On 29 September 2023, Kyiv hosted the First International Defense Industries Forum bringing together over 250 defense companies from more than 30 countries in Europe, America, Asia and Australia that produce a full range of weapons, defense systems and solutions.

In addition to President of Ukraine Volodymyr Zelenskyy, other speakers at the forum included Minister of Defense of Slovakia Martin Sklenar and Deputy Secretary General of NATO Wendy Gilmore. They joined Ukrainian representatives Prime Minister Denys Shmyhal, Minister of Defense Rustem Umerov, Minister of Foreign Affairs Dmytro Kuleba and Minister of Strategic Industries Oleksandr Kamyshin.

During the forum, several new initiatives to strengthen defense cooperation were announced, a summary of which can be found below.

Defense Industries Alliance

Opening the large-scale event, President Zelenskyy announced the creation of the Defense Industries Alliance. By the time the forum concluded, 38 companies from 19 countries had joined the alliance, and Ukrainian companies had signed 20 agreements and memoranda with foreign partners, including on the manufacture of drones, repair and production of armored vehicles and ammunition. Cooperation formats include joint production, exchange of technologies and supply of components. Earlier in September 2023, Ukraine had already signed memoranda of cooperation and understanding with the Arizona Defense and Industry Coalition and the Utah Aerospace and Defense Association.

Special economic regime for the defense industry

According to President Zelenskyy, Ukraine is developing a special economic regime for the defense industry to increase the industry’s attractiveness to investors. A detailed plan will be ready by the end of the year.

Defense fund

Ukraine will establish a special defense fund under operation of the Ministry of Defense. The defense fund will provide additional resources for the following areas of the Ukrainian defense industry:

• Welfare of soldiers, including creation of new military facilities and programs
• Military infrastructure and production development
• Development of new technologies and relevant cooperation support

The defense fund will be replenished through dividends from state-owned defense assets and enterprises as well as proceeds from the sale of confiscated assets of the Russian Federation.

The Defense Industries Alliance is expected to pave the way for Ukraine to localize production of licensed foreign weapons in Ukraine. This will include production in Ukraine of demining machinery and equipment and development and implementation of innovations.

It is important to note that, under a memorandum signed in June with a Ukrainian manufacturer, DOK-ING (a Croatian manufacturer which focuses on unmanned multipurpose vehicles, electric vehicles and robotic systems) has already localized 20 percent of its production in Ukraine and intends to increase the level of localization through strategic partnerships and cooperation projects.

We will keep you posted on further developments in this sector to ensure that you remain up to date on the investment opportunities available in the Ukrainian defense industry.