Build in/with/from Ukraine: What is this?
Updated: 1 day ago
Ukraine’s defence industry is developing several routes for international industrial cooperation.
Three of the clearest models can be described as:
Build in Ukraine;
Build with Ukraine;
Buy from Ukraine.
They solve different problems.
One brings foreign production capacity into Ukraine.
Another places Ukrainian technology and production in partner countries.
The third creates a direct export route for Ukrainian defence products.
For companies, governments and investors, the value of the framework is practical: it helps clarify what type of cooperation is being discussed before negotiations begin.
Overwiew
Why the Three Models Matter
Ukraine’s defence industrial base has expanded rapidly during the full-scale war.
The next phase involves connecting that capacity with allied markets, capital and production systems.
International cooperation can follow several directions.
A European company may want to manufacture inside Ukraine.
A Ukrainian company may want to establish production in an allied country.
A foreign government may want to buy a finished Ukrainian system.
These are very different transactions.
They involve different:
legal structures;
investment models;
export-control requirements;
IP arrangements;
customers;
production risks;
government involvement.
The Build in / Build with / Buy from framework helps separate those paths.
Build in Ukraine
Build in Ukraine is focused on localisation of foreign defence companies inside Ukraine.
The Ministry of Defence describes the initiative as a way to encourage international companies to establish production facilities directly in Ukraine.
Possible structures include:
factories;
production lines;
repair facilities;
service centres;
joint ventures;
licensed production.
The strategic logic is clear.
Ukraine receives additional industrial capacity, technology and investment.
Foreign companies gain closer access to Ukrainian demand, operational feedback and one of the fastest defence innovation environments in the world.
The Ministry of Defence reported that more than 25 foreign companies were at different stages of localisation in Ukraine by late 2025.
Examples referenced by the Ministry include cooperation involving BAE Systems, Rheinmetall, Saab and Northrop Grumman.
Who Should Consider Build in Ukraine?
The model is most relevant for an international company that:
has strong demand from Ukraine;
needs a local repair or service footprint;
wants closer access to Ukrainian testing and users;
plans a long-term market presence;
sees Ukraine as part of its future European production strategy.
Main Questions
A company considering localisation should assess:
security of the production site;
investment structure;
local partner selection;
workforce;
components;
technology transfer;
IP;
export rules;
government support;
long-term demand.
Build with Ukraine
Build with Ukraine works in the opposite geographic direction.
The Ukrainian Council of Defence Industry describes it as joint production with foreign partners outside Ukraine using Ukrainian technologies, engineering experience and production competencies.
One objective is to replicate selected production lines in partner countries.
This can reduce exposure to attacks on Ukrainian production sites and create more resilient international supply chains.
It can also help Ukrainian companies enter foreign procurement systems.
The model may include:
joint ventures;
licensed production;
co-production;
assembly abroad;
production of components;
replication of a Ukrainian production line in a partner country.
UCDI notes that key Ukrainian R&D and competencies can remain in Ukraine while production capacity is distributed across partner jurisdictions.
Why This Model Matters
For a Ukrainian company, Build with Ukraine can provide:
additional production capacity;
foreign investment;
local market access;
political support;
logistics advantages;
access to European supply chains.
For the foreign partner, it can provide access to a technology that has already been developed and tested under operational conditions.
The IP Question
IP should be addressed early.
A production partnership needs clarity around:
who owns the design;
what is licensed;
where modifications can be made;
who owns improvements;
what data can be shared;
what happens if the partnership ends.
A good industrial partnership protects both the Ukrainian technology base and the foreign partner’s investment.
Buy from Ukraine
Buy from Ukraine is the direct export route.
The buyer purchases a Ukrainian defence product rather than establishing a production partnership.
This is the simplest model conceptually and often the most complex in regulatory terms.
Defence exports require compliance with Ukrainian export-control rules and the requirements of the destination country.
The Ukrainian Council of Defence Industry has created an Export Map to help manufacturers understand the process.
The map describes routes including:
working through a special exporter;
using the procedures introduced under Cabinet of Ministers Resolution No. 541 of 29 April 2026 where applicable;
other legal routes as the export framework develops.
The map covers practical steps such as:
registration with the State Service of Export Control of Ukraine;
internal export-control procedures;
end-user requirements;
licensing;
documentation.
UCDI explicitly notes that the Export Map is based on publicly available sources and does not constitute official legal interpretation.
That warning is important.
Defence-export rules can change quickly and companies should obtain current legal and regulatory guidance for each transaction.
How the Models Differ
Build in Ukraine | Build with Ukraine | Buy from Ukraine | |
Where is production? | Ukraine | Partner country and/or distributed between countries | Primarily Ukraine |
Who expands? | Foreign company | Ukrainian company with foreign partner | Ukrainian exporter |
Primary objective | Localisation and Ukrainian industrial capacity | Joint production and international scaling | Direct international sales |
Typical structure | Local production, JV, repair or service centre | JV, licensing, co-production, replicated production line | Supply contract |
Main customer logic | Ukrainian demand plus possible future exports | Ukraine plus allied and international markets | Foreign government or approved buyer |
A company can use more than one model over time.
For example, a Ukrainian manufacturer could first export a product, later establish joint production abroad, and eventually operate a distributed production network.
Export Control and Compliance
International defence cooperation cannot be planned around commercial terms alone.
Companies should consider:
export-control classification;
end-user certificates;
sanctions;
destination restrictions;
technology-transfer rules;
ownership;
security;
IP;
anti-corruption requirements;
customs;
local procurement regulation.
For joint production, the compliance chain can be even more complex because components and technical information may cross borders in several directions.
The company should map the regulatory flow before signing a commercial structure.
A useful internal question is:
What has to move across the border?
Possible answers include:
finished products;
components;
technical documentation;
software;
source code;
manufacturing equipment;
design data;
special materials;
personnel.
Each can trigger different requirements.
Choosing the Right Model
The right model depends on the objective.
Choose Build in Ukraine When: | Choose Build with Ukraine When: | Choose Buy from Ukraine When: |
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Companies should resist the temptation to select the most politically attractive model.
The industrial structure should solve a real commercial and capability problem.
Practical Company Action Plan
1. Define the Objective | Write one sentence: “We need this international partnership because…”. Possible answers: we need additional production capacity; we need access to a new procurement market; we need foreign capital; we need a supplier; we need a customer; we need to reduce production risk. |
2. Select the Model | Match the objective to: Build in Ukraine; Build with Ukraine; Buy from Ukraine. |
3. Map the Transaction | Identify: seller; buyer; manufacturer; IP owner; investor; end user; exporter; government authorities. |
4. Prepare an Industrial Data Room | Include: product description; TRL; production capacity; unit economics; BOM; critical suppliers; IP; quality procedures; existing contracts; test results; export status. |
5. Define IP Before Production | Agree what is transferred and what remains protected. Avoid leaving this discussion until after the foreign partner has already invested in production preparation. |
6. Verify Export Control | Use the UCDI Export Map as a practical starting point and confirm the current legal requirements with qualified export-control advisers and relevant Ukrainian authorities. |
7. Build a Scale-Up Plan | Show how production changes under the partnership: current output; target output; investment required; equipment; people; components; time to rate; major risks. |
8. Define the Long-Term Market | A production partnership is stronger when it has demand beyond one initial order. Map the potential customers and countries that could support the production structure over several years. |
The three models show how Ukraine’s defence industry is moving into a wider international role.
Foreign companies can localise in Ukraine.
Ukrainian companies can build with allies abroad.
International customers can buy Ukrainian systems directly.
The strategic task for each company is to choose the model that matches its industrial objective and then structure the legal, production and commercial work around it.
