Enterprises with foreign investments on the territory of the Republic of Uzbekistan include enterprises that meet the following conditions:

– the size of the authorized capital of the enterprise cannot be less than 400 million soums;

– the share of foreign investments is at least 15 percent of the authorized capital of the enterprise.

Enterprises established on the territory of the Republic of Uzbekistan without the above signs do not apply to enterprises with foreign investment.

Enterprises with foreign investments can be created in any organizational and legal forms, namely, in the form of LLC, OJSC, CJSC.

In the Republic of Uzbekistan, enterprises with the organizational and legal form – Limited Liability Company (LTD) are mainly registered, since this organizational and legal form is considered more convenient for doing business in the Republic of Uzbekistan.

Enterprises with foreign investments undergo state registration at the Center for Public Services under the Ministry of Justice of the Republic of Uzbekistan.

For state registration of enterprises with foreign investments in the Republic of Uzbekistan, the following documents are submitted to the registration authority along with the application:

1 original of constituent documents in the state language in the prescribed manner;

 

Bank payment document confirming the payment of the established amount of the state duty;

 

A power of attorney issued by a foreign founder of a legal entity to its authorized person, legalized or with an apostille in the prescribed manner with translation into the state language;

 

A copy of the founder’s passport, if it is an individual, the document must be submitted with a translation into the state language.

For the state registration of enterprises, a state fee of 10 BRF (2,230,000 UZS) is paid when applying in person, in the amount of 5 BRV (1,115,000 UZS) when applying electronically.

Taxation of enterprises with foreign investments in the Republic of Uzbekistan.

According to the current tax legislation of the Republic of Uzbekistan, all enterprises registered in the Republic of Uzbekistan pay the following types of taxes:

value added tax – 15%, the tax is paid by the Company at the end of each tax periodno later than the deadline for submitting tax returns.

 

excise tax – tax is paid by the Company if the company produces excisable goods;

 

income tax – 15%, the tax is paid by the Company based on the results of the reporting (tax) period no later than the twentieth day of the month following the reporting period (Article 340 of the Tax Code of the Republic of Uzbekistan), the reporting period is a quarter (Article 338 of the Tax Code of the Republic of Uzbekistan);

 

tax for the use of water resources – the rate depends on the type of activity of the Enterprise. Utax payment is madeEnterprise in during the tax period;

 

property tax – tax is paid by the Company if it has property that is the object of taxation in accordance with Article 411 of the Tax Code of the Republic of Uzbekistan. The tax rate is set at 0.2 to 4 percent of the tax base, depending on the object (Article 415 of the Tax Code of the Republic of Uzbekistan ), the amount of tax payable by the Enterprise for the tax period, taking into account advance payments, is paid to the budget no later than the deadline for submitting tax reports (Article 417 of the Tax Code of the Republic of Uzbekistan).

 

Land tax – tax is paid if the enterprise has land plots on the rights. property, possession, use or lease (financial lease) (Article 425 of the Tax Code of the Republic of Uzbekistan). The rates are defined in the law “On the state budget of the Republic of Uzbekistan for 2020” depending on the location of the legal entity. Payment of tax for non-agricultural land is made before the 10th day of each month in the amount of one twelfth of the annual tax amount. (Article 432 of the Tax Code of the Republic of Uzbekistan).

 

Social tax – 12%, the tax is paid by the Enterprise on a monthly basis no later than the 15th day of the month in which the entrepreneurial activity was carried out;

 

Turnover tax – paid by enterprises of the Republic of Uzbekistan, whose total income for the tax period does not exceed one billion soums, the rates are established in article 467 of the Tax Code in the amount of 4 to 25%, depending on the type of activity carried out from the total income. Payers of this tax do not pay the above taxes.

 

Regarding the application of tax incentives and preferences to Enterprises with foreign investments.

According to p.p. 1.2. Decree of the President of the Republic of Uzbekistan dated April 11, 2005 No. UP-3594 “On additional measures to stimulate the attraction of foreign direct investment”, To enterprises created with the attraction of foreign direct investment and specializing in the production of products (provision of services) in the sectors of the economy according to the list according to the appendix (this list is attached to the conclusion*), it provides for the features of the application of benefits for certain taxes in the manner established by the Tax Code of the Republic of Uzbekistan, with the volume of direct private foreign investment:

from 300 thousand US dollars to 3 million US dollars – for a period of 3 years;

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

over 10 million US dollars – for a period of 7 years.

It has been established that the benefits for certain taxes established by the Tax Code of the Republic of Uzbekistan, specified in paragraph 1 of this Decree, are applied when placing these enterprises in all cities and rural settlements of the republic, with the exception of the city of Tashkent and the Tashkent region. This territorial restriction does not apply to enterprises operating in the field of tourism and waste management.

In accordance with Art. 471 of the Tax Code of December 30, 2019 N ZRU-59, direct private foreign investment refers to investments made without providing a guarantee of the Republic of Uzbekistan by individuals who are citizens of a foreign state, stateless persons permanently residing outside the Republic of Uzbekistan, as well as foreign non-state legal entities. Legal entities are provided with tax incentives in the form of exemption from land tax, property tax and tax for the use of water resources, depending on the volume of direct private foreign investment for a period determined by the decision of the President of the Republic of Uzbekistan.

The tax benefits provided for in Article 471 of the Tax Code apply when all of the following conditions are met:

1) when placing legal entities in the territories determined by the legislation;

2) when foreign investors carry out direct private foreign investments without providing a guarantee of the Republic of Uzbekistan;

3) if the share of foreign participants in the authorized capital (authorized capital) of legal entities is at least 33 percent, and for joint-stock companies – at least 15 percent;

4) when making foreign investments in the form of hard currency or new modern technological equipment;

5) when directing at least 50 percent of the income received as a result of the provision of tax benefits provided for in Article 471 of this Code, during the period of their application for reinvestment for the purpose of further development of production.

In the event of termination of the activities of a legal entity with the participation of foreign direct investment that has received tax benefits provided for in Article 471 of this Code, earlier than one year after the expiration of the period for which they were granted, the repatriation of profits and the export of capital of a foreign investor abroad are carried out only after compensation in budget for the amount of tax benefits granted. If non-compliance with the conditions provided for in this Chapter is revealed, for the period during which a legal entity with the participation of direct private foreign investments that received tax benefits provided for in Article 471 of this Code did not meet the established requirements, taxes are paid in the generally established manner with the application of penalties provided for in Section VIII of this Code.

According to the Decrees of the President No. UP-4059 of 02.12.2008 “On the creation of a free industrial economic zone in the Navoi Region”, No. UP-4436 of 13.04.2012 “On the creation of a special industrial zone “Angren””, No. UP- 4516 dated March 18, 2013 “On the creation of a special industrial zone “Jizzakh””, No. UP-4853 dated October 26, 2016. “On additional measures to enhance and expand the activities of free economic zones”, dated 12.01.2016. “On the creation of free economic zones “Urgut”, “Gijduvan”, “Kokand” and “Khazarasp”, special Economic Zones were created in the Republic of Uzbekistan:

Free Economic Zone “Navoi”;

 

Free Economic Zone “Angren”;

 

Free Economic Zone “Jizzakh”;

 

Free Economic Zone “Urgut”;

 

Free Economic Zone “Gijduvan”;

 

Free Economic Zone “Kokand”;

 

Free Economic Zone “Khazarasp”.

 

Depending on the amount of foreign investment, enterprises receive tax incentives with different validity periods in terms of paying:

 

land tax;

 

property tax;

 

corporate income tax;

 

tax on improvement and development of social infrastructure and others.

 

As an additional incentive for enterprises registered in these zones, special rules have been established for making payments in foreign currency. Enterprises have the right not to apply acts of tax legislation that worsen the position of taxpayers. In addition to the general benefits that apply to all zones, there are special benefits for specific zones.

More detailed information about the Economic Zones and the tax and customs benefits available there may be prepared and provided, taking into account the choice of a particular Economic Zone by the Enterprise.

 

Overview of enterprises with foreign investments in the Republic of Uzbekistan

 

 

Taxation of enterprises with foreign investments in the Republic of Uzbekistan.

Regarding the application of tax incentives and preferences to Enterprises with foreign investments.

 

 

Investments in certain economic zones

* APPENDIX to the Decree of the President of the Republic of Uzbekistan dated April 11, 2005 No. UP-3594

SCROLL

sectors of the economy that are subject to incentives provided for direct private foreign investment

  1. Products of the radio-electronic industry and the production of components for computer and computer technology.
  2. Light industry:

production of ready-made cotton, woolen and mixed fabrics, as well as knitted fabrics;

production of finished garments, knitwear, hosiery and textile haberdashery;

production of natural leather, leather and haberdashery industry, footwear industry.

  1. Silk industry:

production of silk fabrics and finished products from silk.

  1. Building materials industry.
  2. Industrial production of poultry meat and eggs.
  3. Food industry:

production of finished industrially processed food products from local raw materials (with the exception of alcoholic, non-alcoholic drinks and tobacco products).

  1. Meat and dairy industry:

production of finished types of meat and dairy products, cheese and animal butter, as well as products for processing animal entrails.

  1. Production of fish larvae and juveniles, as well as processing and conservation of fish and fish products.
  2. Chemical industry.
  3. Petrochemical industry.
  4. Medical industry, as well as the production of drugs for veterinary medicine.
  5. Production of packaging materials.
  6. Construction of power plants based on alternative energy sources.
  7. Coal industry:

coal enrichment;

production of coal briquettes;

shale industry.

  1. Production of electroferroalloys and hardware for industrial purposes.
  2. Mechanical engineering and metalworking:

mechanical engineering

tractor and agricultural engineering;

construction, road and municipal engineering;

mechanical engineering for light and food industries and household appliances.

  1. Machine tool and tool industry.
  2. Glass and porcelain-faience industry.
  3. Microbiological industry.
  4. Production of toys.
  5. Tourism:

hotel services;

tourist services;

organization of theme parks (amusement park, an ensemble of parks organized on one or more topics, providing services aimed at meeting the needs of visitors of different ages).