Defence City, Ukraine’s special support regime for arms makers, now has 63 member companies, the Defense Ministry said in a 19 October release. That is more than double the late-May count, and Euromaidan Press calculations show the newcomers are, on average, much smaller firms.

Ukraine already buys most of its weapons at home. More than 75% of its 2025 weapons procurement budget went to domestic manufacturers. Most new weapons models cleared for military use are Ukrainian too: 892 of the 1,000 authorized from the start of 2026 to mid-June. Defence City is meant to turn that demand into more production capacity, and our calculations suggest it is now reaching smaller producers too.

Who is joining

Each resident’s figure in the ministry’s count is its qualified income, meaning revenue from selling weapons and military equipment. Applicants file details of their defense contracts for the previous calendar year with their application, the ministry’s guide shows. So the combined total changes as members join. It does not track month-to-month sales.

The 63 current residents have a combined qualified income of nearly $2.47 billion. At the end of May, 31 residents had $2 billion, the ministry reported. By July, 45 residents had over $2.07 billion, it added.

By Euromaidan Press calculations, the 32 companies added since May bring about $15 million each on average. The first 31 averaged about $64 million each. The math assumes all 31 early members remain, with unchanged figures. If they do, the newcomers are smaller producers on average, because each figure reflects a firm’s own prior-year weapons sales.

What residents get

The profit-tax break comes with a condition. Residents choose where their untaxed profit goes, but it must go to purposes the tax code allows, the ministry explained. If the money goes elsewhere, the break does not apply.

Residents also get customs incentives and state support to relocate plants and better protect production sites. They can rent state property without an auction. They can also ask to restrict access to sensitive information about them in public registries. Some defense export procedures are simplified too.

Resident status also makes a company eligible to be designated critically important to the defense industry. That lets it defer up to 100% of its staff liable for military service from the draft, the ministry noted.

To join, a company must confirm it meets the legal requirements and file an application with supporting documents. By law, the ministry has 10 working days to decide. If approved, a ministerial order grants the status, and the company enters the Defence City register.

Ukraine is canceling part of its planned military purchases and moving the money to other priorities. Ukraine's Defense Ministry has announced that it, together with the General Staff and the Logistics Forces Command, will free about $346 million by terminating some weapons contracts and dropping some planned purchases.

What the army planned to buy in 2024 and 2025 may no longer be suitable for the front, the ministry noted, because technology and tactics change quickly. The review comes four days after the Ukrainian government drew about $1.1 billion from the defense reserve to pay soldiers in October amid a looming economic crisis.

The ministry gives five reasons for the review: some weapons no longer match combat tasks, certain suppliers cannot build the planned volume, certain models have not been codified, partners already cover some needs, and cheaper means can perform specific jobs in larger numbers.

"For us, there is one criterion: does the item work for results in combat today. Every hryvnia released from irrelevant contracts must reach the troops as the weapons needed right now and in the right place," Col. Yurii Pohribnyi, commander of the Logistics Forces, says.

The procurement agency calls each producer

The General Staff set the final list of purchases for review, and the ministry forwarded the documents to the Defense Procurement Agency to implement the decision. For specific items, delivery volumes were adjusted rather than canceled, which the contracts allow when needs change.

Affected producers have been informed, and the agency is discussing each item with suppliers based on the status and payments of each contract. Artem Romaniuk, acting director of the agency, has explained that further steps on each contract will depend on the army's current needs and the contract terms. The list of weapons stays secret for security reasons.

Funds freed up by terminating contracts and canceling planned purchases will be redirected to the urgent needs of Ukraine’s Defense Forces.