Important Draft Laws, Issues 60–61: Changes to the Diia.City Regime and a Ban on Russian-Language Instruction in Private Schools

The government proposes improving the Diia.City regime by simplifying the requirements for residents and launching new venture instruments to invest in Ukrainian technology companies. Other draft laws would introduce a register of individuals’ bank accounts and safe-deposit boxes, as well as new rules to protect whistleblowers in the field of financial monitoring. In addition, Parliament is to consider new rules for the privatization of state property, the abolition of the minimum heat payment, and a ban on Russian as a language of instruction in private schools.

Support for business: restoring the Antimonopoly Committee’s oversight of state aid

Ukraine has a state aid mechanism. It provides that, during crises (such as war or electricity shortages), as well as to address social problems (such as poverty or unemployment), state or local authorities may provide support to businesses to preserve jobs or ensure the provision of certain goods or services.

Support comes in two forms. The first is national programs that operate across entire sectors (for example, agriculture or metallurgy, film production or publishing). Ministries or state funds launch these programs. A prominent example is the “5–7–9%” small and medium-sized business lending program: a business receives a low-interest loan from a bank, and the state compensates the bank for the difference in interest rates. Another example is support for cultural projects, such as the state budget financing of film production. Support may take the form of grants, subsidized loans, or preferential tax treatment.

The second form is individual support. It is usually provided by local self-government bodies to specific enterprises or individual entrepreneurs to address problems in their communities. For example, to make bread or vegetables cheaper in villages, a council may lease premises to entrepreneurs for a symbolic UAH 1 to operate a shop, or provide a site for a fair free of charge. Support may take the form of grants, local tax benefits, or the write-off of debts owed to the local budget.

However, support must be transparent and justified and must not distort competition. Therefore, the provision of state aid is overseen by the Antimonopoly Committee of Ukraine (AMCU). It approves most aid programs and individual support exceeding a defined threshold (currently €200,000 over three years). AMCU approval is not required for support to enterprises in agriculture and fisheries, the defense sector, infrastructure investment, book publishing projects, youth initiatives, and the development of industrial parks.

In peacetime, the approval procedure is always initiated by the aid provider—this may be a ministry, a specialized fund (for national support programs), or a local council (for individual support). During this process, the provider must formally demonstrate to the Antimonopoly Committee of Ukraine (AMCU) that the support program or individual aid does not distort competition. To do so, the provider must show that the assistance addresses market failures that businesses cannot overcome on their own, has an incentive effect, and is proportionate—that is, its amount is limited to the minimum necessary and will not allow the recipient to crowd out competitors unfairly. 

For their part, the entrepreneur is required to provide the aid provider with complete information about their activities and all aid received over the past five years so that officials can verify compliance with all applicable limits (in particular, whether the business has received excessive funding under a single program and whether it has exceeded the de minimis threshold for aid that may be granted without AMCU approval). Only after the provider submits these documents to the Committee and receives official approval may the funds or benefits be given to the business. If an authority grants support without such approval, the aid will be considered unlawful, and the enterprise will be required to repay it.

During martial law, AMCU oversight does not apply, as all aid is considered permissible.

Bills Nos. 14345, 14345-1, and 14345-2 propose restoring the Antimonopoly Committee’s oversight of state aid. In practice, aid providers would once again be required to undergo the approval procedure for both national programs and individual assistance, and entrepreneurs would have to compile the necessary documentation when applying for aid. To streamline the approval process and make it more transparent, the bills would establish an electronic State Aid Register. Authorities would enter information on the aid they grant, and businesses would be able to obtain an extract detailing the assistance they received in recent years when preparing a package of documents for the AMCU to apply for new aid. The bills would also remove the peacetime exceptions. Specifically, they would eliminate the possibility of granting state aid without prior approval for book publishing, cultural and youth projects, and support for industrial parks—except where such assistance is directed exclusively toward goods, works, and services intended for security and defense purposes.

At the same time, the bills propose raising the aid threshold below which approval is not required from €200,000 to €300,000 over three years. The main bill, No. 14345, would go further and allow up to €750,000 to be granted without AMCU approval to enterprises that provide essential services (for example, water supply or urban transport). In territories where active hostilities are ongoing, the wartime simplification would remain in effect: oversight would not apply until the territory is officially removed from the list of hazardous areas.

Bill No. 14345-1 illustrates how lawmakers may attempt to combine provisions regulating different areas into a single bill. In addition to state aid rules, it would also introduce proposals to reform the Economic Security Bureau (ESB)—specifically, to change the procedure for appointing its head (replacing appointment by the prime minister with appointment by Parliament upon the prime minister’s nomination), and to grant the Bureau authority to conduct counterintelligence activities to protect the country’s economy. The bill would increase ESB staffing from 4,000 to 5,000 personnel, introduce age limits for its employees (for example, up to 60 for colonels), and require them to undergo training at a new specialized Training Center, which the government would establish as a separate institution under the ESB. Currently, ESB employees may undergo training, retraining, and advanced professional development, like other public officials, in accordance with the Laws of Ukraine “On Education” and “On Higher Education”, and in accordance with agreements with educational institutions.

Improving Diia.City residency rules, gig contracts, and launching Diia.City Invest to support investment in residents

Today, Diia.City residents enjoy significant advantages, making this regime highly attractive for businesses. Instead of the standard corporate income tax (18%), companies may opt for the distributed profit tax at 9%. This allows companies to defer tax payments as long as they reinvest profits in their business activities. In addition, employees of Diia.City residents are taxed at reduced rates: personal income tax (PIT) is set at just 5%, compared to the standard 18%, and the unified social contribution (USC) is paid at 22% of the minimum wage, whereas under the general rules it is calculated based on the employee’s full salary.

To qualify for these benefits, a company must employ at least 9 people and ensure an average monthly remuneration of at least €1,200 per specialist. Startups benefit from more favorable conditions: they may obtain resident status and use these benefits during their first two years without meeting the minimum remuneration requirement. However, startups are subject to an annual revenue cap of UAH 10 million (equivalent to the eligibility threshold for sole proprietors in the third group under the simplified tax system—1,167 minimum wages). If this revenue cap is exceeded and the startup does not meet the other standard residency requirements (remuneration and headcount), it will lose its Diia.City resident status.

Bill No. 14362 would amend the rules to make it easier for residents to meet the standard residency requirements. To calculate the €1,200 average remuneration, the bill would include not only employees’ salaries (as is currently the case) but also payments under gig contracts. It would also introduce a rule that if the parties have not agreed on the amount of monthly remuneration in a gig contract, it will be deemed equal to the average remuneration in the company.

For startups, the bill would clarify the rules governing the UAH 10 million revenue cap. Because revenue is calculated cumulatively from the beginning of the year, a successful startup may exceed this threshold at any time. Previously, such an exceedance created a risk of losing Diia.City resident status entirely, but the bill would introduce a safeguard. If a startup’s cumulative revenue since the beginning of the year exceeds UAH 10 million, it will not lose its resident status. Still, it would instead be allowed to transition to the general Diia.City residency conditions. To do so, the startup would only need to notify the Ministry of Digital Transformation (the authorized body) of the revenue exceedance by email and, starting from the following month, comply with the standard requirements for all companies: increase its team to nine people and ensure an average monthly remuneration of at least €1,200.

The bill also proposes introducing a new instrument—Diia.City Invest funds. These would be specialized corporate venture funds with a lifespan of up to 25 years that invest exclusively in Diia.City residents. Such a fund could have up to 15 founders, and its charter capital would have to range from UAH 11 million to UAH 2.5 billion (from 1,250 minimum wages to the equivalent of €50 million).

In conventional investment funds in Ukraine, the fund’s assets are managed not by an individual but by an asset management company. This is a legal entity that operates as a licensed professional market participant and must obtain authorization from the regulator, the National Securities and Stock Market Commission (NSSMC). As a result, the fund is effectively required to appoint such a licensed intermediary and conduct its asset management through it.

The bill would introduce a different model specifically for Diia.City Invest funds: the fund’s assets would be managed by a manager, an individual who would simultaneously perform the functions of the fund’s executive body, acting as its head and being responsible for investment decisions. At the same time, the bill provides that asset management by such a manager would not be considered a professional activity in the capital markets and therefore would not require a license, unlike asset management companies in conventional funds. Instead of licensing, the bill would establish other safeguards: the manager would have to meet fit-and-proper requirements set by the NSSMC and could not be affiliated with the fund’s custodian, depositary, auditor, or appraiser, to prevent conflicts of interest. This model is intended to provide a faster and less costly way to establish venture funds to invest in Diia.City residents. Accordingly, the bill would also introduce shortened timelines for key registration procedures: following submission of the application and supporting documents, the regulator would have to register the fund’s rules, enter the fund into the register, approve the manager, and register the share issuance within five business days.

Register of individuals’ accounts and safe-deposit boxes, and new rules for the protection of money laundering whistleblowers

Bill No. 14327 would introduce amendments to the law on financial monitoring in two areas. First, it would establish a Register of individuals’ accounts and individual safe-deposit boxes, as the current financial monitoring law does not provide a mechanism to consolidate in a single place information on the institutions where a person holds accounts or safe-deposit boxes. The bill would designate the Ministry of Finance as the holder and administrator of the register, with data to be provided by the National Bank of Ukraine, banks, depositaries, and other financial institutions, non-bank payment service providers, and electronic money issuers.

These institutions would populate the register in accordance with two rules: they would submit new information on the day a person’s account or electronic wallet is opened or closed, or when an individual safe-deposit box agreement is concluded or terminated. They would submit information on accounts and safe-deposit box agreements already in existence at the time of the register’s launch within six months of its entry into operation. At the same time, the register would not contain classified information and would not include data on fund movements, account balances, or the contents of safe-deposit boxes. In other words, it would show only where a person holds accounts, wallets, or safe-deposit boxes, without disclosing transaction details or balances.

Information in the register would not be publicly accessible, as it is covered by bank secrecy and other types of professional confidentiality. The data would be retained for at least five years after an account is closed or a safe-deposit box agreement is terminated. In the event of anti-money laundering investigations, this period could be extended by up to 5 years. Individuals can obtain a free electronic extract of their accounts, wallets, and safe-deposit box agreements. Still, the register would not disclose which public authorities had requested information about them.

Alternative Bill No. 14327-1 would establish the same register model. Its key difference concerns the State Financial Monitoring Service of Ukraine. The agency would be required to undergo an external independent performance evaluation (audit) once every three years after the appointment of its head. The audit would be conducted by a three-member commission appointed based on nominations from international organizations, and a finding of ineffectiveness by the commission would constitute grounds for the dismissal of the head.

Another significant change proposed by Bills Nos. 14327 and 14327-1 concern whistleblower protection. Currently, special guarantees apply mainly to those who report corruption. The new bills would establish similar protections in the field of financial monitoring—that is, for individuals who report money laundering or terrorist financing.

As with corruption whistleblowers, a whistleblower may report concerns to the management of their institution (for example, a bank) or to a state regulator (such as the National Bank of Ukraine or the State Financial Monitoring Service of Ukraine). Public disclosure is also permitted, but only if reporting to these bodies has not produced a result or if there is a risk that evidence may be destroyed.

The whistleblower protection guarantees would be the same as those provided to whistleblowers reporting corruption. Information about a whistleblower must not be disclosed, and if disclosure is required by law, the person must be notified at least 18 working days in advance. Whistleblowers would be granted immunity: they could not be held liable or accused of disclosing confidential information for reporting a crime. Moreover, whistleblowers would have the right to free legal assistance.

Other bills would reinforce whistleblower protections by introducing penalties for actions taken against whistleblowers. Bill No. 14328 would impose fines ranging from UAH 17,000 to UAH 42,500 for disclosing a whistleblower’s identity, along with mandatory disqualification of the offender (for example, a bank manager) from holding relevant positions for one year. Any form of workplace retaliation would be strictly prohibited: a whistleblower could not be dismissed, demoted, or subjected to pressure for reporting money laundering. Bill No. 14326 would exempt whistleblowers from liability for causing financial damage to a company’s reputation if they reasonably believed the information to be accurate—in such cases, the inaccurate information would only have to be formally refuted. However, if a whistleblower knowingly reported false information or committed defamation (including through the media), they would bear full civil liability, including both refutation of the false statements and compensation for material and non-material damage.

Personal financial liability of law enforcement officers, prosecutors, and judges for unlawful procedural actions, and a new criminal offense for such violations

Under current law, if investigative bodies (such as the police or the Security Service of Ukraine), a prosecutor, or a court act unlawfully during an investigation, case review, or court hearing, and a person is harmed as a result, compensation is typically paid by the state rather than by the individual official responsible. The law defines typical situations in which such compensation is available, including unlawful conviction, unlawful notification of suspicion, illegal detention, or unlawful pretrial custody. A person becomes entitled to compensation once a court has confirmed the violation.

Bill No. 14351 proposes changing this approach by requiring compensation for harm and damages to be paid not from the state budget but by the individual officials of operational-search bodies, pretrial investigation bodies (such as the police or the Security Service of Ukraine), or the courts, using their own funds and property.

Bill No. 14350 would introduce criminal liability for unlawful actions by bodies conducting operational-search activities, investigative bodies (pretrial investigation authorities such as the police, the Security Service of Ukraine, and the Economic Security Bureau), the prosecution, and the courts. The bill would define unlawful actions during investigations, court proceedings, and operational search measures that restrict human rights, including illegal detention, unlawful notification of suspicion, unlawful pretrial detention, unlawful searches, seizures, or arrests of property. It would establish penalties of imprisonment for a term of seven to ten years for such actions.

New rules for privatization and financing of the State Property Fund

Under current law, the sale of state property does not require buyers to cover the cost of preparing assets for privatization, and all privatization proceeds are transferred directly to the state budget. The State Property Fund is currently financed exclusively from the state budget and prepares assets for sale independently.

Bill No. 14376 would allow the State Property Fund to engage intermediaries to prepare assets for privatization, including preparing technical documentation, conducting inventories, valuations, and audits, and marketing the assets. The government would authorize such intermediaries upon nomination by the State Property Fund. The fee for preparing an asset for privatization would be set at 5% of the sale price, and the buyer would be required to pay this amount within 20 working days after the auction or the signing of a preliminary agreement. These funds would not be transferred to the state budget. Still, they would be paid either into a newly established specialized privatization fund (if the State Property Fund prepared the asset itself) or into the intermediary’s account (if the intermediary carried out the preparation).

The funds could be used for property management, privatization activities, or remuneration of State Property Fund employees. The amount of such remuneration could reach up to 100% of an employee’s monthly base salary, but it would be paid exclusively from the specialized fund and not from the state budget. The State Property Fund would determine the procedure and amounts of such remuneration for its employees.

Abolishing the “minimum payment” for heating

Currently, the state Methodology for the Allocation of Utility Services provides that apartment owners with individual heat meters cannot pay less than a certain “threshold” for heating their apartments, even if their radiators are nearly cold. This threshold is known as the minimum consumption share, and the Methodology currently sets it at 50% of the building’s average heat consumption. This rule is intended to prevent some apartment owners (especially those who do not reside in the apartment) from turning off their heating during the winter. Such “savings” in individual apartments would negatively affect the building’s overall temperature. However, a working group tasked with developing amendments to the Methodology noted last year that “the 50% allocation share is not supported by regulatory or scientific evidence.”

Bill No. 14329 proposes abolishing this minimum threshold requirement. As a result, each resident would pay for heating based solely on their individual heat meter readings. In addition, residents would pay, in proportion to their apartment’s floor area, for heating common areas (such as entryways and stairwells) and maintaining the heating system.

A package of bills to increase guaranteed minimum payments for specific categories of workers in 2026

The Law of Ukraine “On the State Budget of Ukraine for 2026” establishes a single minimum wage for all workers: UAH 8,647 per month and UAH 52 per hour. Bills Nos. 14354, 14356 and 14357 would introduce differentiated minimum wages for specific professions: UAH 30,000 per month and UAH 180 per hour for teachers and academic staff in schools, colleges, lyceums, and higher education institutions; UAH 25,000 per month and UAH 150 per hour for cultural sector employees; and UAH 40,000 per month and UAH 240 per hour for healthcare workers (including doctors, nurses, paramedics, midwives, laboratory technicians, pharmacists, pharmacy technicians, and orderlies).

The bills propose financing these increases by raising the amount of profit that the National Bank of Ukraine transfers to the state budget. The current 2026 budget requires the National Bank of Ukraine to transfer at least UAH 146 billion to the state budget. This is significantly more than in 2024, when the NBU transferred UAH 84.2 billion, while the remaining UAH 18.5 billion of its profit was allocated to reserves. Bills Nos. 14354 and 14357 would require the NBU to transfer UAH 196 billion to the budget, while Bill No. 14356 would require UAH 176 billion. Are such funds available to the NBU—and, more importantly, would they be sufficient to increase the minimum wage by three to five times? Most likely not. Moreover, establishing a uniform minimum wage for healthcare workers would undermine the principle of healthcare reform, which holds that medical professionals’ remuneration is intended to reflect performance.

Bill No. 14355 would establish that in 2026, the monetary allowances of service members of security and intelligence agencies who directly defend the state, both in Ukraine and abroad, must be at least UAH 100,000 per month. The bill would also increase the minimum amount of National Bank of Ukraine profit transfers to the state budget to UAH 246 billion. It would eliminate the provision allocating 50% of banks’ corporate income tax to a special fund for the purchase of passenger railcars.

Under current law, the government sets wage levels and payment procedures for employees of state and municipal kindergartens. At the same time, the founder (for example, a local community) may pay higher wages at its own expense. Bills Nos. 14358 and 14358-1 would establish that the minimum wage for kindergarten employees cannot be lower than that for employees of secondary education institutions, including schools, colleges, and lyceums.

Cheaper consumer loans: how the new limit would work

Currently, Ukraine’s consumer lending law provides that the total cost of a consumer loan—including interest, fees, insurance, and other charges—cannot exceed 1% of the loan amount per day. Bill No. 14370 would reduce this cap to 0.274% per day. These rules would apply to all consumer loans taken for personal, non-business purposes.

Example: Suppose you take out a consumer loan of UAH 5,000 for 10 days. Under the current rules (1%), the maximum total cost (interest and all fees) over that period could reach UAH 500. Under the new proposal (0.274%), over the same 10 days, you would pay no more than UAH 137.

As is currently the case, compliance with these rules would be overseen by the National Bank of Ukraine, which may impose fines of UAH 85,000 to UAH 170,000 per violation. However, such a cap on lending costs could reduce the availability of consumer credit and lead to stricter lending conditions.

Ban on Russian as a language of instruction in private schools

Currently, the law allows private schools that receive funding from parents or other private sources and do not receive public funding to choose the language of instruction independently. At the same time, schools must ensure that students achieve proficiency in Ukrainian at the level required by state standards.

Bill No. 14361 would preserve the right of such private schools to choose the language of instruction but would prohibit the use of Russian for instruction (the bill would prohibit the use of the official language of a state recognized by the Verkhovna Rada of Ukraine as an aggressor state or occupying power. As Parliament has recognized only Russia as such, this would effectively ban the use of Russian as a language of instruction in private schools).