With the escalation of military tensions worldwide, the MilTech sector is entering a new stage of development. For the first time since World War II (in the form in which it existed back then), it is experiencing unprecedented growth and attracting six- and even eight-figure investments.This is explained by the fact that MilTech is one of the most heavily regulated and, at the same time, strategically vital industries. In this case, the choice of jurisdiction for company registration cannot be reduced merely to the cost of incorporation or the level of taxation. This decision affects market access, eligibility to participate in defense tenders, and even the speed at which a product can reach operational deployment.
Ukraine is one of the most convenient countries, in terms of legislation and cooperation with banks, for registering a business in MilTech or Defense Tech. The Ukrainian tax regime Diia.City and the Brave1 cluster with its own marketplace create a favorable environment for the development of this sector.
Diia.City a modern legal and tax initiative for IT companies in Ukraine, which provides:
- reduced tax rates
- flexibility in employment formats (including gig contracts)
- protection of intellectual property
Brave1 — a state-civil cluster in the field of defense technologies that unites various agencies and stimulates cooperation between the state and business. The cluster’s team and industry experts provide developers with financial, informational, and organizational support to achieve technological superiority over the enemy and bring our victory closer.
In addition, the Ukrainian MilTech ecosystem is rapidly growing: since 2022, more than 200 new companies have been established. This brings combat experience, rapid testing, and government support.
At the same time, it is worth honestly noting that Ukrainian business faces certain difficulties, the main ones being: lack of security, difficulties procuring components, logistical problems, and also NBU restrictions on foreign payments.
Alternatives for registering a MilTech company
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- U.S. — large market and investors, but very strict export restrictions (ITAR/EAR) and foreign investment reviews (CFIUS). Companies working with defense articles or technical data are often required to register with the DDTC and maintain a clear compliance plan
- United Kingdom — strong export control system (ECJU, Consolidated List), well-developed infrastructure for R&D, access to the European market, and a clear licensing process. However, many technologies require export licenses
- ЄС (країни-члени) — a single system for dual-use (Dual-Use Regulation) provides common rules across the bloc; if a company is incorporated in a specific EU country, licenses are processed there. Local implementation differences should be considered. Estonia is classically the simplest option here
- Canada — the Controlled Goods Program (CGP) regulates access to “controlled goods” and requires registration, security plans, and inspections; relevant if you plan government contracts in Canada or supply to North America
- Israel — one of the most powerful “combat” MilTech hubs; has a developed export control system (DECA / Defence Export Controls) — strict, but the state actively supports exports. Suitable for rapid technological expertise, but requires additional registration procedures and licenses
- Singapore — clear legislation (Strategic Goods (Control) Act), a jurisdiction geographically advantageous for entering Asian markets; requires compliance with technology transfer and brokering rules
Which regulatory points need to be checked before registering MilTech?
- Does the product/technology fall under military/dual-use classification and where exactly in the control lists? (In practice, there have been cases when “military” equipment was not defined as subject to mandatory licensing, for example, military simulators)
- Is registration with the relevant authority required (DDTC in the US; ECJU in the UK; DECA in Israel; CGP in Canada; Singapore Customs, etc.)?
- Are there restrictions on foreign ownership/investments (CFIUS in the US, FDI reviews in the EU, specific mechanisms in Australia)?
- Requirements for facility and personnel security (background checks, security clearances), internal policies, and inspections (Canadian CGP, US DoD suppliers)
- Sanctions and political risks (export/import can be suspended due to sanctions or political decisions)
- Do banks work with this type of business?
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Compliance and data security in the MilTech business
In the MilTech sector, data processing frequently involves critical infrastructure, military operations, and dual-use technologies. This means that additional requirements may be imposed on the company:
- Data sovereignty — storage and processing of data within a specific country or bloc (for example, the requirement to store classified or restricted information within the US for DoD contractors)
- Secure communication channels and encryption — applying standards at the level of AES-256, TLS 1.3 or higher; in some countries, the use of cryptography also requires a separate license
- Certifications — to work with defense contractors, standards such as ISO/IEC 27001, NIST SP 800-171, CMMC (US), Cyber Essentials (UK) are often required.
- Access policies and personnel checks — background checks, NDA, security clearances, segregation of access rights in IT systems
- Audits and inspections — government and independent audits of compliance with security requirements, sometimes with the right to access your premises and servers
Practical recommendations—choice depending on goals
Current data as of 2025
Sales/contracts in the US + investments from VC | → registration in the US (or a subsidiary in the US) provides access to the market, but will require preparation for ITAR/EAR, CFIUS, and significant compliance costs |
European market and simpler regulation within the EU/UK | → United Kingdom (convenient licensing processes) or EU countries (advantage — unified Dual-Use framework) |
Strategic partnership in AUKUS / quick access to cooperation with the US/UK | → Australia / United Kingdom (AUKUS simplifies export processes between members) |
Rapid technological development and access to military contracts/exports | → Israel (strong ecosystem, but strict licensing and possible banking restrictions due to war) |
Access to Asian markets/hub in Southeast Asia | → Singapore (stable jurisdiction with clear rules) |
Canada | → Suitable for supply to North America, provided CGP compliance |
The risks that are often underestimated before registering a MilTech company are primarily related to licensing. A ban or delay in obtaining licenses can completely block the business launch, as well as lead to fines or even “debarment” — exclusion from participating in military procurement.
Another important factor is foreign investment review and local residency requirements. Many countries enforce strict rules that limit foreign ownership of defense-related companies.
Political risks also remain significant. Sanctions, international conflicts, or changes in government decisions can instantly halt export processes or restrict access to the market.
If you have narrowed down your choice of jurisdictions to a few, they should be compared across key parameters. Pay particular attention to the level of taxation, the ease of company registration and administration, the conditions for obtaining licenses, and the accounting requirements. It is also crucial to assess whether the business can be effectively managed remotely, as well as the availability of modern payment solutions for operations in the defense technology sector.
Singapore and some EU countries offer favorable tax systems. For example, Estonia taxes profit only when dividends are distributed; Poland grants companies with turnover of up to €2 million a reduced corporate income tax rate of 9%; Cyprus and Ireland have a standard rate of 12.5%.
Each of the mentioned jurisdictions allows remote business registration and administration. However, given the specifics of the industry, a local administrator will be desirable or even mandatory in most cases.
Marketing in MilTech: what really works
In this field, classic digital advertising is largely ineffective: Google, Meta, and other platforms strictly block campaigns related to defense or military technologies. Therefore, companies build promotion strategies differently.
- PR and industry media. Publications in specialized outlets and analytical reviews work most effectively. They build trust among investors, governments, and partners.
- Exhibitions and conferences. IDEX, Eurosatory, DSEI, AUSA, and other events become the main entry points. Contracts are concluded there, reputation is built, and most networking takes place.
- Networking and partnerships. It is important to work directly with clusters, accelerators, and associations. In MilTech, there are many closed solutions, and a partner’s recommendation is often more valuable than any advertising.
- Content as a tool of trust. Demonstrations of product performance, market analytics, videos from testing grounds or trials — these replace performance advertising and prove the viability of the solution.=
- Reputation through compliance. Demonstrating that the company complies with international standards is not only a legal requirement but also a key aspect of marketing, as customers and partners trust those who operate transparently.
The MilTech business is always about balancing innovation with strict regulations. The choice of jurisdiction directly affects how quickly you will obtain licenses, whether you can enter international markets, and how much investors and partners will trust your company.
If you are planning to launch a MilTech business and want to avoid critical mistakes at the start, contact WoBorders.
