Three employer structures — company, Diia City and representative office — leading to one employee inside a protective ring

Military reservation of key staff when the owner is foreign: own company, Diia City, representative office or employer of record

ByMarina

Rules checked on 22 September 2026 against Cabinet Resolution No. 76 as amended up to Resolution No. 954 of 15 July 2026. The rules on military reservation are amended often — check the current text before you act.

What military reservation means. Military reservation (Ukrainian: бронювання) is a deferral from call-up during mobilisation that an employer obtains for an employee who is liable for military service. The employer applies — not the employee — through the Diia portal, and for a private business only an employer with critical status can do so. Critical status is a government decision that the employer is critically important for the economy or for the population in wartime; it is not the same as being part of critical infrastructure. While the military reservation lasts, the employee is not called up. It does not end the employee's military registration duties, and it is not a permit to leave Ukraine.

Our briefing on employing people under martial law explains how military reservation works in general. This briefing answers the question foreign owners ask first: does the way you are set up in Ukraine decide whether your key people can be reserved? It does. Military reservation is tied to the legal employer, and an own Ukrainian company, a company with Diia City status, a representative office and an employer of record are each assessed on different conditions.

1. Four structures, four sets of rules

Structure Conditions for critical status Military reservation limit
Your own Ukrainian company (for example a TOV), whoever owns it At least three of the criteria; two are always required: no arrears in taxes or the social contribution, and an average salary of at least three times the minimum wage Up to 50% of employees liable for service in most cases
Your own Ukrainian company with Diia City status (software and IT activities only) The same two fixed criteria; Diia City residency counts as the additional criterion if the company meets the Diia City pay requirement; no minimum salary per reserved employee Up to 50% of employees liable for service in most cases
Permanent representative office of your foreign company Decided by the Ministry of Economy: sector or regional importance, operation in Ukraine for the last two calendar years, accreditation or registration as required by law, and registration with the tax authority Up to 50% of employees liable for service
Employer of record or outstaffing provider Only the provider can reserve the people it employs, and only if the provider itself holds critical status The provider's own quota
Individual entrepreneurs (FOP) on service contracts Military reservation through your company does not apply —

Except for Diia City residents, each reserved employee must also be paid at least three times the minimum wage — see section 2.

2. Your own company: what the owner controls

Foreign ownership is no obstacle. We found no rule that excludes foreign-owned companies; a Ukrainian subsidiary is assessed like any other private company.

Three criteria, two of them fixed. The company must have no arrears in taxes or the social contribution, and the average salary of all its insured employees for the last calendar month must be at least three times the minimum wage — two and a half times for companies located and actually operating in areas of possible or active hostilities. It then needs at least one more of these:

  • taxes, levies and social contributions paid in the reporting year of more than the equivalent of EUR 1.5 million, customs payments excluded;
  • foreign-currency earnings of more than the equivalent of EUR 32 million a year, loans excluded;
  • inclusion in the state list of strategically important enterprises;
  • the sector criteria of the ministry responsible for the company's field, or the regional criteria of the regional military administration;
  • residency in Diia City, if the company meets the Diia City pay requirement (see section 3);
  • for mobile and fixed electronic communications providers, a revenue threshold.

In our assessment the euro thresholds are hard to reach for a young subsidiary, which leaves the sector or regional criteria. They must match the company's real main activity. Some fields — among them fuel and energy companies and companies that serve critical infrastructure — need two criteria instead of three.

The salary tests in hryvnia. At the 2026 minimum wage of UAH 8,647:

Test Normal areas Areas of possible or active hostilities
Company average salary, last calendar month at least UAH 25,941 at least UAH 21,617.50
Monthly salary of each reserved employee, for the whole military reservation period at least UAH 25,941 at least UAH 21,617.50

The per-employee test has applied since 1 September 2026. The resolution exempts state and municipal companies, Diia City residents, religious organisations, verified humanitarian organisations and certain energy and infrastructure companies; other private companies, foreign-owned or not, are not among them.

Status has to be kept. Critical status must be confirmed at least once a year, and a military reservation is granted for up to 12 months. If the number of reserved employees exceeds the quota, the company has ten working days to apply through Diia to cancel the excess.

3. Diia City: an option for software and IT businesses

Diia City is a special legal and tax regime for Ukrainian companies in software development and related digital activities, set by Law No. 1667-IX. For a foreign employer whose Ukrainian business is in that field, it can make military reservation easier.

Who can become a resident. Only a legal entity registered in Ukraine — so a foreign-owned Ukrainian subsidiary can apply, but a representative office or a company registered abroad cannot. Excluded, among others, are companies owned directly or indirectly by an aggressor state, by legal entities registered there or by its citizens or residents; companies 25% or more held by entities in jurisdictions on the FATF list of non-cooperative countries; companies under sanctions; companies that breached the rules on disclosing their beneficial owners; and companies with a tax debt above ten minimum wages for more than 30 days.

Conditions to meet every month (Law No. 1667-IX, Article 5):

  • the company carries on one of the listed activities — software development, testing and support, IT consulting, operation of clients' computer systems, publishing of software and computer games, and related work;
  • the average monthly pay of its employees and gig specialists (people on the Diia City “gig contract”, a civil-law contract) is at least the equivalent of EUR 1,200;
  • it has on average at least nine employees and gig specialists;
  • at least 90% of its income is qualifying income from these activities.

A newly registered company (no more than 24 months old when it applies) can hold the status until 31 December of the following year while meeting only the activity, income and exclusion conditions and an income limit.

What it changes for military reservation:

  • Diia City residency counts as the additional criterion for critical status, provided the company meets the EUR 1,200 pay requirement, shown with its tax reports for the last six months.
  • The two fixed criteria still apply: no tax arrears and a company-wide average salary of at least three times the minimum wage (UAH 25,941 in 2026).
  • The minimum salary for each reserved employee does not apply to Diia City residents.
  • A resident that holds the status under the rule for new companies attaches proof of at least EUR 20,000 in income, grants or investments over its first three full months.

Gig specialists are not employees. Resolution No. 76 contains no rule on gig specialists; its rules on military reservation speak of employees. Plan military reservation only for people on employment contracts.

The cost side. For a resident that in a given month meets the pay and headcount conditions and has no tax debt, the social contribution on each person's salary and on gig remuneration is the minimum contribution — UAH 1,902.34 a month in 2026 — instead of 22% of pay (Law No. 2464-VI, Article 8(14-1)). This does not apply to residents that also hold Defence City status.

Diia City fits only if your Ukrainian business really is in these activities. Energy, engineering, retail or hospitality operations do not qualify.

4. Representative office: possible since August 2024

A permanent representative office of a foreign company is not a Ukrainian legal entity, and until August 2024 the criteria contained no rule for it. Since Resolution No. 988 of 16 August 2024, representative offices of non-residents — foreign companies, foreign non-governmental organisations and accredited foreign humanitarian organisations — can be recognised as critical. Guides written before that date still say a representative office must first set up a subsidiary; that is no longer the rule.

The conditions are different from those for a company:

  • the decision is taken by the Ministry of Economy;
  • the office must meet the sector or regional criteria (the same criterion that companies can use);
  • it must have operated in Ukraine for the last two calendar years;
  • it must be accredited or registered as the law requires and registered with the tax authority.

Up to 50% of the office's employees liable for service can be reserved. Media representative offices follow separate limits. The status must be confirmed at least once a year, as for companies, and the salary rule for each reserved employee applies as well — representative offices are not among the listed exceptions.

5. Employer of record: ask the provider the right questions

When your people are employed by an employer of record, the provider is their legal employer. Only the provider can reserve them — and only if the provider itself holds critical status and the person fits within its quota and salary tests. Your own company's importance does not transfer to the provider.

A provider's status depends on its own figures: the average salary of all its employees, its tax record and its own additional criterion. Before relying on military reservation, ask the provider:

  1. Does it hold a current critical-status decision, from which body, and until when?
  2. Which criterion was the status granted under?
  3. How much of its quota is still free?
  4. Will the salary you plan for the person meet the three-times test for the whole period?
  5. What happens if the assignment ends? A military reservation ends when the employee leaves the employer.

If military reservation is essential for a role, compare the structures before you hire: see our briefing on your first employees in Ukraine.

6. Before you choose a structure

  1. List the roles for which military reservation is essential, how many employees liable for military service they involve, and whether they will be employees or contractors.
  2. Check the salaries: at least UAH 25,941 gross a month for each person to be reserved in 2026, and a company-wide average at the same level.
  3. If your Ukrainian business is software or IT services, check whether it can meet the Diia City conditions every month.
  4. Pick the structure whose conditions you can meet today — not after the first year.
  5. Plan the quota: usually no more than half of the employees liable for service.
  6. Put a date in the calendar for the annual confirmation and for re-checking after every amendment of Resolution No. 76.

Sources

All checked on 22 September 2026:

How ClarusApex can help

Before you decide between an own company, Diia City status, a representative office and employment through a provider, Marina and Stefan check your figures against the military reservation criteria and tell you which structure can meet them. Write to us with the roles and the planned salaries.

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