1. INVESTMENT REGIMES FOR UK Business in Uzbekistan
Umid Aripdjanov Partner | Investments
Tashkent 27 February 2019

2. General overview
Continental law family: post-soviet emerging jurisdiction
From trade through service to investments
Liberalization reforms announced and action plan
FDI preferred: four favorable legal and tax regimes
FDI favorable regime:
National treatment - land, mass media, banking
Non-expropriation policy - privatization plans
Free repatriation - free convertibility
Stabilization for ten years - US$ 5 mln FDI
International arbitration - commercial or investment

3. investment regimes
Four preferential legal, currency and tax regimes offered:
Individual Investment Regime for large-scale infrastructure projects - Investment Agreement, PSA / PEC / Exploration (Concessions / PPPs?)
Specific Regime for significant or ground-breaking projects (individual Presidential Decree)
Free Economic Zones for diversified and prioritized industries (21 zones incl 9 production, 7 pharm) – 402 registered, 112 started
Foreign Direct Investment Regime for any qualified production enterprise with foreign investments (outside of the Tashkent City and Tashkent Region)

4. Individual investment regime
Large-scale project aimed at diversification of economy (textile, petrochemical, gas chemical, refinery, automotive)
Potential for export or import-substitution
Prioritized industries and infrastructure projects
A Feasibility Study to substantiate tax / customs benefits:
Industry-wise / sector exemptions only (?)
Exemptions from customs duties
Time-limited tax holidays or preferences
Currency control and other privileges
Other variances from general law
Bankability aspects for massive investment projects

5. Specific investment regime
Significant or new projects to facilitate the growth of economy (joint investment fund, engineering center, etc)
Facilitate the growth in other industries (hospitality, leasing, access to finances, agriculture, oil service)
No Feasibility Study required
Limited tax, customs and currency benefits:
Certain tax holidays or exemptions for targets
Settlement in FCY for subholding structures (revised)
Localization program (benefits expired)
Decree is a public administrative act issued by one party

6. Free Economic Zones
30 year period: Investments to diversify the economy (electronics, pipes, high-tech, construction, automotive)
Requires a project approval by the Administration
Unified exemptions:
CIT (12% basic) or unified small business tax (4% basic), land tax (variable tariffs), property tax
All customs payments (except admin fee)
Settlement in FCY within Zone (revised)
Exemption period: 3 years ($0.3-3 mln), 5 years ($3-5 mln), 7 years ($5-10 mln), 10 years (>$10 mln) with one half applicable rate of CIT/unified tax for additional 5 years

7. FDI Regime Encouraging FDI into rural areas with a workforce surplus
Specific sectors: light, silk, food, poultry industries, chemicals, machinery, medicine, packaging, renewables
Requires administration of the project by Government
Tax exemptions:
CIT (12% basic) or unified small business tax (4% basic), property tax
Exemption period:
3 yrs ($0.3-3 mln), 5 yrs ($3-10 mln), 7 yrs (>$10 mln)
Qualifications: FDI in FCY or new equipment without sovereign guarantee, minimum equity share of 33% (15% for corporations), 50% profit reinvestment

8. investment considerations
A wholly-owned or majority owned by a foreign investor
DTT: 10% on dividends/interest/royalties (SPV)
BIT protection
Prioritized industry, economic sector, final product
High-tech or innovative equipment (always new)
Regional marketing and sales (Central Asia and beyond)
Foreign investor as a driver and transformer of the specific industry (automotive, chemical, downstream, textile, electronics, construction materials)
Flagship project

9. Questions & contacts Umid Aripdjanov Umid.A@CENTIL.LAW +998 71 1204778
TOP-RANKED LAW FIRM IN UZBEKISTAN
MOST-RECOGNIZED BY CHAMBERS AND LEGAL500
WINNER of The Law Society's "Excellence in International Legal Services" Award 2018 and 2016
SHORTLISTED for The Lawyer's “Law firm of the year: Russia, Ukraine & CIS” Award 2019 and 2017

10. thank you!