Razumkov signs law on stimulating digital economy

Speaker of the Verkhovna Rada of Ukraine Dmytro Razumkov signed the Law of Ukraine “On Stimulating the Development of the Digital Economy in Ukraine” and submitted it to the President for signature.

The document aims to stimulate the development of the digital economy in Ukraine by creating favorable conditions for conducting innovative business, attracting investment, building digital infrastructure, and attracting talented employees. The document provides for the creation of the Diia City special legal and tax regime for the IT industry.

The law stipulates that a special tax regime and a special form of employment (gig work) will be in effect within the Diia City.

At the same time, the law stipulates mechanisms for protecting residents from unauthorized inspections by law enforcement agencies and introduces elements of the system of common (English) law which provides flexible tools to attract funding from residents. Participation in Diia City will be voluntary.

Diia City is expected to facilitate bigger salaries in the Ukrainian IT sector, a five-fold drop in taxes compared to the general tax system, social guarantees for employees, and protection at the legislative level for investors. In addition, the adopted law will increase the level of competitiveness of Ukraine's digital economy.

Already in 2021, the introduction of incentives provided by the law is expected to promote the creation of about 80,000 new jobs; by 2025 – the creative industry market is expected to grow to $11.8 billion (in 2019, it totaled $6.2 billion).

As reported, the Verkhovna Rada adopted the Law of Ukraine “On Stimulating the Development of the Digital Economy in Ukraine” on July 15, 2021.

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