Investment Policy of the Republic of Uzbekistan

During the years of Independence, Uzbekistan formed favorable investment environment, broad system of legal guarantees and privileges for foreign investors, developed integral system of measures on encouragement of activity of the enterprises with the foreign investments.

The investment legislation of Uzbekistan is one of advanced amongst legislations of the CIS countries, and it incorporated major provisions of the international investment law, in particular, regulations on guarantees of the rights of foreign investors, certain preferences for investors and others.

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

· On Foreign Investments;

· On Investment Activities;

· On Guarantees and Measures of Protection of Rights of Foreign Investors;

· On Protection of Rights of Investors on Securities’ Market.

In addition there is number of legislative normative acts issued in the form of Decrees of the President and/or Resolutions of the Government of Uzbekistan.

In accordance with current legislation the concept of foreign direct investment includes:

· investing by foreign investors of material and non-material welfares and rights for them including IPR;

· any income from foreign investments in facilities of enterprise and other types of activities.

Foreign investments in Uzbekistan could be made in different forms, and in particular:

· equity participation in charter funds and other property of business entities, banks, insurance institutions and other enterprises established together with legal entities and/or with natural persons of Uzbekistan;

· creation and development of business entities, banks, insurance institutions and other enterprises completely belonging to foreign investors;

· purchase of property, shares and other securities, including the promissory notes emitted by residents of Uzbekistan;

· investment of intellectual property rights, including copyrights, patents, trade marks, useful model, industrial samples, company names and a know-how, and also business reputation (goodwill);

· purchase of concessions, including concessions on prospecting, exploration, extraction or use of natural resources;

· purchase of the rights for property for facilities of trade and sphere of services, for premises together with the land plots on which they are located, and also the rights of possession and using the land (including on the basis of rent) and natural resources.

The Republic of Uzbekistan has no restrictions concerning the form of capital investment. Foreign investors are entitled to create within the county the enterprise in any organizational-legal form allowed by the legislation.

As of today, the most different forms of capital investment are offered to potential foreign investors:

· creation of joint venture;

· creation of the enterprise with 100 % foreign capital;

· purchase of a part or full package of shares of privatized enterprises.

The enterprises with foreign investments are newly created enterprises meeting the following terms and conditions:

· the size of the charter capital of the enterprise not less than the sum, equivalent to US $ 150 thousand;

· one of participants of the enterprise is the foreign legal entity;

· the share of foreign investments makes not less than 30 % of the charter capital of the enterprise.

Besides, if the enterprise with foreign investments earns over 60% of incomes from sale of produced goods or services, it is considered the industrial enterprise with foreign investments. Such enterprises are provided with additional tax, customs and other preferences and privileges.