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Uzbekestan
We have a team of experienced professionals dedicated to supporting all your business requirements—ensuring smooth operations and full regulatory compliance. This strong foundation enables you to confidently establish and grow your business in Uzbekestan with efficiency and assurance.
WHY UZBEKISTAN?
Uzbekistan, officially the Republic of Uzbekistan, is a doubly landlocked country located in Central Asia. It is surrounded by five countries: Kazakhstan to the north, Kyrgyzstan to the northeast, Tajikistan to the southeast, Afghanistan to the south, and Turkmenistan to the southwest, making it one of only two doubly landlocked countries on Earth, the other being Liechtenstein. The country has a population of more than 38.2 million, making it the most populous country in Central Asia. Uzbekistan is a member of the Organization of Turkic States. Uzbek, spoken by the Uzbek people, is the official language and is spoken by the majority of its inhabitants, while Russian and Tajik are significant minority languages. Islam is the predominant religion, and most Uzbeks are Sunni Muslims.
Uzbekistan is actively expanding its international partnerships and trade agreements, including accession efforts to the World Trade Organization (WTO). Its growing network of bilateral and multilateral relations reflects a commitment to open markets and global economic cooperation. Uzbekistan offers incentives to attract foreign and domestic investment. These include tax exemptions, customs privileges, special economic and industrial zones with simplified administrative procedures, and state support measures in priority sectors. Uzbekistan is the most populous country in Central Asia. The youthful demographic, with a significant portion under the age of 30, presents a dynamic workforce and a growing consumer base. The country has transitioned from a centrally plan economy to a more market-oriented system. Key sectors include agriculture, mining, manufacturing, and service Uzbekistan is rich in natural resources, including go uranium, and natural gas. In 2024, Uzbekistan’s GDP grew by 6.6% (as per the official data provided by National Statistics Committee of the Republic of Uzbekistan), driven by increased investment and consumption. Foreign direct investment accounted for over 30% of total investment, reflecting growing international confidence in the country’s economic prospects.
ADVANTAGES
Uzbekistan offers advantages like a young, large workforce, rich natural resources, strategic location, and strong government support for investment, including tax breaks, simplified bureaucracy (especially in IT), and economic liberalization, making it attractive for cost-effective, growth-oriented businesses, especially in sectors like IT, textiles, and agriculture, despite ongoing implementation challenges in some areas.
Favourable Demographics & Labor:
A large, young population (over 60% under 30) provides a substantial, growing labour force, with increasing skills development, particularly in the IT sector.
Rich Natural Resources:
Significant reserves of gold, uranium, copper, and natural gas offer input advantages and external economic stability.
Strategic Location:
Situated at the crossroads of major trade routes, offering access to large regional markets.
Strong Government Support:
Proactive policies, reduced bureaucracy (e.g., quick company registration), and support from entities like IT Park simplify setup and operation.
Economic Reforms:
Ongoing liberalization includes easing foreign currency controls, tax reductions, and legal reforms to protect business rights.
Targeted Incentives:
Tax and customs benefits for specific zones (like Free Economic Zones for pharma, agriculture) and sectors (IT) reduce costs.
Growing Domestic Market:
High population growth and rising incomes drive demand in various sectors.
Infrastructure Investment:
Heavy government spending on transport, logistics, and digitalization enhances operational efficiency.
IT Sector Boom:
A booming IT sector benefits from tailored support, fiscal advantages, and a pool of young talent.
SIMPLE TAX REGIME
General Taxation Rates (2025)
- Corporate Income Tax (CIT): General 15% for legal entities. Specialized rates of 20% apply to commercial banks, mobile service providers, and markets.
- Personal Income Tax (PIT): A flat rate of 12% for residents. Non-residents are typically taxed at 20% on employment income, though some sources list it as reduced to 12% by presidential decree.
- Value Added Tax (VAT): The standard rate is 12%. Mandatory for entities with annual turnover exceeding UZS 1 billion.
- Social Tax: Paid by employers at a standard rate of 12% on total payroll. Budget-funded organizations pay 25%.
Withholding Tax (WHT): Dividends and interest for residents are taxed at 5%, while non-residents pay 10%. Royalties and other income are generally subject to 20% WHT.
Special Tax Regimes
- Turnover Tax: Designed for small businesses with annual revenue under UZS 1 billion. It replaces CIT and VAT with a standard rate of 4%, though it can vary from 1% to 25% depending on the business type.
- New Foreigner Regime (Effective 2026): A special regime will allow foreign nationals who spend at least 30 days in the country to obtain residency by paying a $50,000 fee, exempting their foreign-sourced income from PIT.
- Special Economic Zones (SEZ): Participants in these zones may receive exemptions from property, land, and water usage taxes for up to 10 years, depending on investment volume (e.g., $15M+ for max benefits).
The social tax rate is paid by legal entities and amounts to 11% of salaries and in-kind benefits of employees.
UZBEKISTAN COMPANIES
Common Business Structures in Uzbekistan
- Limited Liability Company (LLC): Most common for local and foreign investors, offering limited liability and flexibility; can have 1-50 members.
- Joint-Stock Company (JSC): Another option for incorporated entities, suitable for larger operations.
- Sole Proprietorship (Sole Trader): Simplest form, run by one person personally liable for debts; no share capital required.
- Partnership: Can be general or limited (LLP), requiring at least two members, popular for professional services.
- Private Enterprise (PE): A form for business ownership, often with owner-determined capital.
- Company with Additional Liability (CAL): A structure where members have liability beyond their initial contribution
Forms for Foreign Companies
- Branch Office: A subdivision of a foreign company that performs all or part of the parent company’s functions.
- Representative Office (RO): A non-legal entity division that represents and protects the interests of the foreign parent company
Contact Us
Get in touch with the right people to get the right help in setting up your business in Uzbekistan.
enquiries@chandrawatpartners.com.