of the Republic of Uzbekistan
to the United Kingdom of Great Britain
and Northern Ireland

Currency Rates (UZS)   06.04.2014
  CB Buy Sell
GBP 2897.79 2898.00 2941.00
EUR 2456.73 2457.00 2493.00
USD 1832.19 1845.00 1851.00
JPY 224.34 225.00 228.37

Weather (Tashkent) 06.04.2014

, -18 C
, -18C
Precipitation: %

High -18C
Low -18C

High -18C
Low -18C

FAQ on Doing Business in Uzbekistan

1. What is considered to be as foreign investment in Uzbekistan?

All kinds of material and non-material values and rights on them including IPR as well as any income received from foreign investments contributed by the foreign investors to the entrepreneurial activity and other types of activity which are not banned by legislation and predominantly directed at profit are considered to be foreign investments on the territory of the Republic of Uzbekistan.

2. Who may be a foreign investor in Uzbekistan?

The followings may be a foreign investor in the Republic of Uzbekistan:
­Foreign states, administrative bodies or territorial authorities of foreign states;
­International organizations that have been established by agreements or other treaties between states, or those subjects of international public law;
­Legal entities, any other partnerships, organizations or associations that have been established in accordance with, and are operating under, the legislative acts of foreign states;
­Individuals-citizens of the foreign state, non-citizens, and citizens of the Republic of Uzbekistan who permanently reside abroad.

3. Are there any restrictions for foreign investments in Uzbekistan?

No. Foreigners can invest in a business venture Uzbekistan in any way which does not contradict with the legislation.

4. What if the form of investment changes while investing?

Changing the form of an investment initially or re-investing will not bring about changes in its aspect as an investment.

5. What is an enterprise with foreign investment in accordance with Uzbek legislation?

The definition of an enterprise with foreign investment applies to those newly established entities which meet the following criteria:

  • Their charter fund capital exceeds USD 150,000;
  • ­At least one of the share-holders is a foreign legal entity; and
  • ­Foreign investors own at least 30% of the total charter fund.

6. How to establish an enterprise with foreign investments in Uzbekistan?

An enterprise with foreign investments may be created either by establishment of such enterprise, or by purchasing the shares (portions, stocks) in an earlier established enterprise without foreign investments, or by purchasing such enterprise entirely, including a purchase made through privatization.

7. Are there any restrictions with regards to organizational and legal aspects while establishing an enterprise with foreign investments in Uzbekistan?

There are no restrictions with regards to organizational and legal aspects while establishing an enterprise with foreign investments in Uzbekistan.

Furthermore, they may be established in different forms of partnerships, limited/additional liability companies, open/closed joint-stock companies, subsidiaries, and unitary enterprises and in other forms that do not contradict Uzbek legislation.

8. What rights do foreign investors have in Uzbekistan?

Foreign investors have the rights to:

  • Determine, at its own discretion, the amount, type and sphere of investing;
  • Make contracts with legal entities and individuals to carry out an investment activity;
  • Own, use and dispose of his own investments and outcomes of his investment activity. At the decision of the foreign investor, the rights to own, use and dispose of his own investments and outcomes thereof may be transferred to other legal entities and individuals in accordance with the procedures established by Uzbek legislation. The mutual relations between the parties, while transferring those rights, shall be regulated on a contractual basis;
  • Make, at his own discretion, decisions to patent abroad and in the Republic of Uzbekistan his/her inventions, utility models and industrial designs resulting from an investment activity in the Republic of Uzbekistan;
    Independently and freely dispose of revenue (including unimpeded repatriation thereof) received from an investment activity;
  • Attract into  the Republic of Uzbekistan funds in the form of credits and loans;
  • Use funds in the national currency on his accounts to purchase foreign currency on the domestic currency market;
  • Acquire rights to land in cases and on conditions provided for by Uzbek legislation;
  • Use property and any property rights pertaining to him on the basis of the ownership rights as security for all forms of commitments assumed by an investor, including the ones aimed at attracting of loans in accordance with Uzbek legislation;
  • Receive adequate compensation in case of the requisition of his/her investments or other assets;
  • Receive indemnification for damages caused as a result of the illegal actions (inaction) and decisions taken by state bodies and local authorities and officials thereof.

9. What spheres of manufacture are priority in Uzbekistan and supported by the GOU?

There no restrictions for FDIs in any sector or regions in Uzbekistan.

At the same time, the Uzbek legislation envisages depending on the volume of investments a number of preferential conditions for the enterprises that attract foreign direct investments into specific sectors of industry and deploy the production in certain regions of the country.

When investing in certain sectors of economy foreign investors are exempted from profit tax, property tax, social infrastructure tax, unified tax or unified tax payment for micro-firms and small enterprises, as well as mandatory payments to Republican Road Fund.

10. What is defined as “Unified tax payment for micro-firms and small enterprises”?

Effective from 1 July 2005 small enterprises and micro-firms may opt for the application of the Unified Tax Payment in lieu of paying unified tax, mandatory payments to the off-budget Pension Fund, Republican Road Fund, and School Education Fund.

Moreover, when unified tax payment is imposed for micro-firms and small enterprises whose production undergoes excise tax the taxation will go down to the level of excise tax.

In addition, newly established micro-firms and small enterprises have rights to obtain suspension on unified tax payments for a year with payment of suspended volumes within 12 months after the grace period is over.

Unified tax payment rates are fixed annually by the GOU. Effective from 2007 unified tax payment rate for enterprises of all industries is 10%.
Thus, for the enterprises, engaged in specific types pf activity there are lower rates or privileges envisaged.

So, the unified tax rate for:
The enterprises, where the components of develop and introduce computer software make not less than 80% from total amount of produced goods (works, services) pay 5%.

Agricultural enterprises are subject to 6%.

The enterprises exporting goods (works, services) of their own production for freely convertible currency may apply reduced rates of income (profits) tax as follows:

  • A 50% profits tax reduction where the company exports 30% or more of the total sales volume of its products, work or services;
  • A 30% profits tax reduction where the company exports from 15% to 30% of the total sales volume of its products, work or services.

For enterprises of the service sector the established rate reduces by 10%, when the services rendered are paid by plastic cards.

11. What falls under the definition of micro-firms and small enterprises in Uzbekistan?

According to the current Uzbek legislation, micro-firms, small enterprises, alongside with individual businessmen, are subjects of small business provided their conformity to the below-mentioned criteria:

  • ­Micro-firms with a mid-annual number of employees occupied in industrial branches - no more 20 persons,
  • ­In the sphere of services and other non-production branches - no more than 10 persons,
  • ­In the wholesale, retail trade and public catering - no more than 5 persons.

Small enterprises with mid-annual number of employees occupied in branches:

  • ­Light and the food-processing industry, metal working and instrument making, wood processing, furniture industry and the industry of construction materials, - no more than 100 persons,
  • ­Mechanical engineering, metallurgy, fuel and energy and chemical industry, manufacture and processing of agricultural production, construction and other industrial manufacturing spheres - no more than 50 persons,
  • ­Science, scientific servicing, transport, communication, sphere of services (except for insurance companies), trade and public catering and other non-production spheres - no more than 25 persons.

It should be kept in mind that for the above specified category of businesses the legislation has provided additional guarantees. In particular, if there are amendments in the tax legislation which provide for less favorable conditions for micro-firms and small enterprises, then within two years they are levied on the taxes according to the legislation which had been effective, before such amendments were made.

12. Are there any requirements with regards to the amount of the charter fund for micro-firms and small enterprises in Uzbekistan?

No. The charter fund of micro-firms and small enterprises is formed by founders taking into account the minimal amount of charter fund, according to Uzbek legislation for every form of the legal entity.

13. Are there any restrictions for foreign investors, non-residents of the Republic of Uzbekistan, when carrying out labor activities?

Foreign citizens or non-residents enjoy the rights of carrying out of labor activities similar to those of citizens of Uzbekistan on the territory of the Republic of Uzbekistan.

Moreover, foreign citizens, entering the Republic of Uzbekistan for the purpose of carrying out of labor activity, may work on the territory of the Republic with the permission of the Agency for external labor migration, issued for him on the grounds of permission received by employer.

14. What kind of taxation is levied on the income of foreign individuals and legal entities in Uzbekistan?

An individual who permanently resides in Uzbekistan or stays there for 183 days or more during any of 12-months of a financial year is considered as a resident of the Republic of Uzbekistan.

A non-resident is only taxed on income derived from the sources in Uzbekistan.

The same situation occurs when taxing foreign legal entities. So, a legal entity is considered resident in Uzbekistan, if he is:

  • ­Established/registered in Uzbekistan;
  • ­Established outside the Republic of Uzbekistan, whose headquarters are located in Uzbekistan.

Foreign legal entities non-residents of Uzbekistan are only taxable on their income from activities performed in the Republic of Uzbekistan.

With all this going on, levying of taxes and collection of other fees from foreign individuals and legal entities may be stopped or limited on reciprocal situations when foreign state applies the same actions with relation to individuals and legal entities of the Republic of Uzbekistan.

15. Is the property of a foreign investor protected from nationalization in Uzbekistan?

Foreign investments and other assets of foreign investors in the Republic of Uzbekistan are not subject to nationalization.

16. Can reinvestment be foreign investment in Uzbekistan?

All kinds of material and non-material values and rights on them including IPR as well as any income received from foreign investments contributed by the foreign investors to the entrepreneurial activity and other types of activity which are not banned by legislation and predominantly directed at profit are considered to be foreign investments on the territory of the Republic of Uzbekistan.

17. What legal institutions are established in Uzbekistan to protect the rights of foreign investors?

From 1 January 2007 the Law on Courts of Arbitration has come into force and so far it serves as a legal basis for the activity of both permanent and temporarily created arbitration courts. Thus, alongside with available resources of protection of the rights and guarantees to foreign investors, arbitration courts can be established in Uzbekistan under the agreement of both sides with independent experts as a third party.

Furthermore, Ministry of Justice is responsible for protection of foreign investors’ rights and interests. It has the Department for protection of rights of foreign investors and enterprises with foreign investments for these purposes.

18. What kind of tax incentives and customs privileges are provided for enterprises with foreign investments in Uzbekistan?

Besides tax incentives and customs privileges for all enterprises in Uzbekistan, there are other incentives granted to enterprises within the following industries, which attract foreign direct investments:

  1. Radio-electronics Industry and Manufacturing of Componentry to Information Processing Equipment
  2. Light Industry
  3. Silk Industry
  4. Construction Materials Industry
  5. Poultrymeat Industry
  6. Food Industry
  7. Meat and Dairy Products Industry
  8. Chemical and Pharmaceutical Industry

Those enterprises are exempt from income (profits) tax, property tax, infrastructure development tax, ecology tax, unified tax for micro-firms and small enterprises, as well as contributions to the Republican Road Fund.

The above tax exemptions are available for different periods depending on the size of foreign direct investments:

USD 300,000 – USD 3,000,000                                    3 years
USD 3,000,000 – USD 10,000,000                              5 years
Over USD 10,000,000                                                     7 years

The above tax incentives are granted if the following conditions are met:

  • ­The enterprises are located in the labor surplus regions (Karakalpakstan, Jizzakh, Qashqadaryo, Syrdaryo, Surhondaryo, Khorazm), as well as in rural areas of Navoi, Andijon, Namangan and Farghona regions;
  • ­Republic of Uzbekistan does not provide sovereign guarantees for such foreign investments;
  • ­Share of foreign capital of enterprises should not be less than 50%;
  • ­Investments should be made after the state registration of the above enterprises;
  • ­Investments should be made in hard currency by new /modern technological equipment;
  • ­Respective tax savings derived during the entire grace period should be reinvested for further development of enterprises.

In addition, for the period from July 1, 2003 to January 1, 2009 manufacturing enterprises with foreign investments of the State Joint-Stock Company “Uzbekyengilsanoat”, specialized in production of ready-made clothes (garments, fabrics and leather products), footwear, are exempt from any tax except for VAT.

19. Can Uzbek legislation provide additional incentives for foreign investors?

Uzbek legislation may provide, along with general guarantees and protection measures of foreign investors, additional guarantees and safeguards, including those ensuring the unconditional performance of the obligations of the partners of foreign investors.

Additional guarantees and safeguards may be granted for foreign investors on a case-by-case basis when investing:

  • ­In priority sectors ensuring the sustainable economic growth and progressive structural adjustments of the county's economy;
  • ­In priority projects ensuring the strengthening and expansion of the export potential of the Republic and its integration into international economic relations;
  • ­In projects in the sphere of small and private entrepreneurship, the implementation of which is aimed at processing of raw materials, manufacturing consumer goods, providing services and ensuring employment.

Additional guarantees and safeguards for foreign investors may include ensuring of guarantees by the GOU, assisting in funding investment projects, creating special tax and payment regimes, carrying out state monitoring over the implementation of projects concerned and taking other measures in accordance with Uzbek legislation.

Additional guarantees and safeguards are granted for foreign investors by special decisions of the GOU which shall particularly envisage the conditions of and procedures for investing, using and ensuring the repayment of foreign investments.

20. What requirements are to be met for foreign investors (enterprises with foreign investments) to have additional incentives?

In case of providing of additional incentives by GOU for a foreign investor besides the existing incentives (privileges and preferences) an investment agreement should be signed without a delay according to Uzbek legislation.

An investment agreement is concluded between the Ministry for Foreign Economic Relations, Investments and Trade (MFERIT) on behalf of GOU and foreign investor.

To conclude an investment agreement a foreign investor presents to MFERIT:

  • ­A draft investment agreement;
  • ­Main financial parameters carried out on the basis of the feasibility study which has gone through the expertise of authorized state bodies, in cases provided for according to Uzbek legislation;
  • ­The conclusion of the Ministry of Justice regarding the legal opinion to the draft of an investment agreement;
  • ­The conclusions of the Ministry of Finance, Ministry of Economy and State Tax Committee regarding the additional incentives for a foreign investor or an enterprise with foreign investments besides the granted tax privileges and preferences;
  • A foreign investor within the order and time established in the investment agreement presents to MFERIT periodical reports on fulfillment of the accepted obligations.

21. Can foreign investors participate in the privatization process?

Yes. As stated by the Leader of the Republic of Uzbekistan, one of the key priorities of economic development of the country is strengthening in every way the work on attraction foreign investments.

Nowadays the active process of decentralization and privatization of companies in leading economy sectors is going on in order to increase role of private sector in economy and to reduce fundamentally state share in the charter capital of those companies as well as to attract direct investments on a large scale, especially foreign investments for development and modernization of companies. Moreover, there is a possibility to buy unplaced state assets by zero buying costs, conditioned by the investment obligations of investors. The Program for de-stating and privatization for 2006-2008 was confirmed according to the decision of the President of the Republic of Uzbekistan.

For more information on privatization process in the Republic of Uzbekistan please visit the following web-site: http://www.spc.gov.uz/

22. Does foreign investor have a right to hire foreign citizen to the management position of the company with foreign investments?

Yes. There is no prohibition for employment of foreign specialists to the management position in Uzbekistan.

23. Where can foreign investor apply for consultation?

The “UzInfoInvest” Informational Support and Foreign Investments Promotion Agency was established by an initiative of the President of the Republic of Uzbekistan. The “UzInfoInvest” Agency is responsible for informational support of foreign investors, provision them with information on prospective projects and investment legislation, including on guarantees and incentives while implementing investment projects in the Republic of Uzbekistan.

For necessary information foreign investors may apply to the following address:

1, T.Shevchenko str., Tashkent, Uzbekistan (building of the Ministry for Foreign Economic Relations, Investments and Trade), or by the following phone: 99871 138 9100.

Additional information on investment climate, investment legislation in the Republic of Uzbekistan and activity of the Agency may be found at the following web-sites:http://www.investuzbekistan.uz/ and http://www.investuzbekistan.uz/

24. It’s said that previously in Uzbekistan there were restrictions on sum assets (national currency) conversion into foreign currency. Do these restrictions presently exist and do they affect the income repatriation?

There were some short-term restrictions for sum assets conversion into foreign currency in Uzbekistan aiming at currency balance strengthening. Later on in 2003 the Republic of Uzbekistan has adhered to the Article VIII of the Statutes of the International Monetary Fund Agreement due to what mentioned restrictions were lifted.

Today the currency conversion procedure is regulated by the resolutions of Government and special instructions of the Central Bank of the Republic of Uzbekistan.

Foreign investor’s incomes collected in the Republic of Uzbekistan, can be reinvested on the territory the Republic of Uzbekistan, or used in any other way at discretion of foreign investor.

The free transfer of payments into the Republic of Uzbekistan and from it guaranteed to foreign investors without any restrictions after repayment of related taxes and fees in accordance with legislation of the Republic of Uzbekistan.

25. Not long ago, The Constitutional Court of the Republic of Uzbekistan issued a ruling on the interpretation of part 1 of article 10 of the Law of the Republic of Uzbekistan “On guarantees and measures of protection of the rights of foreign investors”. Does this ruling mean that the Republic of Uzbekistan considers invalid investors’ claims made to international court without state consent and refuses to participate in international arbitration procedures in order to settle disputes arose between foreign investors and the state?

Absolutely no. Republic of Uzbekistan being governed by the Constitution and laws and recognizing priority of the universally received international law is eager to settle all economic and other disputes by legal means.

Provision of part one of the article 10 of the mentioned Law stating “if the parties did not reach an agreed resolution to the dispute, such a dispute must be decided by the economical court of the Republic of Uzbekistan or through arbitration in accordance with the provisions and the procedures of international contracts (agreements and conventions) on the resolution of investment disputes to which the Republic of Uzbekistan has acceded” means that its application is stipulated by the observance of rules and procedures of international agreements and is not a direct expression of written consent of the Republic to submit a certain dispute to the definite arbitration court.

As a rule, consent of the parties to submit a dispute to the certain dispute settlement body is to be expressed by the arbitration clause in the investment agreement or by separate agreement concluded between the parties.

Thus, the ruling by the Constitutional Court should not be considered as an infringement of the rights of foreign investors and it’s necessary to approach to this matter constructively and with respect to rights and obligations of both parties in the framework of the universally received norms of international law.

26. There are stereotypes among foreign businesses that Uzbek legislation permanently changes which without doubts is accepted as one of the main risks while establishing business in Uzbekistan. Are there any guarantees for foreign investors from such legislation  amendments?

The state guarantees and protects the rights of foreign investors who execute investment activity on the territory of the Republic of Uzbekistan.
If the subsequent legislation of the Republic of Uzbekistan worsens investment conditions, than legislation current on the date of investment is applied to foreign investments within ten years of the date of investment. The foreign investor has the right at his own discretion to apply those provisions of a new legislation which make better conditions of his investment.

Deterioration of conditions of investment refers to amendments the legislation of the Republic of Uzbekistan providing:

  • increase in the rate of tax on incomes, received as dividends, paid to the foreign investor;
  • introduction of additional requirements that complicate procedure of repatriation or reduce the size of foreign investor's income (profit), being transferred abroad, except for the cases, when the state stops repatriation of cash of foreign investor on conditions of non-discriminative implementation of legislation acts in case of insolvency and bankruptcy of the enterprise with foreign investments or protection of the rights of creditors, criminal acts or the administrative offences accomplished by the foreign investor - the physical person, or other cases demanding necessity of stoppage of such repatriation according to judicial or the arbitral decision;
  • introduction of quantitative restrictions to volumes of investments and other additional requirements to the size of investments, including in form of increase in the minimal volume of foreign investments in the enterprises with foreign investments;
  • introduction of restrictions on share of the foreign investor in authorized capitals of the enterprises of the country;
  • introduction of additional procedures of registration and prolongation of visas of foreign investors, as well as other additional requirements on making foreign investments.

27. How can foreign investor use the above-mentioned guarantee?

Informative procedure of using above-mentioned ten year guarantee is established by the legislation of the Republic of Uzbekistan.

Thus, envisage that at approach of any of the above-mentioned kinds of deterioration of conditions of investment, the foreign investor should notify the corresponding authorized body on application of the specified guarantee.

Authorized bodies to be notified on application by foreign investor of the specified guarantee are state organizations, accomplishing state registration of legal entities, Ministry of foreign affairs, Ministry of internal affairs, Ministry for foreign economic relations, investments and trade, State tax committee of the Republic of Uzbekistan and banks.

Notification of foreign investor is reason for authorized body to apply to foreign investor legislation current on the date of investment. Such notification irrespectively to the date of its sending to the authorized body enters into force from the moment of the adopting of the corresponding legislation.

28. What are the plans of the Government for a short-term prospective for further perfection of business environment of Uzbekistan?

As stated by the Leader of the Republic of Uzbekistan I.A.Karimov at session of the Cabinet of Ministers of the Republic of Uzbekistan, dedicated to the social-economic development of the country in 2006, the further liberalization of tax policy will be carried out in 2007.

Particularly, with a view of activation of the process of modernization and renewal of the enterprises the Government is about to exempt for three years investments directing by companies at the expense of their own and attracted funds from income taxation, and new equipment which is installed and used in industrial process – from property taxation.

In addition, it is proposed to implement for 5 years to micro-firms and small enterprises which are running productive activity and are eligible for the unified tax payment, an investing tax preference, providing decrease of the taxable base for estimated value of the new technologic equipment, but not more then 25 percent of taxable base.

Moreover, the Government intends to introduce to the Parliament of the Republic of Uzbekistan a bill “On international commercial arbitration” which passage  will create a legal base for establishing in the republic of nongovernmental bodies settling international economic disputes which will undoubtedly be an extra guarantee for foreign investor

“Uzinfoinvest” Agency


Home | Contact us | Site Map | Search

41 Holland Park, London, W11 3RP Tel: 44 (0) 20 7229 7679; Fax: 44 (0) 20 7229 7029
All Rights Reserved.