IT Team Mobilization Deferment: Rapid Company Registration and Securing Diia City Resident Status

Under martial law, employee reservation has become a critical factor in maintaining business continuity for Ukrainian IT companies, as well as many other businesses. If a key developer, software architect, or DevOps engineer suddenly becomes unavailable due to mobilization, the company risks project delays, missed deadlines, and potential contract breaches.

Many IT companies face situations where they need to reserve key specialists as quickly as possible. However, the absence of the right corporate structure, non-compliance with legal requirements, or insufficiently prepared documentation often makes this process significantly more complicated. As a result, business owners frequently try to solve the issue under extreme time pressure, registering a legal entity, applying for Diia City residency, and obtaining critical enterprise status only after team members have already begun receiving mobilization notices.

In practice, implementing these mechanisms quickly is almost impossible without proper legal preparation. That is why structuring an IT company correctly has become more than a matter of tax optimization or corporate governance. Today, it is also a strategic tool for reserving key employees, protecting business continuity, and ensuring uninterrupted delivery of projects.

Registering an LLC for IT and Meeting the Diia City Startup Criteria

A client from the IT sector approached us with a clear objective: to register a business and become eligible to reserve employees subject to military service. The challenge was the extremely tight timeline for completing the entire process.

Time was working against the client. At the time of engagement, they had neither a registered LLC nor Diia City resident status. These two elements were essential for obtaining the status of a critically important enterprise, which is the legal basis for applying for employee reservation.

The main challenge was complying with the strict deadlines established for Diia City startups (newly established companies). To retain Diia City resident status and remain eligible for employee reservation, a newly created company must receive foreign currency revenues of at least EUR 20,000 (or the equivalent amount) within the first three months following the month in which it acquires Diia City residency.

The client approached us in the middle of the calendar month. This meant that any delay would automatically reduce the time available to meet the required financial thresholds and create a risk of losing valuable time needed for the subsequent employee reservation process. Under these circumstances, it was essential to establish the correct legal structure without delay, register the company as quickly as possible, prepare the documentation for Diia City residency, and simultaneously develop a roadmap for obtaining the status of a critically important enterprise.

Accordingly, the primary challenge in this case was not only completing the legal registration of the business within a very tight timeframe, but also synchronizing every stage of the process to comply with the applicable legal requirements and the administrative practices of the relevant government authoritiesl.

Our Approach: Running Corporate and Regulatory Procedures in Parallel

To avoid losing valuable time, we chose not to handle the required procedures sequentially. Instead, we launched all key processes in parallel.

Our primary objective was to register the legal entity and prepare the company as quickly as possible to obtain Diia City resident status. The date on which the company was entered into the Diia City Register marked the beginning of the period for meeting the financial criteria required to subsequently qualify as a critically important enterprise.

Step 1. Registering the LLC Electronically Within 24 Hours

We decided to register the LLC through the Diia portal, which significantly reduced the time required to establish the legal entity and eliminated the need for additional paper-based registration procedures.

Before submitting the application, we worked closely with the client to determine and approve all key corporate parameters, including:

• the company's ownership structure;
• the appointment of the director;
• the applicable tax regime;
• the list of business activities (KVED codes).

Particular attention was paid to selecting the appropriate KVED codes. Under Article 5(1) of the Law of Ukraine "On Stimulating the Development of the Digital Economy in Ukraine," only legal entities engaged in one or more qualifying business activities listed in the law, and properly reflected in the Unified State Register, are eligible to obtain Diia City resident status.

Based on the Client's business model, the following KVED codes were included in the company's registration:

• 62.01 — Computer Programming;
• 62.02 — Computer Consultancy Activities;
• 62.09 — Other Information Technology and Computer Service Activities;
• 63.11 — Data Processing, Hosting and Related Activities;
• 58.29 — Other Software Publishing.

Selecting the appropriate business activity codes was a critical part of the registration process. Any discrepancy between the registered KVED codes and the company's actual business activities could have resulted in the rejection of the Diia City resident application or created compliance risks during subsequent reviews under the special legal regime.

Following the submission of the registration documents through the Diia portal, the Extract from the Unified State Register of Legal Entities was issued on the next business day, confirming the successful incorporation of the company.

Step 2. Immediate Bank Account Opening and Preparation for Financial Monitoring

Immediately after the company's state registration, we arranged the opening of a corporate bank account. This was essential not only for launching the company's business operations but also for establishing the financial indicators of the project.

As the Client intended to demonstrate the required volume of incoming funds within a very short timeframe, it was crucial to ensure that the company could promptly receive payments from counterparties and properly document the lawful source of its income.

Step 3. Obtaining the Director's Qualified Electronic Signature and Applying for Diia City Residency

In parallel with opening the company's bank accounts, we arranged for the director to obtain a Qualified Electronic Signature (QES). The QES was essential for filing official applications and reports, as well as submitting the documents required for inclusion in the Diia City Register.

Once the core corporate procedures had been completed, we promptly prepared and submitted the application package for Diia City resident status.

In practice, all key milestones, from incorporating the LLC to filing the Diia City residency application with the Ministry of Digital Transformation of Ukraine, were completed within an exceptionally short timeframe. This rapid execution allowed the Client to preserve the maximum amount of time available to satisfy the required financial criteria and proceed with obtaining the status of a critically important enterprise, which was necessary for reserving employees subject to military service.

The Most Common Mistakes IT Companies Make When Applying for Diia City Residency

Our experience supporting IT companies in LLC registration and obtaining Diia City resident status shows that most issues arise at the initial stage of business structuring. Mistakes made during the incorporation of a legal entity or the preparation of the residency application can lead not only to delays but also to an inability to meet the requirements for obtaining the status of a critically important enterprise and, consequently, reserving employees subject to military service.

The most common mistakes include the following.

1. Incorrectly selected KVED codes. One of the most frequent mistakes is the formal or inaccurate selection of the company's business activity codes (KVEDs). Companies often register only general-purpose codes or include only part of the activities they actually perform. However, under the Law of Ukraine "On Stimulating the Development of the Digital Economy in Ukraine," a Diia City resident must carry out qualifying business activities expressly provided for by law.
2. Losing time due to delayed registration. In projects where employee reservation is the ultimate objective, timing is critical. Many companies postpone registering an LLC or applying for Diia City residency without realizing that meeting the required financial criteria takes time.
   This is particularly important for companies planning to demonstrate the required level of revenue or foreign currency income after obtaining Diia City resident status. When the process begins in the middle of a calendar month, even a delay of a few days effectively shortens the compliance period and may jeopardize the company's ability to qualify as a critically important enterprise.
3. Insufficient preparation for the bank's financial monitoring procedures. Another common issue is opening a corporate bank account without first preparing the documentation required for the bank's AML/KYC (financial monitoring) procedures. Banks carefully scrutinize newly established IT companies, particularly when they expect to receive substantial foreign currency payments from non-resident counterparties.
   As a result, even after registering the LLC, the company may be unable to commence business operations promptly.
4. Treating the application as a mere formality. Many companies mistakenly view obtaining Diia City resident status as nothing more than a technical filing procedure. In reality, the application should be approached as part of a broader legal strategy. From the outset, businesses should evaluate their ability to satisfy the residency criteria, obtain the status of a critically important enterprise, select the appropriate tax regime, and establish a compliant employment model for their specialists.

Without comprehensive legal planning, a company may formally obtain Diia City resident status yet later encounter significant difficulties when applying for employee reservation or demonstrating ongoing compliance with statutory requirements. For this reason, the key to a successful outcome is not only the speed of the registration process but also the proper legal structuring of the business with its long-term objectives in mind.

Comprehensive Legal Support for IT Businesses: Diia City, Critically Important Enterprise Status, and Employee Reservation

We provide comprehensive legal support for IT businesses at every stage of their development, from company incorporation to employee reservation. Our services include:

• assessing your business model and evaluating your eligibility for Diia City resident status and critically important enterprise status;
• registering an LLC within the shortest possible timeframe and selecting the appropriate KVED codes to support future eligibility;
• preparing and managing the entire process of obtaining Diia City resident status;
• preparing the documentation required to obtain critically important enterprise status;
• advising on employment, corporate, and tax matters;
• representing your interests before government authorities and minimizing the risk of delays or refusals.

Our integrated approach allows potential legal and regulatory issues to be identified and addressed at the earliest stage, helping businesses avoid costly mistakes and maintain uninterrupted operations under martial law.

Need assistance with obtaining Diia City resident status, critically important enterprise status, or employee reservation? Contact our legal team for a consultation, and we will develop a tailored strategy that aligns with your corporate structure.