Criticality for defense industry enterprises

For companies in the defense-industrial complex, the status of a critically important enterprise is of particular significance, as it makes it possible to ensure production continuity and creates grounds for employee reservation.

In 2026, the rules were significantly updated - the Ministry of Defence changed the sectoral criteria, introduced a procedure for reviewing previously adopted decisions, and Defence City resident status became a separate ground for obtaining critical status. The main regulatory documents remain Resolution of the Cabinet of Ministers of Ukraine No. 76 and Order of the Ministry of Defence No. 722 dated 28.10.

If your business needs to obtain critical status through the Ministry of Defence of Ukraine, the lawyers of “Prikhodko & Partners” will help verify compliance with the current requirements, prepare the documents, and provide legal support throughout the procedure until a positive decision is obtained.

Updated Ministry of Defence Criticality Criteria in 2026

The main requirements include:

• performance of a state contract in the defense sector / involvement in its performance as a subcontractor, including under a foreign economic agreement;
• performance of contracts for the production of defense products financed from permitted non-budgetary sources, provided that the products are supplied to the Defence Forces;
• performance of defense-related works within the framework of relevant state programs;
• the share of defense products, works, or services exceeding 50% of the enterprise’s total activity during the latest reporting period;
• receipt of grant financing for the development of defense technologies — at least UAH 500,000 per person liable for military service who is planned to be reserved;
• performance of the functions of an authorized entity managing state-owned property in the defense-industrial complex;
• having Defence City resident status;
• being a manufacturer of explosives and ammunition and having the relevant joint decision with the Ministry of Defence.

An alternative mechanism is provided for other defense-industrial complex enterprises, as well as companies in the aircraft and space industries. It is necessary to meet at least 3 out of 6 sectoral criteria, including:

1. performance of a state defense contract;
2. participation in its performance as a subcontractor;
3. inclusion in the electronic register of selection participants and performers of state contracts;
4. participation in state aircraft manufacturing or space activity programs;
5. participation in defense-industrial complex development programs, implementation of new technologies, or expansion of production capacities;
6. production of goods, performance of works, or provision of services used by other defense-industrial complex enterprises for the manufacture of defense products.

In this case, obtaining the relevant status is one of the criteria for subsequently obtaining critical status under Cabinet of Ministers Resolution No. 76. As a rule, the business must confirm compliance with 2 additional requirements provided for by the Resolution. For most companies, the salary criterion is at least three minimum wages — UAH 25,941, and the absence of tax arrears is also verified.

Reconfirmation of Critical Status for Defense-Industrial Complex Enterprises for Employee Reservation

A separate issue is the reconfirmation of critical status for defense-industrial complex companies that obtained the relevant status earlier.

The review by the Ministry of Defence applies to decisions adopted in respect of enterprises before July 7, 2026. For most of them, a simplified procedure was provided without the need to resubmit the entire package of documents, in particular for:

• performers and subcontractors under state defense contracts whose share of defense-related activities exceeds 50%;
• Defence City residents;
• certain manufacturers of explosives and ammunition;
• enterprises in the defense-industrial complex, aircraft manufacturing, and space sectors that had previously met the required combination of sectoral criteria.

They were required to submit to the Ministry of Defence confirmation of the relevant criterion, a certificate of the average salary, and the tax calculation for the previous month.

The deadline for submitting documents expired on August 10, 2026. If the documents were submitted on time, the previous critical status decision remains valid until the expiry date specified in that decision, while if the required procedure was not completed, from September 1, 2026 the status is cancelled together with the employee reservations.

A separate procedure is established for businesses that received a BRAVE1 grant: they are required to make a full submission, including the grant agreement and documents confirming the actual receipt of financing.

Defence City Resident Status for Obtaining Critical Status

Defence City is a special legal regime of state support for defense industry companies. In 2026, this status was expressly included in the Ministry of Defence’s sectoral criteria, meaning that it can be used by a defense-industrial complex enterprise when applying for critical status and subsequent employee reservation.

For most applicants, qualified income must account for at least 75% of the enterprise’s total income, while a reduced threshold of 50% applies to aircraft manufacturing entities.

To obtain Defence City residency, the following steps should be taken:

1. Verify compliance with the requirements of the Law of Ukraine “On National Security of Ukraine”, the income structure, defense contracts, tax status, and corporate data.
2. The following documents, among others, are submitted to the Ministry of Defence:

• an application for the status;
• an initial compliance report;
• financial statements;
• an auditor’s report;
• a document confirming the absence of tax arrears;
• representative’s documents (if required).

3. The application is reviewed within 10 business days.
4. In the event of a positive decision, the Ministry of Defence issues the relevant order and the information is entered into the Defence City Register.

Procedure for Obtaining Critically Important Enterprise Status for the Defense-Industrial Complex

Legal Support for Obtaining Critical Status for the Defense-Industrial Complex

If you need to obtain critical status as a defense-industrial complex enterprise or confirm your status through the Ministry of Defence, it is advisable not to delay and to engage a law firm in advance that will help you properly complete the entire procedure.

The lawyers of “Prikhodko & Partners” assist with:

• analysis of criticality criteria;
• preparation and verification of the required package of documents;
• obtaining Defence City residency;
• submission for critical status / reconfirmation of critical status;
• organization and maintenance of military records;
• employee reservation.

In practice, the lawyers of “Prikhodko & Partners” can handle up to 99% of the legal issues faced by a defense-industrial complex enterprise. If you have any questions, submit a request - our military law attorney will contact you and propose the most appropriate course of action.