1. ECONOMIC POTENTIAL & INVESTMENT ENVIRONMENT OF THE REPUBLIC OF UZBEKISTAN Elyor Ganiev Minister of Foreign Economic Relations, Investments and Trade

2. [2][2] Great Silk Road

3. [3][3] MODERN UZBEKISTAN The leading industrial country in CA. The leading industrial country in CA. Favorable investment climate System of privileges and incentives Attracted more than 21.5 bln USD of Foreign investments so far. Attracted more than 21.5 bln USD of Foreign investments so far. “Open doors” Policy

4. [4][4] GDP (Growth, %)

5. [5][5] EXPORT TREND (mln USD)

6. [6][6] TRADE TURNOVER Turnover growth by 13.5 % Turnover growth by 13.5 % Balance 2 bln USD Balance 2 bln USD Export growth by 18.1 % Export growth by 18.1 % Import growth by 7.4 % Import growth by 7.4 % (mln USD) The volume of the products with high value added, the share of which in total exports increased from 22% in 1991 up to 60% in 2006. The volume of the products with high value added, the share of which in total exports increased from 22% in 1991 up to 60% in 2006.

7. [7][7] INFLATION RATE Effective moderately rigid monetary and fiscal policy in the last 4 yrs have allowed to support inflation rate at rather low level. (%)

8. [8][8] UZBEK TAX SYSTEM Income Tax Rate Unified tax for micro-firms and small enterprises from the volumes of sale of goods (works, services) – 13%, including mandatory payments to the state, target and off-budget funds.

9. [9][9] Income tax 10% 10% Single social tax 24% 24% VAT20%VAT20% Mandatory payments, target and off-budget funds: Road Fund – 1.5%;Road Fund – 1.5%; Secondary School Education Development Fund– 1%;Secondary School Education Development Fund– 1%; Pension Fund – 0.7% of the volumes of sale of productsPension Fund – 0.7% of the volumes of sale of products with deduction of VAT and excise taxes. Mandatory payments, target and off-budget funds: Road Fund – 1.5%;Road Fund – 1.5%; Secondary School Education Development Fund– 1%;Secondary School Education Development Fund– 1%; Pension Fund – 0.7% of the volumes of sale of productsPension Fund – 0.7% of the volumes of sale of products with deduction of VAT and excise taxes. Tax on income of individuals (max.rate) 25% Tax on income of individuals (max.rate) 25% Property tax 3,5% to residual cost Property tax 3,5% to residual cost Land tax – on the rates, set depending on location land plots. Land tax – on the rates, set depending on location land plots. MAIN TAXES ANDPAYMENTS MAIN TAXES AND PAYMENTS UZBEK TAX SYSTEM

10. [10] SMALL AND PRIVATE BUSINESS (Share in GDP)

11. [11] ESSENTIAL CONDITIONS Appropriate legislation Developed infrastructure Cheap energy supplies Necessary production spaces Skilled labor force

12. [12] FOREIGN INVESTMENTS IN UZBEKISTAN FDI inflow for the last 6 yrs increased by 10 times making 2.5 bln USD. FDI inflow for the last 6 yrs increased by 10 times making 2.5 bln USD. More than 3500 enterprises with foreign investments, including world-famous TNCs, in the Uzbek market. More than 3500 enterprises with foreign investments, including world-famous TNCs, in the Uzbek market.

13. [13] INVESTMENT LEGISLATION On Foreign Investments, On Foreign Investments, The following laws form the basis of investment environment in Uzbekistan: On Investment Activities, On Investment Activities, On Guarantees and Measures of Protection of Rights of Foreign Investors, On Guarantees and Measures of Protection of Rights of Foreign Investors, On Protection of Rights of Investors on Securities’ Market On Protection of Rights of Investors on Securities’ Market

14. [14] Stable legislature during 10 yrs, Foreign investments and other foreign assets are not subject to nationalization, GUARANTEES & RIGHTS OF FOREIGN INVESTORS Free transfer of money resources in a foreign currency into Uzbekistan and from it without any restrictions,

15. [15] Foreign investors’ incomes derived in Uzbekistan can be re-invested in the territory of the Republic of Uzbekistan or used in any other way at the discretion of a foreign investor, GUARANTEES & RIGHTS OF FOREIGN INVESTORS

16. [16] Return of foreign investments due to the discontinuance of an investment activity, Insurance protection and guarantees against political and other risks. GUARANTEES & RIGHTS OF FOREIGN INVESTORS

17. [17] INCENTIVES FOR FOREIGN INVESTORS Unprecedented tax incentives, in particular, interest rate reduction and full exemption from tax for 7 yrs depending on the volume of investments, Exemption from VAT payment and custom charges for imported equipments,

18. [18] Exemption from Land tax payment for a specified time, More incentives available for export- oriented enterprises. INCENTIVES FOR FOREIGN INVESTORS

19. [19] On March 14, 2007 a special Decree was signed by the President in order to stimulate upgrading and re-equipment. Tax base reduction for the sum equivalent to the expenditures spent for upgrading and re- equipment for 3 yrs, Tax base reduction for the sum equivalent to the expenditures spent for upgrading and re- equipment for 3 yrs, Tax exemption from the Property tax to re- equipments for 5 yrs. Tax exemption from the Property tax to re- equipments for 5 yrs. INCENTIVES FOR FOREIGN INVESTORS

20. [20] PROSPECTIVE SECTORS FOR INVESTMENT

21. [21] OIL & GAS INDUSTRY GasGas Explored reserves – more than 2 trln m3 Explored reserves – more than 2 trln m3 Extraction – about 65 bln m3 Extraction – about 65 bln m3 Uzbek share in Central Asia: 40% - natural gas 40% - natural gas 55% - coal 55% - coal Coal reserves – 2 bln tons Coal reserves – 2 bln tons Uzbek share in Central Asia: 40% - natural gas 40% - natural gas 55% - coal 55% - coal Coal reserves – 2 bln tons Coal reserves – 2 bln tons Uzbek gas transportation system - 9 main gas pipes with 12 thousand km length Uzbek gas transportation system - 9 main gas pipes with 12 thousand km length Sector Investment Capacity 5 Bln USD

22. [22] MINING & QUARRYING Explored Reserves 3.3 trln USD

23. [23] CHEMICAL INDUSTRY Sector Investment Capacity 800 mln USD

24. [24] ELECTRICAL ENGINEERING INDUSTRY Sector Investment Capacity 250 mln USD

25. [25] CONSTRUCTION PRODUCTS INDUSTRY Sector Investment Capacity 500 mln USD

26. [26] FRUITS AND VEGETABLES PROCESSING INDUSTRY Sector Investment Capacity 300 mln USD Uzbekistan possesses a significant potential for development of processing of agricultural products. UZBEKISTAN: Uzbekistan possesses a significant potential for development of processing of agricultural products. UZBEKISTAN: one of the largest producers of raisin and dried fruits in the world one of the largest producers of raisin and dried fruits in the world one of the top-five producers of tomato- paste in the world one of the top-five producers of tomato- paste in the world capable to cultivate more than 10 mln tn of fruit- and-vegetable products p.a. capable to cultivate more than 10 mln tn of fruit- and-vegetable products p.a.

27. [27] PRIVATIZATION PRIVATIZATION The Privatization P rogram for 2006-2008 has started. The Privatization P rogram for 2006-2008 has started. 105 state enterprises are offered on so-called “zero value” with investment obligations. 105 state enterprises are offered on so-called “zero value” with investment obligations. Share holdings of 1495 state enterprises are offered for sale to private sector, including 1269 enterprises would be fully delivered to private ownership. Share holdings of 1495 state enterprises are offered for sale to private sector, including 1269 enterprises would be fully delivered to private ownership.

28. [28] Andijan Osh Gulja Sarytash IrkeshtamKashgar Building the automobile road between Uzbekistan and China will make a great contribution for the strengthening bilateral trade and investments

29. [29] UZINFOINVEST AGENCY “UZINFOINVEST” Information Support & Foreign Investments Promotion Agency was established in February 2007 by the initiative of the President of the Republic of Uzbekistan Islam Karimov with the purpose of providing a one-window informational and all other possible support to foreign investors in Uzbekistan. Agency is an independent institution (legal entity) under the Ministry of Foreign Economic Relations, Investments and Trade of the Republic of Uzbekistan.

30. UZBEKISTAN IS OPEN FOR YOU! www.investuzbekistan.org

31. THANK YOU!