In the space of eighteen months Ukraine has built, almost from scratch, a system for financing businesses run by its war veterans: a dedicated law, dozens of grants, and soft loans worth millions. What follows is an account of how a veteran actually secures that money—step by step, with every fork in the road—and why the experience of other post-war countries carries a warning. The fate of such programmes is decided not by the size of the purse, but by its design.
A Law That Confers Status, Not a Privilege
The cornerstone was laid in the summer of 2025. The Law “On Veteran Entrepreneurship” (No. 4563-IX), passed on 31 July 2025 and in force since 26 February 2026, is the first in Ukrainian law to grant veteran-run business a distinct legal status. Before it, a veteran entrepreneur was simply an entrepreneur; now he is a “subject of veteran entrepreneurship,” a status conferred for five years.
The logic of the law is subtler than the public slogans suggest. It introduces no tax holidays and does not exempt veteran business from VAT—a point worth stressing, because it is the source of the most common misconception. What the law does instead is create a status and a framework of access. The state, in effect, says: here is a separate till, here is a separate door, here are opportunities reserved for you; come in. The volume of financial support is fixed at 10% of the budgets of the relevant funds. Beneficiaries gain access to reserved public contracts, preferential leasing of state and municipal property, and reduced fees for registering inventions and trademarks. Local councils are permitted to adopt their own support programmes.
One striking provision allows for the priority engagement of veteran enterprises in state and regional procurement through contracts reserved at up to 5% of the relevant budget programmes—an idea borrowed, in part, from the United States. Its practical implementation, however, depends on separate procurement regulation.
The design is sound in principle. Rather than scattering privileges across the whole economy, the state defines the circle of those the support is meant for and builds a dedicated infrastructure around them. Status is acquired, for the most part, automatically through Diia, the national digital-services platform, on the basis of the Register of Veteran Entrepreneurship.
Yet this is where the first crack appears. The law works only as well as the Register works, and the Register’s technical readiness at the moment the law took effect remained in doubt. Automatic conferral of status is an elegant idea—but only for as long as the automatic mechanism does not stumble over identification errors. Moreover, status itself is not the same as a right to any particular programme: one can be a subject of veteran entrepreneurship and still fail to win a grant, and, conversely, secure a grant without holding the status at all. The rules for acquiring status and the rules for accessing finance exist separately, and it is easy to become lost in the gap between them.
The law did not appear on its own. Over several months, secondary legislation was adopted to implement it: the procedure for acquiring and terminating status, the updated mechanism for automatic conferral through Diia with access to reserved contracts, and a separate procedure for clawing back support should status be lost. The system was assembled after the law was passed—and in places it shows.
A Map of the Money
To judge the architecture, one must first grasp its scale—and the scale is genuinely considerable.
The most visible component is the non-repayable grant. The flagship is the eRobota (“eWork”) programme. Its veteran stream offers grants at three levels—up to 250,000, 500,000 or one million hryvnia—depending on the recipient’s job-creation commitments (one, two or four positions respectively). The largest sum comes at a price: the million-hryvnia grant requires 30% co-financing from the applicant’s own funds and an active sole-trader registration of at least a year. Alongside it runs “Own Business” (Vlasna Sprava), offering micro-grants of 50,000 to 250,000 hryvnia—and 75,000 for those who merely intend to register as a sole trader, with no mandatory job-creation requirement. There are also sector-specific streams with higher ceilings: “Own Garden” and “Own Greenhouse” reach up to eight million hryvnia, the creative industries from 100,000 to one million, with separate terms for processing and IT.
On a single application, the veteran stream of eRobota provides up to 1m hryvnia. This is a grant, not a loan: there is no interest, and no repayment is required provided the contract is honoured. For the maximum sum, the applicant must have been a registered sole trader for at least twelve months, create four jobs, and finance at least 30% of the project themselves; the state covers the other 70%.
Having paid the taxes, duties and unified social contribution due on the first grant, a recipient may apply once more for an additional grant under the general rules.
In aggregate, then, support may reach 2m hryvnia—but not at once, and with no guarantee of a second approval.
The second channel is the “Varto” (“Worth It”) competition run by the Ukrainian Veterans Fund. Here the sums are larger: a budget grant of 500,000 to 1.5m hryvnia, and on certain streams up to 3m—but the selection is stricter. On average three or four applicants compete for each place; then come a technical screening, assessment by independent experts, an interview and the reworking of the business plan. A repeat grant is available no sooner than three years later, and only in a different field. For those who need not hundreds of thousands but a few tens of thousands, the fund also offers micro-financing: a one-off reimbursement of up to 20,000 hryvnia for equipment already purchased.
Where a grant is not enough, the soft loan begins. The “Affordable Loans 5-7-9%” programme lends up to 50m hryvnia over three to five years at a rate of 5, 7 or 9%, with the rate falling by half a percentage point for each new job created—though not below five. For zones of high wartime risk, a 1% rate applies to investment purposes during the first two years. The logic is straightforward: the grant supplies the starting capital, the loan the funds to scale. So that a business without collateral can obtain credit at all, the state provides portfolio guarantees covering up to 50% of the risk for an existing business and up to 80% for a new one. Discounted leasing and factoring follow the same compensation logic.
Finally, there is non-state money. Donors often offer smaller sums, but pair them with mandatory training. DVV International, funded by Germany’s foreign ministry, provides up to 400,000 hryvnia—but only after the applicant completes a course. The UNDP finances the economic recovery of small business with a priority for veterans. IREX, backed by the US State Department, runs its own reintegration programme. Large companies—Kernel, SKELAR and MHP among them—co-finance the veterans’ fund competitions.
The experts’ advice is to combine: a grant as starting capital, a soft loan for growth, donor training as support. There is only one caveat, ignorance of which can prove costly: two state grants may not be received at once. Together these channels form a support system that most states have yet even to legislate, while Ukraine is already disbursing money. The safe is full. The question is whether an instruction manual was included with it.
How a Veteran Gets the Money: Step by Step
Picture a veteran, newly demobilised, holding a combat-participant’s certificate and hoping to open a small workshop. What path must he actually travel?
Step one—status and proof. Everything begins with a document establishing the entitlement: a combat-participant’s certificate, a certificate of war-related disability, or the status of a family member of a fallen defender. Separately comes the status of a subject of veteran entrepreneurship, which should for the most part be conferred automatically through Diia on the basis of the Register; if the automatic mechanism fails, an application may be sent to the Ministry of Veterans Affairs by email, signed with a qualified electronic signature. It is here that the first typical refusal can occur—not on the merits, but on a documentary defect: the wrong document, an out-of-date certificate, a discrepancy in the data.
Step two—choosing a programme and a sober calculation. The programmes differ substantially in their terms. “Own Business” is the most accessible option for a beginner: 50,000–250,000 hryvnia, or 75,000 on condition of registering as a sole trader. The eRobota veteran grant offers larger sums but heavier job-creation obligations. The “Varto” competition brings the largest sums and the strictest selection. This is where the decision is made that will shape everything that follows: how many jobs the applicant can realistically sustain, whether he can muster the 30% co-financing for a million-hryvnia grant, and whether he can outcompete three or four rivals for each place.
Step three—the business plan. This is the heart of the application and, at the same time, its most vulnerable part. For eRobota it is submitted on an official template: the portal offers both a blank form and a completed sample. The plan must be not impressive but realistic—market prices, a defensible financial model, a well-chosen location. It is here that most are weeded out: not for political reasons, but through doubtful calculations and a financial model that fails to inspire confidence. A weak business plan is the chief reason available financing goes unclaimed.
Step four—submission. The eRobota veteran grant is submitted online through Diia: authorisation via BankID or electronic signature, completion of the application, upload of the business plan, and signing with an electronic key. The application is reviewed by the State Employment Centre, roughly within ten working days of the deadline. “Varto” works differently. The applicant submits a package of documents—a project timeline, a management structure, a detailed application, a budget—followed by a technical check lasting several days, a window to remedy shortcomings, then some two weeks of independent expert assessment and an interview. The 5-7-9 soft loan runs not through the portal but through an authorised bank: the national development institution compensates the rate, while the decision on the loan itself is taken by the bank under its own standard procedures.
Step five—the decision, the contract and the most important signature. Once approved, an eRobota winner has roughly twenty working days to open an account at Oshchadbank and sign the contract; it is into this account that the funds will arrive. Before signing, one must determine the tax treatment of this particular programme: eRobota grants are not subject to personal income tax, the military levy or the single tax on the aid itself, whereas for funds from other providers the consequences depend on the source of financing, the recipient’s status and the existence of a specific tax exemption.
Step six—the money has arrived, the work has begun. Funds may be used only in accordance with the budget. Jobs tied to a veteran grant must be created within six months and preserved for a set period—two, four or six years, depending on the sum. Wages, social contributions, income tax and the military levy must all be paid in full and on time, for this is a condition of keeping the grant. To buy equipment other than that provided for in the budget, one needs the provider’s written consent: an unauthorised change in the direction of spending is already a breach.
Step seven—the reporting that is underestimated. Interim and final reports, source documents for every hryvnia, proof of the jobs created and, for “Varto,” monthly reports against the timeline besides. This is no formality. It is here that poor record-keeping turns first into a demand to return the money and, where state funds have been misused, into criminal exposure. A veteran who has travelled all seven steps and, at the seventh, failed to keep his source documents may lose more than one who never applied at all.
Seven steps—and at each there is a fork where it is easy to leave the road. The money is there in the system. But the way to it runs through applications, deadlines and tax traps, and there is no clear signpost along it.
Where the Risk Hides
The conceptual document that sets out the system’s generosity also isolates seven clusters of problems.
The most dangerous is the tax risk—yet there is no universal “zero versus 23%” formula here. State grants under the eRobota programme are not included in an individual’s taxable income or in the income of a single-tax payer, so no personal income tax, military levy or single tax is paid on the grant sum itself. This does not, however, relieve the business of the taxes on employees’ wages, or of tax on income earned from the business activity itself.
Other grants—particularly those from charitable or international organisations—require a separate tax assessment. For an individual or sole trader, funds not directly linked to the sale of goods or services and not covered by a specific exemption are ordinarily taxed as personal income: 18% income tax and a 5% military levy. For legal entities, the consequences depend on the tax regime and the rules of accounting. Decisive, therefore, is not the word “grant” but the recipient’s status, the source of the funds, the terms of the programme and the use to which the money is put.
Next comes intended use and reporting—and here the risks are higher still. For the misuse of state funds the consequences do not stop at a demand to return the money: a criminal characterisation is possible, the precise article depending on the circumstances. An error in a report ceases to be an accounting matter and becomes a legal risk of a wholly different order.
Other clusters of problems raise further barriers. The applicant’s status: who exactly must be the veteran—owner, co-owner, director; whether family members qualify; what share of ownership is required. Access to the funds: fierce competition, multi-stage selection, the 30% co-financing requirement for the largest sums, and the ban on combining two state grants. Job obligations: positions must not merely be created but retained. The clawback of support and loss of status: a separate procedure, separate consequences, and a question of the proportionality of sanctions that has yet to be worked out.
And finally, the one closest to lawyers—appeals. A refusal of a grant, the stripping of status, a demand to return funds: these are challenged, for the most part, through administrative proceedings. Here it is worth being candid and direct: settled Supreme Court practice on the new status of a subject of veteran entrepreneurship does not yet exist—the law and its secondary acts are too new to cite specific rulings by number. The existing Supreme Court positions concern adjacent questions: the characterisation of grants for tax purposes and the misuse of budget funds. The practice on veteran status itself will be shaped by the first cases. The first applicants will, in effect, form it through their own experience.
The World Has Already Run This Experiment
Ukraine is not the first country to build an economic bridge for those returning from war. The most developed and instructive precedent here is the American one. It repays close attention, for it shows both sides at once: how such a programme can transform a country, and how it can fail the very people it was meant to help.
The classic was written on a napkin. In the summer of 1944, with the war still under way, Harry Colmery—a former national commander of the American Legion—drafted, in Washington’s Mayflower Hotel, the first sketch of what would enter history as the G.I. Bill, and in the statute as the Servicemen’s Readjustment Act of 1944. Behind it stood the American Legion, with all its political weight; in the history of the veterans’ movement John Stelle was called the law’s “father,” and Congresswoman Edith Nourse Rogers, its co-author, its “mother.” President Roosevelt had at first wanted something more modest: means tests, and a full college course only for those who scored highest on examinations. The Legion insisted otherwise—full payments to all veterans, regardless of means. Universality won, and in that lay the whole design: to reward everyone who had served, and not to repeat the humiliation of the First World War veterans, kept waiting for years for benefits they had been promised.
What did the law, signed on 22 June 1944, actually provide? Tuition and a living stipend, from school to college and vocational training. A preferential mortgage on housing, with better terms for new construction. Low-interest loans for a business or a farm. And the “52-20 Club”—twenty dollars a week for a year for those seeking work. The payments were untaxed. The conditions were simple: at least ninety days of service and no dishonourable discharge.
The scale was unprecedented. By 1956, 7.8 million veterans had used the education benefits—2.2 million entered colleges and universities, a further 5.6 million trained under other programmes. That was roughly half of all sixteen million Second World War veterans. Through the state-guaranteed mortgage programme, nearly 2.4 million of them bought homes before 1952 alone. Historians and economists are all but unanimous: the law was one of the greatest investments in American human capital and helped fuel the post-war boom. Tellingly, the “52-20 Club” was barely needed: less than a fifth of the money set aside for it was spent—people quickly found work or went to study. The funds for passive support went unused, because the active channels worked.
But this history has a dark side, one Ukraine would do well to reflect on with particular care. Access was unequal. The law was written so as not to conflict with the segregation statutes of the South; through the discrimination of local authorities and private institutions in housing and education, Black veterans were largely left outside doors that stood wide open for white ones. The Columbia University historian Ira Katznelson called it “affirmative action for whites.” The lesson is harsh and simple: generosity without equal access deepens inequality rather than dispelling it. Narrow or arbitrary doors devalue any sum—the money is there, but the person for whom it is intended cannot reach it.
The American system did not stop in 1944—it works still, and its modern part is, for Ukraine, even more instructive than the classic. The state long ago grasped that a veteran entrepreneur needs not only money but guidance and demand. And so the Office of Veterans Business Development, within the federal Small Business Administration (SBA), runs a whole array of training programmes. “Boots to Business” delivers entrepreneurial training directly on military bases, within the Transition Assistance Program; its “Reboot” extends the course to veterans of all generations; “Revenue Readiness” is a six-week online course in building a business model; and there are dedicated programmes for women veterans and for veterans with disabilities. Across the country, Veterans Business Outreach Centers offer business-plan analysis, mentoring and practical workshops. There is even a dedicated loan for when a reservist is mobilised and the business suffers—the Military Reservist Economic Injury Disaster Loan.
The most interesting part is demand. Rather than merely giving the veteran money, the American state itself buys goods and services from his company. The federal government sets a target: a certain share of public procurement must go to Service-Disabled Veteran-Owned Small Businesses. The target is written into the base Small Business Act; long set at 3%, it was raised to 5% at the end of 2023 by the National Defense Authorization Act for Fiscal Year 2024. Such firms are entitled to procurement reserved exclusively for them, up to sole-source contracts without competition; today some twelve thousand veteran entrepreneurs hold federal contracts. This is a fundamentally different philosophy of support: not merely to supply starting capital, but to create guaranteed demand. It is precisely this instrument that Ukrainians have written into their law—”reserved public contracts”—but fixed as a norm that has yet to be filled with practice.
Britain demonstrates the same principle on a smaller scale. Veteran business there is financed through the British Business Bank and its partner organisation, X-Forces Enterprise. The figures are modest: some three thousand enterprises since 2013, £33.5m, roughly ten thousand jobs. But the point is not the sum. Along with the loan, the veteran receives a business adviser who helps draw up a plan and calculate cash flow, and mentoring support through the first year after launch. Finance comes with navigation—and that is what changes the outcome.
The opposite pole is where the money was given but the navigation was missing. After its 2016 peace agreement, Colombia offered former combatants a clear package: a one-off starting capital of eight million pesos—about 2,500 dollars—for a productive project, plus a monthly payment at 90% of the minimum wage, at first for two years and later extended. There was an individual path and a collective one. The result fell short of the intention. The state acted slowly—by the end of the Santos government’s term only two collective productive projects had been approved, while a single non-governmental initiative was already supporting 42. Perhaps a sixth of participants, by some estimates, were drawn into productive projects. The money was offered; far from all made use of it.
The wider international experience reduces to a single, recurring proposition. In the lessons drawn from disarmament, demobilisation and reintegration programmes, from the Balkans to Africa, economic reintegration is consistently named the “weakest link.” Money on its own does not work. The typical mistake is to train everyone in the same trade without assessing local demand, so that the market is swiftly saturated. In the Democratic Republic of the Congo, of more than a hundred thousand demobilised, economic reintegration was secured for only 58%—and that amid a shortage of funds. A post-war economy rarely creates jobs on the scale the authors of such programmes assume.
The Pluses, the Minuses and What to Do About Them
The combination of American breadth, British navigation and Colombian gaps shows the Ukrainian system in a clear but fair light. It should be neither extolled nor written off. It should be judged without illusions.
The pluses are real and weighty. Speed—eighteen months from the first dedicated law to the launch of grant programmes; few states move so fast. Breadth: grants from 50,000 to eight million hryvnia, loans up to 50 million, guarantees, leasing, donor money and corporate co-financing cover almost the whole spectrum of need, from launching a small business to a capital-intensive project. A distinct legal category for veteran business is exactly the conceptual solution that international practice took decades to arrive at. And the reserved contracts written into the law are, in essence, a Ukrainian version of the American bet on demand—the most powerful instrument known, if it is filled with practice.
The minuses are real too, and nearly all of them are about design, not the size of the purse.
The tax risk does not arise equally for every grant: state eRobota grants are untaxed, whereas funds from other providers may generate taxable income depending on the source, the recipient’s status and the terms of the programme. Because of the risk of criminal liability for misuse, even an error in a report may carry consequences out of all proportion to the fault. Fierce competition and 30% co-financing screen out the most vulnerable—the very people for whom the system was built. And the Register’s technical unreadiness casts doubt on the automatic conferral of status.
At the same time the system lacks the navigational link that other countries either created in good time or paid dearly for the absence of. A British veteran who needs help managing cash flow telephones his adviser.
The Ukrainian one risks learning of his mistake from the tax authority or an investigator.
The directions for a solution are suggested both by the list of problems and by international experience. Unify the tax rules for non-budgetary grants, so their consequences are clear before the contract is signed. Ensure the Register is technically ready before relying on automatic conferral of status. Simplify and standardise reporting, and make sanctions proportionate, so that an accounting slip does not drag criminal consequences in its wake. Turn reserved contracts into a working mechanism: this is Ukraine’s own 5% bet on demand, and it deserves more than a line in a statute. Assess local demand before financing the same activity en masse, so as not to repeat another country’s saturation. And, above all, build the missing navigational link: an adviser, a mentor, a simple reporting form, and a lawyer who determines the tax treatment of a given programme before the contract is signed.
The success of this system will be measured not in the hryvnia that left the budget, but in the businesses still trading three years from now.
The Position of Bauman Kondratyuk Attorneys at Law
Veteran financing is not merely about the size of the grant; it is about the right design of access to it. The greatest risks arise not where there is little money, but where a clear signpost is missing—in the tax characterisation of the funds, in the reporting, and in the limits of intended use. It is precisely here that an accounting slip can turn into a demand to return the money and, at times, into criminal exposure.
A veteran entrepreneur would be well advised to determine the tax treatment of a specific programme before signing the contract (this is part of what legal support for veteran business means), to keep source documentation for every hryvnia, and to retain proof of the jobs created. And should a dispute arise—a refused grant, a stripped status or a demand to return funds—this is a matter for administrative proceedings, where documents and precise legal argument are decisive.
Frequently Asked Questions
Does the status of a veteran-entrepreneurship subject exempt one from taxes?
No. The law introduces no tax holidays and grants no VAT exemption. It confers a distinct legal status and a framework of access to reserved contracts, preferential leasing and reduced fees. eRobota grants are untaxed, but this does not relieve the business of taxes on employees’ wages or on income from its activity.
How much can a veteran entrepreneur receive?
The range is wide: micro-grants from 50,000 hryvnia, the eRobota veteran grant up to one million, “Varto” competitions up to three million, sector streams up to eight million, and 5-7-9% soft loans up to 50 million. Two state grants may not be received at once.
What is the main risk when using a grant?
The misuse of funds and inadequate reporting. The consequences are not confined to returning the money—a criminal characterisation is possible. Source documents, adherence to the budget and the preservation of jobs are therefore critical.
This material is informational in nature and does not constitute individual legal advice. In every case the specific documents, facts and circumstances are decisive.
Legal Support for Veteran Business
Bauman Kondratyuk Attorneys at Law advises veteran businesses at every stage—from choosing a grant programme and the tax characterisation of funds to reporting and defence in disputes over clawbacks or the loss of status. Explore our services or get in touch to obtain advice before you sign the contract.
Source: this material by attorney Yurii Bauman was first published on the author’s blog at LB.ua—”Veteran business: between the generosity of the state and the difficulty of access” (14 July 2026). On the website of Bauman Kondratyuk Attorneys at Law the material is presented in an editorial adaptation.