Obtaining a license for legal entities
The complex of information systems "License" for the provision of interactive services in the field of licensing and licensing procedures - https://license.gov.uz/
Guarantees of the free transfer of funds
Investors are guaranteed the free transfer of funds in foreign currency to and from the Republic of Uzbekistan without any restrictions, on condition that they pay taxes and payments, including currency conversion for repatriation. Such transfers include:
initial and additional amounts to maintain or increase foreign investment;
income investments implementation;
funds received as compensation for losses in accordance with this Law;
payments made in the execution of contract terms;
proceeds from the sale of all or part of foreign investments;
payments arising from the settlement of the dispute, including any judicial or arbitral award;
salaries and other payments to employees;
funds from other sources received in accordance with the legislation.
In accordance with the laws and international treaties of the Republic of Uzbekistan, the state may suspend the repatriation of funds of a foreign investor on the basis of non-discriminatory application of legislative acts in cases of insolvency and bankruptcy of an enterprise with foreign investment or violation of the rights of creditors, criminal acts or administrative offenses committed by a foreign investor — an individual, or other need to suspend such repatriation in accordance with judicial or and arbitral award.
Benefits and preferences for potential foreign investors
Benefits and preferences for potential foreign investors
According to Articles 471 and 472 of the Tax Code of the Republic of Uzbekistan, tax benefits in the form of exemption from payment of land tax, property tax and water use tax are provided to legal entities established with the involvement of foreign direct investment and specializing in the production of goods (services) in the economic sector in the list approved by the Resolution of the Ministry of Finance of the Republic of Uzbekistan, the State Tax Committee of the Republic of Uzbekistan, the Ministry of Economy of the Republic of Uzbekistan No. 2822 dated August 26, 2016.
Tax benefits are granted for a certain period, which varies depending on the amount of investment:
from $300,000 to $3 million - for a period of 3 years;
from $3 million to $10 million - for a period of 5 years;
above $10 million - for a period of 7 years.
Forms of investment in Uzbekistan
Forms of investments implementation are:
establishment of legal entities or equity participation in their authorized funds (authorized capital), including through the acquisition of property and stocks (shares);
acquisition of securities, including debt instruments issued by the residents of the Republic of Uzbekistan;
the acquisition of concessions, including concessions for exploration, development, production or use of natural resources, as well as participation in the production sharing agreement;
acquisition of property rights, including ownership of intellectual property, copyrights, patents, trademarks, utility models, industrial samples, brand names and know-how, business reputation (goodwill), as well as objects of trade and services along with land plots in which they are located;
acquisition of the right to own and use land (including on a rental basis) and other natural resources.
Investors can make investments in other forms that do not contradict the legislation.
Investment activity can be carried out through a combination of various forms of investments.
Changing the forms in which investments are initially or re-invested does not lead to a change in their qualifications as investments.
Source: Law of the Republic of Uzbekistan оn investments and investment activity, December 25, 2019, No. LRU-598
Enterprises with foreign investment
FDI includes newly created enterprises that meet the following conditions:
- the size of the authorized capital of the enterprise cannot be less than the equivalent of 400 million soums (at least 200 million soums in the Republic of Karakalpakstan and Khorezm region);
– the presence of a foreign individual or legal entity among the founders;
— the share of foreign investments is at least 15 percent of the authorized capital of the enterprise.
Privatization of state assets
Privatization of state assets
In recent years, systemic reforms have been carried out in the country to expand private ownership by reducing state participation in the economy and privatizing state assets, as well as liquidating inefficient and unpromising enterprises.
In particular, over the past three years, about 300 business companies and state unitary enterprises have been privatized, in the authorized capital of which there is a state share (hereinafter - enterprises with state participation), and over 1,600 real estate objects, more than 650 have been liquidated and 160 enterprises have been reorganized.
In accordance with the Decree of the President of the Republic of Uzbekistan dated March 24, 2023 No. PP-102 “On additional measures to reduce state participation in the economy”, a list of blocks of shares (shares) of 1,001 enterprises, sold entirely through public auction, was approved, according to Appendix No. 1* , a list of 40 enterprises whose shareholdings are sold through public auctions in the manner of conducting a people's IPO on the principle of "One share - one lot", in accordance with Appendix No. 1a * and a list of 1,046 state real estate objects and enterprises with state participation, sold through public auctions, according to Appendix No. 2*.
Rights of investors
freely carry out investment activities, determine the volumes, types, forms, scope and directions of investment, not contradicting the legislation of the Republic of Uzbekistan;
conclude agreements with legal entities and individuals to carry out investment activity;
own, use and dispose of income received as a result of investment activities, as well as sell and export of income received as a result of investment activity;
independently and freely manage the income received as a result of investment activity, after paying taxes, fees and other payments stipulated by legislation (hereinafter — taxes and payments);
to use property and any property rights belonging to him by right of ownership as security for all types of obligations undertaken by him, including obligations aimed at attracting borrowed funds;
to receive adequate compensation in case of requisition (expropriation) of his investments and other assets;
raise funds in the form of loans and borrowings;
receive compensation for losses caused as a result of illegal actions (inaction) and decisions of state bodies, local government bodies and their officials.
The procedure for taxation of income of foreign individuals and legal entities received in the territory of the Republic of Uzbekistan
An individual permanently residing in the Republic of Uzbekistan or staying in Uzbekistan for 183 days or more, for any period up to twelve months beginning or ending in the fiscal year, is considered a resident of the Republic of Uzbekistan.
Individuals who are not residents of the Republic of Uzbekistan are taxed on income received from sources on the territory of Uzbekistan.
A similar situation arises in taxation of foreign legal entities. Thus, a resident of the Republic of Uzbekistan is a legal entity established or registered in Uzbekistan, as well as registered outside the Republic of Uzbekistan, whose head office is located in Uzbekistan.
Legal entities that are not residents of the Republic of Uzbekistan are taxed on income (profit) received from sources on the territory of Uzbekistan.
At the same time, the collection of taxes and fees from foreign individuals and legal entities may be terminated or restricted on the basis of reciprocity in cases where the same measures are carried out in relation to individuals and legal entities of the Republic of Uzbekistan in the relevant foreign state.
Guarantees of the rights of subjects of investment activity
Guarantees of the rights of subjects of investment activity
The state guarantees the rights of subjects of investment activity. State bodies and their officials are not entitled to interfere in the activities of investment activity entities carried out in accordance with the law.
If state bodies and their officials discover violations of the law in the activities of investment activity entities, they can take the measures for which they are authorized and which are directly related to the elimination of a specific violation.
State bodies and their officials cannot use the fact of a violation as a basis for interfering or restricting other, unrelated to investment, legal activities of investment activity entities.
The state guarantees non-discrimination against investors in connection with their citizenship, place of residence, place of economic activity, as well as depending on the country of origin of investors or investments.
The exercise of rights by an investor must not violate the rights and legally protected interests of other investors. At the same time, the state as a co-founder (shareholder, participant) of a business entity has equal rights and obligations along with other founders (shareholders, participants).
The rules of this article do not apply to the adoption, amendment, addition or repeal of legislative acts that are directly related to ensuring the national security of the Republic of Uzbekistan, determined in accordance with the generally recognized principles and norms of international law.
Tax and customs benefits for SEZ participants
In accordance with the Decree of the President of the Republic of Uzbekistan dated October 26, 2016 No. No. UP-4853, participants in special economic zones are provided with specifics for the application of benefits for certain taxes, as well as customs payments in the manner established by the Tax Code of the Republic of Uzbekistan and the Law of the Republic of Uzbekistan "On Special Economic Zones".
Benefits for tax and customs payments are provided for a period of 3 to 10 years. FEZ participants are exempt from paying property tax, land tax and tax for the use of water resources, depending on the amount of investments made:
• from $300 thousand to $3 million - for a period of 3 years;
• from $3 million to $5 million - for a period of 5 years;
• from $5 million to $10 million - for a period of 7 years;
• from $10 million and more — for a period of 10 years.
Also, FEZ participants are exempt from paying income tax depending on the volume of investments they have made:
• from $3 million to $5 million - for a period of 3 years;
• from $5 million to $15 million - for a period of 5 years;
• from $15 million and more — for a period of 10 years.
In addition, FEZ participants have the right to receive a deferment on the payment of value added tax when importing goods for up to 120 days.
FEZ participants are exempt from customs payments (except for customs clearance fees) when importing into the territory of the Republic of Uzbekistan:
• building materials, for the implementation of the investment project in accordance with the investment agreement during the construction period,
• raw materials, materials and components used for the production and sale of products for export and technological equipment, analogues of which are not produced in the Republic of Uzbekistan, according to the approved list (the list is approved by the Resolution of the Cabinet of Ministers of the Republic of Uzbekistan No. PKM-352 of 06/04/2021).
Providing additional guarantees and support measures
Providing additional guarantees and support measures:
The Government of the Republic of Uzbekistan may conclude an investment agreement in order to ensure the fulfillment of obligations by foreign investors, who are provided by mutual agreement with additional guarantees and support measures (benefits and preferences).
An investment agreement with the Government of the Republic of Uzbekistan is mandatory concluded if the Government of the Republic of Uzbekistan provides a foreign investor with additional guarantees and support measures (benefits and preferences) as part of state support for investments and investment activities.
Additional guarantees and support measures (benefits and preferences) are provided to foreign investors in each specific case when investing:
in priority sectors that ensure sustainable economic growth, progressive technological changes in the country's economy;
in priority projects that ensure the strengthening and expansion of the export potential of the Republic of Uzbekistan, its integration into world economic relations.
At the same time, additional benefits for the payment of taxes and payments are provided to enterprises with foreign investments created by foreign investors only for a specific definite period and cannot be of an indefinite nature.
Guarantees for foreign investors provided by foreign investors when changing legislation
In case, if subsequent legislation of the Republic of Uzbekistan worsens the conditions for investment, then the legislation that was in force on the date of investment is applied to investors within ten years from the date of investment. The investor has the right, at his discretion, to apply those provisions of the new legislation that improve the conditions for his investment.
The guarantee on the application for ten years of the legislation in force at the time of investment, in case of worsening investment conditions by the subsequent legislation of the Republic of Uzbekistan, is applied in cases:
Introduction of additional requirements that complicate procedure of repatriation or reduce the size of income (profit) investor, transferred abroad, except in cases of suspension of government repatriation of funds to the investor on conditions of non-discriminatory application of legislation in cases of insolvency and bankruptcy of an enterprise with foreign investment or violations of the rights of creditors, criminal acts or administrative offences committed by the investor, or any other need for suspension of such repatriation in accordance with court or arbitration decision;
the introduction of quantitative restrictions on the volumes of investing and other additional requirements on the size of the investment, including in the form of increasing the minimum size of foreign investments in the enterprises with foreign investments;
the imposition of restrictions on equity participation of the foreign investor in statutory funds of enterprises of the Republic of Uzbekistan;
the introduction of additional procedures of registration and prolongation of visas of foreign investors, as well as other additional requirements on making foreign investments.
The validity of the guarantees against unfavorable changes for the investor starts with:
the establishment of the enterprise — from the date of its state registration;
the acquisition of property, shares, stocks and other securities emitted by residents of the Republic of Uzbekistan the right of ownership on objects of trade and sphere of services, for premises together with the land on which
they are located, and the rights of ownership and use of land (including on the basis of rent) and natural resources — from the date of entry into force of the instrument embodying the right of ownership or other real rights;
the attachment of intellectual property rights, including copyrights, patents, trademarks, utility models, industrial samples, brand names and know-how, and also business reputation (goodwill) from the date of entry into force of
the document confirming the attachment of intellectual property rights;
acquisition of concessions, including concessions for the exploration, development, extraction or use of natural resources — from the date of registration of the concession contract in accordance with legislation;
investing with simultaneous securing of investment commitments in the investment agreement with the Government of the Republic of Uzbekistan of the date of entry into force of the Treaty;
investing in other forms not contradicting the legislation of the Republic of Uzbekistan — from the date of entry into force of the document certifying performance by the investor of investment activity on the territory of the Republic of Uzbekistan. This article does not apply to the adoption, amendment, supplement or repeal of legislative acts that are directly related to ensuring the protection of the national security interests of the Republic of Uzbekistan, determined in accordance with generally recognized principles of international law.
Information on registration of joint ventures and foreign enterprises
To register a company with foreign investment in Uzbekistan, you need:
- 1.The size of the authorized capital – not less than 400 000 000 million soums (about 40 000 USD)
- The presence in the composition of founders of a foreign legal entity
- The share of a foreign legal entity must be at least 15% of the total amount of the statutory fund.
To create a company with participation of a foreign investor, you need to go through the following steps:
- Development of a package of constituent documents or introduction of changes to documents of an existing enterprise (if investments are attracted to an already existing enterprise);
- Reservation brand name;
- Notarization of constituent documents;
- State registration (re-registration) of a legal entity;
- Production of the main seal and angle stamp (if required);
- Conclusion of a contract for banking services and the opening of bank accounts (for newly created enterprises).
The founding documents can be prepared either by the founders themselves, or by agreement with them by the third parties (consulting centers, law firms, etc.). You can contact the nearest division of the Chamber of Commerce and Industry, whose specialists will develop necessary documents on a contractual basis. Founders can use standard forms of constituent documents that are available on the official website of the Ministry of Justice. http://www.minjust.uz/ru/interactive/documents/
A newly created enterprise with participation of a foreign investor acquires the status of a legal entity and the right to carry out activities after its state registration. The registration procedure does not depend on the status of the enterprise that is being created (FDI or FIC) – both are registered by Single Centers for provision of public services to business entities on the principle of “one window”.
It is necessary to contact the “one window” center at the location of the founder – a legal entity or at the place of permanent residence of the founder – an individual. From April 1, 2017, an enterprise can be registered via the Internet using an automated system for registering business entities integrated into the Unified portal of interactive state services.
Documents required for state registration of enterprises with foreign capital participation
The procedure for opening a bank account in the Republic of Uzbekistan
from May 1, 2023, legal entities whose founders are residents of the Republic of Uzbekistan and individual entrepreneurs can remotely open bank accounts both during their state registration and in the course of their activities;
for persons with disabilities, it is allowed to use a facsimile signature when affixing sample signatures;
banks are granted the right not to store documents submitted for opening accounts in paper form, if there are conditions for storing them in electronic form;
the opening of accounts for all individuals will be carried out on the basis of a single identifier - a personal identification number of an individual (PINFL).