Investment Environment ofthe Republic of Uzbekistan

INVESTMENTLEGISLATION
The following laws form the basis of investment environment in Uzbekistan:

On Foreign Investments,
On Investment Activities,
On Guarantees and Measures of Protectionof Rights of Foreign Investors.

[2]

GUARANTEES & RIGHTSOF FOREIGN INVESTORS
StableStable legislation
legislation during
during 10
10 years,years,
Foreign
Foreign investments
investments andand other
otherforeign
foreign assets
assets areare notnot subject
subject totonationalization,nationalization,
Free
Free transfer
transfer ofof money
money resources
resources inin aa
foreign
foreign currency
currency into
into Uzbekistan
Uzbekistan andandfrom
from itit without
without any
any restrictions,restrictions,[3]

GUARANTEES & RIGHTSOF FOREIGN INVESTORS
Foreign
Foreign investors’
investors’ incomesincomes derived
derived ininUzbekistan
Uzbekistan can
can bebe re-invested
re-invested into
intoUzbekistan
Uzbekistan oror used
used inin any
any otherother way
way atatthethe discretion
discretion ofof aa foreignforeign investor,
investor,
ReturnReturn ofof foreignforeign investments
investments due
due toto thethediscontinuancediscontinuance ofof anan investment
investment activity,activity,
Insurance
Insurance protection
protection andand guarantees
guarantees
againstagainst politicalpolitical andand other
other risks.
risks.

[4]

INCENTIVES FORFOREIGN INVESTORSOn March 14, 2007 a special Decree was signed by thePresident in order to stimulate upgrading and re-equipment.

Tax base reduction for the sum equivalent to
the expenditures spent for upgrading and reequipment for 3 years,
Tax exemption from the property tax to reequipments for 5 years.
[5]TAX INCENTIVES
Foreign investors are exempted from the following taxes &payments:

Income tax,
Property tax,
Social infrastructure tax,
Unified tax for micro-firms and small enterprises,

Mandatory payments to the Road
Development Fund.

TAX INCENTIVESThe specified tax privileges are given at volume of FDI:

US$ 300 thousand – US$ 3 mln – for the period of3 years,
US$ 3 mln – US$ 10 mln – for the period of 5 years,
over US$ 10 mln for the period of 7 years.

INVESTMENT ENVIRONMENT

MFN
MFN Treatment
TreatmentWith 43 countries, including
Japan, Republic of Korea, China,
EU countries & US.

INVESTMENT ENVIRONMENTInternational
International Agreements
Agreements
Bilateral Investment
Treaties (BIT) with 48 states
Treaties for the Avoidanceof Double Taxation with 51 states

COST FOR MAIN PRODUCTION
FACTORS IN UZBEKISTAN
Water – US$ 0,03 / m3
Natural Gas – US$ 0,04 / m3
Electricity – US$ 0,04 / Kw/h
Fuel Oil – US$ 0,6 / lt
Diesel Oil – US$ 0,6/ lt

NEW TAX CODE
AA new
new revised
revised Tax
Tax Code
Code isis thethe LegalLegal
ActAct ofof thethe direct
direct action,action, inin whichwhich allallregulations
regulations inin thethe spheresphere ofoftaxation
taxation areare systemized.
systemized.
NewNew Tax
Tax Code
Code determines
determines transparent
transparent
procedures
procedures ofof computation
computation ofof taxes
taxes
and
and their
their payment
payment inin Uzbekistan.
Uzbekistan. ThisThis
allowsallows toto create
create integrated
integrated legal
legal basebaseinin thethe systemsystem ofof tax
tax relations.
relations.
[11]

IMPROVEMENT OFINVESTMENT ENVIRONMENTWorkWork onon thethe new
new revised
revised Customs
Customs CodeCodeofof thethe Republic
Republic ofof Uzbekistan,
Uzbekistan, which
which
wouldwould become
become aa statutory
statutory act
act ofof thethedirect
direct action,action, isis underunder way.
way.
SeveralSeveral arrangements
arrangements areare mademade onon
regulating
regulating andand strengthening
strengthening ofof legislation
legislation
inin banking,banking, audit
audit andand insurance.
insurance.
[12]

IMPROVEMENT OFINVESTMENT ENVIRONMENT
The further liberalization of a tax policy
Strengtheningofthebusiness environment

competitive

The further development of a market
infrastructure
Increase of share of private sector ineconomy[13]

IMPROVEMENT OFINVESTMENT ENVIRONMENT
The further strengthening of positive
investment image of Uzbekistan abroad
Creation of more favorable conditions forattraction of foreign investments
Carrying out of an active investment policy[14]

PRIVILEGES & PREFERENCES

Uzbekistan
Uzbekistan isis aa member
member ofof FTZ
FTZ ofofCIS,
CIS, thatthat envisages
envisages duty
duty free
free toto thethe280
280 mlnmln consumers.
consumers.

Enterprises with Participation ofForeign Capital
In Uzbekistan an EPFC can be established in different forms:

partnerships,
limited/additional liability companies,
open/closed joint-stock companies,
subsidiaries,
unitary enterprises

Legislation of the Republic of Uzbekistan fixes
minimal amount of the charter capital for eachform of legal entities :General or limited business partnerships - not lessthan 50 times the minimum monthly wage (MMW)(approximately USD 1,000);Open joint-stock companies - not less than the sumequivalent to USD 50,000;
Closed joint-stock companies - not less than 200 MMW(approximately USD 4,000);

Limited or additional liability companies
than 50 MMW (approximately USD 1000);- not less

In addition, it should be noted that while establishing of an EFI it isnecessary to meet requirements in respect to the minimal size ofthe charter capital (USD 150,000) and the share of foreign
investment must comprise not less than 30% of the charter capital.

REGISTRATIONan EFI & an EPFC
In order to register an EFI with the Ministry of Justice or an EPFC witha local khokimiyat, the following documents must be presented:
two notarized originals of the foundation documents instate language,
Bank Warranty on payment of a state due or a registration
fee fixed by Legislation of the Republic of Uzbekistan,

original inquiry on absence of identical ,sketches of the company’s stamp and seal in triplicate,extract from the Trade Register of the foreign founder ina place of registration of a legal entity,
documents confirming that each founder deposits notless than 30% of the charter capital as an initial payment.

Governmental decree№180, 02/08/2005.
Procedure of investment agreements’conclusion and fulfillment.
Investment agreements with the foreign investors are concluded
and fulfilled in accordance with the established by the legislation
procedure.
Investment agreement stipulates rights, duties and responsibilityof subjects of entrepreneurial activity with regard to objects ofInvestment activity.
The investment agreement is concluded between the Governmentof the Republic of Uzbekistan in the person of the Ministry of

foreign economic relations, investments and trade of the Republicof Uzbekistan (MFERIT) and foreign investor.

Governmental decree№180, 02/08/2005.
For preparation of the investment agreement the foreign
investor represents to the MFERIT:
draft of the investment agreement;
basic economic parameters fulfilled on the basis oftechnical and economic calculation;
conclusion issued by the Ministry of Justice regarding legal examination of the draft
investment agreement;
conclusions of the Ministry of finance, the Ministryof economics and the State tax committee.

Governmental decree№180, 02/08/2005.
Additional guarantees and measures of protection (privileges) are
given to foreign investors in each individual case of investment in:priority branches providing steady economic growth,
progressive structural changes of a nationaleconomy;priority projects providing strengthening andexpansion of industrial and an export potential of
the republic;
projects in the sphere of small business which
implementation is aimed at raw material processing,
manufacture of consumer goods and services,maintenance of employment of the population.

WHY

TO INVEST IN UZBEKISTAN?
Political
Political Stability
Stability
Fast
Fast Growing
Growing Economy
Economy andand InfrastructureInfrastructure
Favorable
Favorable Tax
Tax Policy
PolicyConvenient
Convenient Geographic
Geographic Location
Location
Rich
Rich Source
Source Of
Of Mineral-raw
Mineral-raw Materials
Materials
Well
Well Trained
Trained Labor
Labor Force
Force
TheThe BestBest Place
Place To
To LiveLive[22]

THANK YOU!