Defense Tech and Military Procurement in Ukraine

Yes — foreign companies can participate in Ukrainian defense procurement through several channels: direct commercial contracts with Ukrainian MoD entities; participation in BRAVE1 through a Ukrainian registered entity or partnership; and supply under international military assistance frameworks established by government-to-government agreements. The applicable procedure depends on the technology, the procurement authority, and the funding source. We map the available channels and advise on the most appropriate entry route for the specific situation.

BRAVE1 is Ukraineʼs state defense technology cluster — a joint initiative of the Ministry of Defense, the Ministry of Digital Transformation, the Ministry of Economy, the Security Service, and the Main Intelligence Directorate — that provides grants, accelerated procurement access, and market-entry support for companies developing technology relevant to Ukraineʼs defense needs. It operates under joint ministerial orders and Cabinet of Ministers resolutions. Participation requires registration with the cluster, submission of a technology solution, and compliance with the grant and procurement conditions established by the programme. We advise on the full participation cycle from eligibility to grant compliance.

IP ownership under BRAVE1 grants depends on the specific grant agreement and the category of development. As a general principle, commercial developers retain IP in technology developed with BRAVE1 support — but grant conditions may include licensing obligations to the state, restrictions on commercialization, or requirements to make technology available to Ukrainian defense authorities. We review the applicable grant terms and structure IP arrangements that protect the developerʼs commercial interests within those constraints.

Where technology is developed jointly between a commercial company and a state defense entity — including under a state defense order — Ukrainian law provides that IP may be jointly owned or that the state may have preferential rights to use the technology for defense purposes. The specific outcome depends on the contract terms, the funding structure, and the technology category. We structure joint development agreements that allocate IP rights clearly and protect the commercial developerʼs interests in civilian and export applications of the technology.

Supplying defense technology to Ukraine does not in itself trigger sanctions obligations — Ukraine is not a sanctioned jurisdiction. However, sanctions compliance obligations arise from: the origin of components or technology (US-origin items subject to EAR; EU-origin items subject to EU dual-use regulation); the identity of Ukrainian counterparties (screening against Ukrainian, EU, US, and UN sanctions lists is required); and the nature of the technology (dual-use classification may require export licences). We conduct sanctions and export control screening and advise on compliance structuring for defense technology supply chains.

Ukraine has introduced simplified customs procedures for the import of defense and security equipment under martial law — including reduced documentation requirements, expedited clearance, and temporary exemptions from certain duties and taxes. The applicable procedure depends on the classification of the goods, the importer of record, and whether the import occurs under a government-to-government agreement or a direct commercial contract. We advise on import structuring, customs classification, and compliance with martial law import procedures.

Defence City is a special legal and tax regime for defense technology companies established by Law No. 13420 signed in September 2025. It operates under Ministry of Defense oversight and is modelled on the Diia City regime for IT companies. Resident companies benefit from tax incentives, simplified regulatory procedures, and accelerated procurement access. Both Ukrainian and foreign-owned entities can apply for residency, subject to eligibility requirements related to the nature of their defense technology activities. The regime is designed to remain in effect until 2036 or Ukraineʼs EU accession. We advise on eligibility assessment, residency application, and the interaction between Defence City status and BRAVE1 programme participation.

Ukraine began issuing defense export licenses in early 2026 under a controlled export framework announced by President Zelenskyy in September 2025. The system involves three bodies: the State Service for Export Control (SECS), the interagency commission on military-technical cooperation and export control, and the Cabinet of Ministers. The SECS and interagency commission issue a licensing decision within 90 days of application. Exports are limited to surplus production capacity — priority supply to the Ukrainian Armed Forces remains the overriding obligation. The “Drone Deals” framework covers drones, missiles, ammunition, military software, and defense system integration. The “Build with Ukraine” model covers joint production arrangements in partner countries. We advise Ukrainian defense companies on export readiness and licensing, and international companies on the legal framework for acquiring Ukrainian defense technology.