Ukraine News Updates - December 18, 2025
Ukraine Launches Top 100 Rising Startups Catalog for 2026
Ukraine's Ministry of Digital Transformation, alongside partners including the Ukrainian Startup Fund and Techosystem, released an updated guide showcasing 100 promising startups across strategic sectors, including defense technology, cybersecurity, AI, robotics, MedTech, and aerospace. The catalog highlights Ukrainian founders' capacity to build and scale businesses amid wartime conditions, demonstrating resilience attractive to global investors. The guide aims to facilitate international investment opportunities and position Ukraine's digital ecosystem on the world stage, helping emerging startups access global markets and investors evaluate the country's technological potential.
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World Bank Allocates $290M for Ukrainian Business Support
Ukraine received $290 million from the World Bank under the RISE program, aimed at supporting entrepreneurship, with funds transferred to the state budget. The financing became available after the government met the 2025 program conditions, including export development for small and medium businesses, the implementation of environmental and social standards, and the expansion of digital services. The RISE program, initiated in November 2024 with total funding of $681 million, aims to support at least 20,000 SMEs through 2027 as part of Ukraine's economic recovery plan.
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Ukraine's Economy Accelerates to 5.3% Growth in November
Ukraine's real GDP growth accelerated to 5.3% in November 2025 from 2.3% in October, driven by agriculture, domestic trade, construction, and manufacturing sectors, according to the Ministry of Economy estimates. Third-quarter 2025 GDP growth reached 2.1% year-over-year, exceeding preliminary forecasts, while nine-month growth stands at 1.3% annually. Economic recovery is supported by international development programs, infrastructure reconstruction, housing initiatives (eRecovery and eHome programs), and defense-sector procurement, with manufacturing showing structural shifts toward higher value-added activities, including machinery production rising to 9% of industrial output from 5.7% in 2021.
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Defense City Launch Set for January 2026
Ukraine’s government has approved a package of measures to launch Defense City on 5 January 2026 as a dedicated support regime for the domestic defense industry. The framework includes procedures for registering Defense City residents, calculating qualified defense income, monitoring tax-exempt profit reinvested in development, and annually confirming compliance with regime requirements. It also establishes rules for protecting defense companies’ sensitive data, relocating and securing production facilities, and coordinating central and local authorities under the Ministry of Defense, with access limited to enterprises of strategic defense significance that meet defined standards.
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Ukrainian Naval Drones Strike Russian Submarine in Novorossiysk
Ukraine's Security Service and Navy jointly conducted an operation using Sub Sea Baby underwater drones to damage a Russian Kilo-class submarine (Project 636.3 "Varshavyanka") in Novorossiysk port on 15 December 2025, marking the first such attack on this vessel type. The submarine, equipped with four Kalibr cruise missiles used for strikes against Ukraine, sustained critical damage and was effectively rendered non-operational; the vessel's replacement cost estimates reach $500 million under current international sanctions. The operation follows successful surface drone campaigns that forced Russian naval assets from Sevastopol, driving submarines to alternative bases for maintenance and resupply.
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Ukraine and Germany Expand Defense Cooperation; Norway Commits €2.69M to PURL Initiative
Ukraine and Germany signed multiple defense agreements exceeding €1.2 billion, including long-term Patriot spare parts supply, €200 million in Ukrainian drone procurement, production of 200 Bohdana self-propelled guns on Zetros chassis for €750 million, joint manufacturing of Lenza drones through the Build with Ukraine initiative, and tactical electronic warfare equipment contracts. Norway's Prime Minister Jonas Gahr Støre announced additional funding of approximately €2.69 million (over NOK 3 billion) for American weapons packages through the PURL initiative, including F-16 fighter ammunition, air defense system missiles, and related munitions to enhance Ukraine's military capabilities.
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Diia.City Resident Base Grows, Interest in Distributed Profit Tax Declines
As of 1 December 2025, Diia.City hosts 3,159 active resident companies, an increase of 949 since August, according to MP Danylo Hetmantsev. Residents paid ₴27.7 billion in taxes (excluding social contributions) in January–November 2025, up ₴11.9 billion year-on-year, with ₴13.4 billion coming from firms under the distributed profit tax regime. However, the share of residents using this regime fell to 33.7%, down 13 percentage points in 11 months, as more companies opt to remain under standard corporate income tax, while a large share of the IT sector continues to operate via sole proprietor models outside Diia.City.
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Industrial Park "Art Park Industrial" Planned in Khmelnytsky Region
Ukraine's government approved the registration of the industrial park "Art Park Industrial" in Khmelnytsky city territorial community for a 50-year period, covering 10.22 hectares and estimated to attract over ₴400 million in investment from diverse sources, including private capital and state incentives. The project aims to create approximately 500 jobs in processing industries, including paper and cardboard production, packaging, polygraphy, alternative energy, and information technology sectors, with operations in manufacturing paper products, corrugated packaging, and digital services infrastructure development..