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  • 27 Sep 2019 12:31 PM | Vera Dedyulya (Administrator)

    A special visa for foreign investors - the Investment visa - is being introduced in Uzbekistan, a correspondent reports.

    This is stipulated by a presidential decree (No UP-5833, dated 19 September 2019), which made an amendment to the list of new additional (non-electronic) types of entry visas for certain groups of foreigners, who visit Uzbekistan.

    In line with the approved amendment, the Investment visa will be added to the list of the existing Vatandosh, Student visa, Academic visa, Medical visa and Pilgrim visa.

    The investment visa will be issued for foreigners and entities without citizenship, who have invested in the Uzbek economy no less than 8,500 times the basic calculation value [The basic calculation value is equal to 223,000 soms or about 23 dollars]. This visa will be issue for the period of three years.



  • 27 Sep 2019 12:26 PM | Vera Dedyulya (Administrator)

    Uzbekistan plans to sign at least three deals with large foreign energy companies this year and five more next year as it aims to boost its natural gas output, chief executive of state energy firm Uzbekneftegaz said on Friday.

    The list of potential partners in exploration and development agreements includes BP (BP.L), Total (TOTF.PA), Azerbaijan's SOCAR, Russia's Rosneft (ROSN.MM) and Novatek (NVTK.MM), Bakhodir Sidikov said on the sidelines of an energy conference in Tashkent.

    Potential investors are seeking guarantees that they would be able to export whatever they produce, Sidikov said, but Tashkent is instead offering them guaranteed offtake at prices "at which the project makes economic sense."

    We have some projects where if you use the international price you can get 60% IRR (internal rate of return)," he said. "Nobody expects 60% IRR."

    Asked what profitability levels he considered acceptable, Sidikov said: "Between 11 and 15-16%."

    Next year, Sidikov said, Tashkent plans to sign five more agreements.

    Uzbekistan started actively working on attracting foreign investment after President Shavkat Mirziyoyev took over in late 2016 following the death of his predecessor Islam Karimov.

    Among the challenges faced by the resource-rich nation of 32 million in its quest to bring in investors was the fact that all of its geological data was only available on paper and in the Russian language, Sidikov said. Tashkent is now working with Schlumberger to build a digital geological database.

    Sidikov said Uzbekneftegaz, which produces 42 billion cubic meters (bcm) of gas - out of Uzbekistan's total output of 63 bcm, aimed to add 4-5 bcm to the figure next year to ensure it can fully meet domestic demand.



  • 09 Sep 2019 9:55 AM | Vera Dedyulya (Administrator)

    Together with the World Bank, International Financial Corporation (IFC) is currently in discussions with the government of Uzbekistan to act as a lead transaction advisor for the tendering of a public-private partnership for the design, construction, operation, and maintenance of a new combined-cycle gas turbine near the existing Syrdarya thermal power plant, IFC Country Officer for Uzbekistan Zafar Khashimov told Trend in an interview.

    "The project will help increase efficiency for gas-fired electricity generation and support a reliable power supply in the country," he added.

    Considering Uzbekistan's investment attractiveness to foreign capital, Khashimov noted that during the past two years, the government has made significant progress in advancing difficult economic reforms.

    "In addition to liberalizing the foreign exchange regime, officials have improved the business and investment climate, reduced the state's presence in the economy, and adopted important legal reforms. The changes have definitely made the country more attractive to foreign investors," he stated.

    IFC Country Officer for Uzbekistan added that many big challenges lie ahead and there are critical areas where the government needs to continue the work.

    The work includes reducing the state's role in the economy, further developing infrastructure, boosting technology-enabled services, continuing to improve the investment climate, and implementing reforms of the banking, financial and energy sectors and land and agriculture reforms.

    "These are all steps in the right direction, which we support. Together with the World Bank, we will continue encouraging the country's reform agenda with financial and technical assistance. We firmly believe that Uzbekistan has the potential to become an upper-middle income country by 2030, which is the government's goal," he underlined.

    Recently Trend reported that IFC may take part in modernization of Syrdarya TPP.

    IFC-a sister organization of the World Bank and member of the World Bank Group-is the largest global development institution focused on the private sector in developing countries. The Bank Group has set two goals for the world to achieve by 2030: end extreme poverty and promote shared prosperity in every country.

  • 09 Sep 2019 9:52 AM | Vera Dedyulya (Administrator)

    The President of Uzbekistan, Shavkat Mirziyoyev, has signed Resolution No. PP-4381 dated July 1, 2019 (the "Resolution"), which is aimed, inter alia, at further simplifying privatization procedures. The Resolution recognizes that public assets are often valued at exorbitant prices because of the lack of unified practices on their evaluation, which leads to delays in privatization and necessitates step-by-stop lowering of prices.

    In this regard, the Resolution provides for the simplification of privatization procedures by allowing the following:

    • Public assets may be sold at a price below the nominal value if public bidding leads to the reduction of the price below such a value;
    • State-owned stakes in certain companies (the list of such companies is expected to be approved by the government) may be sold in the absence of pre-emptive rights of other shareholders through public bidding. The opening price shall be determined according to the net asset value as of January 1, 2019, based on the company's audited balance sheet;
    • Investors may pay for the state-owned shares in national currency (i.e. Uzbekistani som) from their accounts at the clearing houses of commodity exchanges and from Loro accounts opened at Uzbekistani banks;
    • Underwriters may operate without providing an auditor's report;
    • Professional securities market participants may operate without providing a certificate of their education.

    Moreover, the Resolution authorizes the Agency for Public Assets Management and state-owned enterprises to contract organizations (both domestic and foreign) as investment consultants without the need for the latter to obtain the license for carrying out the activities in the securities market until January 1, 2020. The foreign organization may operate in such capacity without establishing a local company.

  • 09 Sep 2019 9:43 AM | Vera Dedyulya (Administrator)

    • Uzbekistan's Asaka bank joins EBRD Trade Facilitation Programme
    • US$ 20 million limit will help bank expand its trade finance product range  

    The EBRD is providing a boost to domestic importers and exporters in Uzbekistan by opening a limit of up to US$ 20 million under the EBRD's Trade Facilitation Programme (TFP) to Asaka bank.

    With 22 branches across Uzbekistan Asaka bank will be well-placed to provide financial resources to domestic companies willing to expand their trade operations.

    The trade finance facility will help Asaka bank support import and export transactions, further develop its correspondent banking services and strengthen its trade finance product range.

    The TFP promotes international trade to, from, and within the Bank's countries of operations, including Uzbekistan. Through the Programme, the EBRD provides guarantees to international confirming banks, taking the political and commercial payment risk of international trade transactions undertaken by banks in these countries.

    This is EBRD's latest partner bank to join the programme in Uzbekistan. Trade Facilitation Programme will provide access to finance for exporters and importers, including SMEs, strengthen local capacity in compliance and advance trade finance skills.  The focus will be to support private sector transactions and facilitate trade for the "green" technologies, materials and services.

    Following the reengagement with Uzbekistan in 2017, the EBRD TFP team has delivered 2 regional conferences and 6 training workshops, which were attended by approximately 500 domestic banking professionals. During 2019-2020 the EBRD will be working with the government to improve legislation and regulation in support of enhanced business environment for international trade finance products, including factoring and financial technologies. 

    To date, the EBRD has invested €1.3 billion through 70 projects in the economy of Uzbekistan. Support of small businesses is particularly important as the country moves to reform its economy and strengthen its private sector.


    (c) The European Bank of Reconstruction and Development

  • 03 Sep 2019 3:15 PM | Vera Dedyulya (Administrator)


    Uzbekistan lifted remaining currency controls on Tuesday, August 20, 2019 allowing citizens to purchase foreign cash for the first time as the Central Asian country seeks to attract foreign investment.

    The country of 32 million people has looked to diversify its economy since the death of its longtime leader Islam Karimov in 2016.

    Central bank chairman Mamarizo Nurmuratov said at a press conference that the bank would be allowing the national som currency’s value to be determined “independently in the market,” state media reported.

    “Now the Central Bank will not set prices for the sale and purchase of foreign currency,” Nurmuratov said during the press conference on state television.

    In a press release the bank said it would “use market mechanisms to mitigate the effects of external shocks and ensure the balance of key macroeconomic indicators.”

    The bank said that commercial banks would begin selling foreign currency in cash form, rather than transferring it onto specialized cards that were introduced in 2017. The central bank had previously retained some controls on the som despite allowing a sudden 50 percent drop in the currency in 2017 which brought it closer to its black-market value.

    Before 2017 Uzbekistan’s currency was subject to strict capital controls, leading to a wide gap between its official exchange rate and the black-market rate. Exporting firms were forced to sell their foreign currencies at the artificially high official rate, discouraging foreign investment. After aligning the official rate with the black-market rate, the central bank used “half-market measures” to control the currency in the transition to a free float, economic analyst Navruz Melibayev said.

    “This system was perhaps similar to China’s [control of] the yuan currency. Now we have a full free float like Russia or Kazakhstan,” Melibayev told AFP by telephone.

    Last week President Shavkat Mirziyoyev hailed a surge in investments in the economy, which he said constituted over 38 percent of Gross Domestic Product, in the first half of this year.

    The International Monetary Fund has welcomed economic reforms in Uzbekistan but warned last year that import and export data showed signs of an overheating economy.

    The country was unattractive for investors under Karimov, who took a conservative approach to external debt and favored a strongly protectionist economic model that led to stagnation.

    Uzbekistan depends on commodities such as gold and cotton for economic growth but has looked to diversify since Karimov’s death in 2016.


    August 20, 2019

  • 28 Aug 2019 4:15 PM | Vera Dedyulya (Administrator)

    A package of draft laws which improve the rules on Special investment contracts (hereinafter – “SPIC”) has been adopted. The amendments governing the rules for concluding SPIC came into force on August 13, 2019, and changes in the tax sphere start from September 2, 2019.

    What is SPIC and who needs them?

    The SPIC mechanism enables the investor to conclude an agreement with the government on the development or introduction of new technologies for the development of industrial production in Russia. At the same time, the government commits itself to maintaining the stability of the fiscal and regulatory framework and to granting tax benefits to the investor. Such an agreement also allows the investor to participate in public tenders without meeting localization requirements right away. This mechanism was introduced in Russia in 2015 and, according to the Industrial Development Fund, 33 contracts in diverse industrial fields with a total value of 434 billion roubles have been concluded since then (about 6 billion euros in various industries).

    The new rules introduce significant changes to the current mechanism (SPIC 1.1).

    Who can apply for a SPIC and what preferences will an investor get?

    According to the new version of the law, SPIC conclusion will be held through an open or closed tender, and not in a simple application procedure. The subject of SPIC should be the development and implementation of modern technologies for mass production of goods competitive in the world market, and the Government of the Russian Federation will approve the list of such technologies.

    In addition to receiving tax benefits at the federal and regional levels (e.g., setting the profit tax rate at the federal level to 0% and reducing the tax rate at the regional level) SPIC businesses can count on government support as a part of the implementation project. Investors are immediately granted “Made in Russia” status for products manufactured as a result of SPIC implementation and are also granted a delay in meeting localization requirements.

    The adopted package of draft laws improves conditions for investors in many ways. The changes relate in particular to the following:

    • The term of contracts has been extended to 15 years if the amount of investments is up to 50 billion roubles; and up to 20 years if the amount of investments exceeds 50 billion roubles
    • SPIC can be concluded by investors with any capital investment (the minimum requirement for the amount of investment is cancelled)
    The validity period of preferential profit tax rates is not limited; they will be applied for the entire duration of SPIC and for all project income

    There are two alternative conditions for applying tax incentives to investors:
    1. zero income tax rate will be applied only if the revenue from the SPIC subject is at least 90% of all income;
    2. in case of failure to fulfil the criterion “90-10”, there is the possibility of separate income (expenses) accounting within SPIC framework.

    It should be noted that the application of profit tax benefits is not limited in time but possible until the reporting period in which the SPIC ceases to be effective. However, the benefits are related to the level of government expenditure: government investments in the project are stopped if they exceed 50% of the investor’s investment in SPIC.

    What does this mean for business?

    SPIC attracts investors and is one way to participate in government procurement without meeting localization requirements. The adoption of these amendments should have a positive impact on the Russian industrial sector and create more favourable conditions for foreign investors. SCHNEIDER GROUP is ready to offer you services supporting SPIC conclusions, and also provide related tax and legal advice.

    (c) the Schneider Group 

  • 28 Aug 2019 5:00 AM | Alexander Belyasov (Administrator)

    August 22, 2019, Moscow – Raiffeisenbank has signed an agreement with the Etalon Group on the construction of an office center at Nagatino i-Land business park. Legal support for the transaction on behalf of Raiffeisenbank was provided by a team from the global law firm Dentons led by Partner Florian Schneider and Counsel Olga Popel. The transaction involves the construction of a 16-story office building with a total area of 34,000 m2 and is structured as a built-to-suit deal. Florian Schneider, Partner in Dentons’ Real Estate practice, talks about the deal’s outcome: “This was one of the many major real estate projects our practice has handled over the past year, one that encompassed numerous stages: from legal due diligence on the land plot where the construction will take place and making recommendations on the deal structuring and use of security instruments, to drafting the transaction documents. Thanks to the Dentons team’s concerted efforts, not only were we able to do a quality job on a major project for the client, we also managed to get the transaction signed within a short time frame.”

    Link to the original article:

  • 22 Aug 2019 1:00 AM | Alexander Belyasov (Administrator)

     By Ernst & Young Kazakhstan

    During a meeting of the Government of the Republic of Kazakhstan (“RK”) on 15 July 2019, the President instructed the Government to resolve the issue of Kazakhstan and foreign employees' remuneration.

    In this regard, the Vice-Minister of Labor and Social Protection of the population of the RK reported on planned inspections at entities which have foreigners among their staff. Moreover, the Government of the RK is developing an action plan to prevent violations of labor and migration legislation at entities hiring foreigners.

    Among other plan components, we would like to highlight the following initiatives:

    • By 15 August 2019 – to analyze the working conditions and wages of employees of foreign companies who are citizens of the RK and to introduce relevant proposals.
    • By 1 September 2019 – to organize inspections at entities hiring foreigners to ensure the foreigners are hired legitimately and labor and migration legislation is complied with.
    • By 1 October 2019 – to strengthen the work of the commission setting quotas for hiring foreigners, taking into account the situation on the domestic labor market.
    • By 1 December 2019 – to tighten the issuance of work permits for foreigner employees of the third and fourth categories by introducing changes to the rules.
    • By 1 December 2019 – to amend the Order on the approval of risk assessment criteria and checklists for compliance with labor legislation of the RK by including enterprises hiring over 30 foreigners among the subjective criteria when forming a preventive control list.
    • On a semi-annual basis – to take measures to avoid discrepancies in remuneration and work conditions between foreign and local employees.

    In addition to the above action plan, the draft Law on the introduction of amendments and additions to certain legislative acts of the RK on labor issues has been completed and is currently being considered by the Parliament of the RK.

    Hiring foreigners in the RK involves fulfilling many legislative requirements, both at the foreign specialist work permit application stage, and during the period of his/her work in the RK (visa issues, registration with the migration authorities, etc.). Further, creating unequal working conditions for Kazakhstan and foreign employees and paying the unequal salaries is not allowed.

    Non-compliance with the legislation leads to risks not only for the company and the foreign specialist, but also for his/her family, as well as executives of that company.

    In light of this news, companies hiring foreign employees are highly recommended to make sure that all necessary documentation is executed in accordance with the requirements of the law and that the required minimum share of local personnel is met not only at the time the work permit application is submitted, but also during the entire period of its validity. It is also recommended to review the current remuneration system and reconcile the job responsibilities, qualifications and KPIs of local and foreign employees to ensure fairness in payment and working conditions.

    EY professionals, having wide experience in the above issues, will be happy to assist in identifying the risk areas and drawing up an action plan.

    Among others, EY Kazakhstan can provide professional support in the following issues:

    • Expatriate remuneration surveys;
    • Pay system design, grading;
    • Workforce acquisition strategy;
    • Immigration audit (health check) to evaluate the approaches applied within the company with respect to immigration documents/procedures aiming at reducing the risk of disputes and possible fines/sanctions arising from current practice;
    • Review of employment documents and employment records for their compliance with labor legislation of the RK (HR audit);
    • Legal advice and support with labor legislation of the RK.

    For further information please contact:

    Dinara Tanasheva
    Partner, Tax & Law Services Leader for Kazakhstan and Central Asia
    Tel.: +7 727 258 5960
    [email protected] Maria Aronikova

  • 09 Aug 2019 9:41 AM | Vera Dedyulya (Administrator)

    Silk-manufacturing enterprises of Uzbekistan will receive subsidies from the state until August 1, 2022, Trend reports with reference to the Ministry of Justice of Uzbekistan.

    Subsidies will be issued to compensate up to 50 percent of the cost of transporting 8 types of products by air and rail to the United States, the European Union and Turkey at the expense of the State budget, in accordance with the presidential decree "On additional measures for the development of deep processing in the silk industry".

    Moreover, the cost of grains of the silkworm and other material and technical resources necessary for the production of cocoons, which are delivered by the enterprises of "Uzpaksanoat", will not be considered a turnover of the sale of goods.

    Silk enterprises are given preferential prices for the purchase of transport, the supply of fertilizers and seeds.

    Since the beginning of 2020, 50 percent of the fines imposed for illegal cutting of plantings have been sent to plant new mulberry seedlings on the territory of the violation.

    Tax privileges established by legislation for legal entities with an export share of more than 15 percent from the sale of goods also apply to products made from raw silk and silk wool until January 1, 2021.

    by Trend News Agency