land plots
subsoils,
buildings,
(underground) structures (including roads, pipelines, bridges, towers, canals, etc.),
perennial plantings (fruit and berry crops, vineyards, etc.)
and other property firmly connected with the land (Article 83 of the Civil Code of the Republic of Uzbekistan).

2. Payment Procedures

2.1 Payment for real estate

Between legal entities, payments are rendered in non-cash form, by transferring funds from the buyer’s account to the seller’s one by payment orders. Payments of individual entrepreneurs are executed, usually in the form of non-cash payments (Part 2 st.790 Civil Code of Uzbekistan).

2.2 Payment currency

Foreign investors are free to transfer funds in a foreign currency (to and from the Republic of Uzbekistan) in order to execute contracts (subpara 3 of Article 7(1) of Law No. ZRU-611 of April 30, 1998). However, it is prohibited to make payments in foreign currency on the territory of the Republic, with the exception of payments by international payment cards (No. UP-5177 of September 2, 2017).

Foreign investors (residents and non-residents) can open bank accounts in foreign currency (Article 17 of Law No. 841-XII “On Currency Regulation” and paragraph 3 of the Instruction of the Central Bank reg. by the Ministry of Justice No. 1948 of 04/27/2009).

2.3 (Onshore) Payments in Uzbekistan

Payment between legal entities is made only in non-cash form. Payment by check and bill of exchange is not possible in practice. Payments by legal entities to legal entities or individuals are always made by transfer (payment orders).

Individuals can make payments in UZS in cash to the pay office of the recipient’s organization or directly to another individual.

2.4 Cross-border payments

Cross-border payments include cases where either the seller or the buyer, being in different jurisdictions executes a payment in foreign currency.

Payment in currency from abroad by means of transfer to the bank account of seller is available if payment is between non-residents and residents or if payment is made by means of plastic card in the territory of RU (provided that corresponding terminal exists in the organization – addressee of currency). subpara 13 of Article 18 (3) of Law No. 841-XII.

2.5 Offshore payments

When both the seller and the buyer of the property are non-residents, payments could be executed outside of the territory the Republic of Uzbekistan.

3. Taxation

3.1 Land tax of legal entities

Payers of land tax are legal entities, including non-residents, who have in the property, hold in possession or use the land plots.[1]

The object of taxation for legal entities is deemed to be land plots of legal entities, except for the lands in common use.[2]

3.2 Tax on property of legal entities

Payers of property tax of legal entities are residents who have taxable property, as well as non-residents who own real estate in the territory of the Republic of Uzbekistan.[3]

The object of taxation is as follows: 1) real estate; 3) assets under construction.

3.3 Tax rates for 2019

In accordance with the legislation, in 2019 a legal entity pays taxes relating to real estate objects, at the following rates:

Local taxes

No	Tax type	Tax rate	Object of taxation
1	Land tax	Rates are set depending on the class and location of the land used and on average amount to approximately 5.84 USD per hectare, plus coefficients added to the percentages from 0.75 to 1. 5	land plot

2	Property tax	2 %	residual cost of basic means (except for the cost of land, acquired to ownership); residual cost of immaterial assets; cost of assets under construction not finished on the established dates; cost of equipment, unfixed on the established dates.

3.4. Incentives

In accordance with the legislation, when calculating the tax on the property of legal entities, the tax base is reduced by the average annual value of:

utility facilities;
social and cultural facilities;
irrigation and collector-drainage network facilities;
facilities used for environmental and sanitary purposes, fire safety;
railways and public roads, trunk pipelines, communication lines and power transmission lines;
immovable property and construction in progress, for which the decision on their conservation was made;
objects of civil protection and mobilization purposes.

The following persons are exempt from property tax of legal entities:

organizations of health care, physical education and social welfare, education, culture and art;
enterprises of housing and communal services and other urban civilian enterprises;
newly created enterprises;
voluntarily liquidated business entities.

The following legal entities are except from land tax:

the organization of culture, education, health, social protection of the population;
legal entities owned by public associations of persons with disabilities, the Nuroniy Foundation and the Chernobyl Association of Uzbekistan;
voluntarily liquidated business entities.

Land plots that are not subject to taxation include lands of:

the general use of horticultural, viticultural or vegetable gardening partnerships, collective garages;
state reserves.
(with) natural healing factors;
recreational purposes;
historical and cultural purposes;
water fund;
occupied by power lines, substations and structures on them;
occupied by national communication lines;
occupied by objects of culture, education and health;
occupied by public roads;
occupied by railway lines of general use;
occupied by urban electric transport lines and metro lines;
occupied by sports and fitness complexes;
occupied by water supply and sewage installations of settlements;
occupied by main oil and gas pipelines;
occupied by the main heat routes;
occupied by civil aviation airport facilities;
reserved for the construction of facilities included in the state development programs of the Republic of Uzbekistan;
occupied by objects of conservation;
occupied by hydrometeorological and hydrogeological stations and posts;
occupied by separately located objects of civil protection and mobilization purposes;
occupied by protective forest stands;
newly mastered for agricultural purposes;
existing irrigation, on which land reclamation work is performed;
new plantings of gardens, vineyards and mulberry trees were made;
agricultural and forestry scientific organizations.[4]

The land in free economic zones are also except from the land and property taxes from three to ten years, if the investor meets certain requirements on the minimal amount of the investments.

4. Types of rights (titles) on land plots and other real estate

According to the Land code of RU, legal entities may have land plots with the rights of:

permanent (perpetual) possession,
permanent use,
temporary use,
rent, and
private ownership.[5]

Individuals may have land on the right:

lifelong inheritable possession,
permanent (perpetual) possession,
temporary use,
rent, and private ownership.[6]

4.1. Right of ownership to the land plots

The land is a national wealth and is not subject to sale, exchange, donation, pledge, except in cases established by laws and other regulatory legal acts of the Republic of Uzbekistan.[7] Such acts may be Government decisions on the sale of state property – real estate objects.

Emergence of property rights of legal entities and individuals on land plots

The right of ownership of legal entities and individuals, including non-residents, to land plots occurs with privatization of objects of trade and service facilities, along with the land plots on which they are located.[8]

The right of ownership of diplomatic representatives and international organizations accredited in RU, on land plots occurs with the purchase of buildings or parts of buildings used under the premises of representative offices, including the residence of head of representative office, along with land plots where they are located, as well as land plots for construction of buildings of these representative offices.[9]

The right of ownership of foreign individuals on land plots – personnel of diplomatic corps, representatives of mass media accredited in the Republic of Uzbekistan, employees of permanent establishments, firms, companies and international organizations, persons working on permanent basis at enterprises with foreign investments, as well as persons permanently residing in RU and with limited leave to remain, occurs with the purchase of premises along with land plots, where they are located, in the order established by the legislation.[10]

4.2. The right of life-long inheritable possession of land plots

The right to acquire land plots for lifelong inherited possession belongs to citizens of the Republic of Uzbekistan in the following events:

for carrying out farmership activity;
for individual or condominium housing construction;
for collective farmership;
and in other cases.[11]

4.3. The right of permanent and temporary possession and use of land plots

Land plots shall be granted to enterprises, establishments and organizations for carrying out rural and forestry economies (farmership) for permanent possession, and for other purposes in cases provided by the legislation.[12]

Land plots shall be granted for permanent or temporary possession to:

– the citizens of the Republic of Uzbekistan;

– industrial, transport and other non-agricultural enterprises, institutions and organizations;

– enterprises with foreign investments, international associations and organizations;

– foreign legal entities and individuals;

– and other organizations and persons.

Temporary use of land plots may be as short-term – up to three years; and long-term – from three to ten years. In case of industrial necessity these terms may be prolonged for the period not exceeding the terms of short or long-term temporary use respectively. Prolongation of terms of temporary use of land plots is executed by the bodies, which have granted these areas. Land plots for distant animal industries may be granted to agricultural enterprises, institutions and organizations for the period up to twenty-five years.

5. Sale of land plots for life-long inheritable possession to citizens for individual housing

Sale of land plots for life-long inheritable possession to citizens for individual housing construction is performed through the electronic auction.[13] The decision on the sale of a state-owned land plot is taken by the khokimiyats (administration) of cities and districts from the moment of receiving the protocol through E-IJRO AUKSION.[14]

The organizer of an auction is the State Unitary Enterprise “Elektron onlayn – auktsionlarni tashkil etish markazi”.

Land plots for life-long inheritable possession of citizens are sold at auctions within 0.04 hectares for individual housing construction.

At auctions for the sale of land in the lifetime inheritable possession for individual housing construction can also participate foreign individuals.

6. Transfer of rights to a land plot

Transfer of right on land is an operation of transfer of the right on land plot from one legal entity or individual to another legal entity or individual. Such transfers are made in one the following events:

sale-purchase, exchange, donation, inheritance, renting of land plot;
sale-purchase, exchange, donation, inheritance, renting of buildings and constructions, alienation of apartment house with condition of lifelong maintenance.[15]

7. Regulatory procedures

7.1. Granting (allocating/sale) of land plots

Granting (allocating/sale) of land plots in possession, use, rent and ownership is carried out in the process of alienation. Land alienation is carried out by the Cabinet of Ministers of the RUz, khokims of regions, the city of Tashkent, districts, cities in the manner prescribed by law.[16]

7.2. Payment for land

In the Republic of Uzbekistan use of land plots is on pay basis. Legal entities and individuals having in possession, use and in the ownership land plots shall make payment for the land. Payment for the land is deducted in the form of annual land tax, in the amount depending on quality, location and access to water of the land plot.[17]

7.3. Documents certifying the right on land plot

Documents certifying the right on land plots are as follows:

State certificate on the right of permanent possession of land plot;
State certificate on the right of permanent use of land plot;
State certificate on the right of lifelong inheritable possession of land plot;
State warrant on the right of private ownership on land plot;
Rent agreement or contract of temporary use of land plot
Certificate on state registration of the right on land plot.

These documents indicate the right on the basis of which the land plot is provided, the purpose of its use, the terms of development, the presence of encumbrances and servitudes.[18]

7.4. State registration of rights to land with buildings on it

The state registration of buildings and constructions along with transactions shall be executed by branches of state enterprises of Land Management and Real Estate Cadaster of the Republic of Karakalpakstan, regions and the city of Tashkent in the respective districts (cities).[19]

Buildings and facilities with serving land plot, which are completed and taken into operation are subject to Registration.

Titles for service buildings or structures are not separately recorded. Transfer of ownership right must be registered. Until the transaction is not registered, it is deemed invalid.

State registration of land plots shall be performed at the location of land plots:

–	in case of land ownership	-on the basis of the state order for the right of ownership, contracts of sale and -other documents stipulated by the legislation;
–	at occurrence of the right of ownership and use of land	-on the basis of the decision of the relevant body (official) on the provision of land; protocol on the results of the electronic auction held on the electronic trading platform “E-IJRO AUKSION”
–	in case of a lease right	-on the basis of a land lease agreement;
–	when transferring the right of ownership or use of land	-on the basis of a contract for the sale, exchange, donation, rent, certificate of inheritance right to buildings and structures or -decisions of the owner or an authorized body (person);
–	when transferring the title to a land plot in connection with the transfer of the right to all buildings and structures located on the land plot to another person	-contracts of sale and other types of alienation contracts; -decisions of authorized owners or persons; -court decisions or decisions of the State executive (bailiff); -the act of transfer of the right to buildings and structures between the creditor and the debtor, approved by the State executive (bailiff); – conveyance of title to the land plot of a person from whom the right of ownership or other property rights to buildings and structures is transferred.
–	when transferring the title to a land plot in connection with the transfer of the right to individual buildings and structures or their parts	-the act on partition and definition of new boundaries of the land plot.
–	with servitudes	-based on a contract or -court decisions;
–	with burdens	-based on the pledge of the right of life-long inherited possession, foreclosure of land under the executive documents and other cases established by law.[20]

7.5. Registration of rights to buildings and facilities

The following rights are subject to registration:

occurrence, transfer, restriction and termination of property rights,
economic management right and
operative administration right, as well as
lease rights concluded for a period of more than a year.

In the “floor property” (in multi-storey buildings), each owner registers his/her right of ownership separately.

The title to assets under construction could be subject to registration upon confirmation of the start of its construction by the relevant project organization. Such registration is carried out provided that:

the right to land is registered in the prescribed manner;
construction started on the basis of a project approved in accordance with the law and other legal acts.

Assets under construction are not subject to state registration, if it is

located on land plots acquired on E-IJRO AUKSION, for which the winners have (investment) obligations,
as well as on the unauthorizedly occupied land plot.

When making construction objects owned by individuals into the charter capital of legal entities, the right of ownership of these objects is reregistered for legal entities.

7.6. Registration of rights to perennial plantings

Only the ownership of perennial plantings is subject to state registration. Property rights to perennial plantings, including forest plantations, planted on land plots provided for long-term lease are also subject to state registration.

The ownership of perennial plantations is confirmed:

by the protocol of the commission on the sale to individuals of orchards and vineyards of reorganized agricultural cooperatives on the basis of an auction;
an agreement (supplementary to the agreement) of a long-term lease of a land plot concluded between the khokim of the district (city) and the tenant;
the contract of sale of perennial plantings, along with the decision of the khokim of the district (city) on the re-registration of the land plot to the buyer;
the decision of the relevant state authorities to provide land for activities related to the planting of perennial plantings;
by a court decision or by a decree of the state executive.

7.7. Rights to land plots in the sale of a building, structure or other real estate located on it

With the transfer of ownership to such real estate under the contract for the sale of real estate, The Buyer simultaneously acquires the rights (titles) to that necessary part of the land plot that is occupied by the sold buildings and structures. When the seller is the owner of the land on which the property in sale is located, the buyer is acquires the right of ownership to the land plot or the right to rent or another right to the relevant part of the land plot provided by the contract for the sale of real estate.[21]

7.8. Restrictions on real estate

Land plots. The occurrence of the above rights (titles) is subject to state registration in the branches of state enterprises land management and real estate cadaster, at the location of the land. A document confirming the registration of rights to a land plot is a corresponding certificate of right to a land plot.

Buildings and constructions. Documents confirming the restriction upon the ownership of buildings and structures are:

notice of imposition of arrest on buildings and structures;
notice of the prohibition of the alienation of buildings and structures;
contract on the mortgage of buildings and structures.

8. Amendments to the legislation

Over the previous years, the government initiated the privatization of land plots under buildings of the legal entities and individuals for several times. These reforms were mainly aimed to introduce the principle of the shared fate of a building and structure) with the land plot under it (superficies solo cedit).

Such a program was started with the Presidential Decree “On the privatization of land occupied by buildings and structures of legal entities and citizens” dated July 24, 2006, N UP-3780. This Decree made possible to privatize land plots under buildings and structures. The Decree was not implemented.

The Order of the President of the Republic of Uzbekistan No. R-5464 “On measures to improve the civil legislation of the Republic of Uzbekistan” of 05.04.2019 initiated the second stage of the reforms. Currently, the Law on the Privatization of Land Plots is awaiting its adoption.

[1] Art. 278 of Tax Code

[2] Art. 280 of Tax Code

[3] Art. 265 of Tax Code

[4] Art. 282 of Tax Code

[5] Art. 17(1) of Land Code

[6] Art. 17 of Land Code

[7] Art. 16 of Land Code

[8] Art. 18 of Land Code. See also Decree of the Cabinet of Ministers No. 126 of 04/11/1995

[9] Ibid.

[10] Ibid.

[11] Art. 19 of Land Code

[12] Art.20 of Land Code

[13] See the Regulations on the Procedure for Granting Land Plots and Exercising the Right to Lifelong Inherited Ownership of Land Plots for Individual Housing Construction, approved by Resolution No. 63 of the Cabinet of Ministers of January 28, 2019

[14] Item 63., ibid.

[15] Registration of transfer of rights is carried out on the basis of the Regulations on the Procedure for State Registration of Rights to Real Estate, approved by Resolution No. 1060 of the Cabinet of Ministers of December 29, 2018

[16] Art. 23 of Land Code

[17] Art. 28 of Land Code

[18] Art. 33 of Land Code

[19] Item 6 of Resolution No. 1060 of the Cabinet of Ministers of December 29, 2018

[20] Item 29 (2) of Resolution No. 1060 of the Cabinet of Ministers of December 29, 2018

[21] Article 482 of Civil Code

Acquisition of Land Plots and Other Objects of Real Estate

7.1. Granting (allocating/sale) of land plots

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