The documents required for obtaining a license are submitted by the license applicant to the licensing authority directly, via mail or electronically, with notification of their receipt. Documents submitted in electronic form are confirmed by a digital signature of the license applicant. The indication in the application for issuing a license of the electronic address of the license applicant is his consent to receive notification of the decision taken on his application in electronic form through the information system.
Documents sent to the appropriate licensing authority for obtaining a license are received by an inventory list, a copy of which is sent (delivered) to the applicant with a note on the date of receipt of documents by the specified authority.
The license applicant is responsible for providing inaccurate or distorted information in accordance with the law.
In cases when the licensing body for licensing certain types of activities requires obtaining documents issued by other organizations, licensing of certain types of activities is carried out in a simplified procedure using the “one window” principle, in which the licensing body receives these documents independently without participation of the business entity.
(Article 14 (1). Licensing of certain types of activities on the principle of “one window”)
Foreign investors in the Republic of Uzbekistan can be:
Particularly attractive conditions created for foreign investors, including free economic zones, namely:
Changes in the form and process of investing.
Changes in the forms in which foreign investment is initially or repeatedly is attracted, do not lead to a change in their qualification as an investment.
EFI includes newly created enterprises that meet the following conditions:
— In Uzbekistan, there are no institutional and legal restrictions on the creation of EFI.
At the same time, they can be created in the form of a business partnership (full and limited), a company with limited and additional liability, a joint-stock company (open and closed), a subsidiary, a unitary enterprise and other forms not prohibited by the legislation.
A foreign investor has the right to:
— An individual permanently residing in the Republic of Uzbekistan or staying in Uzbekistan for 183 days or more, for any period up to twelve months beginning or ending in the financial year, is considered as a resident of the Republic of Uzbekistan.
Individuals who are not residents of the Republic of Uzbekistan are taxed on income derived from sources in Uzbekistan.
A similar situation arises with taxation of foreign legal entities. Thus, a resident of the Republic of Uzbekistan is a legal entity established or registered in Uzbekistan, as well as registered outside the Republic of Uzbekistan, the head office of which is located in Uzbekistan.
Legal entities that are not residents of the Republic of Uzbekistan are taxed on income (profits) received from sources in Uzbekistan.
At the same time, the collection of taxes and fees from foreign individuals and legal entities can be terminated or limited on the basis of reciprocity in cases where the same measures are taken in relation to individuals and legal entities of the Republic of Uzbekistan in the respective foreign state.
— Foreign investments and other assets of foreign investors of the Republic of Uzbekistan are protected by the Law “On guarantees and measures of protecting the rights of foreign investors” and are not subject to nationalization.
— On January 1, 2007, the Law “On arbitration courts” entered into force in the republic, which served as the legal basis for creation, functioning and activity of arbitration courts, both permanent and temporarily created. Thus, at present, along with the already existing means of protecting the rights and guarantees of foreign investors, by agreement of the parties, arbitration courts can be established in the republic with the involvement of independent experts acceptable to both parties.
At the same time, the task of ensuring the protection of the rights and legitimate interests of foreign investors and enterprises with foreign investments is entrusted to the Ministry of Justice. To this end, the Department of Legal Protection of Foreign Investments and Enterprises with Foreign Investments was established within the structure of the Ministry of Justice.
Along with customs and tax benefits established for all enterprises of the Republic of Uzbekistan, there are a number of benefits provided to enterprises of the following sectors of the economy, attracting direct private foreign investment:
These enterprises are exempt from paying income tax (profit), property tax, social infrastructure development and landscaping tax, environmental tax, single tax for micro and small enterprises, as well as mandatory contributions to the Republican Road Fund.
The specified tax benefits are provided with the volume of direct private foreign investment:
At the same time, these tax benefits apply under the following conditions:
In addition, from July 1, 2003 to January 1, 2009, industrial enterprises with foreign investments of the SJSC “Uzbekyengilsanoat” (now “Uztuqimachiliksanoat” Association, specializing in production of ready-made clothes (garments, knitwear and leather products), hosiery and footwear, are exempt from paying to the budget of all taxes and fees, except for the value added tax.
— In some cases, on the basis of concluded investment contracts, foreign investors may be provided with additional guarantees and rights protection measures when investing in:
— priority sectors ensuring sustainable economic growth, progressive structural changes in the country’s economy;
— in priority projects that ensure strengthening and expansion of the export potential of the republic, its integration into the world economic relations;
— in projects in the sphere of small and medium-sized businesses, implementation of which is aimed at processing raw materials, production of consumer goods and services, providing employment to the population.
Additional guarantees and protection measures for foreign investors may include the provision of guarantees by the Government of the Republic of Uzbekistan, assistance in financing investment projects, creation of a special tax and payment regime, implementation of state monitoring of project implementation and other measures in accordance with legislation.
In the event that the Government of the Republic of Uzbekistan provides a foreign investor with additional guarantees and protection measures (benefits and preferences) established by the legislation, an investment contract is concluded.
The investment contract is concluded between the Government of the Republic of Uzbekistan in the person of the State Investment Committee of the Republic of Uzbekistan and a foreign investor (investors).
To prepare an investment contract, a foreign investor submits to the State Investment Committee:
draft investment contract;
the main economic indicators carried out on the basis of a feasibility study (feasibility calculation), passed in cases established by the legislation, expertise in authorized bodies;
conclusion of the Ministry of Justice – in terms of the legal expertise of the investment agreement project;
conclusions of the Ministry of Finance, the Ministry of Economy and the State Tax Committee regarding the provision to foreign investors and (or) to establish an enterprise with foreign investments in addition to tax privileges and preferences established by the legislation.
A foreign investor, in the manner and time specified in the investment agreement, submits to the State Investment Committee reports on the progress of fulfillment of assumed obligations.
One of the most important priorities for development of the country’s economy is all possible strengthening of activities on attracting foreign investment.
At present, the republic is on the way of further deepening the process of denationalization and privatization of enterprises of leading sectors of the economy, aimed at increasing the role of private property in the economy, drastically reducing the state’s share in the statutory funds of economic societies, as well as widespread involvement in development and modernization of direct investment enterprises, including foreign. In addition, redemption of unplaced state assets at zero redemption value is possible, with investors taking investment commitments. All information about privatization process in the Republic of Uzbekistan can be found on the website davaktiv.uz
In order to strengthen the currency balance of the republic in a certain period in Uzbekistan there were restrictions on the conversion of soum funds into the foreign currency. The income of a foreign investor received in the Republic of Uzbekistan may be reinvested in the territory of the Republic of Uzbekistan or used in any other way at the discretion of the foreign investor.
Foreign investors are guaranteed free transfer of funds in foreign currency to and from the Republic of Uzbekistan without any restrictions, provided that they pay taxes and other obligatory payments in the manner established by the legislation of the Republic of Uzbekistan.
The Constitutional Court of the Republic of Uzbekistan decided to interpret the first part of the Article 10 of the Law “On guarantees and measures of protecting the rights of foreign investors:
The Republic of Uzbekistan, recognizing the supremacy of the Constitution and laws, as well as the priority of generally accepted norms of international law, recognizes the resolution of economic disputes within the legal field.
The norm of the first part of the Article 10 of the Law that “if the parties are unable to reach an agreed resolution, such a dispute must be resolved by the economic court of the Republic of Uzbekistan or through arbitration in accordance with the rules and procedures of international contracts (agreements, conventions) on resolving investment disputes, to which the Republic of Uzbekistan has joined” is a prescription establishing that its use is subject to the observance of the rules and procedures of international treaties and, accordingly, is not a direct expression of the consent of the republic on the transfer of any case of dispute in an arbitration body.
As a rule, the consent of the parties of the dispute to transfer it to the consideration of a particular dispute resolution body should be expressed in the form of an arbitration clause to the investment contract or a separate agreement concluded between the parties to the dispute.
Thus, the decision of the Constitutional Court should not be considered as an infringement of the rights of foreign investors, and this issue should be approached constructively and with respect for the rights and obligations of each of the parties within the framework of generally accepted norms of international law.
The state guarantees and protects the rights of foreign investors engaged in investment activities in the territory of the Republic of Uzbekistan. If the subsequent legislation of the Republic of Uzbekistan worsens the investment conditions, then the legislation enters into force at the date of investment is applied to foreign investors within ten years from the date of investment. A foreign investor has the right to apply those provisions of the new legislation that improve the conditions of investment.
At the same time, the deterioration of the investment conditions is considered to be the introduction of amendments and additions to the legislation, as well as the adoption of new legislative acts of the Republic of Uzbekistan providing for:
The legislation provides for a notification procedure of using a ten-year warranty.
Thus, upon the occurrence of any of the above types of deterioration of the investment conditions, the foreign investor notifies the relevant authorized body about the application of the guarantee.
The authorized bodies that are notified of the application by a foreign investor of a guarantee are state organizations that carry out state registration of legal entities, the Ministry of Foreign Affairs, the Ministry of Internal Affairs, the Ministry of Investments and Foreign Trade, the State Tax Committee of the Republic of Uzbekistan and serving banks.
Notification of a foreign investor is the basis for the application by the authorized body to the foreign investor of the legislation in force at the date of investment. The notification, regardless of the date of its direction to the authorized body, is valid from the moment the act enters into force.
To register a company with foreign investment in Uzbekistan, you need:
To create a company with participation of a foreign investor, you need to go through the following steps:
The founding documents can be prepared either by the founders themselves, or by agreement with them by the third parties (consulting centers, law firms, etc.). You can contact the nearest division of the Chamber of Commerce and Industry, whose specialists will develop necessary documents on a contractual basis. Founders can use standard forms of constituent documents that are available on the official website of the Ministry of Justice. http://www.minjust.uz/ru/interactive/documents/
A newly created enterprise with participation of a foreign investor acquires the status of a legal entity and the right to carry out activities after its state registration. The registration procedure does not depend on the status of the enterprise that is being created (FDI or FIC) – both are registered by Single Centers for provision of public services to business entities on the principle of “one window”.
It is necessary to contact the “one window” center at the location of the founder – a legal entity or at the place of permanent residence of the founder – an individual. From April 1, 2017, an enterprise can be registered via the Internet using an automated system for registering business entities integrated into the Unified portal of interactive state services.
Application (electronic request – during registration via the Internet).
Requests sent through an automated system for state registration of enterprises with foreign investments, enterprises with foreign capital, other legal entities, whose founders indicate persons who are not citizens of the Republic of Uzbekistan, must sign with an electronic digital signature (EDS) of these persons.
After state registration, an enterprise independently opens payment and other accounts in bank institutions. The bank must be provided with a card with signature samples of the head and chief accountant and a seal (if any).
The Resolution of the Board of the Central Bank (reg. No. 1948-12 of 24.03.2017) introduced amendments and additions to the Instruction on Bank Accounts opened in banks of the Republic of Uzbekistan. This was done in accordance with the Resolution of the Cabinet of Ministers of 09.02 2017 No. 66 “On measures of implementing the resolution of the President of the Republic of Uzbekistan of October 28, 2016 No. RP-2646 “On improving the system of state registration and registration of entrepreneurship entities”.
Wholesale enterprises are now entitled to choose any bank for opening both primary and secondary accounts.
Residents – legal entities that are business entities* for opening accounts should not submit to the bank a copy of the state registration certificate, as well as copies (notarized copies) of constituent documents. Banks receive this information from the “Automated system of state registration and registration of entrepreneurship entities”.
The seal in the application for opening an account is placed if available.
The following documents are submitted to the bank to open deposit accounts on demand in national currency by residents – legal entities that are business entities, individual entrepreneurs, as well as dehkan farms:
a) application for opening an account in the prescribed form;
b) individual entrepreneurs importing goods intended for commercial activities from abroad – a copy of the certificate of the state registration of an individual entrepreneur delivering goods intended for commercial activity, issued by the tax authority at the place of residence;
c) a copy of the state registration certificate;
d) two copies of notarized cards with sample signatures and unsubscribing print in the prescribed form;
e) residents-legal entities that are subjects of business activity – constituent documents (constituent document of the charter), as well as a notarized copy of introduced amendments and additions to them;
f) a document proving the identity of the person (a passport or a document replacing it) that has the authority to sign monetary settlement documents on behalf of the client. A copy is accepted by the bank after the presentation of the original ID. More details:
In 2017, Uzbekistan ranked 87th in the World Bank’s Doing Business ranking by implementing three reforms in such areas as “Registration of property”, “Protection of minority investors” and “Taxation”. The country has simplified the transfer of property rights by increasing information transparency, strengthened the protection of minority investors by explaining the ownership structure and control, and finally reduced the costs associated with paying taxes by reducing the single rate of social payments for employers, as well as income tax rates of enterprises.
At the same time, according to the report, despite the active reform activities of the Central Asian countries in recent years in areas studied by the Doing Business project, there are opportunities for improving indicators such as Connecting to the electricity supply system, International trade and Taxation.
As the locomotives of innovative growth of the economy of Uzbekistan is due to the fact that they have a significant production and technical potential, qualified personnel have been preserved here, they account for the bulk of the manufactured export products and there are good prerequisites for increasing the production of import-substituting products. These include such large corporate enterprises as the National Holding Company Uzbekneftegaz, JSC Navoi Mining and Metallurgical Combine, JSC Almalyk Mining and Metallurgical Combine, Uzbekistan Railways, Uzbekistan Airways, JSC Uzavtosanoat, JSC Uzkhimprom, JSC Uzbekenergo and others.
As evidenced by the experience of countries that have achieved success in ensuring high rates of their development (Canada, China, South Korea, Singapore), one of the main conditions for achieving them was the timely formation of weighted public investment policies and creation of effective mechanisms for financial support for key enterprises of national economies. There were adjusted fiscal, tax, monetary and other policies, reoriented to create effective incentives for various categories of foreign and domestic investors involved in implementation of large national, sectoral and regional projects to modernize their national economies. Loans and credits of international financial institutions, resources of large foreign institutional investors in investment and venture funds became important tools of the mechanism for financing innovation programs for key enterprises formed in these countries. Commercial banks and insurance companies, as well as state assistance in implementation of programs for public placement of their shares on major foreign stock exchanges.
However, the main condition for introducing innovative methods of financing in these countries and the inflow of significant volumes of investment has become the interest of key companies themselves in attracting domestic and foreign capital for their innovative development through skillful use of the potential of such advanced financing instruments as syndicated loans and project financing, leasing and franchising, equity and bond financing, venture capital and debt capital. The head and specialists of economic departments, financial institutions interested in attracting foreign investment, and, most importantly, the strategically important enterprise of Uzbekistan itself must learn to work with all the above categories of investors, since this will depend on the inflow of foreign capital and the need to finance innovative development programs.