New rules on critical enterprise status and employee reservation in Ukraine: October 2026
On 27 October 2026, the Cabinet of Ministers of Ukraine’s Resolution No. 1328 dated 23 October 2026 (the “Resolution”) entered into force, introducing changes to the rules for recognising enterprises, institutions and organisations (collectively, “companies”) as critically important and for reserving employees liable for military service.
The key changes concern the revision of criteria for critical enterprise status, the establishment of a Coordination Centre for the Organisation of Reservation of Persons Liable for Military Service (the “Coordination Centre“), the introduction of an additional stage in the review of applications, and changes to reservation limits for certain categories of companies.
Revision of criteria for critical enterprise status
Central executive authorities, other state authorities and public administration bodies whose jurisdiction extends throughout the territory of Ukraine, as well as regional, Kyiv City and Sevastopol City state administrations (military administrations, if established), must, within 10 days from the date of entry into force of the Resolution, review and agree with the Coordination Centre on the sectoral and regional criteria under which companies are recognised as important to a sector of the national economy or to meeting the needs of a territorial community.
The Resolution requires the criteria to be reviewed and agreed with the Coordination Centre by 6 November 2026.
The Resolution also clarifies the general grounds for recognising companies as critically important for the functioning of the economy and ensuring the livelihood of the population during a special period. Such status may be granted to companies whose temporary suspension or significant reduction of operations due to the mobilisation of their employees would cause harm to the state’s defence capability, the functioning of critical infrastructure, the livelihood of the population or the state’s macrofinancial stability. This must be supported by verifiable indicators.
At the same time, the relevant companies must operate in one of the sectors specified in the Resolution (including the defence industry, retail trade, information technology and healthcare) or in another sector agreed with the Coordination Centre following a substantiated request from a ministry or another state authority responsible for formulating and/or implementing state policy in that sector.
Coordination centre and review timelines
The Coordination Centre will agree on sectoral and regional criteria, provide recommendations on critical enterprise status and on increasing reservation limits, and may also recommend considering the revocation of an existing decision on critical enterprise status. Final decisions on critical enterprise status will be made by the relevant authorised body.
Under the general procedure, the review of a company’s application involves three stages:
- Up to 7 business days from receipt of the application: the authorised body verifies the company’s compliance with the applicable criteria and submits a request to the Coordination Centre.
- Up to 1 calendar month from receipt of the authorised body’s request: the Coordination Centre provides its recommendations and proposals.
- Up to 3 business days from receipt of the recommendations: the authorised body adopts a decision on recognising the company as critically important or issues a written refusal explaining the company’s non-compliance with the applicable criteria.
Upon a substantiated request by a state body, an expedited review by the Coordination Centre must be completed within 7 business days from the Coordination Centre’s receipt of such request.
Accordingly, provided there are no delays, the overall review process may take approximately 1.5 months under the general procedure, or around 3 to 4 weeks under the expedited procedure.
Reservation limits and calculation rules
The general reservation limit for companies recognised as critically important for the functioning of the economy and ensuring the livelihood of the population remains at 50% of employees liable for military service.
For representative offices of donor institutions and implementers of international technical assistance projects, the reservation limit is set at no more than 50% of employees liable for military service who are directly involved in carrying out the activities of a single project, but no more than 7 individuals.
The rules for counting employees with deferments on other grounds also remain unchanged. The basis for calculating the reservation limit includes employees liable for military service who have deferments on other grounds, including employees with disabilities who remain liable for military service. As a general rule, such employees are counted at only one place of employment, where the duration of their employment relationship is the longest.
For certain categories of critically important companies in the defence industry and energy sector covered by the Resolution, the reservation limit has been reduced from 100% to 95%. The limit is calculated based on the number of employees liable for military service specified in the decision of the relevant ministry. At the same time, all employees liable for military service who are directly involved in production processes are subject to mandatory reservation.
For companies that are critically important for meeting the needs of the Armed Forces of Ukraine and other military formations, the general possibility of reserving up to 100% of employees liable for military service remains, within the number specified in the decision on critical enterprise status.
Procedure for increasing reservation limits
A decision on increasing the general reservation limit above 50% will be made by the authority that granted critical enterprise status, taking into account the recommendations and proposals of the Coordination Centre. An increase of the special reservation limit above 95% is possible by a decision of the relevant ministry, taking into account the agreed recommendations and proposals of the Coordination Centre.
For representative offices of donor institutions and implementers of international technical assistance projects, the reservation limit may be increased to more than 7 individuals if more than 7 employees liable for military service are directly involved in carrying out the activities of a single project. However, the increased limit may not exceed 50% of the total number of employees liable for military service. The relevant decision is made by the State Secretary of the Cabinet of Ministers of Ukraine, taking into account the recommendations and proposals of the Coordination Centre, on the basis of a substantiated request from a representative office of a donor institution or an implementer of an international technical assistance project, provided that the applicant has been granted critical enterprise status.
Systematic violations of military registration rules by a company’s director may serve as grounds for the Coordination Centre’s refusal to consider proposals on increasing the limit. In particular, this includes two or more documented instances of such violations within the preceding 12 months and/or the director having been held administratively liable for such violations.
Under the general mechanism for increasing the reservation limit above 50%, the period for completing employee reservations has been extended from 5 to 10 business days. It is calculated from the date on which the state body submits a notification of the change of the reservation limit through Diia. If the company fails to complete the reservations within this period, the decision to increase the reservation limit ceases to be valid.
Existing decisions on critical enterprise status and increased reservation limits
Decisions on recognising companies as critically important for the functioning of the economy and ensuring the livelihood of the population that were valid as of 27 October 2026 remain effective for the period for which they were adopted, subject to the grounds for revocation. At the same time, the relevant authorities are required to verify the companies’ compliance with the revised criteria.
If a criterion on the basis of which a company was recognised as important to a sector of the national economy or a territorial community is removed, the relevant decision on critical enterprise status must be revoked.
For certain previously adopted decisions on increasing reservation limits, the Resolution establishes separate transitional periods of validity.
Recommended actions for companies
- Monitor the revision of the criteria for critical enterprise status and prepare documents and indicators confirming the critical importance of the company’s activities. The Resolution requires the criteria to be reviewed and agreed with the Coordination Centre by 6 November 2026.
- Plan the submission of documents in advance, considering the new review timelines and the expiry date of the existing critical enterprise status. As noted above, the review process may take approximately 1.5 months.
- Review the company’s compliance with military registration requirements.
- Companies benefiting from increased reservation limits should verify the date until which the relevant decision will remain valid under the new rules.
For more information, please contact Maksym Tesliar at [email protected] or Iryna Shaposhnikova at [email protected].
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