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 Embassy of the Republic of Uzbekistan to the United Kingdom of Great Britain and Northern Ireland |
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LegislationLEGISLATION IN FOREIGN ECONOMIC SPHERE Legislation of the Republic of Uzbekistan in foreign economic sphere is directed to stimulating the attraction of direct foreign investments. For instance, the Decree by the President of the Republic of Uzbekistan dated April 11, 2005 No. UP-3594 “On additional measures on stimulating the attraction of direct foreign investments” was adopted for further improving the investment climate in the country, attracting private direct foreign investments for realization of privatization programs, modernization, technical reequipment and reconstruction of manufacturing enterprises. Alongside with the existing legal base on guarantees and preferences for the foreign investors, including laws “On foreign investments”, “On foreign economic activity” and “On guarantees and protection measures of the rights of foreign investors” (find all texts below), the Decree has address orientation in granting tax privileges for direct foreign investments. Duration of tax exempt period depends on a size of direct private foreign investments: Annotation to the Decree of the Cabinet of Ministers of the Republic of Uzbekistan «On the procedure of application of customs privileges to the property, imported by foreign investors to the Republic of Uzbekistan for own needs» On December 6, 2007 the Cabinet of Ministers of Uzbekistan adopted the Decree ¹249 «On the procedure of application of customs privileges to the property, imported by foreign investors to the Republic of Uzbekistan for own needs». Decree is adopted according to the Laws of the Republic of Uzbekistan «On customs tariffs» dated on August 29, 1997 and «On foreign investments» dated on April 30, 1998. According to the Decree the property imported by foreign investors to the Republic of Uzbekistan for own needs, is not assessed with the customs duties, and as well as, foreign investors carry out their industrial activity on the territory of the Republic of Uzbekistan, as a rule, by creation of actions with foreign investments. Decree is stipulated that privileges on free of taxation from customs duties of the property imported by foreign investors for own industrial needs, also used for enterprises with foreign investments. It is regulated that from January 1 of 2008 a privilege on free of taxation from customs duties of the property imported by foreign investors for own industrial needs, operate to the enterprises with foreign investments from shares of the foreign investor in the capital not less than 33 percent. The current Decree is entrusted to the Ministry of external economic relations, investments and trade together with the Ministries of Justice, finance, economy and the State customs committee of the Republic of Uzbekistan in two weeks period to make proposals on changes and amendments to the legislation, following of current decree. Law of the Republic of Uzbekistan, April 30, 1998 ¹609-1 Article 1. Purpose and tasks of the Law The present Law defines a legal basis and the procedure for execution of foreign investments on the territory of the Republic of Uzbekistan. The basic tasks of the present Law are the following: - economy promotion in the Republic of Uzbekistan and its integration into world economical system by stimulation of flow of foreign investments; - an attraction and efficient use of foreign financial, material, intellectual and other resources, modern foreign technologies and managerial experience. Article 2. Legislation on foreign investments The legislation on foreign investments includes the present Law, the Law of the Republic of Uzbekistan "On guarantees and measures of protection of foreign investors' rights", other legislative acts. If an international agreement concluded by the Republic of Uzbekistan established other rules than those provided by the legislation on foreign investments, than the rules of international agreement are applied. Article 3. Foreign investments Foreign investments on the territory of the Republic of Uzbekistan are considered to be all kinds of material and non material benefits and rights on them including the rights for an intellectual property as well as any income received from foreign investments invested by the foreign investors to the object of entrepreneurial activity and other types of activity not prohibited by the legislation predominantly for the purpose to derive profit (income). In present law an income invested by the foreign investors as reinvestments in the objects of entrepreneurial activity and other kinds of activity means any funds derived from investment in the Republic of Uzbekistan including profit, interest, dividends, royalty, license fee and agent's commissions, payments for technical assistance and maintenance and other forms of bonuses. Article 4. Foreign investors The following shall be granted the status of the foreign investors in the Republic of Uzbekistan: - the foreign states, administrative or territorial bodies of the foreign states; - the international organizations founded in accordance with the agreements or other contracts signed by the states or ones being the subjects of an international public right; - the legal entities, any other societies, organizations or associations based and acting in accordance with the legislative acts of the foreign states; - the natural entities being the citizens of the foreign state, persons without citizenship status and citizens of the Republic of Uzbekistan who have their constant residence abroad. Article 5. The forms of implementation of foreign investments Foreign investors can implement foreign investments on the territory of the Republic of Uzbekistan by the following ways: - by share participation in authorized funds and other property of economic societies and companies, banks, insurance organizations and other enterprises established jointly with legal and (or) natural entities of the Republic of Uzbekistan; - by creation and development of economic societies and companies, banks, insurance organizations and other enterprises, completely belonging to the foreign investors; - by acquisition of the property, shares and other securities, including promissory notes, emitted by the residents of the Republic of Uzbekistan; - by investment of rights for intellectual property, including copyrights, patents, trade marks, useful models, industrial samples names of firms and know-how as well as business reputation (goodwill); - by acquisition of concessions including ones for prospecting, mining or use of natural resources; - by acquisition of property right for object of trade and service, dwelling quarters with land where they are located, as well as the rights for tenure and use of land (including on the lease base) and natural resources. The foreign investors can execute investments on the territory of the Republic of Uzbekistan in other forms, not contradicted the current law. Changing of forms in which foreign investments are executed primarily or repeatedly, do not change their qualification as investments. Article 6. Enterprises with foreign investments The foreign investors can establish the enterprises with foreign investments on the territory of the Republic of Uzbekistan and use all the rights, guarantees and privileges granted them by the legislation of the Republic of Uzbekistan. The enterprises with foreign investments established on the territory of the Republic of Uzbekistan are understood to be ones in which the foreign investments make not less than 30 (thirty) per cent of shares (parts) of an authorized fund. They shall operate in any organization and legal forms not contradicted the legislation of the Republic of Uzbekistan. One of the participants of the enterprise with foreign investments should be a foreign investor specified in second, third or fourth indentions of an article 4 of the present Law. The enterprise with foreign investments can be created either by its establishment or as a result of purchase by the foreign investor of a share (a part) of participation in the enterprise established earlier without foreign investments or by purchase of such enterprise completely including during the process of privatization. The enterprise with foreign investments acquires the rights of legal entity from the moment of its state registration. The procedure for creation and the state registration of the enterprises with foreign investments are defined by the Cabinet of Ministers of the Republic of Uzbekistan. Article 7. Subsidiary enterprises, affiliates and representative offices of the enterprises with foreign investments The enterprise with foreign investments shall be entitled to establish on the territory of the Republic of Uzbekistan subsidiaries, affiliates with the rights of a legal entity, as well as representative offices and other detached subdivisions without the legal entity status pursuant to the legislation of the Republic of Uzbekistan. The subsidiary enterprises, affiliates, representative offices and other detached subdivisions of the enterprises with foreign investments can be established outside the territory of the Republic of Uzbekistan. Article 8. Economic associations of the enterprises Pursuant to the legislation of the Republic of Uzbekistan the enterprises with foreign investments can establish the economic associations, concerns, consortiums and other corporations on a voluntary basis on the territory of the Republic of Uzbekistan as well as to be included into current associations as their full member. Article 9. Legal regime established for the foreign investments on the territory of the Republic of Uzbekistan The state guarantees and protects all foreign investors' rights when they execute investment activity on the territory of the Republic of Uzbekistan. Rightful and equal regime, complete and constant protection and safety are granted to foreign investors and foreign investments. Such regime is as favorable as that one specified by the international agreements signed by the Republic of Uzbekistan. The legal regime established for foreign investments can not be less favorable than appropriate one established for foreign investments executed by legal and natural entities of the Republic of Uzbekistan. According to common established norms of international law, the legislation of the Republic of Uzbekistan can include the restrictions or embargo for foreign investments executed in relevant spheres of economy and lines of activity with the purpose of protection of national security of the Republic of Uzbekistan. Rehabilitation of violated rights and interests of foreign investors guaranteed by the law of the Republic of Uzbekistan, is regulated by the legislation as well as by international agreements signed by the Republic of Uzbekistan.
Article 10. Foreign investors' rights In accordance with the principles of international law and the legislation of the Republic of Uzbekistan, the foreign investor has the right for the following: - to define on his own account the amount, kinds and channels of investments; - to conclude agreements with legal and natural entities to execute investment activity; - to own, use and dispose his investments and the results of investment activity. On the decision of the foreign investor, the rights to own, use and dispose investments and their results can be assigned to other legal and natural entities in accordance with the procedure established by the legislation of the Republic of Uzbekistan. - Interrelation of the parties under the aforesaid assignment shall be regulated by them on the basis of agreements; - to take decision on their own account about patenting abroad and in the Republic of Uzbekistan of inventions, useful models and industrial samples belonging to foreign investor and received as a result of investment activity in the Republic of Uzbekistan; - to dispose on his own account and freely an income (including its unobstructed repatriation) resultant from investment activity; - to attract financial resources in the form of credits and loans to the Republic of Uzbekistan; - to use means in national currency on his own accounts for the purpose of purchasing of foreign currency at the local foreign currency market; - to acquire rights for land in cases and on terms provided by he legislation; - to use property and any property rights belonging to him on the right of ownership, as a security on all kinds of obligations undertaken by him including ones directed to attract borrowed funds in accordance with the legislation of the Republic of Uzbekistan; - for receipt of adequate compensation in case of requisition of his investments and other assets; - to get compensation for losses inflicted as a result of unlawful activity (non-activity) and decisions of the state administration bodies, local authorities and their officials. The foreign investor also has another rights provided by the legislation of the Republic of Uzbekistan.
Article 11. Obligations of the foreign investors When execute investment activity on the territory of the Republic of Uzbekistan, the foreign investor has the following obligations: - to observe the current legislation of the Republic of Uzbekistan; - to pay taxes and effect other payments in accordance with the legislation of the Republic of Uzbekistan; - to be responsible on contractual liabilities undertaken in connection with investment; - to obtain the conclusions of examination expert of investment projects regarding to observation of sanitary, hygienic, ecological and other requirements following from the legislation of the Republic of Uzbekistan; - to abstain from direct and (or) indirect unlawful influence his partners on investment activity or the state administration bodies and local authorities with the purpose to receive the additional privileges and advantages in comparison with his competitors. The foreign investor is responsible for violation of the legislation of the Republic of Uzbekistan on common grounds and answers by his property belonging to him on the right of ownership, on which a claim can be made in accordance with the legislative acts of the Republic of Uzbekistan.
Article 12. Economic activity of foreign investors Economic activity of foreign investors including creation, sale reorganization or liquidation of the enterprises with foreign investments, their subsidiary enterprises, affiliates and other structures as well as economic associations and corporations, formation of funds of the enterprises with foreign investments, conclusion of lease and other agreements is regulated by the legislation of the Republic of Uzbekistan. The enterprises with foreign investments pay taxes and other payments in accordance with the legislation of the Republic of Uzbekistan including social insurance payments and social security payments for personnel being the citizens of the Republic of Uzbekistan. All expenses of the enterprises with foreign investments in foreign currency should be secured at the expense of their own foreign exchange earnings as well as other sources of foreign exchange receipts permitted by the legislation of the Republic of Uzbekistan. Their self- repayment in foreign currency should also be secured within a framework of established consortiums, associations and other organizations. The enterprises with foreign investments on their own account execute export-import operations observing the demands of the legislation of the Republic of Uzbekistan. Export of indigenously produced output is not liable to licensing and allocation. The enterprises with foreign investments have the right to import production for their own manufacturing requirements without license in accordance with the legislation of the Republic of Uzbekistan. The procedure for determination of the indigenously produced output supplied to export and produce imported by the enterprises for their own requirements is determined by the Cabinet of Ministers of the Republic of Uzbekistan. Property imported by the foreign investors to the Republic of Uzbekistan for their own production needs as well as for the personal needs of foreign investors and citizens of foreign states residing in the Republic of Uzbekistan according to the labour contract signed with foreign investors, is not imposed a customs duty. Patenting of inventions and introduction of industrial samples belonging to the foreign investors investing them in the form of investments as well as to the enterprises with foreign investments, is executed in accordance with a procedure established by the legislation of the Republic of Uzbekistan. The enterprises with foreign investments on their own account establish a list, an order of creation and use of the enterprise's funds. Labour relations of the personnel of the enterprises with foreign investments are regulated by the legislation of the Republic of Uzbekistan. Social insurance and social security of the personnel of the enterprises with foreign investments (except for social insurance and social security of foreign workers) are regulated by the legislation of the Republic of Uzbekistan. The enterprises with foreign investments can acquire land in cases and on terms provided by the legislation. When the right of property for constructions and structures is transferred, the right of use of land is transferred jointly with these object in accordance with an order and on terms established by the legislation of the Republic of Uzbekistan. Granting of property on lease to foreign investors is executed by the lessor on the basis of agreements and in accordance with the legislation. The enterprises with foreign investments execute record and accountability in accordance with the procedure established by the legislation of the Republic of Uzbekistan. They keep books and records in national currency of the Republic of Uzbekistan as well as at their own discretion, in hard currency.
Article 13. Concession Agreements Concessions for the prospecting, developing, and exploiting of natural resources and execution of other economic activity is fulfilled by the foreign investors in accordance with the concession agreements concluded by them with the authorized agencies of the state administration bodies of the Republic of Uzbekistan in accordance with the procedures established by the legislation. Concessions are allowed in all spheres and all kinds of activity if they are not forbidden by the legislation of the Republic of Uzbekistan and serve the purpose of the concessions agreements.
Article 14. Attraction of foreign personnel According to the Law of the Republic of Uzbekistan "On foreign investments" foreign investors and enterprises with foreign investments with the purpose of investment activity, have the right to conclude any labour contracts with the citizens of any foreign state and persons without citizenship residing outside the Republic of Uzbekistan. Those persons are entitled to come and stay in the Republic of Uzbekistan during whole period of the labour contract validity and obtain appropriate multiply visas. - In accordance with the legislation of the Republic of Uzbekistan, the foreign investors and the enterprises with foreign investments with the purpose of execution of investment activity, have the right for free conclusion of the labour contracts with citizens of any foreign state and persons without citizenship having their residence outside the territory of the Republic of Uzbekistan. Such persons are entitled to come and stay in the Republic of Uzbekistan during the whole period of validity of the labour contract; they enjoy the right to get relevant visas many times. Questions associated with payment for work, granting of holidays, pension security of foreign personnel should be discussed with every worker whom the contract signed with. The salaries of such personnel and other earnings got in a legal way, can be transferred by them to other states without any restrictions after payment of taxes and obligatory payments established by the law. The foreign investor, the enterprise with foreign investments shall transfer social insurance and social security payments for every worker to relevant funds located in the country of constant residence of such worker.
Article 15. Movement liberty The foreign investors, their representatives and foreign personnel residing in the Republic of Uzbekistan with the purpose to execute investment activity, enjoy the right for free movement throughout the whole territory of the Republic of Uzbekistan. Special restrictions can be applied exclusively with the purpose to assure national security provided that such restrictions for free movement are specified by the legislation of the Republic of Uzbekistan.
Article 16. Insurance of the foreign investments The insurance of the investments and risks of the foreign investors is executed on the voluntary basis. The foreign investors use the same right for insurance protection as local investors use in any insurance organization, acting legally on the territory of the Republic of Uzbekistan. An insurance of foreign investments against political and other risks can also be fulfilled by the international organizations, the foreign state export credit agencies and other insurance companies. Insurance organizations carrying out an insurance of foreign investments do not answer for obligations of the Republic of Uzbekist an. The state does not answer for obligations of insurance organizations except for cases stipulated in the agreements of the parties. Insurance of foreign investments provides insurance protection and guarantees against political and other risks including the following: - the expropriation of the property as well as any legislative or administrative measures leading to withdrawal of property or alienation from it, the loss of the control over it or income derived from it; - the introduction of restrictions for transfer of foreign currency outside the country; - the introduction of amendments, having discriminatory nature with regard to some groups of foreign investors to the legislation; - the interference of the state administration bodies, local authorities and their officials to contract relations of investors; - the wars, civil troubles and the same events; - other kinds of political and other risks associated with foreign investors and foreign investments.
Article 17. Security of liabilities Property and property rights of the enterprise with foreign investments can be used by it as a security for all kinds of its liabilities including attraction of borrowed funds. Its right of property for objects of trade and service as well as dwelling units with land where they are located, property rights for buildings, structures and equipment as well as other proprietary rights can be used as a security of the liabilities. All property and property rights belonging to the foreign investor on the right of ownership irrespective of the place of their location, can be used by him as a security of his obligations.
Article 18. Reorganization and liquidation of the enterprise with foreign investments The enterprise with foreign investments can be reorganized or liquidated in accordance with the procedure provided by the legislation of the Republic of Uzbekistan. Unless otherwise provided by the legislation, the enterprise with foreign investments which has not formed its authorized fund in the amount provided by the constituent documents within one year from the date of its state registration, is liquidated under the established procedure. At the same time, the enterprise which has not formed its authorized fund within the specified period in the amount provided by constituent documents, can decrease its amount up to actually formed one, but not less than minimum sum established by the legislation, or it may be transformed into other organizational and legal form. Assets of the enterprise with foreign investments under its liquidation are liable to tax in accordance with the established procedure. The rest part is distributed among the partners of the enterprise with foreign investments proportionate to their share in the enterprise's prop rty unless otherwise provided by the constituent documents. The foreign investor, in case of his leaving the enterprise with foreign investments or its closing down, gets the right to refund his share in the enterprise's property in the form of money or goods in accordance with the market value. The discharged personnel should be guaranteed the observance of their rights and interests in accordance with the legislation if the enterprise with foreign investments is reorganized or liquidated.
Article 19. Liabilities of the state on foreign investments The state, the state administration bodies and local authorities answer only on those liabilities undertaken in relevant agreements with foreign investors and signed by officials authorized in accordance with the procedure established by the legislation of the Republic of Uzbekistan. The state does not answer on liabilities of the residents of the Republic of Uzbekistan attracting foreign investments except for cases when such liabilities are guaranteed by the state in accordance with the established procedure.
Article 20. Functions of bodies attracting foreign investments With the view of attraction, realization and protection of foreign investments, a body authorized by the government, the other state administration bodies and local authorities as well as interested non-governmental organizations execute the following: - prepare and spread an information on possibilities and terms of investment activity in the Republic of Uzbekistan; - consult potential investors on legal, economical and other matters of activity and render necessary assistance and promotion in solving arisen questions; - elaborate suggestions on perfection of legal base of foreign investors' activity; - represent within their power the Republic of Uzbekistan in international relations on matters of foreign investments; - fulfill other functions directed to attract, realize and protect foreign investments.
Article 21. State authorities' powers on control for foreign investors' activity The taxation bodies and other state authorities empowered by the government of the Republic of Uzbekistan within the limits of their powers established by the legislation of the Republic of Uzbekistan, execute control for observation of the law of the Republic of Uzbekistan by the foreign investors and the enterprises with foreign investments. A control authority is to keep commercial secrets when control is executed. Divulging of commercial secrets is prosecuted according to the legislation of the Republic of Uzbekistan.
Article 22. Conflicting provisions In case of some non-conformity between provisions of the present Law and other legislative acts or international agreements signed by the Republic of Uzbekistan, the provisions more favorable for foreign investments have an advantage.
President of the Republic of Uzbekistan I. Karimov
Sources:
1. State Property Committee of Uzbekistan (www.gki.uz) 2. “Uzinfoinvest” Agency (www.uzinfoinvest.uz) 3. Chamber of Commerce of Uzbekistan (www.chamber.uz)
ON FOREIGN ECONOMIC ACTIVITY Law of the Republic of Uzbekistan, May 26, 2000 No. 77-II
On the introduction of amendments and supplements to Law of the Republic of Uzbekistan
The Oliy Majlis of the Republic of Uzbekistan has resolved as follows: To introduce amendments and supplements to Law of the Republic of Uzbekistan dated June 14, 1999 "On foreign economic activity of the Republic of Uzbekistan" (Gazette of the Supreme Council of the Republic of Uzbekistan 1991, No. 8, Art. 182; 1992, No. 9, Art.335), having approved its new version (enclosed).
President of the Republic of Uzbekistan I. Karimov
Article 1. Basic tasks addressed by the Law
The present Law regulates the scope of relationships associated with carrying out foreign economic activity. The basic tasks addressed by the present Law are as follows: security of economic safety, protection of economic sovereignty and economic interests of the Republic of Uzbekistan, when carrying out foreign economic activity, promotion of the national economy development, creation of conditions for integration of the national economy into world economic system.
Article 2. The legislation on foreign economic activity The legislation on foreign economic activity comprises the present Law, as well as other regulatory documents. If a certain international agreement signed by the Republic of Uzbekistan lays down rules and regulations other than those contained in the legislation of the Republic of Uzbekistan on foreign economic activity, the former is applicable.
Article 3. Foreign economic activity Foreign economic activity is defined as the activity carried out by legal and natural entities in the Republic of Uzbekistan aimed at the establishment and development of mutually advantageous ties with legal and natural entities of foreign states, as well as with international organizations. Both legal entities registered in the Republic of Uzbekistan and natural entities domiciled in the Republic of Uzbekistan and registered as individual entrepreneurs are entitled to carry out foreign economic activity. Unless otherwise stipulated by the legislation, state bodies of the Republic of Uzbekistan may carry out foreign economic activity.
Article 4. Underlying principles of foreign economic activity Underlying principles of foreign economic activity are as follows: - freedom and economic self-sufficiency of subjects of foreign economic activity; - equality of subjects of foreign economic activity; - prevention of discrimination when carrying out foreign economic activity; - mutual advantage, when carrying out foreign economic activity protection by the state of rights and lawful interests of subjects of foreign economic activity.
Article 5. Subjects of foreign economic activity Legal and natural entities of the Republic of Uzbekistan carrying out foreign economic activity are considered to be subjects of foreign economic activity.
Article 6. Objects of foreign economic activity Foreign economic activity may be carried out with regard to goods (work, services), any property, including securities, currency and currency values, as well as with regard to electric, thermal and other kinds of energy, transport facilities, objects of intellectual property considered to be objects of purchase and sale or exchange, with the exception of those banned by the law to be used in foreign economic activity.
Article 7. Rights enjoyed by the subjects of foreign economic activity Subjects of foreign economic activity have equal rights to carry out foreign economic activity. Subjects of foreign economic activity are entitled: independently, within the framework of the legislation, to define forms of participation in foreign economic activity; to attract, at their own discretion and in keeping with the established procedure, on a contract basis, other legal and natural entities to carry out foreign economic activity; Subjects of foreign economic activity may also enjoy other rights according to the law.
Article 8. Obligations of subjects of foreign economic activity Those involved in foreign economic activity are obliged: to submit foreign economic activity reports in keeping with the procedure established by the legislation; to present documents confirming correspondence of goods imported tothe Republic of Uzbekistan to technical, pharmacological, sanitary, veterinary, phytosanitary, ecologica standards and requirements established in the Republic of Uzbekistan. Besides, subjects of foreign economic activity may have other obligations provided by the legislation.
Article 9. Main lines of foreign economic activity Main lines of foreign economic activity are as follows: - international economic and financial cooperation; - foreign trade activity; - attraction of foreign investment; - investment activity outside the Republic of Uzbekistan.
Article 10. International economic and financial cooperation International economic and financial cooperation is carrying out foreign economic activity aimed at establishment and expansion of mutually advantageous ties of subjects of foreign economic activity of the Republic of Uzbekistan with legal and natural entities of foreign states and international organizations in the following spheres: production, finance, bank and insurance activity, education, personnel training, tourism, public health, as well as in scientific and technical, cultural, environmental, humanitarian and other spheres in accordance with the procedure established by the legislation.
Article 11. Foreign trade activity Foreign trade activity is considered to be entrepreneurial activity in the sphere of international interchange of goods, works (services). Foreign trade activity is carried out in the form of export and import of goods, works (services). The removal of goods outside the customs territory of the Republic of Uzbekistan without obligation on their backward import is considered to be export. Bringing of goods to the customs territory of the Republic of Uzbekistan without an obligation on their backward export is considered to be import. Operating of works (rendering of services) by the legal and natural entities of the Republic of Uzbekistan to the legal and natural entities of foreign state regardless of place of their operating (rendering) is considered to be export of works (services). Operating of works (rendering of services) by the legal and natural entities of foreign state to the legal and natural entities of the Republic of Uzbekistan regardless of place of their operating (rendering) is considered to be import of works (services).
Article 12. Attraction of foreign investment All kinds of material and nonmaterial values and rights to them, including rights to intellectual property, as well as any income derived from foreign investment, invested by foreign investors into objects of entrepreneurial and other kinds of activity not banned by the law is considered to be foreign investment in the Republic of Uzbekistan. Forms and the procedure for the implementation of foreign investment in the Republic of Uzbekistan are defined by the legislation.
Article 13. Investment activity outside the Republic of Uzbekistan Complex of actions of subjects of foreign economic activity associated with the investment of material and nonmaterial values and rights to them into objects of entrepreneurial and other activity outside the Republic of Uzbekistan is considered to be investment activity outside the Republic of Uzbekistan. Investment activity outside the Republic of Uzbekistan may be carried out in accordance with the procedure established by the legislation by means of: creation of legal entities or share participation in authorized funds (capitals), including by purchasing property and shares; establishment of representative offices, affiliated branches and other separate sub-divisions outside the Republic of Uzbekistan; purchase of securities, including promissory notes, issued by residents of foreign states; purchase of concessions, including those for prospecting, exploration, extraction (mining) or use of mineral resources; purchase of right of ownership, as well as rights of possession and use of land and other natural resources. Investment activity outside the Republic of Uzbekistan may also be carried out in other ways stipulated in the law of foreign states and the legislation of the Republic of Uzbekistan.
Article 14. Representative offices of foreign states and their legal entities in the Republic of Uzbekistan Representative offices of foreign states for trade and economic affairs are established in the Republic of Uzbekistan on the basis of international agreements signed by the Republic of Uzbekistan with the relevant foreign states. Foreign legal entities are entitled to establish representative offices in the Republic of Uzbekistan in accordance with the legislation of the Republic of Uzbekistan.
Article 15. Guarantees of rights and interests of subjects of foreign economic activity The Republic of Uzbekistan guarantees implementation of the rights and lawful interests of subjects of foreign economic activity. State bodies and their officials are not entitled to interfere into activity carried out by subjects of foreign economic activity in keeping with the legislation. In case where the state bodies of the Republic of Uzbekistan adopt acts violating rights of subjects of foreign economic activity defined by the present law, the losses inflicted to them, should be compensated under the legislation.
Article 16. Access to information Subjects of foreign economic activity have the right to receive information, concerning their rights and interests in the sphere of foreign economic activity and considered to be not confidential, from state bodies according to the established procedure. Confidentiality of information is defined under the law. Legislative acts, regulating foreign economic activity and recognized as those with common obligatory character, are to be published in mass media and available to subjects of foreign economic activity.
Article 17. State regulation of foreign economic activity State regulation of foreign economic activity is implemented by means of: the formation and improvement of legislative base of foreign economic activity; currency regulation; tax regulation; tariff and nontariff regulation; the application of protective, compensatory and antidumping measures to observe economic interests of the Republic of Uzbekistan; the establishment of the procedure for carrying out foreign trade activity, including quantitative restrictions and state monopoly on export and import of certain categories of goods; the establishment of export control over goods, equipment, scientific and technical documentation, works and services, results of intellectual activity (specified in the lists of export control objects), which in view of inherent in their characteristics and features can to contribute significantly to creation of weapons of mass destruction (nuclear, chemical, bacteriological (biological) and toxin weapons), its delivery system (rockets and other hardware that capable of delivering of weapons of mass destruction), other kinds of arms and defense technology; the certification of imports and exports; the establishment of technical, pharmacological, sanitary, veterinary, phytosanitary and ecological standards and requirements; granting of preferences and privileges to subjects of foreign economic activity. Investment activity outside the Republic of Uzbekistan may also be carried out in other ways in keeping with the legislation.
Article 18. Powers of the Cabinet of Ministers of the Republic of Uzbekistan in the sphere of regulation of foreign economic activity The Cabinet of Ministers of the Republic of Uzbekistan fulfills the following: elaborates a strategy of the development of foreign economic activity; ensures economic security, protection of economic sovereignty and economic interests of the Republic of Uzbekistan; concludes international treaties of the Republic of Uzbekistan in the sphere of foreign economic activity; works out the Republic's balance of payments; issues guarantees of the Republic of Uzbekistan under obtained foreign credits; possesses, uses and disposes property of the Republic of Uzbekistan abroad; executes other powers under the legislation.
Article 19. Authorized state body in the sphere of regulation of foreign economic activity The Ministry for Foreign Economic Relations, Investments and Trade of the Republic of Uzbekistan is considered to be an authorized state body in the sphere of regulation of foreign economic activity. The Ministry for Foreign Economic Relations, Investments and Trade of the Republic of Uzbekistan fulfills the following: ensures the pursuance of a state policy in the sphere of foreign economic activity, the implementation of tasks for protection of economic interests of the Republic of Uzbekistan when carrying out foreign economic activity; works out proposals on improvement of legislative base of foreign economic activity; coordinates and regulates activity of subjects of foreign economic activity within the competence defined by the legislation; coordinates work of bodies of state management in the sphere of regulation of foreign economic activity; executes other powers in keeping with the legislation.
Article 20. Prohibition and restriction of export and import The legislation of the Republic of Uzbekistan may establish prohibition and restriction of export and import with a view to: - ensure national security; - protect life and health of citizens, as well as flora, fauna and environment; - observance of social moral and legal order; - preserve cultural heritage of people of the Republic of Uzbekistan; - protect cultural values from illegal export, import and transfer of property rights; - support balance of payments of the Republic of Uzbekistan; - fulfill international obligations of the Republic of Uzbekistan; - prevent depletion of nonrenewable natural resources; - protect other interests of the Republic of Uzbekistan.
Article 21. Licensing and fixing quotas of export and import of certain categories of goods Export and import of certain categories of goods may be carried out only after receipt of an appropriate permit (license) for their import or export. Licenses for export and import of certain categories of goods are issued by the agencies authorized by the Cabinet of Ministers of the Republic of Uzbekistan. The Cabinet of Ministers of the Republic of Uzbekistan may establish quantitative restrictions (quotas) with regard to export and import of certain categories of goods. Allocation of quotas, as a rule, is executed on a competitive or an auction basis. A list of certain categories of goods which export and import is liable to licensing and fixing quotas, as well as the procedure for issue of licenses and allocation of quotas are defined by the Cabinet of Ministers of the Republic of Uzbekistan.
Article 22. Export control With a view to protect national interests of the Republic of Uzbekistan when carrying out foreign economic activity with regard to goods, equipment, scientific and technical documentation, works and services, results of intellectual activity (specified in the lists of export control objects), which in view of inherent in their characteristics and features can to contribute significantly to creation of weapons of mass destruction (nuclear, chemical, bacteriological (biological) and toxin weapons), its delivery system (rockets and other hardware that capable of delivering of weapons of mass destruction), other kinds of arms and defense technology, as well as observation of international obligations, a system of export control operates in the Republic of Uzbekistan. A list of objects of export control, as well as the procedure for their export or transit are established by the Cabinet of Ministers of the Republic of Uzbekistan.
Article 23. Protection of economic interests of the Republic of Uzbekistan and subjects of foreign economic activity In case where foreign state takes measures violating economic interests of the Republic of Uzbekistan and subjects of foreign economic activity, as well as in case where such state fails to perform liabilities to the Republic of Uzbekistan under international agreements, the Republic of Uzbekistan is entitled to introduce counter-measures in the sphere of foreign economic activity in accordance with generally acknowledged norms and principles of international law.
Article 24. Safeguards Safeguards can be applied with respect to increased import by resolution of Cabinet of Ministers of the Republic of Uzbekistan. The procedure for the application of safeguards is defined by the legislation.
Article 25. Antidumping duties Antidumping duties can be applied with respect to import of goods by dumping prices by resolution of Cabinet of Ministers of the Republic of Uzbekistan. The procedure for the application of antidumping duties is defined by the legislation.
Article 26. Countervailing duties Countervailing duties can be applied with respect to import of goods by dumping prices by resolution of Cabinet of Ministers of the Republic of Uzbekistan. The procedure for the application of antidumping duties is defined by the legislation.
Article 27. Technical, pharmacological, sanitary, veterinary, phytosanitary and ecological standards and requirements imposed on imported goods Goods imported to the Republic of Uzbekistan should meet technical, pharmacological, sanitary, veterinary, phytosanitary and ecological requirements established in the Republic of Uzbekistan. The following goods are banned to be imported to the Republic of Uzbekistan: those not complying with standards and requirements specified in part one of the present Article; those without certificate, marking or mark of correspondence in cases stipulated by the legislation.
Article 28. Free economic zones Special conditions to carry out foreign economic activity may be established in the Republic of Uzbekistan (tax treatment, exchange and customs control, etc.) for free economic zones; such conditions are regulated by the legislation on free economic zones.
Article 29. Free trade The Republic of Uzbekistan may conclude international treaties with foreign states on free trade aimed at abolition of customs duties and taxes, as well as related charges and quantitative restrictions for export and import of goods, elimination of other obstacles preventing free movement of goods.
Article 30. Settlement of disputes Any disputes which may arise in the course of carrying out foreign economic activity are settled in keeping with the procedure stipulated in the agreement. If provisions regulating the procedure for settlement of disputes are not available in the agreement, applicable law and place for examination are defined in accordance with generally acknowledged norms of international private law.
Article 31. Responsibility born for the infringement of the legislation on foreign economic activity Persons identified as having violated the legislation on foreign economic activity are made answerable to the law according to the established procedure. ON GUARANTEES AND MEASURES OF PROTECTION OF FOREIGN INVESTORS' RIGHTS Law of the Republic of Uzbekistan (April 30,1998 ¹611-I) (with amendments)
Article 1. Purpose and tasks of the Law The present law determines guarantees and measures of protection of rights of foreign investors executed investment activity on the territory of the Republic of Uzbekistan. The basic tasks of the present law are the following: formation of a complex of measures on guarantees and protection of foreign investors' rights; determination of conditions of granting of additional guarantees and measures of protection for particular categories of foreign investors and foreign investments.
Article 2. Legislation on guarantees and measures of protection of foreign investors' rights Relations associated with granting and implementation of guarantees and measures of protection of foreign investors' rights are regulated by the present Law, the law of the Republic of Uzbekistan "On foreign investments" and other legislative acts. If an international agreement concluded by the Republic of Uzbekistan established other rules than those provided by the legislation on guarantees and measures of protection of foreign investors' rights than rules of international agreement are applied.
Article 3. Guarantees of foreign investors' rights The state guarantees and protects the rights of foreign investors who execute investment activity on the territory of the Republic of Uzbekistan. Discrimination is not admitted to foreign investors in connection with their nationality, place of residence, denomination, a place of execution of economic activity, as well as depending on the country of origin of investors or investments with taking into account guarantee of realization of international agreements of the Republic of Uzbekistan. Legislative acts including departmental normative ones have not retroactive effect if their execution causes damage to foreign investor or foreign investments. If the subsequent legislation of the Republic of Uzbekistan makes worse 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. Worsening conditions of investments refer to changes and amendments to the legislation current on the date of investment or adoption of the new legal acts, 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. Order of implementation of the parts four and five of the present article is determined by the Cabinet of Ministers of the Republic of Uzbekistan. All agreements on foreign investments, first of all private ones, in the part of security of unconditional guarantees of their fulfillment, are under control of a relevant bodies authorized by the government of the Republic of Uzbekistan. State administration bodies and local authorities has no right to interfere in economic activity of foreign investors executed in accordance with the legislation of the Republic of Uzbekistan. If, the state administration bodies and local authorities under their own legal power, reveal violation of the law by the foreign investor, they can assume only those measures which they are authorized for and which are associated directly with elimination of relevant violation. The state administration bodies and local authorities can not use the fact of violation as a ground for interference or limitation of other legal activity of the foreign investor. The given article is not applied to approval, amendment or abrogation of legislative acts which are connected directly with assurance of protection of interests of national security of the Republic of Uzbekistan, specified under common principles of an international law.
Article 4. Additional guarantees and measures of protection granted to foreign investors Together with common guarantees and measures of protection of foreign investors, additional guarantees and measures of protection including ones providing absolute fulfillment by the partners of their obligations to foreign investors, can be granted by the legislation. Additional guarantees and measures of protection can be granted to foreign investors in every particular case under investment to the following: to priority branches providing stable economic growth and progressive structural changes of country's economy; to priority projects providing consolidation and expansion of export potential of the republic, its integration into global economic cooperation; to the projects of small business which realization is directed to processing of raw materials, primary goods, production of consumer goods and services, assurance of employment of population. Additional guarantees and measures of protection to foreign investors can include granting of the government's guarantee of the Republic of Uzbekistan, rendering of assistance in financing of investment projects, establishment of a special tax and payment regime, the state monitoring of realization of projects and other measures in accordance with the legislation. Additional guarantees and measures of protection are granted to foreign investors by the special Government's decisions in which in particular, conditions and order of investment, use and security of recoupment of foreign investments are provided.
Article 5. Guarantees against nationalization. Conditions of execution of requisition Foreign investments and other assets of foreign investors of the Republic of Uzbekistan are not subject to nationalization. Foreign investments and other assets of foreign investors are not subject to requisition except for cases of natural calamities, accidents, epidemics, epizootics. The decision on requisition is taken by the Cabinet of Ministers of the Republic of Uzbekistan under observation of requirements on which requisition: is limited by minimal amount of investments or other assets required to solve tasks following from indicated cases; is executed on non discriminatory basis and in accordance with the order established by the legislation; is accompanied by payment of compensation adequate to inflicted loss. A state is a guarantor of timely fulfillment of indicated compensation payments. A foreign investor has the right to contend in legal form and by arbitration the following: legality of the purpose used for execution of requisition; an amount of requisitions; valuation of requisited investments and other assets; correspondence of payment of compensation subject to payment; procedure which was observed by state administration bodies and local authorities under execution of requisition.
Article 6. Guarantees of funds use Foreign investor's profits received in the Republic of Uzbekistan can be re-invested on the territory of the Republic of Uzbekistan or used by all means at the foreign investor's discretion. According to the legislation, the enterprises with foreign investments have the right for the following: to open, use and dispose accounts in any currency and any bank on the territory of the Republic of Uzbekistan as well as outside it; to receive and return loans in foreign currency. Limitation of use or compulsory withdrawal of resources from the accounts of an enterprise with foreign investments can be effected by the state administration bodies and local authorities exclusively in accordance with the procedure established by the legislation.
Article 7. Guarantees of funds transfer Foreign investors are guaranteed a free transfer of funds in foreign currency to and from the Republic of Uzbekistan without any limitations provided payment of taxes and other obligatory payments by them in accordance with the procedure established by the legislation of the Republic of Uzbekistan. Such transfers include the following: initial and additional sums designed either to support or to increase foreign investments; income received from investment execution; funds received as compensation for inflicted losses in accordance with the present Law; payments executed in order of agreements execution; proceeds of sales of all or part of foreign investments; payments arised on account of dispute settlement including any judicial or arbitral decision; salary and other payments to workers; funds from other sources received in accordance with the legislation. In accordance with the rules of international law, the state can stop repatriation of foreign investor's funds on terms of non discriminatory application of legislative acts in cases of insolvency and bankruptcy of an enterprise with foreign investments or protection of creditors' rights, criminal acts or administrative infringement of a law effected by a foreign investor - natural entity, or other necessity to stop such repatriation according to arbitration or court decision.
Article 8. Guarantees of refund of foreign investments in connection with cessation of investment activity The foreign investor has the right to stop investment activity in the Republic of Uzbekistan in accordance with the order established by the legislation. After cessation of investment activity, the foreign investor has the right for free repatriation expressed either in money or natural form of his assets got as a result of cessation of investment activity without loss for fulfillment of foreign partner's obligations with regard to the Republic of Uzbekistan or other creditors.
Article 9. Free access to open information Legislative acts including departmental normative ones as well as judicial decisions effecting the foreign investors' interest anywise, should be available to them; and in cases directly provided by the legislation - they should be published. State administration bodies and local authorities are to provide information interested for foreign investor, at their request in accordance with the procedure stipulated by the legislation.
Article 10. Settlement of disputes Dispute associated with foreign investments (investment dispute) directly or indirectly, can be settled on agreement of the parties by consultation between them. If the parties will not be able to achieve agreed settlement, than such dispute should be settled either by an economic court of the Republic of Uzbekistan or by arbitration in accordance with the rules and procedures of international agreements (conventions) on settlement of investment disputes, to which the Republic of Uzbekistan has been joined. The parties involved in investment dispute can, on mutual agreement, determine the authority settling such dispute, as well as a county which can execute arbitration legal procedure of investment dispute. Foreign investors' disputes, not associated with their investment activity on the territory of the Republic of Uzbekistan, shall be settled in accordance with the legislation of the Republic of Uzbekistan except for cases when other procedure for dispute settlement is provided by an agreement in keeping with the rules of international law.
Article 11. Amenability for violation of the legislation on guarantees and measures of protection of foreign investors' rights If violation of legislation on guarantees and measures of protection of foreign investments' rights takes place, an investor has the right to get adequate compensation for inflicted losses in due course of law. In case of adoption by the state administration bodies or local authorities of normative acts limiting foreign investors' rights as well as in cases of their unlawful interference into economic activity of foreign investors, than inflicted losses shall be compensated by such authorities in due course of law. Officials of the state administration bodies or local authorities who violated a law on guarantees and protection of foreign investors' rights, are responsible according to the established order.
Article 12. Conflict provisions In case of some non-conformity between provisions of the present law and other legislative acts or international agreements of the Republic of Uzbekistan, the provisions, more favorable for foreign investments have an advantage.
Article 13. Application of law to investments executed earlier The present law is applied to foreign investments executed in the Republic of Uzbekistan prior to coming of the present law into force, only in part of its more preference to foreign investor.
President of the Republic of Uzbekistan I. Karimov |
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