Investment in Ukrainian DefTech: why developments are often registered abroad
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The Ukrainian defense technology sector, known as DefTech, is developing rapidly during the war. Many domestic startups are creating innovative drones, communication systems, and software for the front line. However, experts point to an interesting trend: a significant portion of the funding and intellectual property of these companies is registered in foreign holdings rather than in Ukraine.
The main reason for this choice is the desire to attract international investors. Foreign funds often feel more secure when a company is registered in jurisdictions with developed legal systems, such as the United States or European Union countries. This allows startups to more easily access the capital necessary to scale the production of military technologies.
On the other hand, this practice raises concerns among Ukrainian economists. When a company becomes part of a foreign holding, taxes from its operations and profits from the sale of technologies may remain outside of Ukraine. This creates a risk that the country loses part of the economic benefit from the successes of its own inventors, even if the developments themselves are created by Ukrainian specialists.
To solve this problem, the state is trying to improve conditions for doing business within the country. New tax incentives are being introduced and procedures for defense enterprises are being simplified. The goal is to make Ukraine an attractive place not only for creating technologies but also for their legal registration and further development.
The future of Ukrainian DefTech depends on the balance between attracting foreign investment and protecting national interests. For now, the sector remains one of the most promising areas for the economy, which is confirmed by the high interest of global investors in Ukrainian innovations in the security sphere.
Sources: AIN.UA
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