June 26, 2019

Privileges of enterprises with foreign investments

CONTENT

The Law #611-I dated 30.04.1998 “On guarantees and measures for protection of rights of foreign investors” 

The Decree of the President of the Republic of Uzbekistan # UP-4434 dated 10.04.2012 “On additional measures for attraction of foreign investments”

The Decree of the President of the Republic of Uzbekistan # UP-5495 dated 01.08.2018 “On measures for radical improvement of the investment climate in the Republic of Uzbekistan”

The Decree of the President of the Republic of Uzbekistan # UP-5635 dated 17.01.2019 “On the State Program for implementation of the Action Strategy in five priority areas of development of the Republic of Uzbekistan within 2017-2021 in the “Year of active investments and social development””

 

The Law #611-I dated 30.04.1998 “On guarantees and measures for protection of rights of foreign investors”

  1. Legislative acts, including regulatory acts do not have retroactive effect in cases when implementation thereof causes damage to the foreign investor or foreign investments.
  2. If the subsequent legislation of the Republic of Uzbekistan worsens the conditions of investments then the legislation acting as of the date of investment applies to foreign investors within 10 years from the moment of investment. A foreign investor enjoys the right at its own discretion to apply to those provisions of the new legislation that improve the conditions of investments.
  3. Foreign investments and other assets of foreign investors in the Republic of Uzbekistan are not subject to nationalization.
  4. Foreign investments and other assets of foreign investors are not subject to requisition except for the cases of natural disasters, accidents, epidemics, epizootics.
  5. Enterprises with foreign investments are entitled to:
    1. Open, use and dispose of accounts in any currency and any bank in the territory of the Republic of Uzbekistan, as well as abroad;
    2. Receive and return loans in foreign currency.
  6. Foreign investors are guaranteed unobstructed transfer of money means in foreign currency to and from the Republic of Uzbekistan without any limitations on precondition of payment of taxes and all obligatory payments in the manner prescribed by the legislation of the Republic of Uzbekistan.

The Decree of the President of the Republic of Uzbekistan # UP-4434 dated 10.04.2012 “On additional measures for attraction of foreign investments”

Newly incorporated  enterprises with foreign investments where the contribution of a foreign investor in monetary form is not less than US$5 million, in case of amendments of tax legislation enjoy the right to apply to within 10 years from the date of its registration the provisions for payment of the Corporate Income Tax, VAT(turnover on the sale of goods, works, services), Corporate Property Tax, Single Social Payment, Single Tax Payment, as well as mandatory contributions to the Republican Road Fund and out-of-budget Fund for development of material and technical base of educational and medical institutions under the Ministry of Finance of the Republic of Uzbekistan, acting at the date of their state registration.

The Decree of the President of the Republic of Uzbekistan # UP-5495 dated 01.08.2018 “On measures for radical improvement of the investment climate in the Republic of Uzbekistan”

Khokims of regions (cities) are entitled to allocate non-agricultural land plot for a long-term lease to enterprises with foreign investments for a period of up to 50 years, but not less than the period specified in the application, for the implementation of investment projects in the manner established by the Cabinet of Ministers of the Republic of Uzbekistan.

The Decree of the President of Uzbekistan provides for:

  1. reducing the minimum amount of the share of foreign investments in the charter capital of enterprises with foreign investments from 30 % to 15 % (Please note, that the Law on Foreign Investments is not amended yet);
  2. cancellation of requirement for mandatory participation of a foreign legal entity as a participant in the enterprise with foreign investments (Please note, that the Law on Foreign Investments is not amended yet);
  3. reducing the minimum amount of the charter capital of enterprises with foreign investments from 600 million Uzbek Soums to 400 million Uzbek Soums (approximately US$ 47,000);
  4. reducing by 3 times the amount of the state duty for the state registration of enterprises with foreign investments.

Foreign citizens and stateless persons who have invested in the Republic of Uzbekistan in the amount of at least 8500 times of the minimum monthly wage established in the Republic of Uzbekistan as of the date of making investments (approximately US$212,500), in the form of acquiring shares and interests of economic entities, as well as foundation of foreign enterprise, enjoy the right to receive multiple three-year visa with the possibility of an unlimited number of renewal without need to leave the territory of the Republic of Uzbekistan.

The Decree of the President of the Republic of Uzbekistan # UP-5635 dated 17.01.2019 “On the State Program for implementation of the Action Strategy in five priority areas of development of the Republic of Uzbekistan within 2017-2021 in the “Year of active investments and social development””

From March 1, 2019 the following order is established:

  • for founders (participants) of enterprises with foreign investments and members of their families, an “investment visa” is introduced. The validity term of that visa is 3 years and it could be prolonged without need to leave the territory of the Republic of Uzbekistan;
  • citizens of foreign countries, including founders (participants) of enterprises with foreign investments who have invested in foundation of enterprises producing goods and rendering services in the amount of not less than US$ 3 million in the territory of the Republic of Uzbekistan, will receive in the simplified manner a residence permit in the Republic of Uzbekistan for a period of 10 years;
  • foreign investors holding a residence permit in the Republic of Uzbekistan or an “investment visa”, as well as members of their families, have the right to use medical and educational services under the conditions provided for citizens of the Republic of Uzbekistan;
  • temporary registration of foreign investors, as well as attracted foreign specialists  and their family members shall be carried out in the locality where the investment project is being implemented, for the term of visa (in case of absence of a visa – for 1 year) without need to re-register while staying in other regions of the country.