Registering a company in Uzbekistan can indeed be an attractive option for investors worldwide, given the country's strategic location in Central Asia and its efforts to enhance its economic landscape. Let's delve into the key aspects of registering a company in Uzbekistan for foreigners and the basic requirements of the registration process.
Foreign direct investment policy in Uzbekistan
The government of Uzbekistan has identified attracting foreign direct investment (FDI) as a top policy priority. Uzbekistan's investment policy is generally open to foreign investors across various sectors of the national economy. There are minimal restrictions based on the place of residence or country of origin of foreign investors. However, it's important to note that certain strategically important sectors, including energy, telecommunications, transport, and mining, may have some restrictions.
The "Law on Investments and Investment Activities," which became effective on January 27, 2020, guarantees the unrestricted repatriation of funds from Uzbekistan and ensures the protection of investments from nationalization. This legal framework provides foreign investors with confidence and security for their investments.
These initiatives and policy changes reflect Uzbekistan's commitment to creating an attractive investment climate for both domestic and foreign investors. The combination of tax incentives, investment protection, and sectoral openness serves as an encouraging environment for investors considering opportunities in Uzbekistan.
Why invest in Uzbekistan?
Investing in Uzbekistan presents a range of compelling opportunities for both domestic and foreign investors. Here are the key reasons why investing in Uzbekistan is worth considering:
The presence of significant human and intellectual potential in the country provides a skilled workforce, which can be a valuable asset for businesses.
Uzbekistan's strategic location in Central Asia positions it as a key gateway to access other substantial markets in the region. This geographic advantage can be particularly advantageous for businesses with regional ambitions.
The country's highly developed transport infrastructure, including roads, railways, and airports, facilitates the movement of goods and people, enhancing logistics and connectivity.
Uzbekistan's financial system is considered stable according to international rating agencies. This stability can instill confidence in investors seeking a secure environment for their financial activities.
Access to financial resources, including those provided by institutions like the Fund for Reconstruction and Development of the Republic of Uzbekistan, can support modernization and effective investment policies.
Uzbekistan boasts one of the most diversified economies in Central Asia. This diversity offers investors opportunities across various sectors.
Uzbekistan is actively working to diversify its economy and improve its investment climate. This includes initiatives in digitalization, optimizing public services, streamlining permitting processes, and other measures. For those considering company registration in Uzbekistan, the following sectors hold significant market opportunities in banking, tourism and IT sectors.
Legal entity forms in Uzbekistan
The Republic of Uzbekistan provides foreign investors with a range of legal entity forms for establishing companies. The key types of companies that can be registered in Uzbekistan include Limited Liability Companies (LLC), Joint Stock Companies (JSC), branches, and representative offices.
Procedure for Registering an LLC in Uzbekistan
An LLC in Uzbekistan offers flexibility for foreign ownership and does not require local participation. In practice, it is often advisable for foreign investors to register an LLC with 100% foreign ownership.
Step-by-Step Guide to Registering an LLC in Uzbekistan:
- Begin by reserving the trade name of the LLC.
- Gather and prepare the necessary constituent documents.
- Collect documents that confirm the physical address or location of the LLC. This may involve a lease agreement or a letter of guarantee from the tenant.
- Submit all the required documents to the relevant authorities. This step formalizes the LLC as a legal entity.
- Open a bank account in Uzbekistan and deposit the authorized capital into the account. Obtain a payment document as evidence of capitalization.
- Depending on the nature of the business activities, secure any required special licenses or permits.
Required documents for company registration:
For Physical Non-Resident Persons:
- Copy of a legalized passport.
- Registration of Taxpayer Identification Number (TIN).
For Foreign Companies:
- Copy of the foreign company's registration certificate.
- Photocopies of the foreign legal entity's constituent documents.
Important Notes:
- All documents must be notarized.
- Documents should be either legalized at the Embassy of Uzbekistan or apostilled according to The Hague Convention by relevant government authorities.
- Registration actions can be carried out by proxy, and the presence of the general director is typically necessary only when opening a bank account in Uzbekistan.
- Foreign entrepreneurs can also choose to register a Joint Stock Company in Uzbekistan, where there are no residency requirements for shareholders. The choice between LLCs and JSCs depends on various factors, including the investor's objectives, intended ownership structure, and long-term plans for the company.
Taxation
Understanding the tax aspects of opening a company in Uzbekistan is crucial for successful business operations.
The new Tax Code notably reduced corporate and individual income taxes by nearly 50% in 2020.
Enterprises (legal entities) are generally subject to CIT at 15%.
The standard VAT rate in Uzbekistan is 12%.
Certain goods exported from Uzbekistan may be exempt from VAT.
The basic property tax rate for legal entities is 1.5%.
Dividends and interest paid to non-residents are subject to a tax rate of 10%, unless a reduced rate applies under double tax treaties (Uzbekistan has signed multiple DTA agreements).
Tax returns must be filed with the Tax Authority within 3 months after the end of the tax year.
Conclusion
Registering a company in Uzbekistan is increasingly popular, especially for investors worldwide. However, the registration process may involve complexities and nuances, making professional guidance essential.
Specialists can provide support to navigate in Uzbekistan's legal and tax requirements, ensuring an efficient and compliant registration process. This support includes consultations and assistance in obtaining permits from regulatory authorities, ensuring that your business operates in Uzbekistan's market smoothly.
