July 28, 2020
The Law of the Republic of Uzbekistan of 17.02.2020 No. LRU-604 “On Special Economic Zones”
This legal act is adopted in Uzbek or Russian languages. The English lingual version is an unofficial translation. In case of any ambiguity (discrepancy), please refer to the text of the legal act in the state language.
Adopted by the Legislative Chamber on December 9, 2019
Approved by the Senate on December 14, 2019
CHAPTER 1. GENERAL PROVISIONS
Article 1. Purpose of this Law
The purpose of this Law is to regulate relations in the sphere of organizing the functioning and development of the Special Economic Zones.
Article 2. Legislation on the Special Economic Zones
Legislation on the Special Economic Zones consists of this Law and other legislative acts.
If an international agreement of the Republic of Uzbekistan establishes rules other than those provided for by the legislation of the Republic of Uzbekistan on the Special Economic Zones, the rules of the international agreement shall apply.
Article 3. Basic concepts
The following basic concepts are applied in this Law:
investment project – a set of interrelated activities aimed at implementing or attracting investments to obtain economic, social and other benefits;
investor – a subject in investment activity that invests its own and (or) borrowed funds or other attracted investment resources in objects of investment activity in order to make a profit;
a Special Economic Zone – a territory with defined borders and a special legal regime that is specially allocated for attracting foreign and domestic investment, high technologies and managerial experience for accelerated socio-economic development of the relevant region;
special legal regime – a set of legal norms that establish special conditions for investment and other business activities on the territory of the Special Economic Zones;
register of participants of the Special Economic Zone – information database containing information about participants of the Special Economic Zone and investment projects;
the Master Plan of the Special Economic Zone – a project document approved by the administrative Council of the Special Economic Zone or the management company of the special industrial zone, on the basis of which planning, development, reconstruction and other types of urban development of the territory of the Special Economic Zone are exercised.
CHAPTER 2. STATE REGULATION IN THE SPHERE OF ORGANIZATION OF FUNCTIONING AND DEVELOPMENT OF THE SPECIAL ECONOMIC ZONE
Article 4. Powers of The Cabinet of Ministers of the Republic of Uzbekistan
Cabinet of Ministers of the Republic of Uzbekistan:
ensures the implementation of a unified state policy in the sphere of organization of functioning and development of the Special Economic Zones;
approves programs for the development of the Special Economic Zones;
approves the borders of the Special Economic Zones;
forms administrative councils of the Special Economic Zones, coordinates, monitors and controls their activities;
approves charters of the Special Economic Zone Directorates, coordinates, monitors and controls their activities;
defines the authorized public authorities in the sphere of organization of functioning and development of the Special Economic Zones, controls their activities;
monitors the timely implementation of investment projects.
Article 5. Authorized public authority in the sphere of organization of functioning and development of the Special Economic Zones
Authorized public authority in the sphere of organization of functioning and development of the Special Economic Zones:
implements state policy in the sphere of organization of functioning and development of the Special Economic Zones;
develops draft legal acts in the sphere of organization of functioning and development of the Special Economic Zones;
develops and approves a methodology for evaluating the effectiveness of the Special Economic Zones;
organizes interaction of investors, participants of the Special Economic Zones and relevant ministries, state committees and departments at each stage of implementation of investment projects;
organizes work on solving organizational issues related to the implementation of investment projects, including removing existing bureaucratic obstacles;
monitors the implementation of investment projects on the territory of the Special Economic Zones;
assesses the performance of the Directorate and participants of the Special Economic Zones;
organizes the execution of decisions of the President of the Republic of Uzbekistan and the Cabinet of Ministers of the Republic of Uzbekistan on the organization of functioning and development of the Special Economic Zones;
submits to the Cabinet of Ministers of the Republic of Uzbekistan proposals on organization of functioning and development of the Special Economic Zones and development activities of Directorates and management boards of the Special Economic Zones.
Article 6. Program for the development of the Special Economic Zone
The development of the Special Economic Zone is carried out in accordance with the program, which includes:
creating production infrastructure;
providing programs for the development of engineering and communication and road transport infrastructure;
creating a market infrastructure;
a set of measures to attract foreign and domestic investment in accordance with the functional and industry specialization of the Special Economic Zone.
Financial support for the Special Economic Zone development program is provided by the zone’s own resources, private sources, the State budget of the Republic of Uzbekistan, international financial institutions and foreign government financial organizations, as well as other sources not prohibited by law.
While forming state investment programs of the Republic of Uzbekistan, financial support for programs for the development of engineering and communication and road transport infrastructure of the Special Economic Zones should be provided.
Article 7. Management of state property located on the territory of the Special Economic Zone
The Special Economic Zones are created on the basis of empty and inactive objects of state property, territories of administrative-territorial entities, as well as of non-agricultural land.
Objects of state property located on the territory of the Special Economic Zone, with the exception of strategic objects of state property that are not subject to privatization, may, by decision of local Executive authorities within their competence, be provided to the Directorate of the Special Economic Zone for operational management in coordination with the authorized body for managing state assets. Objects of state property are provided to the Directorate of the Special Economic Zone for operational management for the entire period of operation of the Special Economic Zone.
The administrative Council of the Special Economic Zone shall be entitled to take a decision on implementation, including at a zero redemption value with acceptance of investment obligations, the empty and idle state-owned facilities located on the territory of the Special Economic Zone to participants of the Special Economic Zone.
Agricultural land may be granted in exceptional cases for the Special Economic Zones of pharmaceutical and agricultural areas only for the cultivation of agricultural products and medicinal plants. The Special Economic Zones that have a different functional and sectoral specialization may be granted agricultural land by separate decisions of the President of the Republic of Uzbekistan.
Land plots on the territory of the Special Economic Zones are managed by the Directorates of the Special Economic Zones and can be provided for use by participants of the Special Economic Zones, except for the territory of special industrial zones, on the basis of decisions of the administrative councils of the Special Economic Zones for the implementation of investment projects in accordance with investment agreement.
The decision to grant land for the implementation of an investment project is made by the Protocol of the administrative council of the Special Economic Zone with the simultaneous adoption of a separate decision of the Chairman of the Council of Ministers of the Republic of Karakalpakstan, the corresponding governor (hereinafter – “khokim”) of the region or the khokim of Tashkent on the provision of land. This procedure does not apply to the provision of land on the territory of special industrial zones.
It is not allowed to refuse to assign a land plot to a participant of the Special Economic Zone.
Urban development activities on the territory of the Special Economic Zones are carried out in accordance with the approved Master Plans of the Special Economic Zones.
Article 8. Public-private partnership in the Special Economic Zones
Public-private partnership in the Special Economic Zones is carried out in accordance with the Law of the Republic of Uzbekistan “On Public-Private Partnership”.
CHAPTER 3. TYPES OF THE SPECIAL ECONOMIC ZONES AND MEASURES FOR ORGANIZING THEIR ACTIVITIES
Article 9. Types of the Special Economic Zones
The Special Economic Zones can be created in the form of:
free economic zones;
special scientific and technological zones;
tourist and recreational zones;
free trade zones;
special industrial zones.
Article 10. Free economic zone
A free economic zone is a territory intended for creating new production capacities, developing high-tech production, active engaging in the development of modern competitive, import-substituting, export-oriented finished industrial products, as well as ensuring the development of production, engineering and communication, road transport, social infrastructure and logistics services.
Article 11. Special scientific and technological zone
A special scientific and technological zone is a territory where scientific organizations and other organizations in the field of scientific activity (technology parks, centers for technology distribution (technology transfer), innovation clusters, venture funds, business incubators, and others) are concentrated in order to develop innovative infrastructure.
Article 12. Tourist and recreational zone
A tourist and recreational zone – a territory that is created for the implementation of investment projects to create modern tourist infrastructure (hotel complexes, cultural and recreational facilities, shopping and entertainment and other tourist destinations), special functional and seasonal recreation areas with the necessary conditions for servicing tourists.
Article 13. Free trade zone
A free trade zone includes consignment warehouses, territories with special customs and tax regimes, as well as areas for processing, packaging, sorting, and storing goods.
Free trade zones are established at border points, airports, railway junctions or other places on the customs territory of the Republic of Uzbekistan.
Article 14. Special industrial zone
A special industrial zone is a territory where a special regime of management, economic and financial activities is introduced. Special industrial zones include service and production zones, which are formed by allocating land plots to create the necessary administrative, scientific and technological, industrial, engineering and communication, road transport and social infrastructure.
The rules and procedure for functioning of a special industrial zone are approved by the Cabinet of Ministers of the Republic of Uzbekistan.
CHAPTER 4. REQUIREMENTS FOR INVESTMENT PROJECTS, PROPOSED FOR SALE ON THE TERRITORY OF THE SPECIAL ECONOMIC ZONE
Article 15. General requirements for investment projects, proposed for implementation on the territory of the Special Economic Zones
General requirements for investment projects proposed for implementation on the territory of the Special Economic Zones include:
compliance with the requirements of legislation in the field of architecture and construction, technical regulation, ecology and environmental protection, labor protection and industrial safety;
availability of funding sources;
compliance with the functional and industry specialization of the Special Economic Zone;
compliance of technological equipment and process parameters with modern energy efficiency requirements.
Article 16. Special requirements for investment projects, proposed for sale on the territory of free economic zones
Investment projects proposed for implementation on the territory of free economic zones, at the time of submitting an investment application, must provide for the production of new types of products that are not produced in the Republic of Uzbekistan or whose production volumes in the Republic of Uzbekistan do not cover the needs of the domestic market.
The investment projects offered for realization on the territory of free economic zones, must provide for the alteration of the product line of the final product by the product range code of foreign economic activity of the Republic of Uzbekistan in comparison with the raw material at the level of one of the first four characters or the increase of value-added products of at least thirty percent.
In free economic zones, it is not allowed to implement investment projects for the production of products for which a competitive environment has been created, the domestic market is saturated, or there are domestic producers of like products whose production volumes cover the needs of the domestic market.
Conclusions of the relevant authorized bodies on the absence of domestic producers of like products in the Republic of Uzbekistan, insufficient production volumes and the level of competitive environment are requested by the Directorate of free economic zone independently for subsequent submission to the administrative Council of free economic zone.
These requirements do not apply to fully export-oriented investment projects.
Article 17. Special requirements for investment projects, proposed for implementation on the territory of special scientific and technological zones
Investment projects proposed for implementation on the territory of special scientific and technological zones must meet the following requirements:
registered patent rights;
the presence of scientific and technical innovation and knowledge-intensity of products (according to the characteristics the goods are new or differ significantly from the characteristics of previously produced like product or consumer characteristics of the product are improved in comparison with existing analogues or, in the absence of direct competition, there are new consumer (functional) features, including enhancing the competitiveness of the product, or identified a new method of use of the product, allowing to expand the scope of use of such goods).
Conclusions of the relevant authorized bodies on the existence of registered patent rights and scientific and technical novelty and science intensity of the products are requested by the Directorate of the Special Economic Zone independently for subsequent submission to the administrative Council of the Special Economic Zone.
Article 18. Special requirements for investment projects, proposed for implementation on the territory of tourist and recreational zones
Investment projects proposed for implementation on the territory of tourist and recreational zones should include measures to ensure the creation of tourist industry facilities, the safety and health of tourists in the organization of tourist services, including by equipping tourist industry facilities with video surveillance systems, warning (notification) and providing necessary assistance in case of emergencies.
Article 19. Activities prohibited on the territory of the Special Economic Zones
The following activities are prohibited on the territory of the Special Economic Zones:
production that does not meet environmental and labor protection standards;
production of weapons and ammunition, weapons and ammunition trade;
production of nuclear materials and radioactive substances, nuclear materials and radioactive substances trade;
production of alcohol and tobacco products;
processing of rawhide, corral or slaughter of animals;
production of cement, concrete, cement clinker, bricks, reinforced concrete slabs, products from coal, lime and gypsum;
recycling, decomposition, incineration, gasification, chemical treatment, final and (or) temporary storage and (or) underground disposal of all types of waste;
placement of oil refineries, nuclear power plants, nuclear installations, radiation sources, points and installations intended for storage, utilization and processing of spent nuclear fuel, radioactive substances and waste, as well as other radioactive waste.
Decisions of the President of the Republic of Uzbekistan or the Cabinet of Ministers of the Republic of Uzbekistan may impose bans and restrictions on certain types of activities on the territory of the Special Economic Zones.
CHAPTER 5. PROCEDURE FOR CREATING AND EXTENDING THE TERM OF FUNCTIONING, BORDER CHANGES AND LIQUIDATION OF THE SPECIAL ECONOMIC ZONE
Article 20. Creation, extension of the period of operation, change of borders and elimination of the Special Economic Zone
The Special Economic Zone is created by the decision of the President of the Republic of Uzbekistan for a period of up to thirty years. Based on the decision of the President of the Republic of Uzbekistan, the Cabinet of Ministers of the Republic of Uzbekistan makes a decision on the organization of the functioning and development of the Special Economic Zone.
Extension of the term of operation, change of borders and liquidation of the Special Economic Zone are exercised by the decision of the President of the Republic of Uzbekistan.
State administration authorities, the Council of Ministers of the Republic of Karakalpakstan, regional administration (hereinafter – “khokimyat”) and of the city of Tashkent may submit to the Cabinet of Ministers of the Republic of Uzbekistan a proposal to create, extend the term of operation, change the borders or early liquidation of the Special Economic Zone.
The Cabinet of Ministers considers a proposal within thirty days from the date of its receipt and, if approved, submits a proposal to the Administration of the President of the Republic of Uzbekistan.
Article 21. Documents submitted for creation, extending the period of operation, changing borders or liquidation of the Special Economic Zone
The proposal to create the Special Economic Zone is accompanied by:
draft decision of the President of the Republic of Uzbekistan on the establishment of the Special Economic Zones in which the name of the Special Economic Zone, the period for which it is created, goals for which it is created, and the type of the Special Economic Zone, features of its special legal regime, functional and industry specialization, total area and description of borders of the Special Economic Zone, measures to ensure its creation and development are specified;
draft program for the development of the Special Economic Zone, indicating specific activities, persons and organizations responsible for their implementation, as well as sources of funding for the development of the Special Economic Zone;
a copy of the land cadastral plan with the proposed boundaries of the Special Economic Zone;
land composition, list of landowners, land users, lessees and owners of land located in the prospective borders of the Special Economic Zone (if any) and their written consent to the transfer of land to the Council of Ministers of the Republic of Karakalpakstan, khokimyats of regions and Tashkent city to create the Special Economic Zone;
a business plan justifying the need and possibility of creating the Special Economic Zone, its type, developed on the basis of an analysis of social, environmental and economic conditions in the relevant territory, provision of material and labor resources, communications, as well as financial and economic justification of the proposed features of special legal regime of the Special Economic Zone;
draft Charter of the Directorate of the Special Economic Zone (if the Directorate is created in the form of a state institution).
The proposal to extend the term of operation of the Special Economic Zone is accompanied by:
draft decision of the President of the Republic of Uzbekistan on extending the term of operation of the Special Economic Zone;
justification of the necessity and possibility of extending the term of operation of the Special Economic Zone.
The proposal to change the borders of the Special Economic Zone is accompanied by:
draft decision of the President of the Republic of Uzbekistan on changing the borders of the Special Economic Zone;
draft Master Plan of the Special Economic Zone and a copy of land cadastre plan with marked borders of the Special Economic Zone, taking into account the proposed change of its borders;
land composition, list of landowners, land users, lessees and owners (if any) of the land plots located on territories, intended for inclusion in the Special Economic Zone, whose boundaries will change, and their written consent to the transfer of land to the administrative Council of the Special Economic Zones and special industrial zones, the transfer of land to Council of Ministers of Republic of Karakalpakstan, khokimyats of regions and Tashkent city;
list of legal entities and business entities already operating in the territories proposed for inclusion in the borders of the Special Economic Zone;
list of participants of the Special Economic Zone (if any) operating on the territories proposed for exclusion from the borders of the Special Economic Zone;
justification of the necessity and possibility of changing the borders of the Special Economic Zone.
The proposal for early liquidation of the Special Economic Zone is accompanied by:
draft decision of the President of the Republic of Uzbekistan on early liquidation of the Special Economic Zone, providing for a set of organizational measures to ensure the liquidation of the Special Economic Zone, as well as, if necessary, providing guarantees and (or) compensation to participants of the Special Economic Zone;
draft resolution of the Cabinet of Ministers of the Republic of Uzbekistan defining the composition and powers of the liquidation Commission, as well as the procedure for liquidation of the Special Economic Zone;
list of participants of the Special Economic Zone with an indication of investment projects implemented by them in the event of early liquidation of the Special Economic Zone on the grounds provided for in paragraphs two and six of part two of article 22 of this Law;
technical, economic, financial and legal justification of the necessity and possibility of early liquidation of the Special Economic Zone, indicating the reasons and possible consequences of its early liquidation for the relevant administrative-territorial units and the Republic as a whole, participants of the Special Economic Zone, developed on the basis of a detailed analysis of social, environmental, economic and other conditions in the relevant territory, as well as indicators of the functioning and efficiency of the liquidated the Special Economic Zone.
Article 22. Grounds for liquidation of the Special Economic Zone
The Special Economic Zone is considered to be liquidated at the end of the period for which it was created.
A decision on early liquidation of the Special Economic Zone is made if:
this is due to the need to protect human life and health, protect the environment, and ensure national security and defense;
within one year from the date of creation of the Special Economic Zone, no legal entity has been registered as a participant of this Special Economic Zone and (or) no jobs have been created by a participant of the Special Economic Zone;
within six months from the date of creation of the Special Economic Zone the participants of this Special Economic Zone did not carry out activities for the implementation of investment projects;
there are no participants of the Special Economic Zone in the Special Economic Zone due to the loss of the status of a participant of the Special Economic Zone and within one year from the date of the loss of such status by the last participant of this Special Economic Zone no legal entity has been registered as a participant in its territory;
achieving the goals of creating the Special Economic Zone, as defined by the decision of the President of the Republic of Uzbekistan on the creation of the Special Economic Zone, has become impossible for other reasons.
In the event of early liquidation of the Special Economic Zone on the grounds provided for in paragraphs two and six of part two of this article, the participants of the Special Economic Zone shall be provided with guarantees and (or) compensation for damage or lost profits incurred by them, or the privileges and preferences granted in accordance with the previously existing procedure shall be preserved.
To resolve property and other issues related to the liquidation of the Special Economic Zone, to settle relations between the Directorate and participants of the Special Economic Zone, other organizations and individuals, the Cabinet of Ministers of the Republic of Uzbekistan creates a liquidation Commission, determines its composition and powers, and approves the procedure for the liquidation of the Special Economic Zone in case of its early liquidation.
CHAPTER 6. MANAGING THE SPECIAL ECONOMIC ZONE
Article 23. Administrative Council of the Special Economic Zone
The administrative Council of the Special Economic Zone is a collegial body formed from representatives of the relevant local Executive authorities and other organizations, headed by a Chairman who is the Chairman of the Council of Ministers of the Republic of Karakalpakstan, the corresponding khokim of the region and the khokim of Tashkent city.
Administrative Council of the Special Economic Zone:
coordinates the activities of local Executive authorities on issues related to the functioning of the Special Economic Zone, compliance with the special legal regime and assistance to participants of the Special Economic Zone;
selects investment projects for implementation on the territory of the Special Economic Zone;
makes decisions on granting land plots to participants of the Special Economic Zone for the implementation of investment projects;
organizes timely implementation of projects for the construction of engineering, communication and transport infrastructure of the Special Economic Zone;
reviews and approves the annual budget of income and expenses of the Directorate of the Special Economic Zone.
Decisions of the administrative Council of the Special Economic Zone taken within its competence are binding on the Directorate and participants of the Special Economic Zone.
Article 24. Directorate of the Special Economic Zone
The Directorate of the Special Economic Zone is a legal entity in the form of a state unitary enterprise created to ensure the operation and management of the Special Economic Zone.
Directorate of the Special Economic Zone:
ensures the operation of a special legal regime on the territory of the Special Economic Zone;
organizes interaction with potential investors and participants of the Special Economic Zone based on the “single window” principle, including acceptance of investment applications for consideration and selection, issuance of necessary permits for connection to engineering and communication infrastructure networks;
monitors the implementation of investment projects, as well as monitoring the fulfillment of the obligations included in the investment agreement by the participants of the Special Economic Zone;
ensures the implementation of the Special Economic Zone development program;
maintains a Register of participants in the Special Economic Zone;
organizes monitoring of compliance with the legislation on environmental control, as well as on the protection and use of cultural heritage objects in the territory of the Special Economic Zone;
provides marketing services, as well as services to promote products to domestic and foreign markets under agreements with participants of the Special Economic Zone;
conducts activities to attract investors to the Special Economic Zone;
provides information support to investors and participants of the Special Economic Zone, including organizing their meetings with representatives of public authorities and other organizations;
provides participants of the Special Economic Zone with ownership, use and lease of land plots, as well as buildings and structures located on the territory of the Special Economic Zone;
participates in public-private partnership projects.
The Directorate of the Special Economic Zone is headed by a Director who is appointed and dismissed by the Cabinet of Ministers of the Republic of Uzbekistan on the recommendation of the administrative Council of the Special Economic Zone, agreed with the authorized public authority in the field of organization of the functioning and development of the Special Economic Zones. This procedure does not apply to special industrial zones.
The Directorate does not have the right to interfere in the activities of participants of the Special Economic Zone exercised in accordance with the legislation.
Article 25. Special industrial zone management
The special industrial zone is managed by the management company of the special industrial zone, which is vested with the powers of the administrative Council and the Directorate of the Special Economic Zone, provided for by this Law.
The management company of a special industrial zone is a legal entity created in the form of a joint-stock company or a limited liability company, including with the participation of foreign investors.
The main conditions for managing a special industrial zone are:
independent decision-making on the placement of investment projects and provision of land plots to participants of a special industrial zone, including on lease;
application of international standards and requirements in the construction of facilities;
independent formation of engineering and communication and social infrastructure;
accounting and mutual settlements for delivered utilities, communication services and energy resources on the basis of a single contract concluded by the participants of the special industrial zone with the management company of the special industrial zone;
organization of issuing licenses and permits, including for the design, construction, operation, use of buildings and structures, as well as the use of land plots in accordance with the Master Plan of a special industrial zone on the principle of “single window”.
The authorized public authority in the sphere of organizing the functioning and development of the Special Economic Zones coordinates and controls the activities of the management company of the special industrial zone and has the right to examine all its activities and operations, as well as make appropriate decisions.
The financial statements and related financial information of a special industrial zone management company are subject to mandatory annual audit. Audit reports and audit opinions must be submitted to the authorized public authority in the field of organization of functioning and development of the Special Economic Zones.
CHAPTER 7. SUBMISSION AND REVIEW PROCEDURE OF INVESTMENT APPLICATION
Article 26. The procedure for submission of investment applications
The investment application is submitted by the investor to the Directorate of the Special Economic Zone. The investment application form is approved by the Cabinet of Ministers of the Republic of Uzbekistan.
The investment application must be accompanied by:
copies of the Charter of the legal entity and the certificate of state registration of the legal entity (for the investor-legal entity);
a copy of the identity document (for an individual investor);
business plan or feasibility study of an investment project;
the project investment agreement.
The investment application shall indicate the taxpayer identification number assigned to the legal entity, and for a foreign legal entity, in accordance with the legislation of the relevant foreign state, an analog of the taxpayer identification number shall be indicated.
Foreign legal entities shall submit legalized documents specified in the second paragraph of part two of this article, certifying that the foreign legal entity is a legal entity under the legislation of a foreign state, with a notarized translation into the state and English languages.
Legalization of documents submitted by foreign legal entities is not required if:
the documents specified in the second paragraph of part two of this article have an apostil affixed;
international agreements of the Republic of Uzbekistan establish that documents that are produced or certified by an institution or a specially authorized person in the territory of one of the Contracting parties within their competence and in the prescribed form are accepted in the territories of other Contracting parties without any special certificate.
Article 27. Preparing an investment application for consideration by the administrative Council of the Special Economic Zone
An investment application received by the Directorate of the Special Economic Zone is subject to registration on the same day, and if received after the end of business hours – on the next business day.
The Directorate of the Special Economic Zone considers the investment application and the documents attached to it within two working days. If the documents do not meet the requirements of the legislation on the Special Economic Zones, the package of documents is returned with a reasoned justification of the reasons for the return. After eliminating the reasons that served as the basis for the refund, the investment application can be re-submitted to the Directorate of the Special Economic Zone.
If there are no shortcomings, the investment application and the documents attached to it are sent by the Directorate of the Special Economic Zone for examination to the authorized public authority for examination (hereinafter referred to as the expert institution).
The term of the examination is twenty working days. During the examination, the economic feasibility of implementing an investment project is determined, as well as its compliance with the requirements provided for in articles 15 – 19 of this Law.
Based on the results of the examination, the investment application and the documents attached to it may be returned by the expert institution to the Directorate of the Special Economic Zone for revision with a reasoned justification of the reasons for the return. After the investor has eliminated the reasons for the refund, the revised documents are sent to the Directorate of the Special Economic Zone for re-examination.
The term for re-examination of the investment application and the documents attached to it is ten working days. At the same time, it is not allowed to submit new comments on documents that were previously examined.
The investment application and the documents attached to it, together with the conclusion of the expert institution, are sent by the Directorate of the Special Economic Zone to the administrative Council of the Special Economic Zone for consideration within two working days.
This article does not apply to investment projects proposed for implementation on the territory of special industrial zones. At the same time, consideration and examination of the investment application and the documents attached to it are carried out by the management company of the special industrial zone independently in accordance with the procedure determined by the Cabinet of Ministers of the Republic of Uzbekistan.
Article 28. The consideration of investment applications by the administrative Council of the Special Economic Zone
The administrative Council of the Special Economic Zone begins to consider the investment application and the documents attached to it only if there is a positive conclusion of the expert institution.
The investment application is considered by the administrative Council of the Special Economic Zone within five working days from the date of its submission by the Directorate of the Special Economic Zone.
During the consideration of the investment application, the administrative Council of the Special Economic Zone may propose to the investor to make changes (additions) to the investment project. In this case, the proposals of the administrative Council of the Special Economic Zone are reflected in its decision. If the investor does not agree with the proposed changes (additions), the administrative Council of the Special Economic Zone shall re-consider the investment application with the participation of the investor.
The administrative Council of the Special Economic Zone makes a decision on the implementation or inexpediency of the investment project. The decision is made by a majority vote of the total number of members of the administrative Council of the Special Economic Zone.
The decision of the administrative Council of the Special Economic Zone is formalized by a Protocol, which is signed by the Director of the Directorate of the Special Economic Zone, members of the administrative Council of the Special Economic Zone and approved by the Chairman of the administrative Council of the Special Economic Zone.
If a decision is made to grant a land plot to a participant of the Special Economic Zone for the implementation of an investment project, within one day from the date of approval of the Protocol by the decision of the administrative Council of the Special Economic Zone, the Chairman of the Council of Ministers of the Republic of Karakalpakstan, the corresponding khokim of the region or the khokim of Tashkent city, decides to grant a land plot.
An extract from the Protocol and a copy of the decision to grant the land plot (if there is such a decision) are sent by the Directorate of the Special Economic Zone to the investor who submitted the investment application, within one working day from the date of approval of the Protocol.
The decision of the administrative Council of the Special Economic Zone to implement an investment project on the territory of the Special Economic Zone is the basis for:
conclusion of an investment agreement;
providing a land plot or an empty (inactive) building, with the definition of the total area and location of its location.
If false or distorted information is found in the submitted documents, the administrative Council of the Special Economic Zone shall terminate consideration of the investment application, and the investment application shall be returned to the investor with a reasoned justification of the reasons for the return.
The investor’s submission of an investment application and its consideration by the Directorate and the administrative Council of the Special Economic Zone can be exercised in electronic form.
Members of the administrative Council and the Director of the Directorate of the Special Economic Zone are required to maintain confidentiality in respect of information that has become known to them due to the fulfillment of their duties when considering an investment application and the documents attached to it.
The decision of the administrative Council of the Special Economic Zone and (or) the conclusion of an expert institution on the inexpediency of implementing an investment project may be appealed by the investor who submitted the investment application, in accordance with the procedure established by law.
CHAPTER 8. PARTICIPANT OF THE SPECIAL ECONOMIC ZONE
Article 29. The acquisition of the status of participant of the Special Economic Zone
In order to implement an investment project, the investor, within five working days after receiving the decision of the administrative Council on the feasibility of implementing the investment project, submits to the registration authority at the location of the Special Economic Zone documents for state registration of the business entity created by it as a legal entity or re-registration of the business entity previously created by the investor.
A legal entity acquires the status of a participant in the Special Economic Zone after signing an investment agreement and being included in the Register of participants in the Special Economic Zone.
To be included in the Register of participants of the Special Economic Zone, a legal entity created by an investor shall submit to the Directorate of the Special Economic Zone a copy of the certificate of state registration as a legal entity and a document confirming payment for inclusion in the Register of participants of the Special Economic Zone in the amount determined by the Cabinet of Ministers of the Republic of Uzbekistan.
The Directorate of the Special Economic Zone, within two working days from the date of receipt of the documents specified in part three of this article, shall include a legal entity in the Register of participants of the Special Economic Zones and issue a certificate of the participant of the Special Economic Zone in the form approved by the Cabinet of Ministers of the Republic of Uzbekistan.
The Directorate of the Special Economic Zone notifies the relevant tax, customs and statistical authorities within one business day after the legal entity is included in the Register of participants in the Special Economic Zone.
Article 30. Rights and obligations of the participant of the Special Economic Zone
A participant of the Special Economic Zone may:
enjoy legal protection guarantees, privileges and preferences provided by law for participants of the Special Economic Zones;
receive land plots, buildings, structures for use, including on a lease basis, and construct infrastructure facilities for production activities in accordance with the procedure provided for by this Law;
demand from management of the Special Economic Zone for timely implementation of engineering communications and road transport infrastructure in accordance with the investment agreement and network charts of implementation of the investment project;
use on equal terms by all kinds of services provided by the Directorate the Special Economic Zone the Special Economic Zone, including on a contractual basis;
carry out construction of infrastructure facilities necessary for the implementation of the investment project at their own expense, in accordance with the Master Plan of the Special Economic Zone;
use other rights provided for by law.
A participant in the Special Economic Zone must:
fulfill the obligations stipulated by the legislation and the investment agreement within the established time limits;
comply with legal requirements;
submit to the Directorate of the Special Economic Zone a report on the fulfillment of obligations under the investment agreement and business plans.
A participant of the Special Economic Zone may not transfer its rights and obligations under the investment agreement to another legal entity until all obligations under the investment agreement are fulfilled.
The participant of the Special Economic Zone carries out its activities in accordance with this Law and other legislative acts, as well as the investment agreement.
Article 31. Loss of the status of a participant of the Special Economic Zone by a legal entity
A legal entity loses its status as a participant of the Special Economic Zone in the following cases:
liquidation of the Special Economic Zone;
liquidation (termination of activity) of a legal entity;
changes in the location of a legal entity if the new location is located outside the territory of the Special Economic Zone;
failure of a participant of the Special Economic Zone to fulfill its obligations under the investment agreement;
at the request of a participant of the Special Economic Zone;
in case of reorganization of a participant of the Special Economic Zone, with the exception of a merger or accession carried out between participants of the Special Economic Zone who have the same tax and customs benefits.
The decision to lose the status of a legal entity as a participant in the Special Economic Zone is made by the administrative Council of the Special Economic Zone on the recommendation of the Directorate of the Special Economic Zone.
A decision on the loss of a legal entity’s status as a participant in the Special Economic Zone on the grounds provided for in paragraph five of part one of this article may be appealed by a participant in the Special Economic Zone in court.
In accordance with the decision of the administrative Council of the Special Economic Zone, the Directorate of the Special Economic Zone terminates the investment agreement with the participant of the Special Economic Zone and removes it from the Register of participants of the Special Economic Zone.
The Directorate of the Special Economic Zone within one business day from the date of exclusion of the participant of the Special Economic Zone from the Register of participants of the Special Economic Zone notifies the participant of the Special Economic Zone in writing (including via e-mail), the administrative Council of the Special Economic Zone, tax, customs and statistical authorities, as well as the authorized public authority in the sphere of organizing the functioning and development of the Special Economic Zones and local Executive authorities, indicating the date and reason for the loss of the legal entity’s status as a participant in the Special Economic Zone.
The loss of a legal entity’s status as a participant in the Special Economic Zone entails the cancellation of tax, customs privileges and other preferences.
Article 32. Procedure for revoking a legal entity of the status of a participant of the Special Economic Zone in the case of non-fulfillment of obligations under the investment agreement
If a participant of the Special Economic Zone fails to fulfill its obligations under the investment agreement, a legal entity created by an investor on the territory of the Special Economic Zone may be deprived of the status of a participant of the Special Economic Zone at the initiative of the Directorate of the Special Economic Zone.
Upon the identification by the Directorate of the Special Economic Zone failure of the participant of the Special Economic Zone to fulfill the obligations under the investment agreement (except for cases of occurrence of circumstances of insuperable force (force majeure), and through the fault of the Directorate of the Special Economic Zone) the relevant act with detailed description of the violations and non- fulfillment of obligations in terms established by investment agreement is drafted and is signed by the representatives of the Directorate and member of the Special Economic Zone. The act also specifies the period during which the participant of the Special Economic Zone must ensure the fulfillment of obligations under the investment agreement. This period should not exceed ninety days.
In case of confirmation of the occurrence of force majeure, the Directorate and the participant of the Special Economic Zone shall draw up a schedule that ensures the execution of investment obligations within a reasonable time, taking into account the actual time of delay caused by the occurrence of force majeure.
In the event of default by participant of the Special Economic Zone within the term stipulated by parts two and three of this article, obligations under the investment management agreement, after the written approval from the administrative Council of the Special Economic Zone and the authorized public authority in the sphere of organization of functioning and development of the Special Economic Zones in writing (including via email) notifies the participant of the Special Economic Zone on the termination of the investment agreement in connection with its failure.
If, after ten days, the participant of the Special Economic Zone has not appealed to the court the decision to terminate the investment agreement, the investment agreement is considered to be terminated unilaterally.
If a participant of the Special Economic Zone has appealed to the court the decision to terminate the investment agreement, then further disputes related to the performance of obligations under the investment agreement shall be resolved in court.
The loss of legal person status of the participant of the Special Economic Zone in connection with default of obligations under the investment agreement entails the abolition of tax and customs exemptions and payment in full of unpaid tax and customs duties and the abolition of the right of use of land, vacant or idle state property given to the legal entity for implementation of the investment project.
Article 33. Procedure for losing the status of a participant of the Special Economic Zone on the basis of a participant’s application of the Special Economic Zone
An application for the loss of the status of a participant of the Special Economic Zone is submitted by a participant of the Special Economic Zone to the Directorate of the Special Economic Zone. The Directorate of the Special Economic Zone submits the received application to the administrative Council of the Special Economic Zone within two working days.
The application for loss of the status of a participant in the Special Economic Zone is considered by the administrative Council of the Special Economic Zone within ten days, and in cases where there are signs of material or financial damage to the Directorate of the Special Economic Zone – thirty days.
The decision of the administrative Council of the Special Economic Zone may provide for measures to compensate for material or financial damage caused by a participant of the Special Economic Zone, including by applying to the court of the Directorate of the Special Economic Zone.
The loss of a legal entity’s status as a participant in the Special Economic Zone, provided that no material or financial damage has been caused to the Directorate of the Special Economic Zone, does not entail the termination of its activities on the territory of the Special Economic Zone, as well as the termination of rights to property owned by the legal entity. In this case, this legal entity loses the right to use the special legal regime provided for participants of the Special Economic Zone.
This procedure does not apply to depriving a business entity of the status of a participant in special industrial zones.
CHAPTER 9. INVESTMENT AGREEMENT
Article 34. The conclusion of the investment agreement
The Directorate of the Special Economic Zone enters into an investment agreement in accordance with the terms, conditions and procedures set out in the investment project.
The investment agreement must be signed by the investor and the Director of the Directorate of the free economic zone within three working days after receiving the Protocol (extract) of the administrative Council of the Special Economic Zone by the investor.
The investment agreement enters into force on the date when the legal entity created by the investor acquires the status of a participant in the Special Economic Zone.
Article 35. Extension of the term of the investment agreement
The investment agreement can be extended by the Directorate of the Special Economic Zone upon the application of a participant of the Special Economic Zone. The application is submitted by the participant of the Special Economic Zone no later than one month before the expiration of the investment agreement.
The statement of the participant of the Special Economic Zone on the extension of validity of investment agreement is attached with business plan which is implemented in the Special Economic Zone of investment project, justifying the need to continue its implementation.
Article 36. Termination of the investment agreement
The investment agreement is terminated:
at the end of the investment agreement;
if a legal entity is deprived of the status of a participant in the Special Economic Zone;
in case of early liquidation of the Special Economic Zone;
in other cases stipulated by law or investment agreement.
CHAPTER 10. SPECIAL LEGAL REGIME OF THE SPECIAL ECONOMIC ZONE
Article 37. Features of the special legal regime
Special customs and tax regimes may be established in the Special Economic Zones, as well as the regime of entry, exit and stay of citizens, conditions of labor relations, financial and credit activities, and other regimes aimed at attracting investment, stimulating the development of entrepreneurship and socio-economic development of the Special Economic Zone.
A special legal regime is established by laws or by a decision of the President of the Republic of Uzbekistan.
Benefits granted to participants of the Special Economic Zones are applied only to activities carried out on the territory of the Special Economic Zones.
Foreign investors registered as participants in the Special Economic Zone can enjoy all the rights, guarantees and benefits provided to them by the legislation of the Republic of Uzbekistan.
Article 38. Special customs regime
A special customs regime may include:
temporary exemption or reduction of customs payment rates;
lifting or easing non-tariff restrictions on exports or imports.
Customs clearance of goods exported or imported by participants of the Special Economic Zones with the application of benefits for customs payments is carried out in accordance with the procedure established by law.
The special customs regime on the territory of the Special Economic Zone is provided by the customs authorities of the Republic of Uzbekistan.
The special customs regime does not apply to the transit of goods through the territory of the Special Economic Zone.
A special customs regime should not create a non-competitive environment.
Article 39. Exemptions from taxes and customs payments
Participants of the Special Economic Zones enjoy tax benefits in accordance with the procedure provided for by the Tax code of the Republic of Uzbekistan.
Participants of the Special Economic Zones are exempt from payment of:
customs payments (except for value added tax and customs clearance fees) for construction materials that are not produced in the Republic and imported in accordance with the established procedure for the implementation of the investment project in accordance with the investment agreement during the construction period;
customs payments (except for customs clearance fees) for the import of technological equipment, the analogues of which are not produced in the Republic of Uzbekistan, according to the approved list.
Customs payments (except for customs clearance fees) are not paid when participants of the Special Economic Zones import raw materials, materials and components used for production and sale of products for export to the territory of the Republic of Uzbekistan.
Participants in the Special Economic Zones are entitled to receive a deferred payment of value-added tax on imports of goods for a period of up to 120 days.
The amount of value added tax resulting from the excess of the amount of value added tax deductible over the amount of accrued tax shall be reimbursed to the participant of the free economic zone under the simplified procedure within seven days.
The amount of value added tax paid is reimbursed to participants of the Special Economic Zones from the Republican budget of the Republic of Uzbekistan in accordance with the procedure determined by the Cabinet of Ministers of the Republic of Uzbekistan.
Article 40. Regulation of labor relations in the Special Economic Zones
Labor relations in the Special Economic Zones are regulated by the Labor code of the Republic of Uzbekistan, collective agreements (agreements) and (or) individual labor agreements (contracts).
Collective agreements (agreements) and individual labor agreements (contracts) may not worsen the situation of employees of legal entities established on the territory of the Special Economic Zones, in comparison with the conditions provided for by the legislation of the Republic of Uzbekistan, as well as conventions of the International labor organization, to which the Republic of Uzbekistan is a party.
The staff of employees of legal entities established on the territory of the Special Economic Zones must consist of citizens of the Republic of Uzbekistan for at least ninety percent of the total number of employees.
Article 41. Budget of the Directorate of the Special Economic Zone
The Directorate of the Special Economic Zone has an independent budget, which is approved annually by the administrative Council of the Special Economic Zone in the form of an estimate of income and expenses.
The income of the Directorate of the Special Economic Zone is formed from payments for inclusion in the Register of participants of the Special Economic Zone, proceeds from the provision of land plots for use, leasing of buildings and structures that are used and managed by the Directorate of the Special Economic Zone, from the provision of services under contracts and other sources not prohibited by law.
At the stage of formation of the Special Economic Zone before reaching self-sufficiency, but no more than three years, it is possible to attract funds from the national and local budgets for the maintenance of the Directorate of the Special Economic Zone, loans, as well as from other sources not prohibited by law, in accordance with the established procedure.
CHAPTER 11. FINAL PROVISIONS
Article 42. Guarantees of legal protection of participants of the Special Economic Zone
Participants of the Special Economic Zone are guaranteed I protection of their rights and interests, which is provided by this Law and other legislative acts, as well as international agreements of the Republic of Uzbekistan.
Participants of the Special Economic Zones, when changing the tax legislation, have the right to apply during the term of benefits, but no more than ten years, the rules and regulations for the payment of taxes, fees and other payments that were in force on the date of their inclusion in the Register of participants of the Special Economic Zone, except for the rules and provisions of legislative acts regulating the taxation of excisable goods.
Participants of the Special Economic Zones have the right to use convenient conditions, forms of payment and settlements for exported and imported goods.
In the Special Economic Zones, all guarantees and benefits for participants in the Special Economic Zones provided for by law are observed. Additional guarantees and benefits may be provided by the decision of the President of the Republic of Uzbekistan.
Losses, as well as lost profits and moral damage caused to legal entities and individuals as a result of unjustified interference in their activities by public and other authorities or officials, are subject to compensation or compensation in court.
Article 43.Dispute Resolution
Disputes in the sphere of organization of functioning and development of the Special Economic Zones are resolved in accordance with the procedure established by law.
Article 44. Liability for violation of the law about the Special Economic Zones
Persons guilty of violating the legislation on the Special Economic Zones are liable in accordance with the established procedure.
Article 45. Invalidation of certain provisions of legislative acts of the Republic of Uzbekistan
Recognize as invalid:
1) Law of the Republic of Uzbekistan of April 25, 1996 N 220-I “On free economic zones” (Statement of the Oliy Majlis of the Republic of Uzbekistan, 1996, N 5-6, article 58);
2) Section XV of the Law of the Republic of Uzbekistan of April 25, 2003 N 482-II “On amendments and additions to certain legislative acts of the Republic of Uzbekistan” (Statement of the Oliy Majlis of the Republic of Uzbekistan, 2003, N 5, article 67);
3) Article 3 of the Law of the Republic of Uzbekistan of December 14, 2005 N ZRU-11 “On amendments to some legislative acts of Uzbekistan in connection with the conversion of the Agency for foreign economic relations of the Republic of Uzbekistan Ministry of foreign economic relations, investments and trade of the Republic of Uzbekistan” (Statement of chambers of Oliy Majlis of Uzbekistan, 2005, N 12, p 410);
4) Article 11 of the Law of the Republic of Uzbekistan of October 10, 2006 N ZRU-59 “On amendments and additions to some legislative acts of Uzbekistan in connection with improvement of legal protection and liberalization of financial responsibility of business entities” (Statement of chambers of Oliy Majlis of Uzbekistan, 2006, N 10, p 536);
5) Law of the Republic of Uzbekistan of September 23, 2009 N ZRU-224 “On amendments and additions to the Law of the Republic of Uzbekistan “on free economic zones” (Statement of the chambers of the Oliy Majlis of the Republic of Uzbekistan, 2009, N 9, article 338);
6) Article 10 of the Law of the Republic of Uzbekistan of August 20, 2015 N ZRU-391 “On modification and additions in some legislative acts of the Republic of Uzbekistan, aimed at further enhancing reliable protection of private property, businesses, and removing barriers to their accelerated development” (Statement of chambers of Oliy Majlis of Uzbekistan 2015, N 8, p. 312);
7) Article 20 of the Law of the Republic of Uzbekistan of 18 April 2018 N ZRU-476 “On modification and additions in some legislative acts of the Republic of Uzbekistan” (Statement of chambers of Oliy Majlis of Uzbekistan, 2018, N 4, p 224).
Article 46. Ensuring of enforcement of publicizing clarification of the nature and meaning of this Act
To the Ministry of investment and foreign trade of the Republic of Uzbekistan, the Ministry of economy and industry of the Republic of Uzbekistan and other interested organizations to ensure performance, communication to the performers and an explanation among the population of the merits of this Law.
Article 47. Bringing legislation into line with this Law
To The Cabinet of Ministers of the Republic of Uzbekistan:
bring government decisions into line with this Law;
ensure that the state administration bodies review and cancel their normative legal acts that contradict this Law.
Article 48. Entry into force of this Law
This Law shall enter into force after three months from the date of its official publication.
Participants of free economic zones registered by the directorates of free economic zones prior to the entry into force of this Law and implementing investment projects in the territory of free economic zones shall retain the benefits and preferences provided for by law until the expiration of the period for granting them.
President of the Republic of Uzbekistan Sh. Mirziyoev
Narodnoye Slovo, February 18, 2020
“Collection of legislation of the Republic of Uzbekistan”,
February 24, 2020, N 7, article 73