“Diia.City”: the leadership of the capital and the growth of innovation hubs

The digital state “Diia.City” is demonstrating strong financial performance, as evidenced by significant revenues flowing into the budgets of various regions of Ukraine. The undisputed leader in the amount of taxes paid by Diia.City resident companies is Kyiv and the Kyiv region, which together contributed more than 24.3 billion hryvnias. This highlights the concentration of high-tech business and the significant potential of the capital region in developing an innovative ecosystem.

Regional distribution: the geography of innovative success

Lviv region ranked second in terms of payments to budgets. Companies participating in “Diia.City” and registered in this western region paid 2.4 billion hryvnias. This indicates the active development of an innovation cluster in Lviv region, which is becoming attractive to IT companies and startups.

Completing the top three is Dnipropetrovsk region, whose contribution amounted to 1.7 billion hryvnias. This region is also showing steady growth in the IT sector, attracting new investments and talent.

The top five most active regions in the context of “Diia.City” also include Kharkiv and Odesa regions. Kharkiv region demonstrated tax payments of 788.5 million hryvnias, while data from Odesa show 612.9 million hryvnias. These figures confirm that Ukraine’s innovative development is not limited to western or capital regions, but also includes other strategically important centers.

Context for the growth of “Diia.City”:

“Diia.City” is a special legal and tax regime created to support the development of the IT industry in Ukraine. Launched in 2022, this initiative aims to become a magnet for Ukrainian and international technology companies by offering preferential tax conditions, protection of intellectual property rights, and simplified regulatory procedures. The implementation of “Diia.City” is part of a large-scale state digitalization program aimed at stimulating economic growth, creating new jobs, and increasing the competitiveness of Ukraine’s IT sector on the global stage.

The history of the Ukrainian IT industry dates back to the late 1980s and early 1990s, when the first software products began to be developed at research institutes and universities. Gradually, after Ukraine gained independence, the industry began to gain momentum, transforming from individual developers into powerful companies. A serious boost to development came in the 2000s, when Ukrainian IT specialists began to work extensively in outsourcing, providing services to international companies. This made it possible to accumulate experience and adopt global management and technology practices. However, imperfect legislation, high taxes, and an insufficient level of business protection often hindered full-scale development and investment attraction.

It was precisely to solve these problems that the innovative space “Diia.City” was created. The main advantages for residents include:

• Special tax regime: Lower tax rates on profits and employee payments significantly reduce the tax burden on business.
• Flexibility in labor relations: The ability to use gig contracts provides greater flexibility in cooperation with specialists.
• Protection of intellectual property rights: Enhanced protection of copyrights and patents, which is critically important for innovative companies.
• Simplified corporate governance: Modernized corporate law provisions that make doing business easier.
• Access to investment: Creating a favorable environment for attracting both domestic and foreign investment.

Growth dynamics:

Despite the difficult times caused by the full-scale invasion, “Diia.City” continues to demonstrate resilience and growth. Resident companies already part of this ecosystem are actively resuming operations, adapting to new realities, and continuing to pay taxes, thereby supporting the Ukrainian economy.

These significant financial indicators are not just statistics, but evidence of the effectiveness of the “Diia.City” model. They show that Ukraine has strong potential in high technology, and this potential can be effectively realized if a favorable business climate and government support are created. The expansion of “Diia.City” success to Lviv, Dnipropetrovsk, Kharkiv, and Odesa regions indicates the right development path and the potential for creating regional innovation hubs across the country. This, in turn, will contribute to decentralizing development, reducing dependence on a single region, and creating new opportunities for skilled professionals in different parts of Ukraine.

Further development of “Diia.City” and scaling its success to other regions will become a key factor in rebuilding and strengthening the Ukrainian economy, as well as in shaping Ukraine as a leading player in the global technology arena. These figures are a certain indicator of how the state can effectively support the innovation sector, thereby creating win-win conditions for both business and the state as a whole. It is also an important signal to foreign investors that Ukraine’s IT sector is stable, promising, and ready for cooperation.