February 3, 2019
Incorporation of Legal Entity in Uzbekistan
Incorporation of legal entity in Uzbekistan
- Law of the Republic of Uzbekistan No. 598 of 25.12.19 “On Investments and Investment Activities”;
- Law of the Republic of Uzbekistan No. 223-I of 26.04.1996 “On Joint-Stock Companies and Protection of Shareholders’ Rights”;
- Law of the Republic of Uzbekistan No. 310-II of 06.12.2001 “On Limited and Additional Liability Companies”;
- Decree of the President of the Republic of Uzbekistan No. UP-4434 dated 04.10.2012 “On Additional Measures to Stimulate the Attraction of Foreign Direct Investment”;
- Appendix No. 1 to the PCM of the Republic of Uzbekistan dated 09.02.2017 No. 66 “Regulations on the Procedure for State Registration of Business Entities”;
- Resolution of the Cabinet of Ministers dated 02.12.2020 No. 763 “On Amendments and Additions to the Resolution of the Cabinet of Ministers of February 9, 2017 No. 66’On Measures to Implement the Resolution of the President of the Republic of Uzbekistan of October 28, 2016 No. PP-2646 ‘On Improving the System of State Registration and Registration of Business Entities'”.
Prior to the registration of company in Uzbekistan (the Uzbek Company) the founder must perform the following actions through the following steps:
Format of the Extract of Registration of the Founder:
This extract from the certificate of registration after being delivered to Uzbekistan must be translated into Uzbek or Russian language (if it was not already translated in the country of origin). The translation must be certified by a notary officer in Uzbekistan. The translation and notarization takes 2-3 days. It is important to make sure that the records of apostille or legalization are also translated to Uzbek or Russian, therefore the translation and notarization of the translation are normally made in Uzbekistan. When the translation is made in the country of origin of the documents, the records of apostille or legalization could remain non-translated, which may cause problems with acceptance of such document for the circulation in Uzbekistan.
Content of the POA:
The PoA shall grant the following rights:
- to sign documents on behalf of the Founder;
- to make the decision on establishing of the Uzbek Company;
- to appoint members of the governing bodies of the established Uzbek Company (including CEO and CFO);
- take other actions related to the registration of the Uzbek Company;
Format of the POA:
Please note that the PoA also must be apostilled or legalized by Uzbek Consulate in the country of registration of the founder. And subsequently translated into Uzbek or Russian language with the translators signature certified by a notarial officer in Uzbekistan. For the PoAs issued by founders originating from the CIS countries, an ordinary notarized PoA would suffice.
The PoA may be issued to a person appointed by the Founder for further management of the company. The person to whom the power of attorney was issued cannot appoint himself as the head of the established company. If the Founder plans to appoint his attorney (the holder of the PoA) as the head of the company, then the Founder will have to issue a special decision to be produced in the same format as the Extract from the Trade Register and the Power of Attorney (see above).
Presumably, it will be a limited liability company (LLC or Company or Uzbek Company). See Annex 1.
A company may not have as a sole participant another company consisting of one person, except for the cases when its only participant is a joint-stock company consisting of one shareholder.
The founder must determine a person who would head the contemplated company.
If a non-resident is to be appointed as the head of the Uzbek Company, the attorney (holder of the Power of Attorney) will have to appoint a temporary director (CEO) of the Uzbek Company for a period until the employment permit of the foreign specialist is granted to the Uzbek company and the imported CEO receives a work permit for Uzbekistan.
Appointing a temporary CEO of the Uzbek Company until a foreign candidate obtains work permit
If a foreign individual will be the CEO of the Uzbek Company, it is recommended to appoint a temporary (interim) CEO, until the designated foreign individual obtains his/her individual work permit. Local regulations prohibit performance of labor duties by foreigners without an individual work permit. Further certain actions, like opening bank accounts and arranging payment of the state fees for the work permit cannot be made without appointment of the CEO. Therefore an interim (temporary) CEO becomes a must, if CEO planned to be a non-resident individual. Such temporary CEO could be appointed by the Founder (base on its Decision) or perform temporary CEO function on the grounds of the PoA or be a person appointed by your local lawyers (based on the powers granted to the lawyers).
The founder must determine a person or a legal entity to perform functions of the accountant of the Uzbek Company. If the accounting to be outsourced to a third party firm, the latter must nominate a person who will individually participate in opening bank accounts of the Uzbek Company and act as a financial officer of the Uzbek Company with the right of second signature and according be ready to execute the Uzbek Company’s banking card with specimen of signatures of the officers authorized to manage the Uzbek Company’s bank account and funds.
The founder (or lawyers) must collect a letter of declaration of office premises from a potential land-lord. The founder must make preliminary agreement on the office premises for the Uzbek Company for use as its official legal address after the registration. As a rule, landlord initially requires a mortgage or after the conclusion of the contract – an advance payment for 3 months.
The Founder must determine all and main types of economic activity which the Uzbek Company will be performing. The selection shall be based on the data from the Official State Classifier of Types of Economic Activity of Uzbekistan) (OKED).
The founder must choose bank in which the LLC will open its main bank account and agree with the bank on the terms of cooperation, plans for foreign exchange and cash turnover demands.
A procedure of state registration of legal entities in the territory of Uzbekistan (the Registration) is regulated by the Resolution of the Cabinet of Ministers of the Republic of Uzbekistan No. 66 of 09.02.2017. Legal entities (including entities with participation of foreign investors) could be registered in the Republic of Uzbekistan by the Uniform Centers for Providing of Governmental Services for Business Entities (the “Registration Body”).
The Registration is currently performed through the Automated State Registration System (the System).
Working days and hours of the System:
The System’s territorial offices are open from Monday through Friday from 9am to 6 pm.
The Registration could be performed by submission of the standard application for incorporation of commercial legal entity (the “Application”) in one of the following ways:
- The Registration option One – through WEB access
the applicant (the founder or it representative) must
- obtain access to the personal account of company by acquiring the electronic signature at the department of tax inspection of district or Tashkent city (or other relevant administrative territory);
- register with the id.gov.uz site and obtain login and password;
- enter site fo.birdarcha.uz and access with use of the available login and password;
- enter section on registration of business (https://fo.birdarcha.uz/s/ru_landing#) and follow the instructions;
- upload data relating to the founder and the Uzbek Company (fill in the standard form on line);
- select (register) name of the Uzbek Company;
- make payment of the state fee for the registration.
Based on the filed documents and information, the System issues a certificate of registration and uploads the foundation documents into the personal account of the founder. These documents could be accessed and printed out by the user at any time afterwards.
- The Registration option Two – by attendance
This is a registration by visiting (attendance) of the relevant registering office of the System in the appropriate administrative territory and includes the following steps:
First visit to the System office:
- reserving and (registering) name of the Uzbek Company;
The Interim work:
- elaboration of the Uzbek Company’s foundation documents (Shareholders’ Agreement or Sole Founders’ Decision and the Charter);
- payment of the state registration fee for the incorporation of the Uzbek Company;
Second visit to the System office:
- filing hard-copy originals of the foundation documents (one original of each) of the Uzbek Company;
- power of attorney issued to the authorized representative of the founder (parent company) or a contract with the representative;
- filling-in data and uploading it into the System with the assistance of the System officer.
Based on the filing the System officer performed the following:
- fills-in the on-line registration form and prints it out for further execution by the Uzbek Company’s representative;
- scans and uploads all filed documents and returns the originals to the applicant;
- issues a certificate of registration of the Uzbek Company and hands over to the founder (representative) one registered original of the foundation document.
The process takes near 30 minutes.
The state registration in the above body includes simultaneous registration with the tax and statistical organs of Uzbekistan. After the registration, the Uzbek Company will have to order corporate stamps and open corporate bank accounts with the servicing bank in Uzbekistan (total of 28 commercial banks).
The reservation of the name of the Company could be made either through internet (if the whole process of registration is made via use of electronic signature) or at the System office. After reservation of the name of the Company the founder (or its representative) can prepare sketches of corporate stamps (round and rectangular).
A legal entity along with a full company name may also have an abbreviated company name. The corporate name of the legal entity must contain an indication of its legal form. In cases provided by law, the name must contain an indication of the nature of the activities of the legal entity.
The founder must (a) find out suitable office premises for the lease by the Uzbek Company; and (b) obtain from the land-lord a letter of guarantee (declaration) of office premises after the registration of the Uzbek Company. Such letter must be accompanied with copies of documents evidencing the land-lord’s ownership of the premises preserved for the Uzbek Company.
А nominal (virtual) legal address of company is not allowed in Uzbekistan. A location of the Uzbek Company must be real. The Founder must select an office space for future renting or purchasing by the Uzbek Company. At the stage before the registration of the Uzbek Company, it will be sufficient to receive a letter of guarantee (declaration letter) from the lessor or the owner of the premises confirming the availability of office space and the intention to provide it to the Uzbek Company after its registration. Such a letter must be accompanied by copies of documents confirming the ownership of premises reserved for the Uzbek Company.
There are no special restrictions regarding the office, but the office must be real (not virtual) and the documents of the Uzbek Company (corporate, financial, accounting, etc.) must be stored in it.
At first step, your party will have to present to your lawyers the following information regarding the Uzbek Company:
- Full name and abbreviated name
- Legal (postal address).
- Information on the representative offices and affiliates of the Uzbek Company.
- Objectives (not to be confused with types of economic activity).
- Types of business (economic) activities.
- The size of the сharter fund/capital (could be formed with property or money).
- Contributions to the сharter capital:
- type of contribution (property or property and non-property rights);
- size of the contribution ;
- procedure for making a contribution;
- ways to make contribution;
- terms of making contributions to the сharter capital.
- Structure of governing bodies:
- two-tier management – general meeting of participants and executive body management;
- tri-tier management– general meeting of participants, supervisory board and executive body.
- Structure of the executive body:
- collective executive organ – decisions are made by voting of the members;
- sole manager executive organ – in his absence acts another officer holding PoA.
- Full name s of the following members of governing bodies:
1) General Director / Director, 2) Deputy General Director; 3) Financial Director; 4) Other Directors, if applicable and 5) Chief Accountant – for the collective executive body;
1) General Director / Director and 2) Chief Accountant – for sole executive body.
- Whether an Audit Commission to be formed in the Uzbek Company or the Auditor to be elected, then the full name of persons elected to this body.[ In companies with more than fifteen participants, the formation of the audit commission (election of an auditor) of a company is mandatory.]
- Will the Internal Audit Service be established in LLC?
If yes, then determine quantity of members and nominate candidates.
In a company with a book value of assets of more than one billion (1,000,000,000) UZS (96,469 USD), an internal audit service must be created. The internal audit service is created and its employees are appointed by the supervisory board of the company.
- Photocopies of passports of the General Director /Director and Chief Accountant of the Uzbek Company (for submitting to the district tax authority).
- To approve sketches of the round stamp and rectangular stamp of the Uzbek Company prepared by your lawyers.
- What languages will be the working for the Uzbek Company?
- In what languages should constituent documents be prepared (the Charter, the Founder’s Decision):
- Uzbek (national) and English; or
- Uzbek (national) and Russian; or
- Uzbek (national), Russian and English.
At second step, the Founder or lawyers shall elaborate:
- The Decision of the Founder or the Shareholders’ Agreement, which shall contain the following:
- on approval of the Charter of the Uzbek Company;
- on approval of the monetary value of contributions made by the founders of the Uzbek Company;
- on approval of the executive organ of the Uzbek Company;
- on approval of the Uzbek Company’s
- The Charter
The Decision could be executed by the Founder or it authorized representative acting on the basis of the POA.
The Decision of the Founder must address the following matters:
- Appoint an authorized representative with the right of execution and filing of all the documents required in the course of incorporation of the Uzbek Company;
- Determine composition of the management organs of the Uzbek Company;
- Approve the Charter of the Uzbek Company; and
- appoint the CEO and CFO (accountant) of the Uzbek Company.
The Decision of the Founder in relation to setting up a 100% subsidiary legal entity in Uzbekistan (the Uzbek Company) (the Decision of the Founder) could be made directly or through a representative (holder of PoA).
The Decision of the Founder made by the Founder
If the Decision of the Founder is made directly by the Founder, it shall be made abroad and then apostilled or legalized and accompanied with the certified and notarized translation for further filing to the registering organ.
The Decision of the Founder made by its representative (a PoA holder)
If the Decision of the Founder is made by an authorized representative (a holder of PoA), acting on the grounds of a PoA or a contact (e.g. lawyers), such individuals must be vested with the appropriate powers.
The state registration fee could vary depending on the status of the Uzbek Company (with or without the status of enterprise with foreign investments) and on the form of registration: via internet or through direct visit to the System office.
The registration fee shall be paid to the bank account of the registering organ (System office). Bank payment details must be collected at the appropriate the System office.
|N||Type of registration||Amount of State registration fee|
|attendance registration||registration via internet|
|8.||LLC (an ordinary company)||1,0 BCA=22 USD||0,5 BCA= 11 USD|
|21.||a company with the official status of
“enterprise with foreign investments”
|32,0 BCA=688 USD||16,0 BCA=344 USD|
“BCA” means basic calculation amount, which currently equals to 223,000 UZS, which is near to US$22.00.
The registration with the tax and statistics organs of the State shall be performed by the officers of hte System without any actions undertaken by the applicant.
This means elaboration of the design of the sketches of corporate stamp and corner stamp of the Uzbek Company and approval by the Founder or Founder’s authorized representative. Subsequently the stamps shall be ordered with a manufacturer.
The elaboration of sketches of stamps could be made by the lawyers or Company’s officers after the registration of the Company.
This stage is composed of the following steps:
- Conclusion of employment contract of the Uzbek Company with the CEO.
- Conclusion of the service (or employment) contract of the LLC with the party rendering accounting services;
- Issuance of a corporate order regarding the appointment of the CEO
- Issuance of a corporate order on vesting of the accounting services to the accountant;
- Issuance of the corporate order on the specimen of the authorized signatories of the Uzbek Company;
- the Uzbek Company representative visits a servicing bank and enters with the bank into bank account agreement;
- Filling-in the banking card with the specimen of the authorized signatories;
- Approval by the servicing bank of the banking card with specimen of the authorized signatories.
Registration of legal entity in Uzbekistan with the Registration Body shall be made within 30 minutes. Period of time required for incorporation of a legal entity in average consumes from 10 to 30 calendar days.
A Limited Liability Company (LLC) is a company established by one or more physical (individuals) or legal entities with a charter capital divided into shares whose size is determined by the foundation documents. In contrast to a closed JSC, shares in an LLC are not securities. The constitutive documents of an LLC established by two or more entities are the foundation agreement and the company charter. If an LLC is established by one entity, the foundation document of an LLC would be the charter only. A company with the sole founder cannot form LLC in Uzbekistan with its 100% ownership. The number of shareholders may not exceed 50 (otherwise, the company must be transformed into an open JSC within one year). The participants in an LLC are not liable for its obligations and they bear the risk of losses connected with the company’s activities within the limits of the value of their personal contributions (subject of few excerptions). Participants in the company, who have not paid their contributions in full, are jointly and severally liable for its obligations to the extent of the unpaid part of the contribution of each of the participants. The liability of the company is limited to the extent of its assets.
The amount of the charter capital is determined by the Charter of LLC and consists of the nominal value of shares of its participants. Regarding certain spheres of activity which are subject to obligatory licensing (banking, insurance, tourism, etc.) there are certain requirements to the minimum amount of the charter capital.
The supreme management body of an LLC is the General Meeting of Participants (GMP). The GMP has exclusive powers with respect to those specific issues stipulated in the Uzbek LLC Law as being within the competence of the supreme management body. It mainly covers the business, financial, management and structural issues of the company. The meeting is convened not less than once a year. Participants jointly holding not less than 10% of votes have the right to demand an extraordinary GMP at any time and for any reason. For most decisions a simple majority of participants present at the meeting is sufficient. A supermajority (75%) and unanimous vote is required for issues of high priority related to amending the charter, and increasing or reducing the charter capital. An LLC has a director (chief executive officer) or a directorate (collective executive body) carrying out the day-to-day management of the company. A director or the members of the directorate are elected at the GMP. The scope of the authority of the directorate is specified in the foundation documents of the company. Unlike a JSC, there is no mandatory requirement for establishing a Supervisory Board in an LLC. However, an LLC may have a Supervisory Board, if this is provided in the constitutive documents. In addition, the company is prohibited from issuing shares and obligations as securities.
A joint stock company (JSC) is a legal entity which provides its shareholders with limited liability to the extent of value of their shareholding (with few exceptions from this rule). Shareholders who have not fully paid for their shares bear joint and several liability for the JSC’s obligations within the limits of the unpaid portion of the value of their shares. The number of founders of the JSC is unrestricted (i.e. from 1 to any). Shareholders of open JSC may freely dispose of their shares without the consent of other shareholders. JSC may have closed subscription for shares except in cases where such closed subscription is limited by the company’s charter and by the Joint Stock Company Law. An JSC may close subscription to shares, with the exception of cases when such a closed subscription is limited by the company’s charter or the Law on Joint-Stock Companies.
The charter capital of a JSC comprises the nominal value of the company’s shares acquired by the shareholders. All shares must have the same nominal value. The nominal value of preferred shares distributed may not exceed 20% of the company’s charter capital. The amount of the charter capital shall be determined by the Charter. Regarding certain spheres of activity which are subject to obligatory licensing (banking, insurance, tourism, etc.) there are certain requirements to the minimum amount of the charter capital.
Shares in a JSC may be registered shares (showing name of the owner). The nominal price of a share may not exceed 5,000 UZS (US$ 0.49). Value of shares in the Charter of the company must be recorded in Uzbek currency.
Preferred shares give their holders the priority right to receive dividends and other rights as stipulated in the Joint Stock Company Law. The procedure for paying for the company’s shares is determined at the time of its establishment by the Foundation agreement or the Charter. Payment for shares may be made in cash, securities and other assets or property rights having monetary value. The forms and terms of distribution of shares (open and closed) are specified in the company charter. A JSC may issue securities which may be further converted into shares pursuant to the terms stipulated in the company charter and/or in subsequent resolutions of the General Meeting of Shareholders.
The supreme management body of the JSC is the General Meeting of Shareholders (GMS). The meeting is held at least once a year. A meeting of shareholders other than the annual meeting is considered to be an extraordinary meeting. All exclusive issues of high priority connected with the company’s management, administration, business policy, corporate structure, financial aspects, elections and some other issues are within the sole competence of the GMS, as stipulated in the Joint Stock Company Law and in the company charter. Decisions within the exclusive competence of the GMS may not be delegated for resolution by any other body of the JSC. For most decisions, a simple majority vote is sufficient (more than 50%). A supermajority vote (75%) at the GMS is required for certain matters as stipulated in the Joint Stock Company Law. The GMS is valid if shareholders together holding more than 60% of the votes register and attended. The GMS may be attended either by a shareholder or its proxy. Any shareholder may at any time replace its proxy, and/or attend such meeting in person.
The Supervisory Board (the SB) is intermediate management organ. Formation of the Supervisory Board is not mandatory for the JSC with less than 30 shareholders. JSCs with bigger quantity of shareholders must form the SB.
The Supervisory Board exercises overall management of the JSC with the exception of those issues referred by the Joint Stock Company Law and the company charter to the exclusive competence of the GMS. If there are less than 30 holders of voting shares, the company charter may stipulate that the functions of the company’s supervisory board be performed by the GMS. The Supervisory Board handles issues of lower priority, mainly covering the implemented, preparatory, financial, and security market policies, as well as some supervisory and structural functions. Election of the Supervisory Board and its chairman, the procedure for calling and holding Board meetings, and also other issues related to the Board’s operation must be specified in the company charter and/or in internal regulations.
The Executive organ manages the company’s day-to-day activities through a director (chief executive officer), or a directorate (collective executive body). The director or directorate acts in the name and on behalf of the JSC within the scope of authority delegated by the GMS or Supervisory Board or as provided for in the company charter. The director and members of the directorate may incur joint and several liability for their actions.
The JSC have obligation for the disclosure of certain information relating to the company and its shareholders, which is determined by the applicable laws and regulations.
charter fund must be formed within one (1) year from the date of state registration of legal entity.
The status of an “enterprise with foreign investments” could be granted to a company, which meets the following requirements:
- According to Appendix No. 1 to the PCM of the Republic of Uzbekistan dated 09.02.2017 No. 66, the authorized capital should not be less than 400 million soums (approximately 38,000 US dollars);
- one of the participants is a foreign individual or a foreign legal entity;
- the participatory share of the foreign legal entity shall not be less that 15% of the total amount of the charter fun.
The status of an “enterprise with foreign investments” grants:
- certain protection for foreign investments, as are provided under the Law of the Republic of Uzbekistan No 598 of 25.12.19 “On investments and investment activities”; and
- other basic guarantees, benefits and preferences established for foreign investors and enterprises with foreign investments that are provided by the Presidential Decree No UP-4434 of 04.10.2012
The company with foreign investments may enjoy certain guarantees and economic privileges and exemptions. Economic privileges and exemptions include exemptions from customs fees on imported technological equipment and the right to obtain certain tax deductions and customs privileges in the event of participation in priority projects or sector of economy specified by the Government, that are mainly granted to manufacturing entities. In addition, special privileges are granted to legal entities included in the list of priority projects or operating in certain sectors of the economy or in certain administrative territories.
 This is a certification by the notary public of the signature of the qualified translator.
 This is a certification by the notary public of the signature of the qualified translator.
 Paragraph 5 of Article 7 of the Law of the Republic of Uzbekistan on Limited Liability and Additional Liability Companies.