Massive closure of IT FOPs in 2025 turned out to be a technical failure
29 July 12:59
The first half of 2025 was a real challenge for the Ukrainian IT sector. The statistics on the termination of sole proprietorships in the IT sector reached record levels. This has caused a wave of concern about a possible crisis in the industry. However, a study by YouControl.Market debunks these fears, revealing the true reasons for the statistical jump, "Komersant Ukrainian" writes.
Record decline: figures that shocked the market
In the first three months of 2025, 16.7 thousand IT entrepreneurs ceased their activities. This figure is striking in its scale: it is 135.4% more than in the first quarter of the previous year, when only 7,079 terminations were recorded. Compared to the second quarter of 2024, when 8,316 sole proprietors ceased operations, the figure for the first quarter of 2025 was almost twice as high.
For the entire first half of 2025, the total number of terminated IT sole proprietorships reached 25.4 thousand. This created a negative balance of minus 7 thousand entrepreneurs, as only 18.4 thousand new sole proprietors were registered at the same time. For comparison, the first half of 2024 ended with a positive increase of 4 thousand IT entrepreneurs.
Explaining the phenomenon: technical failure instead of crisis
YouControl.Market analysts have concluded that massive suspensions in the first quarter are not a sign of a systemic crisis in the IT industry. Most likely, the record figures are related to the resumption of the work of state registries after a cyberattack, which could have led to the accumulation of unfulfilled operations to terminate the activities of sole proprietors.
This version is supported by the fact that the demand for starting new IT businesses remained stable. In the first half of 2025, 18.5 thousand new IT entrepreneurs were registered, which is only 4.8% less than in the same period of the previous year (19.3 thousand). Such a slight decline does not correspond to the scale of terminations and indicates a continued interest in doing IT business in Ukraine.
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New geography of Ukrainian IT: growth outside the capital cities
The study revealed interesting regional trends that may indicate the beginning of the decentralization of the IT industry in Ukraine. The traditional top five leaders in terms of the number of newly established IT FOPs remain unchanged: Kyiv tops the ranking with 3.7 thousand new entrepreneurs, followed by Lviv (1.9 thousand), Dnipro (1.7 thousand), Kharkiv (1.5 thousand), and Kyiv (1.3 thousand) regions. Together, these five regions accumulate more than half of all new IT businesses in the country.
However, the most impressive processes are taking place outside of traditional IT centers. A number of regions have demonstrated high growth rates, which may indicate the processes of relocation and the formation of new centers of business activity.
The absolute leader in terms of relative growth was Zakarpattia region, where the number of new registrations of IT sole proprietorships increased by an impressive 28.7% compared to the first half of 2024. This may indicate an active migration of IT professionals to the border region, possibly due to its proximity to EU countries and greater security.
Poltava region also showed a significant increase of 17.5%, which may be due to the development of regional IT hubs and improved infrastructure. Rivne region (14.1%) also demonstrated strong growth, which confirms the trend toward geographic diversification of the IT sector.
Significant growth was also recorded in Mykolaiv (11.1%) and Ternopil (9.6%) regions, indicating that IT entrepreneurship is spreading far beyond traditional centers.
Trends by gender
The gender analysis reveals contradictory trends in Ukrainian IT entrepreneurship. On the one hand, women retain a slight lead in creating new IT businesses. In the second quarter of 2025, their share among newly established IT sole proprietorships amounted to 51.6%, which remained virtually unchanged from 52.2% in the second quarter of the previous year.
However, there were more dramatic changes in the structure of terminated sole proprietorships. While in the second quarter of 2024, women accounted for only 29.6% of those who ceased operations of IT sole proprietorships, in the second quarter of 2025, this share rose sharply to 39%. Accordingly, the share of men among those who closed their IT business decreased from 70.4% to 61%.
Although men still close more sole proprietorships in absolute numbers, the growth rate of the number of closures among women is much higher. This may indicate different approaches to doing business or specific challenges faced by women entrepreneurs in the IT sector.
Conclusions and prospects
YouControl.Market’s research refutes alarmist sentiments about the crisis in the Ukrainian IT sector. The record outages in the first quarter of 2025 are most likely a technical artifact related to the restoration of government systems after a cyberattack.
The real trends in the industry look more optimistic: the demand for IT businesses remains stable, the sector is geographically decentralized with the emergence of new regional centers, and women continue to play a key role in the development of IT entrepreneurship.
The processes of relocation and decentralization, which are manifested in the growth of activity in Zakarpattia, Poltava, and other non-capital regions, can be an important factor in strengthening the economic resilience of the Ukrainian IT sector in wartime.
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