October 22, 2021
Special economic zones in Uzbekistan
2. What is a Special Economic Zone (SEZ)?
3. Types of special economic zones
4. Benefits for SEZ participants
5. How is a SEZ created?
6. SEZ List
– Law of the Republic of Uzbekistan No. ZRU-604 dated 17.02.2020 “On special economic zones”;
– Decree of the President of the Republic of Uzbekistan “On measures to further improve the system of coordination and management of the activities of free economic zones” No. UP-5600 dated December 21, 2018
– Resolution of the President of the Republic of Uzbekistan “On additional measures for the accelerated development of the fishing industry” No. PP-3657 dated April 6, 2018
– Decree of the President of the Republic of Uzbekistan “On measures to create a free economic zone Sirdaryo” No. UP-5412 dated April 12, 2018.
– Resolution of the President of the Republic of Uzbekistan “On measures to strengthen coordination and increase the responsibility of ministries, departments, local government bodies for the effective functioning of the activities of free economic zones” No. PP-3175 dated August 7, 2017.
– Resolution of the Cabinet of Ministers of the Republic of Uzbekistan dated January 16, 2018 No. 29 “On measures to implement the resolution of the President of the Republic of Uzbekistan dated October 25, 2017 N PP-3356” On additional measures to improve the efficiency of free economic zones and small industrial zones “
– Resolution of the Cabinet of Ministers of the Republic of Uzbekistan “On measures to further expand the production of import-substituting and export-oriented products in free economic zones of the Republic of Uzbekistan” No. 110 dated February 27, 2017.
2. What is a special economic zone (SEZ)?
A special economic zone (SEZ) is a territory in a country that is subject to different economic rules than in other regions of the same country in order to attract foreign investment and develop this region. In Uzbekistan, the Law “On Special Economic Zones” was adopted on February 17, 2020. According to the Law, a SEZ is 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.
3. Types of special economic zones
The legislation provides for 5 types of FEZ:
- free economic zones;
- special scientific and technological zones;
- tourist and recreational zones;
- free trade zones;
- special industrial zones.
3.1. Free economic zone
A free economic zone is a territory intended for the creation of new production facilities, the development of high-tech production, active involvement in the development of production of modern competitive, import-substituting, export-oriented industrial products, as well as ensuring the development of production, engineering and communication, road transport, social infrastructure and logistics services.
3.2. 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 are concentrated in order to develop an innovative infrastructure (technology parks, technology diffusion centers (transfer of technology), innovation clusters, venture funds, business incubators, and others).
3.3. Tourist and recreational zone
Tourist and recreational zone – a territory that is created for the implementation of investment projects to create modern objects of tourist infrastructure (hotel complexes, cultural and recreational, shopping and entertainment and other tourist facilities), special functional and seasonal recreational zones with the provision of the necessary conditions to serve tourists.
3.4. Free trade zones
Free trade zones include consignment warehouses, territories with special customs and tax regimes, as well as areas for processing, packing, sorting, and storing goods.
Free trade zones are created at border points, airports, railway junctions or other places in the customs territory of the Republic of Uzbekistan.
3.5. Special industrial zone
A special industrial zone is a territory in which 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, production, engineering and communication, road transport and social infrastructure.
4. Benefits for SEZ participants
4.1. Special legal regime
In special economic zones there may be a special customs, tax regime, as well as a regime of entry, departure and stay of citizens, conditions of labor relations, the implementation of financial and credit activities and other regimes aimed at attracting investments, stimulating the development of entrepreneurship and the socio-economic development of a special economic zones.
Benefits provided to participants in special economic zones apply only to activities carried out in the territory of special economic zones.
Foreign investors registered as participants in a special economic zone can enjoy all the rights, guarantees and benefits provided to them by the legislation of the Republic of Uzbekistan.
4.2. Special customs regime
A special customs regime may provide for:
- a) temporary exemption or reduction of rates of customs payments;
- b) cancellation, relaxation of non-tariff restrictions on exports or imports.
The special customs regime does not apply to the transit of goods through the territory of the special economic zone.
4.3. Benefits for customs payments
Participants in special economic zones are exempt from paying:
a) customs payments (except for value added tax and customs clearance fees) for construction materials not produced in the republic and imported in accordance with the established procedure for the implementation of an investment project in accordance with an investment agreement during the construction period;
b) customs payments (except for customs clearance fees) when importing technological equipment, the analogues of which are not produced in the Republic of Uzbekistan, according to the approved list.
5. How is a SEZ created?
A 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 a special economic zone.
Extension of the term of operation, change of borders and liquidation of a special economic zone are carried out by decision of the President of the Republic of Uzbekistan.
Government bodies, the Council of Ministers of the Republic of Karakalpakstan, khokimiyats of regions and the city of Tashkent may submit a proposal to the Cabinet of Ministers of the Republic of Uzbekistan on the creation, extension of the term of operation, change of borders or early liquidation of a special economic zone.
The Cabinet of Ministers of the Republic of Uzbekistan considers the 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.
The proposal for the creation of a special economic zone shall be accompanied by:
a) draft decision of the President of the Republic of Uzbekistan on the creation of a special economic zone, which indicates the name of the special economic zone, the period for which it is created, the goals of creation and the type of the special economic zone, features of its special legal regime, functional and sectoral specialization, the total area and description of the boundaries special economic zone, measures to ensure its creation and development;
b) a draft program for the development of a special economic zone with an indication of specific measures, persons and organizations responsible for their implementation, as well as sources of financing for the development of a special economic zone;
c) a copy of the land cadastral plan with the estimated boundaries of the special economic zone;
d) composition of land, a list of landowners, land users, tenants and owners of land plots located within the proposed boundaries of a special economic zone (if any), and their written consent to transfer land plots to the Council of Ministers of the Republic of Karakalpakstan, khokimiyats of regions and the city of Tashkent to create a special economic zone ;
e) a business plan substantiating the need and possibility of creating a special economic zone, its type, developed on the basis of an analysis of social, environmental and economic conditions in the relevant territory, the provision of material and labor resources, communications, as well as a financial and economic justification of the proposed features of the special legal regime of a special economic zone;
f) draft charter of the directorate of a special economic zone (if the directorate is created in the form of a state institution).
6. List of SEZ
You can find the list of SEZs here.