Diia.City: who benefits and who doesn't
A Diia.City resident can choose a tax on distributed profits instead of corporate profit tax and engage people under gig contracts. For some companies that's a significant saving and a clear model for investors.
But there are conditions. The company must carry out qualifying activities, have a minimum number of employees and gig specialists, and pay them no less than a set level. A small team of sole-proprietor contractors often doesn't qualify.
What's included
- Assessment of whether Diia.City suits your company right now.
- LLC registration, if there's no company yet.
- Documents for joining and following the application through.
- Gig contracts and employment contracts with the team.
- Ownership structure: founders' shares, vesting, options, preparing for investment.
Main requirements for a resident
| Requirement | What it means |
|---|---|
| Activities | Most revenue from qualifying IT activities |
| Team | At least 9 employees and gig specialists |
| Pay | An average of at least the equivalent of €1,200 a month |
| Form | A legal entity registered in Ukraine |
The figures and rules have to be checked at the time of joining, as they have changed. I check the current requirements for your situation.
Structure before an investment
An investor looks at more than the product. They check whether the company owns the rights to the code, whether the ownership structure is clean, whether a founder might walk off with half the team. So before a round we put the developer agreements and the shareholder agreement in order.
Apple's third founder
In 1976 Ronald Wayne owned ten percent of Apple. Within days he sold his share for $800, because he was afraid of being personally liable for the partnership's debts. Today that share would be worth billions. Structure is best thought through at the start, while the cost of a mistake is small.
How it works
Your part: the financial picture and a team list. The rest of the arrows are mine.
Law of Ukraine “On Stimulating the Development of the Digital Economy in Ukraine” (Diia.City residents, gig contracts); Tax Code of Ukraine (tax on distributed profits, taxation of gig specialists).
Frequently asked questions about Diia.City
How much does joining Diia.City cost?
From €150 for my work. The scope depends on whether there's a company and how many people need to be signed up.
Can a sole proprietor become a Diia.City resident?
No, only a legal entity. A sole proprietor can work with a resident under a gig contract.
Can a company leave Diia.City?
Yes, a resident can give up the status.
What happens if the company stops meeting the requirements?
The status can be lost. So we keep an eye on the figures throughout the year.
No company yet? Start with LLC registration. For product documents, see Terms of Service and Privacy Policy.