Regulatory uncertainty is already costing Ukraine more than it appears

For over four years of full-scale war, tech businesses have learned to operate under shelling, relocate offices, lose people, seek new markets and support the army. The one thing they still haven’t adapted to is working under constant regulatory uncertainty. And it is precisely this uncertainty that is costing the economy far more than it appears.

The IT Ukraine Association has put forward concrete proposals for shaping the Government’s Priority Action Plan and has already approached Prime Minister Serhiy Koretsky and Minister of Digital Transformation Oksana Ferchuk with a list of initiatives that are fundamentally important for the development of the industry and for strengthening the country’s economy as a whole.

Six points that cannot be started from scratch

Preserving and developing Diia.City. As of 2026, around 4,500 companies, more than 175,000 professionals and over 520 defence companies and start-ups operate under this legal regime, confirming its systemic importance for Ukraine’s economy and security.

Predictability of reservation (draft deferral) for employees of critical enterprises, including digital sector companies performing defence, export, infrastructure and socially significant functions. Business needs a minimisation of regulatory turbulence, unified criticality criteria, sufficient transition periods and predictable procedures.

Artificial intelligence regulation compatible with EU law and friendly to innovation. The Ministry of Digital Transformation already has a Roadmap, a White Paper and an AI development sandbox. The next step is drafting AI legislation together with accompanying compliance tools for Ukrainian businesses.

Modernisation of labour legislation. The government’s draft Labour Code for 2026 was withdrawn. However, it is vital to return to this reform through broad consultation with business, workers and industry associations. Together, we need to build a modern framework for labour relations that accounts for digitalisation, flexible forms of employment, remote and project-based work, and the growing needs of high-tech industries.

Implementation of the WINWIN strategy as a practical roadmap for the development of digital innovation in Ukraine, approved by the Government. In our view, the focus should be on concrete implementation tools for the development of the AI, DefenceTech, AgriTech and EdTech sectors, tools for attracting investment, support for innovative exports, and centres of excellence.

Cyber defence and the replacement of hostile software. In the first half of 2026 alone, CERT-UA processed 3,309 cyber incidents — a figure that, only a few years ago, would have represented an annual total. Also in 2026, the official list of software banned by the state was expanded to 1,770 items. However, without a practical government approach to inventory, replacement and prevention of the use of risky software, these measures will not deliver the expected results.

The IT industry represents over USD 6.6 billion in exports (41.6% of all Ukrainian services exports, excluding companies operating in the defence sector), more than UAH 50 billion in taxes, and around 305,000 highly qualified professionals who directly or indirectly support hundreds of thousands more jobs in related sectors.

A strong IT industry has a direct impact on the technological capacity of every sector of the Ukrainian economy without exception, adding resilience and even the ability to grow amid crisis conditions. Indeed, according to the Code Economy study, sectors that actively digitalised before the full-scale invasion grew by almost 20%, compared with just 4.7% for less digitalised sectors.

Predictability is one of the key conditions for the development of Ukraine’s IT industry in today’s global market. It is worth noting that most international contracts in the technology sphere with Ukrainian IT companies are signed for 12–24 months, and the client’s first question is simple: will this team still be working with me in a year? If there are no guarantees, the contract is increasingly structured through Poland, the United Kingdom or another jurisdiction. The team stays in Ukraine, while foreign currency earnings, taxes and investment gradually “migrate” abroad. This process has already begun. And its cause is not wages or taxes, but regulatory uncertainty — something that can be avoided even in wartime.

Dialogue must end in decisions

Over recent years, we have seen a simple pattern: when business is involved in shaping the rules, they work. When rules are written without business, they will have to be rewritten.

The implementation of WINWIN 2030, the development of Diia.City, support for technological exports and cybersecurity, the advancement of artificial intelligence, and the digitalisation of the defence sector were all subjects of the first large-scale meeting between the IT ecosystem and the new Minister of Digital Transformation, Oksana Ferchuk, and Deputy Minister Natalia Denikeieva. Importantly, most of these areas align with the strategic priorities already outlined by the Ministry’s new team.

Ukrainian IT businesses expect consistent state policy, open dialogue, and rules that allow them to plan development not for a few weeks, but for years ahead.