Obtaining a license for legal entities

Article 14 of the Law of the Republic of Uzbekistan “On Licensing Certain Types of Activities” contains a list of documents required to obtain a license.

To obtain a license, the license applicant must submit to the relevant licensing authority:

Application for a license – for: for a legal entity – the name and organizational and legal form of the legal entity, location (postal address), name of the banking institution and account number of the banking institution; for an individual – last name, first name and patronymic, information about the document proving the identity of a citizen; licensed type of activity (its part), intended for implementation by a legal entity or individual, as well as this type of activity in cases provided for by law. The license application may include the email address of the license applicant;
a document confirming the payment by the licensing authority of the fee for consideration of the application of the license applicant in cases provided for by law;
other documents confirming the compliance of the license applicant with the requirements and conditions for obtaining a license for a specific type of activity, as well as other documents established by law.
It is not allowed to require a license applicant to submit other documents not provided for by this Law and other legislation on licensing certain types of activities.

The documents required for obtaining a license are submitted by the license applicant to the licensing authority directly, by mail or in electronic form with notification of their receipt. Documents submitted in electronic form are certified by the electronic digital signature of the license applicant. The e-mail address of the license applicant in the application for obtaining a license is his consent to receive an electronic notification of the decision on his application through the information system.

Documents submitted to the relevant licensing authority for obtaining a license are accepted according to the list, and a copy of the list is sent (submitted) to the applicant indicating the date the documents were received by this authority.

The license applicant will be liable under the law for providing false or misleading information.

In cases where the licensing authority needs to receive documents issued by other organizations for licensing certain types of activities, licensing of certain types of activities is carried out in a simplified one-stop shop, while the licensing authority receives these documents independently, without the participation of business entities.

(Article 14 (1). Licensing certain types of activities on a one-stop basis)

Foreign investors in the Republic of Uzbekistan can be:

• foreign states, administrative or territorial bodies of foreign states;
• international organizations established in accordance with interstate agreements or other treaties or being subjects of public international law;
• legal entities, any other companies established and operating in accordance with the laws of foreign states,
• organizations or associations;
• foreign citizens and stateless persons permanently residing outside the Republic of Uzbekistan.

Forms of foreign investment in Uzbekistan

• participate in authorized funds and other property of economic companies and societies, banks, insurance companies and other enterprises created jointly with legal entities and (or) individuals of the Republic of Uzbekistan;
• creation and development of business associations and companies, banks, insurance companies and other enterprises wholly owned by foreign investors;
• acquisition of property, shares and other securities, including debt obligations issued by residents of the Republic of Uzbekistan;
• inclusion of intellectual property rights, including copyrights, patents, trademarks, utility models, industrial designs, trade names and know-how, and goodwill;
• concessions, including concessions for the exploration, exploitation, extraction or use of natural resources;
• by acquiring the right of ownership to objects of trade and services, residential buildings together with the land plots on which they are located, as well as the right to own and use land (including for rent) and the right to own and use natural resources.
• as well as in other forms that do not contradict the current legislation.
  Change the form and process of investing

Changing the forms in which foreign investments are first or repeated does not change their investment qualifications.

VSK includes newly created enterprises that meet the following conditions:

– the authorized capital of the enterprise must be at least 150 thousand US dollars;

– one of the participants must be a foreign legal entity;

– At least 30% of the authorized capital must be foreign investment.

– There are no organizational and legal restrictions on the creation of the CEC in Uzbekistan.

They can be organized in the form of a business company (general or limited partnership), a limited and additional liability company, an (open and closed) joint stock company, a subsidiary, a unitary enterprise and other forms not prohibited by law.

Иностранный инвестор имеет следующие права:

• independently determine the volumes, types and directions of investment;
• conclusion of contracts with legal entities and individuals for the implementation of investment activities;
• own, use and dispose of their investments and the results of investment activities. By decision of a foreign investor, the rights to own, use and dispose of investments, their results can be transferred to other legal entities and individuals in the manner prescribed by the legislation of the Republic of Uzbekistan. When transferring rights to another person, the relations of the parties are regulated by agreements;
• Independent decision-making on patenting own inventions, utility models and industrial designs obtained as a result of investment activities in the Republic of Uzbekistan abroad and in the Republic of Uzbekistan;
• independent and free disposal of income from investment activities after paying taxes and other obligatory payments (including its unhindered repatriation);
  Attracting funds to the Republic of Uzbekistan in the form of credits and loans;
• use funds in national currency on your account to purchase foreign currency in the domestic foreign exchange market;
• acquisition of rights to land in cases and under the conditions provided for by law;
• Use, in accordance with the legislation of the Republic of Uzbekistan, of property owned by him on the basis of ownership and any property rights, as security for all types of obligations, including debt obligations;
• receive commensurate compensation in case of requisition of own investments and other property;
• on the recovery of losses caused by illegal actions (inaction) and decisions of state administration bodies, local public administration bodies and their officials.

The Republic of Uzbekistan does not impose any restrictions on investments in industries or regions where foreign direct investment is directed.

The procedure for taxation of income from sources in the territory of the Republic of Uzbekistan

– A resident of the Republic of Uzbekistan is an individual who permanently resides in the Republic of Uzbekistan or resides in Uzbekistan for 183 days or more during any period up to twelve months beginning or ending in the financial year.

Individuals who are not residents of the Republic of Uzbekistan are taxed on income from sources in the territory of the Republic of Uzbekistan.

The same situation is with the taxation of foreign legal entities. Thus, a legal entity established or registered in Uzbekistan, as well as a legal entity registered outside the Republic of Uzbekistan, whose parent company is located in Uzbekistan, is a resident of the Republic of Uzbekistan.

Legal entities that are not residents of the Republic of Uzbekistan are taxed on income (profit) from sources in the territory of Uzbekistan.

The collection of taxes and fees from foreign individuals and legal entities may be suspended or limited by mutual agreement, subject to the same measures being taken with respect to legal entities of the Republic of Uzbekistan in the relevant foreign state.

– Foreign investments and other property of foreign investors in the Republic of Uzbekistan are protected and not nationalized by the Law of the Republic of Uzbekistan “On guarantees and measures to protect the rights of foreign investors”.

Legal institutions have been created to protect the rights of foreign investors

• On January 1, 2007, the Law “On Arbitration Courts” came into force, which served as the legal basis for the creation of arbitration courts in the country, their permanent and temporary activities. Thus, in addition to the existing means of protecting the rights and guarantees of foreign investors, arbitration courts can be created on the territory of the republic with the involvement of independent experts representing the interests of both parties.
• At the same time, the Ministry of Justice is entrusted with the task of ensuring the protection of the rights and legitimate interests of foreign investors and enterprises with foreign investments. To this end, the Department of Legal Protection of Enterprises with Foreign Investors and Foreign Investments has been established in the Ministry of Justice.

Tax and customs benefits are provided to foreign investors and enterprises with foreign investments

In addition to customs and tax benefits provided for all enterprises of the Republic of Uzbekistan, there are a number of benefits for enterprises in the following sectors of the economy that attract foreign direct investment:

Manufacture of radio-electronic products and components for computers and computers.

1. Light industry:
2. Silk industry:
3. Building materials industry:
4. Raising poultry and eggs.
5. Food industry:
6. Dairy industry:
7. Chemical and pharmaceutical industry:

These enterprises are subject to income tax, property tax, tax on the development of social infrastructure and improvement, environmental tax, a single tax for micro and small enterprises, as well as mandatory payments to the Republican Road Fund.

These tax benefits are provided when attracting foreign direct investment in the following amounts:

– From 300 thousand US dollars to 3 million. up to US dollars – for a period of 3 years;

– 3 million rubles 10 million US dollars. up to US dollars – for a period of 5 years;

– 10 million rubles More than USD – for a period of 7 years.

In this case, these tax benefits are provided subject to the following conditions:

– location of the above enterprises in rural areas of the Republic of Karakalpakstan, Jizzakh, Kashkadarya, Syrdarya, Surkhandarya, Khorezm regions, as well as in Navoi, Andijan, Namangan and Fergana regions;

– attraction of private direct foreign investments by foreign investors without providing guarantees of the Republic of Uzbekistan;

– the share of foreign participants in the authorized capital of the enterprise must be at least 50%;

– carry out private direct investments after the state registration of these enterprises;

– inflow of foreign investments in the form of freely convertible currency or new modern technological equipment;

– use the income received as a result of these benefits to reinvest in the further development of the enterprise during their use.

In addition, from July 1, 2003 to January 1, 2009, SJSC “Uzbekyengilsanoat” was a manufacturing enterprise with foreign investment (ready-made clothing (tailoring, textiles and leather goods), the current “Uzengilsanoat”, specializing in the production of socks and footwear association) are exempt from paying all types of taxes and fees to the budget, except for value added tax.

– In some cases, on the basis of concluded investment agreements, foreign investors may be provided with additional guarantees and measures to protect the rights to invest in the following industries:

– priority sectors of sustainable economic growth, progressive structural changes in the country’s economy;

– priority projects to strengthen and expand the country’s export potential, ensuring its integration into the world economy;

– Projects in the field of raw materials processing, production of consumer goods and services, employment of small and medium-sized enterprises.

Additional guarantees and protection measures provided to foreign investors Guarantees of the Government of the Republic of Uzbekistan, assistance in financing investment projects, creation of a special tax and payment regime, state control over the implementation of projects and other measures in accordance with the law.

Requirements for foreign investors (enterprises with foreign investments) to obtain

additional benefits

– The Government of the Republic of Uzbekistan concludes a mandatory investment agreement to provide foreign investors with additional guarantees and preferences (privileges and preferences) established by law.

The investment agreement is concluded between the Government of the Republic of Uzbekistan and a foreign investor (investors) represented by the Ministry of Investments and Foreign Trade of the Republic of Uzbekistan.

To prepare an investment agreement, a foreign investor submits the following documents to the Ministry of Investments and Foreign Trade of the Republic of Uzbekistan:

draft investment agreement;
main economic indicators based on a feasibility study (feasibility study) reviewed by the relevant authorities in cases provided for by law;
The conclusion of the Ministry of Justice – in terms of legal expertise of the draft investment agreement;
conclusions of the Ministry of Finance, the Ministry of Economy and the State Tax Committee in the field of granting tax benefits and preferences to foreign investors (enterprises with foreign investments) in addition to the guarantees and protection measures established by law.
A foreign investor submits reports on the fulfillment of its obligations to the Ministry of Investments and Foreign Trade of the Republic of Uzbekistan in the manner and terms specified in the investment agreement.

Allowing foreign investors to participate in the privatization process

– One of the priorities for the development of the economy is the comprehensive strengthening of work to attract foreign investment.

Currently, enterprises in the leading sectors of the economy are aimed at increasing the role of private property in the economy, a sharp reduction in the state’s share in the authorized capital of business entities, the development and modernization of enterprises, as well as attracting foreign investment, are moving towards further deepening the process of denationalization and privatization. In addition, investors have the opportunity to purchase unallocated state assets at zero cost by incurring capital liabilities. All information about the privatization process in the Republic of Uzbekistan can be found on the website davaktiv.uz.

Information on restrictions on the conversion of soums into foreign currencies and their impact on the repatriation of income

– In order to strengthen the currency balance of the republic in Uzbekistan, for some time there were restrictions on converting soums into foreign currency. The income received by the investor in the territory of the Republic of Uzbekistan can be reinvested in the territory of the Republic of Uzbekistan or used for other purposes at the discretion of the foreign investor.

Foreign investors are guaranteed the free transfer of funds in foreign currency to the Republic of Uzbekistan and its use without any restrictions, subject to the payment of taxes or other obligatory payments in the manner established by the legislation of the Republic of Uzbekistan.

The Constitutional Court of the Republic of Uzbekistan decided to comment on Article 10 of the Law “On Guarantees and Measures to Protect the Rights of Foreign Investors”:

– Recognizing the supremacy of the Constitution and laws, as well as generally recognized norms of international law, the Republic of Uzbekistan stands for the resolution of economic disputes within the framework of the law.

Article 10 of part one of the Law states that “If the parties fail to reach an agreement, the Republic of Uzbekistan undertakes to apply which is a rule requiring compliance with the norms and procedures of international treaties, and automatically agrees with the consent of the Republic to refer any dispute to one or another arbitration court does not express correctly .

As a rule, the consent of the parties to the dispute to refer to one or another dispute resolution body should be explained in the form of an additional arbitration note to the investment agreement or a separate agreement of the parties to the dispute.

Thus, the decision of the Constitutional Court should not be considered as a violation of the rights of foreign investors and should be approached constructively and taking into account the rights and obligations of each party within the framework of generally recognized norms of international law.

Guarantees for foreign investors in case of changes in legislation

– The state guarantees and protects the rights of foreign investors operating in the territory of the Republic of Uzbekistan. If subsequent legislation of the Republic of Uzbekistan tightens investment conditions, foreign investors will be subject to legislation in force for 10 years from the date of investment. A foreign investor has the right, at his own discretion, to use the provisions of the new legislation that improve the investment climate. At the same time, the aggravating aspects of the investment climate are the introduction of amendments and additions to the legislation, as well as the adoption of new legislation of the Republic of Uzbekistan, which provides for:

– increase in the amount (rate) of income tax in the form of dividends paid to foreign investors;

– the introduction of additional requirements that complicate procedures related to repatriation or reduce the amount of income (profit) of foreign investors transferred outside the Republic of Uzbekistan, the inability of foreign investors to invest in foreign investments and the return of bankruptcy or protection of the rights of creditors of the funds of a foreign investor in cases of committing, committing criminal or administrative offenses, except for cases of suspension of the operation of the funds of a foreign investor by an authorized state body or repatriation of a foreign investor by a court or arbitration decision;

– introduction of quantitative restrictions on the volume of investments and other additional requirements for the volume of investments in the form of an increase in the minimum amount of foreign investment in enterprises with foreign investment;

– restrictions on the participation of foreign investors in the authorized capital (authorized capital) of enterprises;

– Introduce procedures for obtaining and extending visas for foreign investors – individuals, as well as other additional requirements for foreign investment.