Zelensky signs law creating Diia City

Ukrainian President Volodymyr Zelensky signed the basic law on the creation of the special legal regime Diia City.

The legal regime provides for a special tax model for IT companies, the introduction of elements of English law to attract investment, and a separate procedure for interaction with government regulatory bodies.

The law also introduces gig contracts. This is a hybrid of an employment contract and a contract for services: the specialist receives specific rights and obligations, while the employer gains a flexible cooperation model and a low tax burden on the worker.

The provisions of the law will remain in effect for 25 years.

Earlier, on July 15, the Verkhovna Rada of Ukraine approved in the second reading and in full the basic bill on the creation of the special legal regime Diia City.

According to an April poll, 80% of IT workers in Ukraine did not support the introduction of Diia City. Among the concerns cited by respondents were:

• a distrust of the Ministry of Digital Transformation and the state as a whole (70%);
• the deterioration of working conditions and the removal of the third group of individual entrepreneurs (FOP) under the simplified tax system for individual entrepreneurs (40%);
• lower salaries (33%);
• an increase in taxes (29%).

Subscribe to ForkLog news on Telegram: ForkLog Feed — full news feed, ForkLog — the most important news, infographics and opinions.