklum, an IT large of over 3,500 staff, with the core staff operating from Kyiv, informed the Kyiv Impartial.

In keeping with Trade Ombudsman Roman Waschuk, the Diia Town used to be designed with a “whole-system way,” one thing that “hardly occurs” in different Ukrainian industries.

“It might be nice to look different examples, like Diia Selo (village), or Diia Software bills,” stated Waschuk.

On the similar time, only a few months sooner than the release the brand new law sparked controversy amongst a lot of firms within the IT business. The business’s fast construction in Ukraine is steadily attributed in particular to the loss of consideration from the federal government and regulators.

In keeping with the survey performed by means of the Lviv IT cluster, solely 5% of IT builders welcomed Diia Town. With the brand new formula being non-mandatory and firms unfastened to enroll in and depart at will, native town budgets will receive advantages much less from tax adjustments.

“We will be able to continuously observe any makes an attempt from the state to violate this compromise (between IT industry and executive wishes). We will be able to give protection to the pursuits of IT firms,” stated Stepan Veselovskiy, head of the cluster, information company Coffee.TV reported on Feb. 11. 

Oksenyuk from Ciklum believes that the steadiness of the brand new regime amid political instability is the most important for the rustic. If the brand new regime proves its potency over the following 12 months, there might be some other “spherical of virtual ecosystem construction within the nation.”

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“It is going to carry huge adjustments into training, the evolution of the marketplace of skills, and Ukraine’s place within the world IT area,” stated Oksenyuk. 

Nonetheless, Ciklum is in no hurry to enroll in Diia Town, taking into consideration this a “severe step.”

“It’s important for us to listen to the opinion of our colleagues and assessment the enjoy of the ‘pioneers’. Simplest after this we will be able to transfer towards concrete plans,” stated Oksenyuk.