November 1, 2022
Procedure for obtaining the prior consent of the antimonopoly authority
Table of Content
2. Criteria for qualifying a transaction as requiring prior consent
3. By whom and where documents are submitted
4. Application and document submission methods
5. Required documents and their format
6. The amount of the application fee
8. Grounds for refusal to grant the consent of the AMC
Before acquiring participatory interest (shares) in a legal entity of the Republic of Uzbekistan, the parties to the transaction need to check whether this transaction meets the criteria for qualifying the transaction as requiring the prior consent of the Antimonopoly Committee of the Republic of Uzbekistan (“AMC“). This article describes a detailed procedure for obtaining the prior consent of the AMC.
- Law of the Republic of Uzbekistan No. ZRU-319 of 6 January 2012 “On Competition”;
- Resolution of the Cabinet of Ministers of the Republic of Uzbekistan No. 86 dated 1 March 2022 “On approval of the Unified Regulation on procedures for issuing Individual documents of a permissive nature through a special electronic system” (Annex 12).
2. Criteria for qualifying a transaction as requiring prior consent
The criteria for qualifying a transaction for the acquisition of participatory interest/shares as requiring the prior consent of the antimonopoly authority are the following:
1) Criterion of the size of the acquired block of participatory interest/shares:
– if more than 50% of participatory interest/ shares are acquired;
2) The criterion of the total amount of (a) assets or (b) proceeds from the sale of goods for the last calendar year of the parties involved in the transaction – the buyer and seller of participatory interest/shares:
– if it exceeds one hundred thousand times the size of the base calculated value – at the moment – it is over 2.7 million US dollars;
3) Criterion of a group of persons:
Where the concept of “group of persons” means a set of persons where one entity controls another entity, directly or indirectly owns more than 50% of another and 6 other different control criteria by one person of another:
A group of persons is a set of persons having a single (common) economic interest, with respect to which one or more of the following conditions are fulfilled:
– two or more legal entities, one of which directly or indirectly, as well as in accordance with the powers received from other persons, owns more than fifty percent of the authorized capital of another legal entity;
– two or more legal entities in which the same individual, as well as his spouse, parents (adoptive parents), children (adopted, adopted), blood and half-brothers and sisters have by virtue of their participation in these legal entities or in accordance with the powers received from other persons, more than fifty percent of the authorized capital of each of these legal entities;
– two or more legal entities in which the same legal entity has, by virtue of its participation in these legal entities or in accordance with the powers received from other persons, more than fifty percent of the authorized capital of each of these legal entities;
– two or more legal entities whose executive body includes the same individuals and their close relatives;
– two or more legal entities in which more than fifty percent of the quantitative composition of the collegial executive body and (or) the supervisory board are the same individuals and their close relatives;
– two or more legal entities, one of which, on the basis of legislation or constituent documents of these legal entities or contracts concluded between them, has the right to give these legal entities binding instructions;
– two or more legal entities in which the same individual or the same legal entity, on the basis of the legislation and constituent documents of these legal entities, or contracts concluded with them, has the right to give them binding instructions.
At the same time, prior consent of the AMC is not required in the following cases:
- for founders when forming a legal entity;
- agreements on the acquisition by a legal entity of its shares;
- if the joint-stock company retains the size of its authorized capital when it changes to another organizational and legal form;
- when transferring participatory interest (shares) in the authorized capital to trust management, as well as when withdrawing participatory interest (shares) by investment agents for the purpose of subsequent resale;
- transactions on the acquisition of participatory interest (shares) in the authorized capital by a legal entity in accordance with the decision of the President of the Republic of Uzbekistan or the Cabinet of Ministers;
- agreements on the acquisition of participatory interest (shares) in the authorized capital of legal entities within the framework of state privatization programs;
- transactions involving the acquisition of participatory interest (shares) in the authorized capital by an individual, if at the time of filing the application such an individual did not dispose of more than fifty percent of participatory interest (shares)in the authorized capital of any legal entity.
3. By whom and where documents are submitted
The applicant can be legal entity buying participatory interest (shares) in the company. At the same time, it can be the following persons:
- Individuals and legal entities – residents of the Republic of Uzbekistan;
- Individuals and legal entities – non-residents of the Republic of Uzbekistan.
4. Application and document submission methods
Individuals and legal entities – residents of the Republic of Uzbekistan can apply for prior consent both in person and online, using. electronic digital signature (EDS). To submit an application in an appearance form, the applicant is required to contact the Center for Public Services (“CPS“) with a package of documents and an application. It is worth noting that, unfortunately, not all CPS employees will be able to help with this procedure. Moreover, many of them do not even know about the existence of such a procedure.
Accordingly, due to the fact that online filing of documents requires the presence of the applicant’s EDS, a foreign citizen (in the absence of an EDS) or a foreign legal entity will not be able to submit documents online, so it will need to be done only by contacting the CPS. At the same time, if a foreign applicant does not have the opportunity to submit documents himself, he can appoint a representative, who, in turn, when providing a duly executed power of attorney to a CPS employee, will be able to submit documents on behalf of the applicant.
5. Required documents and their format
The applicant must provide the following documents:
| No. | Name of the document | Form | Legalization/Apostille | Language | Comments |
| 1 | Application | The information is provided in the form of a simple letter in any form | Not required | National or Russian | If the Applicant is an individual, the following information is attached to the Application:
– Full name; – PINI – phone number; – email; If the applicant is a legal entity, the following information is attached to the Application: – Name; – TIN; – Legal address; – Date and place of state registration; – Name of the servicing bank and account number; – phone number; – email. |
| 2 | Information about the applicant’s participation in the authorized capital of other legal entities (including foreign companies) | The information is provided in the form of a simple letter in any form | Not required | National or Russian | The name of the legal entity is indicated. Subject, type of activity, TIN and the size of the participatory interests or number of shares are indicated. |
| 3 | Information on the composition of the founders (participants) of the applicant and on the size of the participants’ shares/participatory interest in the authorized capital of the applicant (for legal entities) | The information is provided in the form of a simple letter in any form | Not required | National or Russian | The size of the participatory interest and number of shares and its nominal value are indicated. |
| 4 | Information about the types of activities carried out by the applicant | The information is provided in the form of a simple letter in any form | Not required | National or Russian | |
| 5 | Information on the names and volumes of goods produced and sold by the applicant for the last two (2) years preceding the date of submission of the application by the Applicant, or, if the activity is less than two (2) years, then for the entire period of activity | The information is provided in the form of a simple letter in any form | Not required | National or Russian | If the applicant carries out activities only for the provision of services, then data on the volume of sales of services for the last 2 years are provided according to statistical reports. |
| 6 | Financial statements of the applicant (Form 1 and 2) and statistical statements of the applicant for the last two (2) calendar years | Not required | National or Russian language. In case of translation, its notarization is required | ||
| 7 | Information about the composition of the group of persons in which the applicant is included, indicating the reasons for including persons in the group. | The information is provided in the form of a simple letter in any form | Not required | National or Russian | |
| 8 | Extract from the register (for legal entities) | Required | National or Russian language. In case of translation, its notarization is required | ||
| 9 | Information about the company in which it is planned to purchase participatory interest/shares | The information is provided in the form of a simple letter in any form | Not required | National or Russian | The name, TIN, legal address, telephone number, e-mail, the number (size) of participatory interest (shares) acquired by the applicant, the composition of the founders (participants) and information about the size of their shares in the authorized fund are indicated. |
| 10 | Information about the participation of the Target Company in the authorized capital of other legal entities: | The information is provided in the form of a simple letter in any form | Not required | National or Russian | The name of the household is indicated. Subject, type of activity, TIN and the size of the participatory interest or number of shares. |
Taking into account that foreign financial statements consist of a large number of pages, we recommend preparing scanned versions of the reports before filing. In addition, it is important to take into account the file sizes, in particular, to reduce them to a minimum, because otherwise the system will not accept documents.
6. The amount of the application fee
The investor pays a fee for consideration of the application in the amount of 0.05 percent of the revenue (in the absence of revenue – the book value of assets) received by the parties to the transaction from the sale of goods in the last calendar year, but not less than 7 and not more than 1000 times the amount of the base calculated amount. The initial payment can be made in the amount of 7 of the base calculated amount, and the AMC will review the amount during the application process.
Here it is essential to draw attention to some technical problems that may appear when making a payment. According to the legislation of the Republic of Uzbekistan, all payments for fees and duties must be made in the national currency of the Republic of Uzbekistan. Thus, foreign companies that do not operate on the territory of the Republic of Uzbekistan face the problem of paying the fee, since they do not have bank accounts on the territory of Uzbekistan, which leads to the need for third parties to pay the fee.
In addition, unfortunately, not all banks in Uzbekistan are adapted to this surcharge. In particular, not every bank’s system automatically displays the relevant data when entering a personal account, which leads to the impossibility of making a payment.
The AMC reviews the documents and the application within 8 working days after payment of the fee.
If there are reasons why the transaction leads or may lead to a restriction of competition, including by creating or strengthening a dominant position in the commodity or financial market, the AMC may extend the period of consideration of the application for a maximum of one month by sending a notification with a clear indication of the established grounds. The consent of the AMC is valid for 1 year from the date of issue.
8. Grounds for refusal to grant the consent of the AMC
The grounds for refusal to grant the consent of the AMC are:
- if the applicant has submitted an incomplete package of documents required for the issuance of a permit document;
- if the applicant does not comply with the requirements and conditions for the issuance of consent;
- if there is incorrect or distorted information in the documents submitted by the applicant;
- in case of a justified negative conclusion based on the results of research, inspections or other scientific and technical assessments that must be carried out in accordance with the legislation.
It is not allowed to refuse to issue a document of a permissive nature on other grounds, including for reasons of its inexpediency.