Ukraine's Cabinet has opened the construction of underground arms production space to private investors, Prime Minister Serhii Koretskyi announced on 22 October, saying the rule applies from that day. A second decision eases imports for partner-funded weapons production.
Koretskyi said the change would add more of the space arms makers need, especially as Russian strikes intensify. On 9 December 2025, the Defense Ministry reported that more than UAH 1.5 billion (about $36 million) in budget support had let war-damaged defense firms restore operations. At the time, the ministry planned to relocate or duplicate the most critical plants, and underground complexes were under construction. The new model puts no additional burden on the state budget, Deputy Defense Minister Hanna Hvozdiar said. The bill still lands somewhere, though. Defense firms will buy, lease, or take the space for use, and companies working on state contracts are among those eligible. If they pay developers out of state-contract revenue, part of the cost could come back to the budget.
Developers build, arms makers move in
The changes to Cabinet resolution No. 1494 give private investors a simplified route to construction and permits, the ministry said. Developers can build protected facilities with their own or raised funds. Deadlines, terms of use, and the handover are set in a contract between investor and defense firm. The mechanism covers new sites as well as moving or expanding existing production. If a firm gets only part of a facility, that part must be at least 25% of the facility's total area and fit for production.
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Developers must sign deals with, among others, residents of Defence City, Ukraine's special legal regime for arms makers, holders of state defense contracts, and firms the ministry designates as critical.
Tax break for partner-funded arms production
Components for weapons production that international partners pay for will enter Ukraine free of import duty and VAT, Koretskyi said. He added that customs inspection and clearance would be simplified and sharply shortened through a "single window."