November 17, 2022

Simplification of business regulation in Uzbekistan

On November 9, 2022, the Decree of the President of the Republic of Uzbekistan No. UP-244 “On measures to simplify state regulation of entrepreneurial activity” (hereinafter referred to as “Decree 244“) was adopted, which aims to reduce the regulatory burden for business entities.

Decree 244 defines the instruments exclusively with the help of which the State can regulate entrepreneurial activity (other regulatory instruments can be established by Laws). Decree 244 also stipulates that regulatory instruments, which are established in documents that are not normative legal acts or regulatory documents in the field of technical regulation, do not have legal consequences.

Decree 244 also cancels the following requirements from January 1, 2023:

  • on the written notification of creditors when making a decision to reduce the authorized capital of a business entity and an announcement about it in the media;
  • on the sale of new imported cars only by legal entities — official dealers of manufacturing enterprises;
  • on the suspension of electricity supply to legal entities that have consumed electricity in excess of the volumes specified in the electricity supply contract (monthly contractual volume);
  • on the registration of employees hired by an individual entrepreneur on a separate account with the state tax service bodies by registering them in the Unified National Labor System (ENST).

From March 1, 2023, the Decree establishes the following:

  • all legal entities, regardless of ownership forms, are allowed to provide commercial services through the Unified Portal of Interactive Public Services (EPIGU) in compliance with information security requirements. The procedure for the provision of such services in the EPIGU will be determined by the Ministry for the Development of Information Technologies and Communications and the legal entity providing the service;
  • taxpayers are granted the right to appeal directly to the court against decisions taken by tax authorities based on the results of on-site tax audits and tax audits;
  • it is not allowed to execute orders based on direct public procurement contracts, the amount of one of which is 3,500 times the size of the basic calculation value (BRV) or more, implemented in accordance with the resolutions of the Cabinet of Ministers;
  • it is prohibited to purchase goods (works, services), the sum of the cost of which is 3,500 times the size of the BRV or more, under direct contracts between the ministry (department, institution) and its constituent organization (institution).

The decree also plans to introduce, from January 1, 2023, a special legal regime “Regulatory Sandbox” (the Special Legal Regime), providing for special (more simplified) regulation of the activities of business legal entities that test new products and services or the results of other intellectual activity based on modern technologies in a controlled limited environment for the following spheres:

  • e-commerce (except for trade of restricted or prohibited goods (works, services));
  • transport and logistics;
  • industrial production;
  • agriculture.