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Uzbekistan is an emerging lower-middle income economy in the middle of Central Asia. An unprecedented reform program launched in 2017 has made the country’s previously isolated and highly centralized economy more friendly to private investors and resilient to external factors. The Government of Uzbekistan (“the government” or “the GOU”) declares that its goal is to overcome underemployment and poverty including through improving the business environment. The prospects for economic transformation and the huge potential of the domestic market with a population of over 36 million are attracting increasing attention from U.S. companies.

Investors can benefit from the availability of raw materials and labor resources, direct access to the markets of all Central Asian countries, and various incentives and preferences, in some cases even including state subsidies. However, despite the ever-improving legal framework, support from the host country government continues to be an important prerequisite for business success due to weak enforcement of contracts and court decisions in the event of business disputes. Local authorities generally welcome investments that are in line with their development programs, in which infrastructure and export-oriented projects dominate.

The country historically has close trade and investment ties with Russian and China. Russia’s unprovoked and unjustified full-scale invasion of Ukraine in February 2022 and the subsequent sanctions measures imposed by the international community decreased the inflow of foreign direct investment (FDI) in 2022 by about 27% to $8 billion, of which the manufacturing industry accounted for 48% and the energy industry – 12%. Uzbekistan is not a member of either the Eurasian Economic Union (EAEU) or the Collective Security Treaty Organization (CSTO) and stays in compliance with U.S. and EU regulations. The decline in investment inflows from Russia was offset by a growing inflow of remittances. Although Russia continues to be Uzbekistan’s largest economic partner, its destructive policies are motivating the GOU and local businesses to explore new markets and develop transportation corridors that bypass sanctioned jurisdictions.

Large private investors entered the industrial, chemical, banking, tourism, and aviation sectors during the reporting period. The energy deficit caused by declining supplies of hydrocarbons and inefficient infrastructure boosted green energy development. 1000 MW in solar energy projects have already been implemented, and more are in the tender stage, attracting the interest of investors from Saudi Arabia, the United Arab Emirates, China, Japan, and Korea. The GOU’s declared goal is to generate 25-30% of its electricity from renewable energy sources by 2030 and reach net zero carbon emissions by 2050.

At the same time, in 2022 relatively little progress was made in development of long-awaited legislation on the capital/securities market, which is critical to unlock the inflow of capital from portfolio investments. Data localization requirements slowed the development of the ICT sector, although the GOU’s goal of reaching $1 billion in business process outsourcing exports in the next five years appears feasible. Intellectual property rights enforcement remains weak. Many sales of state assets to private owners did not meet international transparency standards. The GOU continues to prohibit certain expressions of speech and/or religious practice, which may impose some risks for doing business responsibly, but there are no records of foreign citizens being detained for such violations, and investors have not expressed any concerns on that matter. The leadership of Uzbekistan repeatedly declared its commitment to advance the policy of reforms. If such policies continue to advance the interests of honest private investors, Uzbekistan has the potential to become a powerful regional economy.

Table 1: Key Metrics and Rankings
Measure Year Index/Rank Website Adress
TI Corruption Perceptions Index 2022 126 of 180
Global Innovation Index 2022 82 of 132
U.S. FDI in partner country ($M USD, historical stock positions) 2021 $35 million
World Bank GNI per capita 2021 $1,960

Policies Towards Foreign Direct Investment

In recent years, the GOU has had to cope with the consequences of the global COVID-19 pandemic and a fast-changing geopolitical situation caused by Russia’s unprovoked and unjustified full-scale invasion of Ukraine. To maintain sustainable growth and tackle the fundamental problems of unemployment and poverty, the government mobilized more public funds then it had initially planned. These unexpected challenges, (and the consequent increase in public debt), has highlighted the importance of private and foreign investment (FDI). At all levels, the GOU has declared as a priority the creation of the most favorable conditions possible for investors, advertised Uzbekistan as a promising place for new investments, and promoted it as the best destination for businesses relocating from Russia and other sanctioned economies. The government also has demonstrated a desire to discuss and eliminate problems that impede the development of private sector.

The legislation of Uzbekistan, including the Law on Investments and Investment Activities, guarantees the unrestricted transfer of funds out of Uzbekistan and the protection of investments from nationalization. In 2021 the GOU created a multi-level mechanism for interaction between public authorities and investors, which includes the Ministry of Investments, Industry and Trade (MIIT), designated deputy heads of regional governments, diplomatic missions abroad, and commercial banks.

On November 16, 2022, the President of Uzbekistan discussed business environment issues with the Council of Foreign Investors – an advisory body created in 2019 to facilitate direct communication between the government and foreign investors, including U.S. companies and leading international financial institutions. At the meeting, the President of Uzbekistan committed to improve the rule of law and protection of private property, continue reforms in the banking sector, and provide more opportunities for public-private partnerships. He announced the creation of a permanent Committee for the Protection of Investors’ Rights under the Council to introduce international best practices.

The GOU has declared its ambition to double the country’s GDP over the next 10 years. To achieve this, over the next 5 years it plans to attract up to $120 billion in private investment, including $70 billion in FDI. But more remains to be done to completely unlock all the economic benefits of FDI. Investors expect more transparency in public procurement, guarantees for the enforcement of public-private contracts, and effective protection of private property and intellectual property rights. Currently local businesses also complain about excessive pressure from government agencies, which continue to exercise a disproportionately and inappropriately high level of regulatory authority. Uzbekistan is ranked 126th (of 180) in Transparency International’s Corruption Perceptions Index.

Uzbekistani officials generally welcome all kinds of foreign investment. By law, the government cannot discriminate against foreign investors based on nationality, place of residence, or country of origin. In 2022, the GOU introduced additional privileges for foreign investors in the Information Technology (IT) sector. These include lower taxes and IT-Visas – three-year long work permits with simplified extension or residence permit options.

However, the government has demonstrated a continued desire to control capital flows in major industries, encouraging investments in a preapproved list of mainly export-oriented investment projects. The National Investment Program for 2023-2025 (Presidential Resolution 459 of December 28, 2022) contains 768 projects worth $55.4 billion. Investments in import-intensive projects can generally expect very little support, according to the World Bank’s “Recommendations for National FDI Strategy and Roadmap for Uzbekistan.”

The Ministry of Investment, Industry and Trade ( , ) facilitates the registration of investment projects. The Investments Promotion Agency ( ) provides foreign investors with consulting services, information and analysis, business registration, and other legal assistance, as does the Chamber of Commerce and Industry of Uzbekistan ( ), on a contractual basis. For IT sector investors, the IT Park provides a range of business registration and other services ( ).

The GOU organizes and attends media events and joint government-business forums on a regular basis and at these events officials stress their interest in seeing new companies establish operations in Uzbekistan.

On March 24-26 the GOU hosted First International Investment Forum in Tashkent tended by over fifteen hundred participants. At the Forum, the government announced its goal to increase the share of the private sector in GDP from its current 50 percent to 80 percent by 2026. On August 22, 2022, President of Uzbekistan Shavkat Mirziyoyev met with leading investors and entrepreneurs, where, after an open discussion of business problems, he issued a decree to write off debts incurred due to changes in land and property tax rates, lower the VAT, and introduce a moratorium on new penalties against entrepreneurs. The GOU also committed to better protect private property from nationalization. On November 16, 2022, the president chaired the First Plenary Session of the Council of Foreign Investors in Uzbekistan (FIC). Created in 2019, the FIC operates as an institutional platform for direct dialogue between the GOU and over 80 representatives of foreign investors and international financial institutions. ( ).

During the reporting period, various GOU officials attended several in-person and virtual meetings with representatives of U.S. companies. In March, Deputy Secretary of Commerce Don Graves met with then Uzbekistan’s Deputy Prime Minister Sardor Umurzakov; and in October Under Secretary of Commerce for International Trade Marisa Lago traveled to Uzbekistan and discussed trade and investment issues with various senior GOU officials. U.S. business facilitation agencies and the U.S. International Development Finance Corporation (DFC) met with Uzbekistani government officials under the framework of the Strategic Partnership Dialogue in December 2022.

The Institute of the Business Ombudsperson (IBO) was created in 2017 to protect the rights and legitimate interests of businesses, assist foreign businesses in resolving emerging disputes through extrajudicial and pre-trial procedures, provide other legal support, and apply fines to violators of investor rights. According to IBO official reports, in 2022 it reviewed 9,850 complaints and resolved 48 percent of them in investor’s favor. Overall, however, the role of IBO in promoting the interests of foreign investors remains rather limited, according to the OECD’s 2021 report “Improving the Legal Environment for Business and Investment in Central Asisa.” The Law on Investments and Investment Activities (Article 32) obliges Uzbekistan’s state bodies, diplomatic missions, and consular institutions abroad to provide advisory and informational assistance to investors.

Limits on Foreign Control and Right to Private Ownership and Establishment

By law, Uzbekistan guarantees the right of foreign and domestic private entities to establish and own business enterprises, and to engage in most forms of remunerative activity. In 2022, the GOU continued measures to reduce government involvement in the economy and privatized state-owned enterprises and assets in the chemical, transportation, construction, and banking sectors. During the year, the monopolies of state-owned enterprises in the air transportation and chemical industries were eliminated in practice. The number of foreign companies in the IT sector has increased significantly due to the GOU’s policy of targeted investor preferences. In theory, private enterprises may freely establish, acquire, and dispose of equity interests in private businesses, but, in practice, the underdeveloped status of Uzbekistan’s securities markets hinders such transactions. Establishing private enterprises in some sectors can be difficult due to the prevalence of state-owned or state-supported monopolies. The state still reserves the exclusive right to export some commodities, such as nonferrous metals and minerals.

Private capital is not allowed in some industries and enterprises. The Law on Denationalization and Privatization (adopted in 1991, last amended in 2022) lists state assets that cannot be sold off or otherwise privatized, including land with mineral and water resources, the air basin (atmospheric resources in the airspace over Uzbekistan), flora and fauna, cultural heritage sites and assets, state budget funds, foreign capital and gold reserves, state trust funds, the Central Bank, enterprises that facilitate monetary circulation, military and security-related assets and enterprises, firearm and ammunition producers, nuclear research and development enterprises, some specialized producers of drugs and toxic chemicals, emergency response entities, civil protection and mobilization facilities, public roads, and cemeteries.

Foreign ownership and control of airlines, railways, long-distance telecommunication networks, and other sectors deemed related to national security requires special GOU permission. By law, foreign nationals cannot obtain a license or tax permit for individual entrepreneurship in Uzbekistan. In practice, therefore, they cannot be self-employed, and must be employed by a legally recognized entity.

According to Uzbekistan’s law, local companies with at least 15% foreign ownership can qualify as having foreign investment. The minimum fixed charter-funding requirement for a company with foreign investment is 400 million s’om (USD35,100, USD 1 equals about 11,400 s’om as of May 2023). The same requirement for companies registered in the Republic of Karakalpakstan and the Khorezm region is 200 million s’om. Minimum charter funding requirements can be different for business activities subject to licensing. For example, the requirement for banking activities is 100 billion s’om; for activities of microcredit organizations – 2 billion s’om; for pawnshops – 500 million s’om; for production of ethyl alcohol and alcoholic beverages – 10,000 Base Calculation Rates (BCR) (one BCR equals 330,000 s’om or about $29, as of March 2023); lotteries – 200 million s’om; and for tourism operators – 400 BCRs. Foreign investment in media enterprises is limited to 30%.

The GOU requires localization of personal data storage in line with the Law on Personal Data (ZRU-547), adopted on July 2, 2019. According to the law, foreign internet companies are encouraged to move their server equipment with local users’ personal data to the territory of Uzbekistan. The GOU may block services in the country in the event of non-compliance.

The government may scrutinize foreign investment, with special emphasis on sectors of the economy that it considers strategic, such as mining, energy, transportation, banking, and telecommunications. There is no standard, transparent screening mechanism, and some elements of Uzbekistan’s legal framework are expressly designed to protect domestic industries and limit competition from abroad, such as a list created in January 2021 of 529 imported items banned from the public procurement process. The basis for inclusion of items on the list was the presence of two or more domestic suppliers of similar goods and services. There are no legislative restrictions that specifically disadvantage U.S. investors.

Other Investment Policy Reviews

In December 2021, the United Nations Conference on Trade and Development (UNCTAD) published its Uzbekistan Investment Policy Review ( ). The report contains findings on Uzbekistan´s investment environment and policies and 10 recommendations for improving the climate for FDI, which address policy and administration with regard to the entry of foreign investment; regulatory and tax policy; measures to improve the competitive provision of business services; and investment promotion issues. The Organization for Economic Cooperation and Development (OECD), the World Trade Organization (WTO), and have not conducted investment policy reviews of Uzbekistan in the past five years.

International and Uzbekistan-based civil society organizations and NGOs are publishing their reports on issues related to forced labor monitoring in the cotton harvest, violation of worker’s rights, and other issues. Some of publications can be reviewed at Business & Human Rights Resource Centre ( ) and Environmental Justice Atlas ( ) resources.

Business Facilitation

The GOU has declared that business facilitation and improvement of the business environment are among its top policy priorities. Uzbekistan’s working-age population has been growing by over 200,000 people per year over the past decade. Therefore, the GOU prioritizes private businesses and joint ventures with the potential to create additional jobs and help the government address unemployment concerns. The introduction of one-window and on-line registration practices and electronic reporting systems simplified and streamlined business registration procedures. The GOU has created 23 Free Economic Zones (FEZ), as well nearly 502 special small industrial zones (SIZ) in all regions of the country to attract more FDI. New legislation has created additional tax incentives for private businesses and promised firms protection against unlawful actions by government authorities.

By legislation (effective from January 2018), foreign and domestic private investors can register their business in Uzbekistan using any Center of Government Services (CGS) facility, which operate as “Single Window” (SW) registration offices, or the Electronic Government (EG) website – . The registration procedure requires electronic submission of an application, company name or trademark, and foundation documents. The SW/EG service will register the company with relevant government agencies and local administration. The registration fee is equivalent to 20% of a BCR for local investors and 10 BCRs for foreign investors (USD290, one BCR equals 330,000 s’om, or about $29 as of May 2023). The new system has reduced the length of the registration process from several weeks to 30 minutes.

Depending on the extent of foreign participation, a business can be defined as an “enterprise with foreign capital” (EFC) if less than 15% foreign-owned, or as an “enterprise with foreign investment” (EFI) if more than 15% foreign-owned and holding a minimum charter capital of 400 million s’om (about $35,100 as of May 2023). Foreign companies may also maintain a physical presence in Uzbekistan as “permanent establishments” without registering as separate legal entities, other than with the tax authorities. A permanent establishment may have its own bank account.

Outward Investment

In general, the GOU does not promote or incentivize outward investments. Ministry of Investments, Industry, and Trade coordinates outward investments mainly in the form of bilateral economic cooperation engagements. Some state-owned enterprises invest in development of their marketing networks abroad as part of efforts to boost export sales. Private companies that operate primarily in the retail, manufacturing, transportation, construction, and textile sectors use outward investments for market outreach, to access foreign financial resources, for trade facilitation, and, in some cases, for expatriation of capital. The most popular destinations for outward investments are Russia, China, Kazakhstan, Singapore, UAE, Scotland, Turkey, and Germany.

There are no formal restrictions on outward investments. However, financial transactions with some foreign jurisdictions (such as Afghanistan, Iran, Syria, Libya, and Yemen) and offshore tax havens can be subject to additional screening by the authorities.

Uzbekistan has bilateral investment treaties (BIT) with 46 countries. In 1994, Uzbekistan signed a BIT with the United States, but it has not been ratified. Several BITs with other countries, including Belarus and South Korea, have not yet entered into force. In 2004, Uzbekistan and Russia signed a Strategic Framework Agreement with free trade and investment concessions, and an alliance agreement in 2005. Uzbekistan has signed bilateral free trade agreements with 11 former USSR countries (Russia, Belarus, Ukraine, Armenia, Azerbaijan, Georgia, Kazakhstan, Kyrgyzstan, Moldova, Turkmenistan, and Tajikistan). In 2004, Uzbekistan and Ukraine agreed to remove all bilateral trade barriers. Uzbekistan joined the CIS Free Trade Zone Agreement in 2014. In 2020, Uzbekistan assumed observer status in the Eurasian Economic Union (EAEU). In December 2015, the GOU officially announced that Uzbekistan would not join the Free Trade Zone within the Shanghai Cooperation Organization (SCO). See UNCTAD’s database for more details: .

Uzbekistan has ratified double taxation and tax evasions prevention agreements with 54 countries. The U.S. Internal Revenue Service ( ) considers Uzbekistan to be one of the former Soviet republics now covered by a taxation treaty with the Commonwealth of Independent States (CIS), as the successor to the dual taxation treaty signed between the United States and the Union of Soviet Socialist Republics (USSR) (signed in 1973 and entered into force in 1976). However, the Government of Uzbekistan argues that this agreement cannot be considered in effect and has proposed signing a new double taxation treaty. Uzbekistan officially presented a draft of a new dual taxation treaty to the U.S. government in December 2017. In 2015, Uzbekistan and the United States signed the Intergovernmental Agreement to Improve International Tax Compliance with respect to the United States Information Reporting Provisions, commonly known as the Foreign Account Tax Compliance Act (FATCA). The FATCA agreement entered into force in July 2017. Uzbekistan has not become a member of the OECD Inclusive Framework on Base Erosion and Profit Shifting (BEPS).

Reform of the taxation system, which for many years had been considered discouragingly burdensome and inadequate, was among the most desired reforms by the new administration. President Mirziyoyev first announced tax reform initiatives in 2016, and active discussions on their parameters started in 2017. The new Tax Code went into effect on January 1, 2020. The tax reform has led to a notable decrease of the tax burden to businesses and simplification of tax reporting. Key changes included: the 8% social security contributions and all mandatory payments to various state funds were abolished; zero tax rates were introduced for export profits; corporate and individual income taxes were reduced from a progressive rate of up to 24% to a single flat rate (15% for entities and 12% for individuals); the income tax rate on dividends was reduced from 10% to 5%; and the VAT tax rate also decreased from 20 to 12%.

Transparency of the Regulatory System

Uzbekistan has a substantial body of laws and regulations aimed at protecting the business and investment community. Primary legislation regulating competition includes the Law on Competition, the Law on Guarantees of the Freedoms of Entrepreneurial Activity, the Law on Private Enterprise, the Law on Investments and Investment Activities and a body of decrees, resolutions, and instructions. In late 2016, the GOU publicly recognized the need to improve and streamline business and investment legislation, which is still perceived by the business community as complicated, often contradictory, and not fully consistent with international norms. In 2020, the GOU initiated a “regulatory guillotine” policy to simplify and streamline the legislation. Since then, nearly ten thousand laws and regulations have been abolished. But this did not greatly affect the convenience of tracking legislative changes for businesses. In some cases, the government may require businesses to comply with decrees or instructions that are not publicly available. To avoid problems with tax and regulatory measures, foreign investors often secure government benefits through Presidential Decrees and GOU resolutions. These, however, have proven to be easily revocable, based on a number of recent cases.

For additional information, please review the World Bank’s Regulatory Governance assessment on Uzbekistan: .

Practices that appear as informal regulatory processes are not associated with nongovernmental organizations or private sector associations, but rather with influential local politicians or well-connected local elites.

Most rule-making and regulatory authority exists on the national level. Businesses in some regions and special economic zones can be regulated differently, but relevant legislation must be adopted by the central government and then regulated by national-level authorities.

According to the World Bank’s 2021 report “Assessing Uzbekistan’s Transition Overview,” only a few local legal, regulatory, and accounting systems are transparent and fully consistent with international norms. Although the GOU has started to unify local accounting rules with international standards, local practices are still document- and tax-driven, with an underdeveloped concept of accruals.

Uzbekistan is just beginning to develop its Environmental, Social, and Governance (ESG) regulations. In 2021, the country presented its first ever ESG report, which described the progress of ongoing reforms in various areas, such as Infrastructure for Growth, Active Governance & Strong Civil Society, and Sustainable Livelihoods. Key findings of the report include that GOU efforts to work with international NGOs on the issue of forced labor in the agricultural sector are re-positioning the country as an attractive partner for reliable textiles sourcing, and that the GOU is making efforts to reduce greenhouse gas emissions and achieve the goals of the Paris Agreement. (Uzbekistan’s ESG report can be reviewed here: ).

Parliament and GOU agencies publish some draft legislation for public comment, including draft laws, decrees and resolutions on the government’s development strategies, tax and customs regulation, resolutions of regional governments, and other legislation. Public review of the legislation is available through the website .

Uzbekistan’s laws, presidential decrees, and government decisions are available online. Uzbekistan’s legislation digest ( ) serves as a centralized online location for current legislation in effect. As of now, there is no centralized nor comprehensive online location for Uzbekistan’s legislation, similar to the Federal Register in the United States, where all key regulatory actions or their summaries are published. There are other online legislative resources with executive summaries, interpretations, and comments that could be useful for businesses and investors, including  and .

Formally, the Ministry of Justice and the Prosecutor’s Office of Uzbekistan are responsible for oversight to ensure that government agencies follow administrative processes. In some cases, however, the- U.S. business community assesses that local officials have inconsistently interpreted laws, often in a manner detrimental to private investors and the business community at large.

GOU officials have publicly suggested that improvement of the regulatory system is critical for the overall business climate. In 2021-2022, Uzbekistan adopted laws and regulations to streamline business related legislation, and abolished over nearly ten thousand laws, decrees and resolutions, which shrank the national legal framework by over 10 percent.

Regulatory reform efforts implemented in previous years, which include Presidential Decree UP-5690 “On Measures for the Comprehensive Improvement of the System of Support and Protection of Entrepreneurial Activity,” adopted in March 2019, set enforcement mechanisms for effective protection of private businesses, including foreign investors. The Law on Investments and Investment Activities, adopted in December 2019, guarantees free transfer of funds to and from the country without any restrictions. This law also guarantees protection of investments from nationalization. The GOU has implemented several additional reforms in recent years, including the currency exchange liberalization, tax reform, simplification of business registration and foreign trade procedures, and establishment of the business Ombudsperson.

The government’s development strategies include a range of targets for upcoming reforms, such as ensuring reliable protection of private property rights; further removal of barriers and limitations for private entrepreneurship and small business; creation of a favorable business environment; suppression of unlawful interference of government bodies in the activities of businesses; improvement of the investment climate; decentralization and democratization of the public administration system; and expansion of public-private partnerships.

OECD reporting and local legal analysts have indicated that previously implemented regulatory system reforms often left room for interpretation and were, accordingly, enforced subjectively. New and updated legislation continues to leave room for interpretation and contains unclear definitions. In many cases, private businesses report they still face difficulties associated with enforcement and interpretation of the legislation. More information on Uzbekistan’s regulatory system can be reviewed at the World Bank’s Global Indicators of Regulatory Governance ( ).

The Ministry of Justice and the system of Economic Courts are formally responsible for regulatory enforcement, while the Institute of Business Ombudsperson was established in May 2017 to protect the rights and legitimate interests of businesses and render legal support. The state body responsible for enforcement proceedings is the Bureau of Mandatory Enforcement under the General Prosecutor’s Office. Several GOU policy papers call for expanding the role of civil society, non-governmental organizations, and local communities in regulatory oversight and enforcement. The government also publishes drafts of business-related legislation for public comments, which are publicly available. However, the development of a new regulatory system, including enforcement mechanisms outlined in various GOU reform and development roadmaps, has yet to be completed.

Uzbekistan’s fiscal transparency still does not meet generally accepted international standards, according to the 2022 Fiscal Transparency Report for Uzbekistan.

In 2022, the GOU demonstrated very little progress in its efforts to ensure compliance with the requirements of fiscal transparency, perhaps due to the increased uncertainty of external and internal factors, which prevented the measured formation of fiscal policy. The Open Budget web portal , created to be the main source of budget-related information, provides comprehensive information on the enacted budget, its implementation with a breakdown by categories and territories, as well as the report of the Accounts Chamber (the supreme audit). However, the portal is still not fully operational. It does not provide detailed information on budget amendments adopted during the fiscal year, regional budgets, specialized funds, etc. Accountability of many government branches remained relatively low, as did the quality of their reports. According to the Anticorruption Agency of Uzbekistan, 74 ministries and nine local administrations did not publish information on public procurements (as of November 2022), in violation of the law, which establishes fines for senior GOU officials for non-disclosure of reports on the execution of budgets, off-budget funds and state trust funds, or other violations that undermine the transparency of the budget process.

In June 2022, the President signed Decree (UP-154 of June 14, 2022) on measures to increase the transparency of government agencies through monitoring and evaluating their work using rating indicators. In August 2022, the Parliament amended the Administrative Code to require stricter enforcement of liability for violating the legislation on open data, including Presidential Decree (UP-6247 of July 16, 2021) on ensuring transparency of government agencies and state-owned enterprises (SOEs). Enforcement of the legislation can be assessed in the years to come.

International Regulatory Considerations

Uzbekistan is not currently a member of the WTO or any existing economic blocs although it is pursuing WTO accession. In 2020, Uzbekistan assumed observer status in the Eurasian Economic Union. No regional or other international regulatory systems, norms, or standards have been directly incorporated or cited in Uzbekistan’s regulatory system – although GOU officials often claim the government’s regulatory system incorporates international best practices. Uzbekistan joined the CIS Free Trade Zone Agreement in 2014, but that does not constitute an economic bloc with supranational trade tariff regulation requirements.

Legal System and Judicial Independence

Uzbekistan’s contemporary legal system belongs to the civil law family. The hierarchy of Uzbekistan’s laws descends from the Constitution of the Republic of Uzbekistan, constitutional laws, codes, ordinary laws, decrees of the president, resolutions of the Cabinet of Ministers, and normative acts, in that order. Contracts are enforced under the Civil Code, the Law “About the Contractual Legal Base of Activities of Business Entities” (No. 670-I issued August 29, 1998, and last revised in 2020), and several other regulations.

Uzbekistan’s contractual law is established by the Law on Contractual Base for Businesses (Law 670-1 of 1998, last updated in 2022). It establishes the legal basis for the conclusion, execution, change, and termination of economic agreements, the rights, and obligations of business entities, and the competence of relevant public authorities and state bodies in the field of contractual relations. Economic disputes, including intellectual property claims, can be heard in the lower-level Economic Court, and appealed to the Supreme Court of the Republic of Uzbekistan. Economic court judges are appointed for five-year terms. This judicial branch also includes regional, district, town, city, Tashkent city (a special administrative territory) courts, and arbitration courts.

On paper, the judicial system in Uzbekistan is independent, but government interference and corruption are common. Government officials, attorneys, and judges often interpret legislation inconsistently and in conflict with each other’s interpretations. In recent years, for example, many lower-level court rulings have been in favor of local governments and companies which plaintiffs claimed failed to compensate them for the full market value of allegedly expropriated and demolished private property, as required under the law.

In July 2021, President Mirziyoyev approved a new Law on Courts (ZRU-703), which tightens the requirements for judicial candidates, describes the disciplinary liability of judges, and expands their socially protected status. Uzbekistan also adopted a law (ZRU-717) on reforming the Supreme Judicial Council of Uzbekistan by strengthening its independence and authority, as well as several new laws to simplify court proceedings and to improve the institutions for judicial reviews. The Law on International Commercial Arbitration (ZRU-647 adopted February 16, 2021) established the procedures for setting arbitration agreements, appointing arbitrators, and conducting arbitration proceedings. In 2020, the President ordered additional measures to eliminate corruption in the courts and ensure the independence of judges (Decree UP-6127).

Court decisions or enforcement actions are appealable though a process that can be initiated in accordance with the Economic Procedural Code and other applicable laws of Uzbekistan and can be adjudicated in the national court system.

Laws and Regulations on Foreign Direct Investment

Several laws, presidential decrees, and government resolutions relate to foreign investors. The main laws are:

Law on Investments and Investment Activities (ZRU-598, December 25, 2019)
Law on Guarantees of the Freedoms of Entrepreneurial Activity (ZRU-328, 2012)
Law on Special Economic Zones (ZRU-604, February 17, 2020)
Law on Production Sharing Agreements (№ 312-II, 2001)
Law on Concessions (№ 110-I, 1995)
Law on Investment and Share Funds (ZRU-392, 2015)
Law on Public-Private Partnership (ZRU 537, 2019)

In 2022, the GOU adopted nearly seventy laws, over three hundred presidential decrees and resolutions, thousands of government resolutions, and other judicial decisions. Significant changes for investors include reducing VAT from 15 to 12 percent, as well as formalizing the rules of e-commerce and cybersecurity. Otherwise, the new legislation has not impacted the investment environment as it was mainly focused on reforming the government branches and the activities of local administrations.

New legislation that could affect foreign investors includes:

The Law on the State Budget for 2023, (ZRU-813, of December 31, 2022). Subsequent laws made amendments in the Tax Code and other regulations.

The Law on Electronic Commerce (ZRU-792 of September 29, 2022). The law allows online contracts, which now have equivalent legal status with paper documents. Operators of marketplaces and payment services, as well as delivery services, received the right to provide the service of escrow accounts.

The Law on Tax Consulting Activities (ZRU-787 of August 4, 2022). The law expands the types of tax consulting services and establishes the independence of consultants.

The Law on Advertising (ZRU-776 of June 7, 2022). The law establishes new requirements for the language of advertisement content: registered trademarks and logos can be given in the language of origin, but the content of the advertisement must be in Uzbekistan’s official language. The law prohibits using foreign words and expressions that can indicate prices (tariffs) in foreign currencies.

The Law on Cybersecurity (ZRU-764 of April 15, 2022). The law defines cybercrime, cyberspace, cyber threat, cyber security, cyber defense, and cyber-attack. The State Security Service of Uzbekistan became the authorized state body responsible for cybersecurity. The law also establishes the priority of local sourcing for goods and services procured by the public sector for maintaining cybersecurity measures.

The Law on Insolvency (ZRU-763 of April 12, 2022). The law regulates debt repayment and bankruptcy procedures for entities, individual entrepreneurs, and individuals, but does not apply to state institutions. It replaces the Law on Bankruptcy of 1994.

Presidential Decrees on Measures to Support Exports (UP-97 of April 6, 2022, and UP-268 of December 21, 2022). The Decree says that local businesses exporting products with high added value can get state subsidies to compensate 70 percent of their transportation costs for the countries of the European Union, and 50 percent for neighboring countries. Exporters of fabrics and knitted products to European countries, Turkey, Egypt, and Morocco also may apply for subsidies to cover 70 percent of transportation costs.

Presidential Resolution on Measures to Improve Business Inspection Procedures (PP-374 of September 13, 2022). The Resolution established new rules for inspecting businesses, including 10 working days advance notification of the inspection, coordination of control actions with Business Ombudsperson, inspection recording requirements, etc.

As of now, there is no real “one-stop-shop” website for investors that provides relevant laws, rules, procedures, and reporting requirements in Uzbekistan. In December 2018, the GOU created a specialized web portal for investors called Invest Uz ( ), which provides some useful information. The website of the Ministry of Industry, Investments and Trade ( ) offers some general information on laws and procedures, but mainly in the Uzbek and Russian languages.

Competition and Antitrust Laws

Competition and anti-trust legislation in Uzbekistan is governed by the Law on Competition (ZRU-319 of 2012). The main entity that reviews transactions for competition-related concerns is the State Competition Promotion and Consumers Protection Committee (established in January 2019 and reorganized in 2022). This government agency is responsible for advancing competition, controlling the activities of natural monopolies, protecting consumer rights, and regulating the advertising market. There were no significant competition-related cases involving foreign investors in 2022.

Expropriation and Compensation

Private property is protected against baseless expropriation by legislation, including the Law on Investments and Investment Activities and the Law on Guarantees of the Freedoms of Entrepreneurial Activity. Despite these protections, however, the government potentially may seize foreign investors’ assets due to violations of the law or for allegedly arbitrary reasons, including, as reported by investors, a unilateral revision of an investment agreement, a reapportionment of the equity shares in an existing joint venture with an SOE, or in support of a public works or social improvement project (similar to an eminent domain seizure). By law, the government is obligated to provide fair market compensation for seized property, but many who have lost property allege the compensation has been significantly below fair market value.

Profitable, high-profile foreign businesses have reported more instances of alleged expropriation, but smaller companies are also impacted. Under the previous administration, large companies with foreign capital in the food processing, mining, retail, and telecommunications sectors claimed the government expropriated their property. In cases where the property of foreign investors is expropriated for arbitrary reasons, the law obligates the government to provide fair compensation in a transferable currency. However, in most cases the private property was expropriated based upon court decisions after the owners were convicted for breach of contract, failure to complete investment commitments, or other violations, making them ineligible to claim compensation.

Decisions of Uzbekistan’s Economic Court on expropriation of private property can be appealed to the Supreme Court of the Republic of Uzbekistan in accordance with the Economic Procedural Code or other applicable local law. Some foreign investors have characterized the process as slow, unpredictable, non-transparent, and lacking due process.

There were several cases in recent years when investors claimed the government imposed excessive import controls for the supplies of enterprises with foreign investment, which the investors alleged to be measures applied for indirect expropriation.

Dispute Settlement

ICSID Convention and New York Convention

Uzbekistan is a member of the International Center for the Settlement of Investment Disputes (ICSID) and a signatory to the 1958 UN Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention).

By law, foreign arbitral awards or other acts issued by a foreign country can be recognized and enforced if Uzbekistan has a relevant bilateral or multilateral agreement with that country. According to the new Law on International Commercial Arbitration, the arbitral award, regardless of the country in which it was made, is recognized as binding, and must be enforced upon submission of a written application. Implementation of the law shall be in full compliance with existing bilateral agreements of Uzbekistan with foreign states and multilateral agreements.

Investor-State Dispute Settlement

Dispute settlement methods are regulated by the Economic Procedural Code, the Law on Arbitration Courts, and the Law on Contractual Basics of Activities of Commercial Enterprises. The Law on Guarantees to Foreign Investors and Protection of their Rights requires that involved parties settle foreign investment disputes using the methods they define themselves, generally in terms predefined in an investment agreement. Investors are entitled to use any international dispute settlement mechanism specified in their contracts and agreements with local partners, and these agreements should define the methods of settlement.

The Law on Guarantees to Foreign Investors and Protection of their Rights permits resolution of investment disputes in line with the rules and procedures of the international treaties to which Uzbekistan is a signatory, including the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, the 1992 CIS Agreement on Procedure for Settling Disputes Arising Out of Business Activity, and other bilateral legal assistance agreements with individual countries. Currently there is no such bilateral treaty that covers U.S. citizens.

If the parties fail to specify an international mechanism, Uzbekistan’s economic courts can settle commercial disputes arising between local and foreign businesses. The economic courts have subordinate regional and city courts. Complainants may seek recognition and enforcement of foreign arbitral awards pursuant to the New York Convention through the economic courts. When the court decides in favor of a foreign investor, the Ministry of Justice is responsible for enforcing the ruling.

Currently Uzbekistan does not have a ratified Bilateral Investment Treaty (BIT) or a Free Trade Agreement (FTA) with an investment chapter with the United States. The governments of the United States and Uzbekistan signed a BIT in 1994, but ratification documents have not been exchanged and the agreement never entered into force.

Since the GOU launched reforms aimed at improving the business environment, investment disputes have been more limited in scope, but still exist, including several long-unresolved investment disputes involving U.S. companies.

Post is aware of many commercial or investment disputes involving foreign investors which occurred nearly a decade ago. These included alleged asset seizures, expropriations, or liquidations; lengthy forced production stoppages; pressure to sell off foreign shares in joint ventures; and failure to honor contractual obligations. These cases involved a variety of sectors, including food production, retail, catering, mining, telecommunications, agriculture, and chemicals. Although government actions in such cases were taken under the guise of law enforcement, some observers have claimed arbitrary or extralegal motives were involved.

By the Law on International Commercial Arbitration, which entered into force in August 2021, foreign arbitral awards, including those issued against the government, regardless of the country in which it was made, are recognized as binding, and must be enforced upon written application to the court. Foreign arbitral awards or other acts issued by a foreign country also can be recognized and enforced if Uzbekistan has a relevant bilateral or multilateral agreement with that country. If international arbitration is permitted, awards can be challenged in domestic courts.

Although in many cases investor-state disputes in Uzbekistan were associated with immediate asset freezes, almost all of them were followed by formal legal proceedings.

International Commercial Arbitration and Foreign Courts

Alternative dispute resolution institutions of Uzbekistan include arbitration courts (also known as Third-Party Courts), and specialized arbitration commissions. Businesses and individuals can apply to arbitration courts only if they have a relevant dispute-settlement clause in their contract or a separate arbitration agreement. The Civil Procedural Code and the Commercial Procedural Code also have provisions that regulate arbitration. The Law on International Commercial Arbitration, drafted in late 2018 entered into force in August 2021. It states that contractual and non-contractual commercial disputes can be referred to international commercial arbitration by agreement of the parties. The parties can determine the number of arbitrators and the language or languages that can be used in the arbitration. The interim measure prescribed by the arbitration court shall be recognized as binding. The award must be made in writing.

The main domestic arbitration body is the Arbitration Court. General provisions of the Law on Arbitration Courts are based on principles of the UNCITRAL model law, but with some national specifics – namely that Uzbekistani arbitration courts cannot make reference to non-Uzbekistani laws. According to the Law, parties of a dispute can choose their own arbiter and the arbiter in turn choses a chair. The decisions of these courts are binding. The Law says that executive or legislative bodies, as well as other state agencies, are barred from creating arbitration courts and cannot be a party to arbitration proceedings. Either party to the dispute can appeal the verdict of the Arbitration Court to the general court system within thirty days of the verdict. Separate arbitration courts are also available for civil cases, and their decisions can be appealed in the general court system. Arbitration courts do not review cases involving administrative and labor/employment disputes.

The Tashkent International Arbitration Center (TIAC) under the Chamber of Commerce and Industry of Uzbekistan was created in late 2019 as a non-governmental non-profit organization. The main function of this organization is to facilitate dispute resolution for businesses, including foreign investors. The Center may employ qualified arbitration lawyers, both local and foreign. The Center has the right to resolve disputes through mediation or other alternative methods permitted by the law.

The Law on International Commercial Arbitration was approved by Parliament in 2020, signed by the president in February 2021, and entered into force in August 2021 (ZRU-674). According to the law, the arbitral award, regardless of the country in which it was made, is recognized as binding, and must be enforced upon submission of a written application. Implementation of the law shall be in full compliance with existing bilateral and multilateral agreements of Uzbekistan with foreign states.

Most investment disputes involving Uzbekistan’s state-owned enterprises (SOEs) brought into Uzbekistan’s courts have either been decided in favor of the SOEs or have been settled out of court. When the court decides in favor of a foreign investor, the Ministry of Justice is responsible for enforcing the ruling. In some cases, the Ministry’s authority is limited and co-opted by other elements within the government. Judgments against SOEs have proven particularly difficult to enforce.

Bankruptcy Regulations

The Law on Insolvency regulates bankruptcy procedures. By the law, both the debtor and creditors can initiate the insolvency case through court. The court has 2 months to review the case, but this term can be extended by another month in certain circumstances. The applicant must pay a court fee at seven minimum wages (one minimum wage is 920,000 s’oum or $81 as of March 2023) to the court’s deposit account. This amount shall be added to the claim. The interests of creditors can be represented by committees of creditors. After filing the court case, the creditor cannot apply to the debtor directly. Monetary judgments are usually made in local currency. An insolvent entity may initiate a pre-trial sanitation process by notifying the founders and creditors. For the period of pre-trial rehabilitation, the entity would be exemption from paying taxes, fines, penalties for back taxes, other mandatory payments, and loans repayments. It also has the right to change the profile of its business, buy out overdue debts, or attract financial assistance. In some cases, the debtor may apply for state support. Bankruptcy itself is not criminalized except false bankruptcy, non-disclosure of bankruptcy, and premeditated bankruptcy cases.

Investment Incentives

All investment incentives to foreign investors are regulated by national level legislation, which can be adopted only by the president. Regional and local governments have limited authorities to offer any additional preferences. Exceptions can be made for tax incentives granted by special government resolutions or presidential decrees. By the new Tax Code, the GOU may provide holidays for land taxes, property taxes and water use taxes to some companies with foreign direct investments on a case-by-case basis. The GOU has initiated various programs to support businesses owned by underrepresented investors as part of efforts to reduce unemployment. These programs included government sponsored business and financial literacy trainings and co-financing of startups. About $180 million in government funding was allocated to women-owned startups in 2021-2022. This program, however, cannot be used to support underrepresented foreign investors.

The Law on Investments and Investment Activities (ZRU-598, December 25, 2019) provides a range of general guarantees to foreign investors, including protection against the illegal interference of local authorities in their activities; protects them from any discrimination or unjustified nationalization; and ensures the right to use, transfer, and repatriate funds and capital. The law also provides guarantees for the protection of investors from any business environment deterioration due to legislation changes. ( ).

In some cases, the GOU may issue investment guarantees to certain foreign or local investors if it finds the project worthy of such support. The current legislation also allows the GOU to provide joint financing of FDI funded projects. Such joint financing can be provided under public-private-partnership (PPP) agreement framework, or through involvement of the Uzbekistan Direct Investments Fund ( ) and the Fund for Reconstruction and Development of Uzbekistan. In all cases, however, a special GOU resolution is required.

The GOU set an ambitious goal to raise the share of renewable energy generation to 25-30 percent by 2030. To stimulate private investors, the Parliament approved the Law on Renewable Energy (ZRU-539, May 21, 2019). It provides a range of tax and other incentives for renewable energy sector businesses. Renewable energy producers get ten-year relief from paying property and land tax (applied only for energy generation facilities with a nominal power of 0.1 MW and above). Individuals that invest in renewable energy also may enjoy three-year property and land tax relief for facilities equipped with energy generators. Private investors also have a preferential right to sell the energy they generate to state-owned companies at a negotiated price.

Foreign Trade Zones/Free Ports/Trade Facilitation

The first law on free economic zones in Uzbekistan appeared in 1996. After dozens of modifications, in February 2020 it was finally replaced by the Law on Special Economic Zones (SEZ) (ZRU-604), which entered into force May 19, 2020 (the text is available in English: ). The law provides the following classification of special economic zones:

Free Economic Zone (FEZ) – territory allocated for the construction of new high-tech, competitive, import-substituting, and export-oriented industrial production capacities, and for development of industrial, engineering, telecommunications, road, and social infrastructure, as well as appropriate logistics services.

Special Scientific and Technological Zone – territory allocated for the development of innovation infrastructure by scientific and science-related organizations, including technology parks, technology distribution/transfer centers, innovation clusters, venture funds, and business incubators.

Tourist-Recreational Zone – territory allocated for tourism infrastructure development investment projects, including construction of hotels, cultural and recreational facilities, and functional and seasonal recreation areas.

Free Trade Zones – territories for consignment warehouses, areas of special customs and tax regimes, facilities at border crossing points for processing, packing, sorting, storing goods, airports, railway stations or other custom control sites.

Special Industrial Zone – territory with special economic and financial regulations of production and logistical business activities.

According to the new Law of SEZ (Article 39) and the Tax Code (Article 473), investors to special economic zones of Uzbekistan may expect:

Holidays for paying income tax. The length of the tax holiday depends on the size of investment: three years for $3-5 million; five years for $5-15 million; and ten years for over $15 million. The period of the income tax holiday starts from the date of launching commercial operation of the production/service facility within the territory of a SEZ.

Holidays for paying property taxes, land taxes, and taxes for the use of water resources. The term of the holiday shall be determined by the size of investments. Such tax holidays can be applied only to business activities stipulated in the relevant investment agreement with the administration of a special economic zone. Participants of special economic zones also may get some VAT exemptions and other tax benefits.

Exemption from paying customs payments (except for value added tax and customs clearance fees) for construction materials that cannot be sourced locally; technological equipment that cannot be sourced locally, raw materials, materials and components used to produce export-oriented output.

The following activities are prohibited within the SEZs:

Businesses that violate environmental and labor protection standards.

Businesses related to weapons and ammunition.

Businesses related to nuclear materials and radioactive substances.

Production of alcohol and tobacco products.

Rawhide processing, livestock corrals, or slaughter of animals.

Production of cement, concrete, cement clinker, bricks, reinforced concrete slabs, coal, lime and gypsum products.

Processing, decomposition, incineration, gasification, chemical treatment, final or temporary storage or burial underground of all types of waste.

Placement of oil refineries, nuclear power plants, nuclear installations, or radiation sources, or points and installations designed for storage, disposal, and processing of nuclear fuel, radioactive substances, and waste, as well as other radioactive waste.

The first Free Industrial and Economic Zone (FIEZ) was created in 2008 in the Navoi region. By the end of 2022, the GOU had created 19 large and nearly 700 small industrial zones with over 3,700 registered companies.

Performance and Data Localization Requirements

The government welcomes foreign investors mainly in the areas of localization, building local production capacities, and developing export potential. To support local producers, the GOU introduced a rule (Presidential Decree UP-4812 of 2020 and GOU Resolution PKM-41 of 2021), which says import contracts of enterprises and joint ventures with at least a 50% state share exceeding 50,000 BCRs ($1,330,000 as of March 2023) are subject to mandatory review by the supervisory boards of these entities on a quarterly basis. The government also bans import of 529 categories of goods and certain services through public procurement processes. The basis for inclusion of items to the list was the presence of two or more domestic suppliers of similar goods and services. It currently includes food products, construction materials, fertilizers, industrial products, textile and clothing products, footwear and leather goods, furniture, household goods, household electrical appliances, vehicles, paper and cellulose products, and medical products. The GOU also has established a procedure for public procurement of these imported goods through the website of the Center for Electronic Cooperation Portal ( ).

Uzbekistan’s legislation stipulates that the government must apply requirements to use domestic inputs in manufacturing uniformly to enterprises with domestic and foreign investments, but in practice, this is not always the case. There are no requirements for using only local sources of financing.

To qualify as an enterprise or business with foreign investment and be eligible for tax and other incentives, the share of foreign investment must be at least 15% of the charter capital of a company. The investment must consist of hard currency or new equipment, delivered within one year of registering the enterprise. The minimum requirements for charter capital for incentives (except financial institutions) is 400 million s’om (about $35,400 as of March 2023).

Tax incentives for foreign investment are essentially the same as for local enterprises participating in an investment, localization, or modernization program. Enterprises with significant investment in priority sectors or registered in one of free economic or special industrial zones can expect additional benefits.

In 2021, the GOU introduced a new personal data localization requirement (Law ZRU-666 of January 14, 2021).  The law requires the processing (collecting, systematizing, and storing) of all personal data of Uzbekistani citizens to physically occur in Uzbekistan, as well as the domestic registration of such databases.  The requirements may complicate the business of international technology and online commerce companies wanting to use existing cloud-based solutions or servers located outside of Uzbekistan.

As of now, the legislation of Uzbekistan prevents or restricts companies from freely transmitting customer or other business-related data outside the country.

Transfers of technology or proprietary information are not required by the law and can be the subject of an agreement between the foreign investor and its local partner.

Real Property

Property ownership is governed by the Law on Protection of Private Property and Guarantees of the Owner’s Rights. Uzbekistani and foreign entities may own or lease buildings, but not the underlying land. Mortgages are available for local individuals only, but not for legal entities. There are no mortgage lien securities in Uzbekistan.

The new Law on Privatization of Non-agricultural Land Plots (ZRU-522, August 13, 2019) allows private land ownership for plots that do not fall under the definition of agricultural land by the Land Code of Uzbekistan. Land ownership is granted only to entities and individuals who are residents of Uzbekistan. Foreign citizens and entities do not have land property rights in Uzbekistan. Uzbekistan residents can privatize:

Land plots of entities, on which their buildings, structures and industrial infrastructure facilities are located, as well as the land extensions necessary for their business activities;
Land plots provided to citizens for individual housing construction and maintenance;
Unoccupied land plots;
Land plots allocated to the Urban Development Fund.

The following types of land cannot be privatized:

Land plots located in territories that are not covered by officially documented layout plans.
Land plots that contain mineral deposits or state property of strategic importance. The list of such land plots shall be specified by appropriate legislation.
Land plots reserved for environmental, recreational, and historical-cultural purposes, state owned land and water resources, and public areas of cities and towns (e.g. squares, streets, roads, boulevards).
Land plots affected by hazardous substances or susceptible to biogenic contamination.
Land plots provided to residents of special economic zones.

Land privatization is a new concept for Uzbekistan. All agricultural land in Uzbekistan is still owned by the state. As of March 1, 2020, a new law on privatization allows for the privatization of non-agricultural land plots.

Legislation governing the acquisition and disposition of immoveable property (buildings and facilities) poses relatively few problems for foreign investors and is similar to laws in other CIS countries. Immoveable property ownership is generally respected by local and central authorities. District governments have departments responsible for managing commercial real estate issues, ranging from valuations to sale and purchase of immoveable property. Legally purchased but unoccupied immoveable property can be nationalized for several reasons, including by an enforcement process of a court decision, seizure for past due debts on utility or communal services, debts for property taxes, and, in some cases, for security considerations. Unauthorized takeover of unoccupied immoveable property by other private owners (squatters) is not a common practice in Uzbekistan. Usually, authorities inspect the legitimacy of immoveable property ownership at least once every year.

Intellectual Property Rights

Uzbekistan has been on the Watch List of the U.S. Trade Representative’s (USTR) Special 301 Report since 2000.  President Mirziyoyev issued a national strategy for IP development in 2022, appearing to signal continued, high-level political will for improvement. However, effective enforcement policies are still not in place.

The country is not listed in USTR’s 2022 Review of Notorious Markets for Counterfeiting and Piracy.

The GOU increasingly recognizes intellectual property rights (IPR) protections as critical to its economic goals and its accession to the World Trade Organization (WTO). Parliament continues to pass legislation bringing IPR protections in line with international standards, including 2022 legislation granting customs officials ex-officio authority and a law on geographical indications. Responsibility for IPR issues lies with the IP Department. Formerly the Agency for Intellectual Property, the body was incorporated into the Ministry of Justice (MOJ) in February 2019, where it operated as a semi-independent agency before becoming a department of the MOJ by presidential decree in March 2022 (

Uzbekistan’s Customs Code (which came into force on April 22, 2016) allows rights holders to control the importation of intellectual property goods.  The Code introduced a special Customs Record procedure, which is based on a database of legal producers and their distributors. An April 2022 presidential decree introduced a limited form of ex-officio authority, granting customs officials authority to suspend potentially infringing goods at the border for up to 24 hours while confirming shipment details with the rights holders. Uzbekistan’s parliament is considering additional ex-officio legislation. Uzbekistan adopted legislation on geographical indications in March 2022, which certify the origin of a product in cases where the production location confers an essential quality to that product (e.g., champagne can only come from France’s Champagne region; anything else is sparkling wine).

Uzbekistan’s legal framework for patent and copyright protections is generally sufficient, but enforcement remains one of the biggest IP challenges.  Foreign companies face obstacles proving IP violations and receiving compensation for losses sustained due to violations.  IP violators are rarely obligated to cease infringing activities or pay meaningful penalties. President Mirziyoyev introduced Intellectual Property Protection Centers (IPPCs) by presidential decree in 2021, to bolster enforcement efforts. In 2022, the GOU confiscated over $3.5 million worth of infringing or substandard goods, with another $3.4 million seized and destroyed by customs officials. The GOU estimates it removed $275,000 worth of counterfeit pharmaceuticals from the market by introducing stricter product validation requirements for producers and retailers. However, local IP lawyers report that the GOU has limited authority to challenge trademark infringement by individual persons. As a result, determined counterfeiters can skirt the law by operating without a registered business.

Foreign companies are often reluctant to begin legal proceedings because of the time and cost, reputational risk, and uncertain outcome. Trademark cases often take years to settle in the courts, with judges frequently siding with the local infringer over the foreign brand. Furthermore, companies express concern that public proceedings, even if justified, pose a reputational risk to their brand.

While Uzbekistan took important steps in 2018-2022 to address longstanding issues pertaining to IPR, there remain serious deficiencies in trademark and copyright protections, judicial processes related to IPR, and enforcement of actions against IPR violations and violators.

On February 2, 2022, President Mirziyoyev signed a law (ZRU-749) imposing fines for infringement of intellectual property rights. Under the law, the unauthorized manufacture, use, import, sale, and other introduction into civil circulation of a product containing the relevant patented intellectual property is subject to a fine (from 100 to 200 BCRs, or up to $5,300 as of March 2023.) The same liability is introduced for the unauthorized use of a patented manufacturing method or circulation of a product manufactured in such way. The legislation on trademarks and brand names was also tightened with similar penalties. However, local lawyers note that the enforcement of these laws has been complicated by the provisions of a Presidential Resolution with new rules for inspecting businesses (PP-374 of September 13, 2022), which says that the authorities must notify business entities of inspections no later than 10 working days in advance and coordinate these actions with the Business Ombudsperson.

On January 13, 2022, Uzbekistan joined the Marrakesh Treaty to Facilitate Access to Published Works for Persons Who Are Blind, Visually Impaired, or Otherwise Print Disabled. Presidential Resolution on Measures to Improve the Objects of Intellectual Property (PR-4965 January 28, 2021) ordered the creation of a network of Intellectual Property Protection Centers (IPPCs) to combat counterfeiting. The GOU reports IPPCs took 357 preventive measures, resulting in the detection of over 1,000 counterfeit goods in 2022. In April 2018, the GOU provided greater authority to a new Inspectorate under the Ministry of Digital Technologies to monitor compliance and enforce copyright protections on the internet.

Uzbekistan continues the accession process for other international treaties and agreements, including the International Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organizations (Rome, October 26, 1961); Singapore Treaty on the Law of Trademarks (Singapore, March 27, 2006); and Geneva Act of the Hague Agreement Concerning the International Registration of Industrial Designs (Geneva, July 2, 1999).  The GOU is also working on amendments to national legislation to bring it in line with the requirements of international IPR Treaties.  These measures represent the necessary short-term actions for Uzbekistan to maintain its benefits under the U.S. Generalized System of Preferences (GSP).  The full list of IPR-related international agreements/treaties that Uzbekistan has acceded to is available here: .

There are no publicly available reports on seizures of counterfeit goods.  According to the IP Department, in 2022 local authorities initiated 570 criminal and 2,000 administrative cases on IPR violations. While the GOU did not provide disaggregated data for infringing and substandard goods, it confiscated $3.5 million of goods within Uzbekistan and seized another $3.4 million at customs. The GOU also estimates that it confiscated and destroyed an additional $114,000 of counterfeit laundry detergents and perfumes. Additionally, in 2022 the GOU issued its first financial penalty ($5,500) for producing counterfeit medicine.  During 2022, the courts heard 302 IP-related cases, of which 17 were civil, 59 administrative, 32 economic, and 194 criminal. U.S. companies were party to seven cases (five economic and two administrative).

Under current Uzbekistani law, the court considers copyright infringement cases only after the copyright holder submits a claim of damages.  The Prosecutor General’s Office (PGO) has the authority to both penalize violators and order them to desist from producing, marketing, or selling infringing goods, but few cases ever make it to the PGO.  The burden of proving an IP violation is so high that most cases never leave the Antimonopoly Committee or the administrative court system.  While these cases are stalled in the court system, infringing companies often continue to operate without restrictions.

Resources for Rights Holders:

Dorian Mazurkevich
Intellectual Property Attaché
U.S. Patent and Trademark Office
U.S. Department of Commerce 

For additional information about national laws and points of contact at local IP offices, please see WIPO’s country profiles at 

Capital Markets and Portfolio Investment

Prior to 2017, the government focused on investors capable of providing technology transfers and employment in local industries and had not prioritized attraction of portfolio investments. The first plans to improve the capital market and use stock market instruments to meet its economic development goals were announced in 2017. In April 2021, the government created a Department for Capital Market Development under the Ministry Economy and Finance. Currently the Department is drafting the Law on Capital Market. The U.S. Government is supporting the Ministry of Economy and Finance through a technical assistance program led by the U.S. Department of the Treasury.

Uzbekistan has its own stock market, which supports trades through the Republican Stock Exchange “Tashkent,” Uzbekistan’s main securities trading platform and only corporate securities exchange ( ). The stock exchange mainly hosts equity and secondary market transactions with shares of state-owned enterprises. In most cases, government agencies determine who can buy and sell shares and at what prices, and it is often impossible to locate accurate financial reports for traded companies.

Uzbekistan formally accepted IMF Article VIII in October 2003, but due to excessive protectionist measures of the government, businesses had limited access to foreign currency, which stimulated the grey economy and the creation of multiple exchange rate systems. Effective September 5, 2017, the GOU eliminated the difference between the artificially low official rate and the black-market exchange rate and allowed unlimited non-cash foreign exchange transactions for businesses. The Law on Currency Regulation (ZRU-573 of October 22, 2019) fully liberalized currency operations, current cross-border, and capital movement transactions.

In 2019, the GOU considerably simplified repatriation of capital invested in Uzbekistan’s industrial assets, securities, and stock market profits. According to the law (ZRU-531), foreign investors that have resident entities in Uzbekistan can convert their dividends and other incomes to foreign currencies and transfer them to their accounts in foreign banks. Non-resident entities that buy and sell shares of local companies can open bank accounts in Uzbekistan to accumulate their revenues.

Under the law, foreign investors and private sector businesses can have access to various credit instruments on the local market, but the still-overregulated financial system yields unreliable credit terms. Access to foreign banks is limited and is usually only granted through their joint ventures with local banks. Commercial banks, to a limited degree, can use credit lines from international financial institutions to finance small and medium sized businesses.

Money and Banking System

As of January 2022, 31 commercial banks operated in Uzbekistan. 11 commercial banks are fully or partially state-owned, and 20 banks are private, including seven banks with foreign capital. Commercial banks have 690 branches, a network of exchange offices and ATMs throughout the country. State-owned banks hold 78% of banking sector capital and banking sector assets, leaving privately owned banks as relatively small niche players. The nonbanking sector is represented by 84 microcredit organizations and 80 pawn shops.

Major reformation of the banking sector began in 2017. Notable progress was achieved in liberalization of many banking services, including current import transactions and currency conversion. The goals of the GOU’s 2020-2025 banking sector reform policy include reducing the state share the current 78% to 40%. Two out of a planned six state-owned banks were privatized in 2022. The remaining state-owned banks continued the adoption of advanced corporate governance practices with the assistance of various international financial organizations and experts.

S&P, Fitch, and Moody’s rate the banking sector of Uzbekistan as stable and posing limited near-term risks, primarily due to the high concentration and domination of the public sector. The average rate of capital adequacy within the system is 17.8 percent, and the current immediate liquidity rate is 110.1 percent. The growing volume of state-led investments in the economy supports the stability of larger commercial banks, which often operate as agents of the government in implementing its development strategy. S&P Global expects slowing of credit growth from nearly 30 percent in 2020 to 15-18 percent by 2024 due to more stringent regulatory requirements and increased uncertainty. In January 2023, Moody’s Investors Service published its rating on seven Uzbekistan banks following the change of outlook on the GOU’s long-term issuer rating to Ba3 from B1, the senior unsecured MTN program ratings to (P)Ba3 from (P)B1, changed the outlook to stable from positive, and raising of the country’s local and foreign currency ceilings to Ba1 and Ba3 from Ba2 and B1, respectively. The government and the Central Bank of Uzbekistan (CBU) still closely monitor commercial banks.

According to the CBU, the share of nonperforming loans out of total gross loans is 3.6 percent (as of January 1, 2023). The average share of nonperforming loans in state-owned banks is 3.9 percent and 2.1 percent in private banks. A majority of Uzbekistan’s commercial banks have earned “stable” ratings from international rating agencies.

As of January 1, 2023, the banking sector’s capitalization was about $7.1 billion, and the value of total banking assets in the whole country was equivalent to about $50 billion. The four largest state-owned banks – the National Bank of Uzbekistan, Agrobank, Asaka Bank, and Uzpromstroybank – hold 50.5 percent of the banking sector’s capital ($3.6 billion) and 55.7 percent of the assets ($25.7 billion).

Uzbekistan maintains a central bank system. The Central Bank of Uzbekistan is the state issuing and reserve bank and central monetary authority. The bank is accountable to the Supreme Council of Uzbekistan and is independent of the executive bodies (the bank’s organization chart is available here: ).

In general, any banking activity in Uzbekistan is subject to licensing and regulation by the Central Bank of Uzbekistan. Foreign banks often feel pressured to establish joint ventures with local financial institutions. Currently there are seven banks with foreign capital operating in the market, and eight foreign banks have accredited representative offices in Uzbekistan, but do not provide direct services to local businesses and individuals. Information about the status of Uzbekistan’s correspondent banking relationships is not publicly available.

Foreigners and foreign investors can establish bank accounts in local banks without restrictions. They also have access to local credit, although the terms and interest rates do not represent a competitive or realistic source of financing.

Foreign Exchange and Remittances

Foreign Exchange

Uzbekistan adopted Article VIII of the IMF’s Articles of Agreement in October 2003, but full implementation of its obligations under this article began only in September 2017. In accordance with new legislation (ZRU 531 of March 2019 and ZRU-573 of October 2019), all businesses, including foreign investors, are guaranteed the ability to convert their dividends and other incomes in local currencies to foreign currencies and transfer to foreign bank accounts for current cross-border, dividend payments, or capital repatriation transactions without limitations, provided they have paid all taxes and other financial obligations in compliance with local legislation. Uzbekistan authorities may stop the repatriation of a foreign investor’s funds in cases of insolvency and bankruptcy, criminal acts by the foreign investor, or when so directed by arbitration or a court decision.

The exchange rate is determined by the CBU, which insists that it is based on free market forces (11,300 s’om per one U.S dollar as of March 2023). On February 15, 2021, trade sessions at the local FX Exchange transferred from the previous “fixing” methods to the combination of “call auction” and bilateral continuous auctions (“matching”). The CBU publishes the official exchange rate of foreign currencies at 16:00 every business day for accounting, statistical and other reporting purposes, as well as for the calculation of customs and other mandatory payments in the territory of Uzbekistan.

After the almost 50 percent devaluation of the national currency in September 2017, the exchange rate had been relatively stable in 2018 with an average of 2.4 percent annual devaluation. In 2019, the devaluation of s’om accelerated to 14 percent, although the CBU reported it had made $3.6 billion in interventions in the forex market to support the local currency. The annual devaluation was 3.4 percent in 2021, and 3.6 percent in 2022. The local currency’s relative stability in 2021-2022 was supported by increased external revenues (primarily remittances) and strong FX reserves ($35.7 billion by January 1, 2023).

Remittance Policies

President Mirziyoyev launched foreign exchange liberalization reform in September 2017 by issuing a decree “On Priority Measures for Liberalization of Monetary Policy.” The Law on Currency Regulation (ZRU-573), adopted on October 22, 2019, has liberalized currency exchange operations, current cross-border, and capital movement transactions. Business entities can purchase foreign currency in commercial banks without restrictions for current international transactions, including import of goods, works and services, repatriation of profits, repayment of loans, payment of travel expenses and other transfers of a non-trade nature.

Banking regulations mandate that the currency conversion process should take no longer than one week. In 2022, businesses reported that they observed no delays with conversion and remittance of their investment returns, including dividends; return on investment, interest, and principal on private foreign debt; lease payments; royalties; and management fees.

Sovereign Wealth Funds

The Fund for Reconstruction and Development of Uzbekistan (UFRD) serves as a sovereign wealth fund. Uzbekistan’s Cabinet of Ministers, the Ministry of Economy and Finance, and the five largest state-owned banks were instrumental in establishing the UFRD, and all those institutions have membership on its Board of Directors.

The fund does not follow the voluntary code of good practices known as the Santiago Principles, and Uzbekistan does not participate in the IMF-hosted International Working Group on sovereign wealth funds. The GOU established the UFRD in 2006, using it to sterilize and accumulate foreign exchange revenues, but officially the goal of the UFRD is to provide government-guaranteed loans and equity investments to strategic sectors of the domestic economy.

The UFRD does not invest, but instead provides debt financing to SOEs for modernization and technical upgrade projects in sectors that are strategically important for Uzbekistan’s economy. All UFRD loans require government approval.

State-owned enterprises (SOEs) dominate those sectors of the economy recognized by the government as being of national strategic interest. These include energy (power generation and transmission, and oil and gas refining, transportation, and distribution), metallurgy, mining (ferrous and non-ferrous metals and uranium), telecommunications (fixed telephony and data transmission), machinery (the automotive industry, locomotive and aircraft production and repair), and transportation (airlines and railways). Most SOEs register as joint-stock companies, and a minority share in these companies usually belongs to employees or private enterprises. Although SOEs have independent boards of directors, they must consult with the government before making significant business decisions.

The government owns majority or blocking minority shares in numerous non-state entities, ensuring substantial control over their operations, as it retains the authority to regulate and control the activities and transactions of any company in which it owns shares. The Agency for Management of State-owned Assets is responsible for management of Uzbekistan’s state-owned assets, both those located in the country and abroad. There are no publicly available statistics with the exact number of people employed by wholly and majority state-owned enterprises, or their contribution to the GDP. According to some official reports and fragmented statistics, there are 2,340 SOEs in Uzbekistan (as of January 2023), including large enterprises and holding companies, unitary enterprises, and joint stock companies, which employ about 1.5 million people, or about 11% of all domestically employed population. The share of SOEs in the GDP is about 50%, and taxes paid by the ten largest SOEs contributed about 40% of total state budget revenues.

The list of Uzbekistani SOEs is available on the official website of the Agency for Management of State-owned Assets: .
The listing of large companies and banks only is available at GOU website: .

By law, SOEs are obligated to operate under the same tax and regulatory environment as private businesses. In practice, however, private enterprises do not enjoy the same terms and conditions. In certain sectors, private businesses have limited access to commodities, infrastructure, and utilities due to legislation or licensing restrictions. They also face more than the usual number of bureaucratic hurdles if they compete with the government or government-controlled firms. Most SOEs have a range of advantages, including various tax holidays, as well as better access to commodities, energy and utility supplies, local and external markets, and financing. There are cases when gaps in the legislation are used to ignore the rights of private shareholders (including minority shareholders and holders of privileged shares) in joint stock companies with a state share.

IMF notes that Uzbekistan SOEs absorb disproportionate shares of skilled labor, energy, and financial resources, while facing weak competition enforcement and enjoying a wealth of investment preferences. A November 2022 IMF Staff Report says that the shift from public to private sector-led growth will require, among others, further opening up internal markets to entry by private firms and eliminating privileges for state-owned enterprises, as well as adopting the new competition law and ensuring the independence and adequate powers of the anti-monopoly authorities.

GOU has officially recognized the problem. President Mirziyoyev said strong involvement of the state in the fuel and energy, petrochemical, chemical, transport, and banking sectors was hampering their development. He announced a plan to increase the private sector share in GDP to 80 percent by 2030. New legislation adopted in 2020-2021 has strengthened the role of the Anti-Monopoly Committee, overturned over 600 obstructing laws and regulations, abolished 70 (out of 266) types of licenses and 35 (out of 140) permits for various types of businesses. Every year the GOU sets privatization targets with the aim to reduce the number of SOEs by 75% before 2026. In addition to privatization efforts, the GOU intends to attract private investments to the public sector through promotion of public-private partnerships (PPP). The new law on PPP, adopted in 2019, and a number of follow-up regulations introduced in 2020, create a more favorable environment for such partnerships.

Implementation of this SOE optimization and reform program will likely take some time, as the GOU seeks to avoid high social costs, such as mass unemployment. The global economic slowdown caused by COVID-19 pandemic, geopolitical turbulences (war in Ukraine, sanctions on Russia), and tighter global financial conditions have slowed SOE reform. The IMF’s 2022 Staff Report says that the GOU is continuing market-oriented reforms despite “the headwinds” to reduce the still large role of the state in the economy and further improving the business environment.

The above-mentioned privileges granted to SOEs complicates commercial competition with them in the domestic and international markets. Recognizing the issue and seeking to reduce the participation of state monopolies in the economy, on November 2022, the GOU announced changes to the Law on Competition, which include setting clear criteria to prevent the state from doing business in certain sectors. In 2022, the GOU introduced a new legislation that prohibits the creation of new SOEs in commodity markets where five or more private sector entities operate. Existing SOEs are prohibited from engaging in non-core businesses. As a result of the reform, SOE monopolies were eliminated in 31 markets of goods, and the total number of SOE monopoly has decreased by 20%. The transformation of natural monopolies in traditionally SOE dominated areas like airlines, banking, machinery, and chemical resulted in entering new private businesses to the market. Uzbekistan SOEs have not made any notable investment in the United States.

Uzbekistan adopted its Corporate Governance Code in 2015 as a voluntary requirement. The same year, the GOU set corporate governance requirements for joint-stock companies (Decree UP-4720). The latest OECD report on Uzbekistan can be reviewed here: 

Privatization Program

GOU policy papers indicate it is prioritizing further privatization of state-owned assets. The GOU’s goal is to reduce the public share of capital in the banking sector and business entities through greater attraction of foreign direct investments, local private investments, and promotion of public-private partnerships.

The new public sector optimization policy was first announced in 2018. Then the GOU developed a plan to reduce the number of SOE’s from over 3,000 to about 650 by 2026. Companies that operate critical infrastructure and enterprises that qualify as companies of strategic importance will remain in full state ownership. As of 2023, about 30 percent of SOEs were privatized, including several banks, chemical plants, manufacturing, and service companies.

Senior government officials see privatization and public-private partnerships as a solution to improve the economic performance of inefficient large SOEs and as an instrument to attract private investments. They view such investments as critical for the creation of new jobs and mitigation of state budget deficits. The GOU believes it needs to prepare SOEs for privatization by introducing advanced corporate governance methods and restructuring the organization and finances of underperforming SOEs.

By law, privatization of non-strategic assets does not require government approval and can be cleared by local officials. Foreign investors are allowed to participate in privatization programs. For investors that privatize assets at preferential terms, the payment period is three years, and the investment commitment fulfillment term is five years. Large privatization deals with the involvement of foreign investment require GOU approval.

Privatization programs officially have a public bidding process. Recently adopted legislation and regulations are intended to ensure the transparency and fairness of privatization process, as well as facilitating greater involvement of international financial institutions and foreign experts as consultants. In the past, however, investors perceived privatization procedures as confusing, discriminatory, and non-transparent. Many investors note a lack of transparency at the final stage of the bidding process when the government negotiates directly with bidders before announcing the results. In some cases, the bidders have been foreign-registered front companies associated with influential Uzbekistani families. The State Assets Management Agency of Uzbekistan coordinates the privatization program ( ).

There is no legislation on responsible business conduct (RBC) in Uzbekistan, and the concept has not been widely adopted, though many companies are active in charitable and corporate social responsibility activities, either through their own initiative or because they were mandated by local government officials.

The GOU and the legislators have not instituted or proposed requirements for businesses to conduct due diligence or reporting regarding human rights or other responsible business conduct issues.

Local and international NGOs and the ILO have observed cases of forced and child labor in the agricultural sector. However, much has changed since President Mirziyoyev took office and the GOU has reversed course and worked hard to eradicate forced labor from the harvest and move away from Soviet-era cotton production targets. Currently silk cocoons remain on the U.S. Department of Labor’s List of Goods Produced by Child Labor or Forced Labor under Trafficking Victims Protection Reauthorization Act (TVPRA List).  In 2022, the Department of Labor removed cotton from the TVPRA List.  International organizations and outside observers generally agree that the annual cotton harvest is free from systemic forced or child labor.

Relevant government agencies and departments inspect both newly registering and operating local businesses and enterprises for enforcement of the Labor Code in respect to labor and employment rights; the Law on Protection of Consumer’s Rights for consumer protections; and the Law on Protection of Nature for environmental protections. Labor or environmental laws and regulations are not waived for enterprises with private and foreign investments.

Legislation, including the Law on Joint-Stock Companies and Protection of Shareholder’s Rights, issued in 1996 and last updated in 2018, sets a range of standards to protect the interests of minority shareholders. In 2018, the GOU approved corporate governance rules for SOEs.

The Law on the Securities Market requires businesses that issue securities (except government securities) to publish annual reports, which should include a summary of business activities for the previous year, financial statements with a copy of an independent audit, and material facts on the activities of the issuer during the corresponding period.

There are no independent NGOs, investment funds, worker organizations/unions, or business associations promoting or monitoring RBC in Uzbekistan. Some international organizations, like the Asian Development Bank, provide technical and advisory assistance to the government and local enterprises.

There are no independent NGOs, investment funds, worker organizations/unions, or business associations promoting or monitoring RBC in Uzbekistan.  Some international organizations, like the Asian Development Bank, provide technical and advisory assistance to the government and local enterprises.

After adopting the Corporate Governance Code in 2015 as a voluntary requirement, the GOU set corporate governance requirements for joint-stock companies (Decree UP-4720) known as the Corporate Governance Code for Joint-Stock Companies. The Code provides for the introduction of advanced corporate governance practices, including the introduction of internal controls, organizational structure standards, and ensuring the transparency through publication of auditing and financial reports.

At present, Uzbekistan does not adhere to the OECD guidelines regarding responsible supply chains of minerals from conflict-afflicted and high-risk areas, and there has been no substantial evidence to suggest the government encourages foreign and local businesses to follow generally accepted CSR principles such as the OECD Guidelines for Multinational Enterprises. Uzbekistan does not participate in the Extractive Industries Transparency Initiative (EITI).

Uzbekistan’s legislation prohibits the private security industry or use of private security companies within the country.

Additional Resources

Department of State

Department of the Treasury

Department of Labor

Climate Issues

The GOU has ambitious environmental goals, increasing its nationally determined contribution (NDC) under the Paris Agreement, joining the Global Methane Pledge, and setting renewable energy targets. In October 2019, President Mirziyoyev approved the Green Economy Transition Strategy for 2019-2030 (PP-4477), aimed at improving energy efficiency of the basic sectors, diversifying energy consumption through introduction of renewable energy sources, mitigating and adapting to climate change, improving efficiency in the use of natural resources, and conserving natural ecosystems.

The GOU has developed its natural capital agenda in cooperation with, and financial support from, international financial institutions including the UNDP, World Bank, and Asia Development Bank. The Center for Hydrometeorological Services of Uzbekistan implements the UN Framework Convention on Climate Change; the State Committee for Ecology and Environmental Protection (SCEEP) implements the UN Convention on Biodiversity; and the State Forestry Committee implements the UN Convention to Combat Desertification. A January 2023 government reorganization consolidated these agencies into a single Ministry of Natural Resources. Environmental considerations are reflected in the GOU’s many policy papers, including the National Sustainable Development Goals, Environmental Protection Concept, Agriculture Development Strategy, Renewable Energy Plan, and Municipal Solid Waste Policy. The GOU is finalizing its Climate Change Strategy for the next decade.

In 2021, Uzbekistan increased its NDC commitments under the Paris Climate Agreement – it plans to reduce greenhouse gas emissions per unit of GDP by 35 percent of 2010 levels by 2030, compared to the 10 percent reduction stated in the original NDC. The GOU released a decarbonization strategy for its electricity sector, targeting carbon neutrality by 2050. The strategy calls for efficiency improvements to the transmission grid, a regulatory framework for renewable energy, carbon pricing, public awareness campaigns, and increased environmental protections. While the GOU has begun to attract international investment for renewable energy, there has been no progress towards carbon pricing. Natural gas remains heavily subsidized, with energy tariff liberalization repeatedly postponed since 2019.

In 2022, the GOU signed on to the Global Methane Pledge, committing Uzbekistan to reducing methane emissions by 30 percent, compared to 2020 levels. In June 2022, the GOU and the EBRD agreed to a methane reduction project, to improve emissions data and develop a roadmap for action. Most of Uzbekistan’s methane emissions come from natural gas. The GOU intends to privatize the major state-owned enterprises in that industry, which will necessitate investments to bring them into line with international environmental standards.

The GOU expects greater private sector contributions to achieving its environmental and natural capital goals. New policies that currently under development are expected to provide more financial and non-financial tools to support the green economy transition. Existing legislation, primarily the Law on Public-Private Partnership (ZRU-537 adopted May 10, 2019) contains incentives for the development of renewable energy generation. Uzbekistan’s Public-Private Partnership Development Agency manages the public tender process in cooperation with the Ministry of Energy and Ministry of Investments, Industry, and Trade. Private companies submit proposals on a design, finance, build, operate, and maintain basis. On selection, the implementing company signs a power purchase agreement with the National Electricity Grid of Uzbekistan to supply power at the agreed-on price. Private sector implementers often secure financing from the International Finance Corporation, the European Bank for Reconstruction and Development, or the Asian Development Bank. The GOU intends to use this mechanism to build 8,000 MW of wind and solar generation by 2026, increasing to 12,000 MW of wind and solar by 2030.

Uzbekistan has introduced a set of national pollution standards for air, water, and soil. The GOU also maintain several projects on nature preservation, introduction of nature-based solutions in various industries, and sustainable forest management. SCEEP, under the new Ministry of Natural Resources, is Uzbekistan’s environmental regulator. The agency reviews ecological assessments for government and private projects and ensures compliance with environmental regulations. However, the GOU could expand the set of regulatory incentives available, such as carbon credits or tradable permits, to reach its environmental targets.

The problem of protecting forests, reserves and trees in urban areas is becoming very relevant in Uzbekistan. In recent years, cases of deforestation and unauthorized tree felling to clear land plots for commercial purposes have attracted increased public attention. In 2019, the GOU introduced a temporary moratorium on cutting trees, which, however, proved to be ineffective. The moratorium has become indefinite from 2022. In 2021, President Mirziyoyev launched a five-year program to plant one billion trees and shrubs. This project is funded mainly by local administrations and international donors. The GOU has not offered any incentives for businesses to be engaged in preventing deforestation.

Resource efficiency, pollution abatement, and climate resilience considerations continue to have little influence on public procurement policies in Uzbekistan. The GOU is working on a new National Climate Change Strategy, which may facilitate introduction of public procurement and other incentives.

Uzbekistan’s legislation and Criminal Code both prohibit corruption. President Mirziyoyev has declared combatting widespread corruption one of his top priorities. On January 3, 2017, he approved the Law on Combating Corruption. The law is intended to raise the efficiency of anti-corruption measures through the consolidation of efforts of government bodies and civil society in preventing and combating cases of corruption, attempted corruption, and conflict of interest, ensuring punishment for such crimes. On June 29, 2020, Presidential Decree UP-4761 created an Anti-Corruption Agency. Subordinate to the president and reporting to Parliament, the agency is responsible for developing and implementing state policy to prevent and combat corruption. On July 6, 2021, Presidential Decree UP-6257 approved 2021-2022 State Anti-Corruption program, which includes a range of measures to ensure the transparency of the government and tighten criminal liability for violators. This program complements the strategy adopted in 2019. Its goals are to strengthen the independence of the judiciary system, develop a fair and transparent public service system requiring civil servants to declare their incomes, establish mechanisms to prevent conflicts of interest, and facilitate civil society and media participation in combating corruption.

Along with the Anti-Corruption Committee, the Prosecutor General’s Office of Uzbekistan (PGO) is the government arm tasked with fighting corruption. Since Mirziyoyev took office in September 2016, the number of officials prosecuted under anti-corruption laws has increased. The GOU registers thousands of corruption-related crimes every year. By preliminary assessments, the damage caused by budget embezzlement and corruption crimes in 2022 exceeded $116 million. Punishment has varied from fines to imprisonment with confiscation of property.

Formally, the anti-corruption legislation extends to all government officials, their family members, and members of all political parties of the country. From January 1, 2022, Uzbekistan introduces a system of mandatory declaration of income and property for all civil servants, heads and deputies of state-owned enterprises and institutions (entities with state ownership share over 50%), as well as for their spouses and minor children.

In recent years, the GOU has demonstrated efforts to improve the legal framework of awarding contracts and procedures for public procurement. To reduce corruption, the new legal framework provides for the introduction of more transparent electronic bidding systems. The new Law on Natural Resources (ZRU-403 of June 23, 2020), in combination with the Law on Production Sharing Agreements, the Law on Concessions, and various Government Resolutions specify procedures for awarding natural resource extraction contracts and licenses. The most recent Public Procurement Law (ZRU-684, adopted April 22, 2021, effective January 1, 2022) streamlines relevant procedures and requirements. According to the legislation, public procurement or a natural resource extraction contract/license can be awarded through an open auction through E-IJRO AUKSION electronic auction platform, or by decision of the government. In the latter case, the legislation lacks details on actual application procedures and the government’s decision-making process. While enforcement of the new legislation is still at early stage, the process of awarding GOU contracts continues to lack transparency.

The Law on Combating Corruption (ZRU-419, adopted January 3, 2017, last updated November 19, 2021) prescribes a range of measures for preventing corruption, including raising public awareness and introducing transparent rules for public-private interactions. According to the law, all public officials are obliged to notify their supervisors or law enforcement agencies of all cases of proposed corruption from businesses or individuals, as well as any similar offenses committed by other public service employees. The law, however, does not specifically encourage companies to establish relevant internal codes of conduct.

Currently only a few local companies created by or with foreign investors have effective internal ethics programs.

Uzbekistan is a member of the OECD Anti-Corruption Network (ACN) for Eastern Europe and Central Asia. One of the latest OECD reports on anti-corruption reforms in Uzbekistan (March 21, 2019) says that, although Uzbekistan has already undertaken a number of key anti-corruption reforms, the GOU now needs to systematize its anti-corruption policy by making it strategic in nature.

The Law on Combating Corruption encourages more active involvement of NGOs and civil society in investigation and prevention of crimes related with corruption. However, there are still very few officially registered local anti-corruption NGOs. One of them – Transparency Uzbekistan – was registered in September 2021. Embassy Tashkent is not aware of any active corruption investigations conducted by local NGOs. There is evidence of unjust persecution of local civil society activists who are fighting corruption.

Corruption is still a notable factor in the economy and social sphere of Uzbekistan due to the insufficiency of law enforcement practices and relatively low wages in the public sector. Recognizing the issue, the country’s leadership has initiated legislative and institutional reforms, which have already raised Uzbekistan’s rating in Transparency International’s Corruption Perceptions Index from 157 (out of 180 rated countries) in 2017 to 126 in 2022. U.S. businesses have cited corruption and lack of transparency in bureaucratic processes, including public procurements and licensing, as among the main obstacles to foreign direct investment in Uzbekistan.

Resources to Report Corruption

The government agencies that are responsible for combating corruption are the Anti-Corruption Agency, the Prosecutor General’s Office, and the Ministry of Justice. Currently, no international or local nongovernmental watchdog organizations have permission to monitor corruption in Uzbekistan.

Contact information for the office of the Anti-Corruption Agency of Uzbekistan:

Address: 8A, Shota Rustavely St., 100070, Tashkent, Uzbekistan
Hotline telephone numbers: +998(71) 202-0400 (Ext 709), 271-1007

Contact information for the office of Uzbekistan’s Prosecutor General:

Address: 66, Akademik Gulyamov St., 100047, Tashkent, Uzbekistan
Hotline telephone numbers: +998(71) 1007, 202-0486

Contact information for the office of Uzbekistan’s Ministry of Justice:

Address: 5, Sayilgoh Street, 100047, Tashkent, Uzbekistan
Website: , 
Hotline telephone numbers: +998(71) 1008, 262-9245б 207-0443

Uzbekistan does not have a history of politically motivated violence or civil disturbance. There have not been any examples of damage to projects or installations over the past ten years. Protests in Nukus in July 2022 that resulted in violent confrontations between protesters and security forces were seen as an isolated case. They resulted in a reported 21 deaths but did not lead to extensive property damage. In general, the environment in Uzbekistan is not growing increasingly politicized or insecure. Uzbekistani authorities maintain a high level of alert and aggressive security measures to thwart terrorist attacks.

During 2022, the population of Uzbekistan increased by 753 thousand people (2.1 percent) to 36 million. The gender distribution is roughly equal: 18.1 million men and 17.9 million women. According to publicly available statistics, about 32 percent of the population is under 16 years old; 57 percent is working age (16-60); and 11.5 percent is 60 years old and older. Uzbekistan’s Statistics Agency reports indicate the total number of labor resources is 19.6 million people (over 250 thousand increase year-on-year). Nearly 14 million of them were considered employed. The share of the non-agricultural workforce is about 73 percent. There are about three million Uzbekistani citizens who work abroad as labor migrants. The official number of unemployed is over 1.3 million people, or 8.6 percent. Note: The accuracy of given statistics is based on records of the residents’ registration offices and studies conducted by the Ministry of Employment and Poverty Reduction but does not always reflect the actual situation in the country. The next national census in Uzbekistan is expected in 2023, while the last one was in 1989. End note.

It is relatively easy to find qualified employees in Uzbekistan, and salaries are low by Western standards. According to both government and independent analysts’ statistics, about 7-9 percent of the population live below the poverty level (on poverty ratio applicable for lower middle-income countries, or $3.20 a day based on purchasing-power-parity in constant prices of 2011), and approximately 45 percent of the employed population have low-productivity and low-income jobs. Accordingly, Uzbekistan is one of the largest suppliers of labor migrants among former Soviet Union republics.

The Uzbekistan Agency of Strategic Reforms and independent consultants estimated Uzbekistan’s informal economy at 48-62 percent of GDP, or up to $40 billion. The Ministry of Employment and Poverty Reduction reported that the number of unofficially employed people is close to 6 million. There is no clear line between formal and informal economies, as many companies practice double bookkeeping to avoid some tax liabilities. In addition to clearly criminal activities, the share of which is relatively insignificant, “grey economy” businesses may be observed in various sectors, including trade, financial services, construction, home-based manufacturing, and transportation. The GOU recognizes the scale of the problem. A relatively systemic strategy to combat the informal economy appeared in 2021. It includes measures aimed at reducing the tax burden, bureaucratic pressure, corruption, and correcting inconsistencies in the legal system. The main rules for ensuring business legality came into force in January 1, 2022, but small businesses reported that their introduction, especially in the field of tax administration, caused confusion. As a result of intense public debate, the government had to postpone their enforcement. Representatives for U.S. industry report that businesses in the informal economy have been the main violators of intellectual property rights, and the main suppliers of counterfeit products that created marketing difficulties for U.S. and other foreign business.

At 99%, literacy is nearly universal, but most local technical and managerial training does not meet international business standards. Foreign firms report that younger Uzbekistanis are more flexible in adapting to changing international business practices but are also less educated than their Soviet-trained elders. Widespread corruption in the education sector has lowered educational standards as unqualified students purchase grades and even admittance to prestigious universities and lyceums.

Legislation requires companies to hire Uzbekistani nationals for specified positions in banking and auditing companies. The chief accountant must be an Uzbekistani national, as should either the CEO or any one member of the board of directors. Only Uzbekistani nationals can be tour guides. Businesses registered within special economic and industrial zones must have at least 90% locally sourced labor force.

According to Uzbekistan’s Labor Code, labor-management relations should be formalized in a fixed-term or temporary employment contract. The maximum length of a single fixed-term contract is 60 months. The Labor Code and subordinate labor legislation differentiate between layoffs and firing. Employees can terminate their employment by filing written notice two-weeks prior or applying for leave without pay. Layoffs or temporary leave without pay can be initiated by an employer if the economic situation declines. For firing (severance), the employer should personally give two months’ advance notice in the case of corporate liquidation or optimization, two weeks’ advance notice in the case of an employee’s incompetence, and three days’ advance notice in the case of an employee’s malpractice or unacceptable violations. In case of severance caused by corporate liquidation or optimization, an employee should receive compensation, which should not be less than two average monthly salaries paid during their employment plus payment for unused leave (if another form of compensation was not agreed to in the employment contract). However, many businesses still choose to avoid signing formal contracts with employees, especially those involved in seasonal agricultural or construction work.

Officially, labor legislation cannot be waived or applied differently for private or foreign-owned enterprises, including those that operate in special economic and industrial zones. On March 4, 2020, Uzbekistan joined the Hague Conference on Private International Law.

The new Law on Trade Unions (ZRU-588) was adopted in March 2020. According to this law, all trade union activities should be based on the principles of the compliance, voluntariness, non-discrimination, independence and self-governance, equality, transparency, and openness. The law guarantees rights of trade unions and their associations and protects them from illegal interventions of government agencies, officials, and employers. Currently, the Federation of Trade Unions of Uzbekistan incorporates 14 industrial and 14 regional trade unions, including unions of Karakalpakstan Republic and Tashkent City, with official reports of 6.1 million employees in the country participating. Formally, the unions have the status of public associations, and their leaders declare their work as a non-governmental organization, but the GOU is financing the Federation and its regional branches.

By law, all employees of either local or foreign-owned enterprises operating in Uzbekistan have the right to:

fair and timely payment of wages that should not be less than the minimum monthly salary amounts set by the government;
a standard workweek of forty hours, with a mandatory rest period of twenty-four hours and annual leave;
overtime compensation as specified in employment contracts or agreed to with an employee’s trade union, which can be implemented in the form of additional pay or leave. The law states that overtime compensation should not be less than 200 percent of the employee’s average monthly salary rate (broken down by hours worked). Additional leave time should not be less than the length of actual overtime work;
working conditions that meet occupational health and safety standards prescribed by legislation;
compensation of any health or property damages incurred as a result of professional duties through an employer’s fault;
professional training;
formation and joining of labor unions; pensions; and legal support in protection of workers’ rights.

There is no single state institution responsible for labor arbitration. The general court system, where civil and criminal cases are tried, is responsible for resolving labor-related disputes. This can be done on a regional or city level. Formally, workers can file their complaints through the Prosecutor General’s Office. The Ministry of Employment and Poverty Reduction should provide legal support to employees in their labor disputes.

The law neither provides for nor prohibits the right to strike. In recent years, both SOE and private sector employees in the construction, mining and petrochemical industries and workers involved in various public projects conducted strikes, protesting salary payment delays and demanding improvement of their working conditions. Reportedly, senior company executives and local government officials met with strike initiators and in many cases resolved issues raised by the workers. There is no public information about the role of official unions in these negotiations.

Although employees in Uzbekistan enjoy many rights by law, in practice these laws are subject to arbitrary and inconsistent interpretation. For example, the law prohibits compulsory overtime – and only 120 hours of overtime per year is permitted. In practice, overtime limitations are not widely observed, and compensation is rarely paid. Wage violations have become more common in recent years.

19 conventions and one Protocol of the UN’s International Labor Organization (ILO) are officially in force in Uzbekistan:

Forced Labor Convention;

Freedom of Association and Protection of the Right to Organize Convention

Right to Organize and Collective Bargaining Convention;

Equal Remuneration Convention;

Abolition of Forced Labor Convention;

Discrimination [Employment and Occupation] Convention;

Minimum Age Convention;

Worst Forms of Child Labor Convention;

Labor Inspection Convention;

Employment Policy Convention;

Labor Inspection (agriculture) Convention;

Tripartite Consultation (International Labor Standards) Convention;

Forty-Hour Week Convention;

Holidays with Pay Convention;

Maternity Protection Convention [Revised];

Workers’ Representatives Convention;

Collective Bargaining Convention;

Promotional Framework for Occupational Safety and Health Convention;

Safety and Health in Construction Convention; and

Protocol of 2014 to the Forced Labor Convention.

The most recent observations of the ILO’s Committee of Experts on the Application of Conventions and Recommendations (CEACR) can be reviewed here: 

The law prohibits all forms of forced or compulsory labor, including by children, except as legal punishment for offenses such as robbery, fraud, or tax evasion, or as specified by law. Uzbekistan has eliminated the systematic use of child labor in the annual cotton harvest and has implemented reforms to significantly improve its record on adult forced labor. The Ministry of Employment and Poverty Reduction establishes and enforces occupational health and safety standards. Labor inspectors conduct routine inspections of small and medium-sized businesses once every four years and inspect larger enterprises once every three years. The labor inspectorate – significantly expanded in size — was previously unable to conduct unscheduled inspections, but these are now legal and in regular use.

In 2022, Uzbekistan adopted a new edition of the Labor Code (the Law ZRU-789 of October 28, 2022). The main changes in the Code include improved rules for the severance pay, expanded categories people that must be employed without a probationary period, new definitions for working hours, and state guarantees for employment of socially vulnerable categories of people, including victims of human trafficking. The new Labor Code enters into force on April 30, 2023.

Other labor related legislation enacted in 2022 includes:

Law on Ratification of Safety and Health in Construction Convention (Geneva, June 20, 1988) (ZRU-750 of February 7, 2022). The convention provides additional safeguards for construction industry employees and thus demonstrates Uzbekistan’s commitment to adopt international principles and standards of guaranteeing workers’ rights.

The Law on Civil Service (ZRU-788 of August 8, 2022, enacted November 10, 2022). The law defines the framework for civil service, establishes rules for hiring, rotation, as well as various restrictions to prevent corruption and conflicts of interests.

The U.S. International Development Finance Corporation (DFC) began working in Uzbekistan in 1992 (as the Overseas Private Investment Corporation, or OPIC) and has loaned approximately $231 million over the course of its operations in Uzbekistan. The last DFC (OPIC) project in Uzbekistan was approved in 2011. Currently, DFC is evaluating two requests to provide political risk insurance, one for a hotel and business complex under development in Tashkent, and the other for a commercial loan to a state-owned bank to support its lending programs for small and medium enterprises. DFC is also evaluating investment in a dry port logistics project and a higher education project.

On January 9, 2021, Uzbekistan committed to support the Abraham (Ibrahim) Fund. On January 7, 2021, Uzbekistan joined the Central Asia Investment Partnership – a regional private sector development program overseen by the DFC and Astana International Finance Center (Kazakhstan). On May 17, 2018, the Corporation and GOU officials signed a Memorandum of Cooperation (MOC) on bolstering investment in natural resources, energy, infrastructure, and other critical sectors. Formally the GOU’s approval of U.S. government investment support for Uzbekistan private sector projects is not required. Uzbekistan is a developing country member of the Multilateral Investment Guarantee Agency.

Table 2: Key Macroeconomic Data, U.S. FDI in Uzbekistan

Host Country Statistical source*

USG or international statistical source

USG or International Source of Data:  BEA; IMF; Eurostat; UNCTAD, Other

Economic Data





Host Country Gross Domestic Product (GDP) ($M USD)





Foreign Direct Investment

Host Country Statistical source*

USG or international statistical source

USG or international Source of data:  BEA; IMF; Eurostat; UNCTAD, Other

U.S. FDI in partner country ($M USD, stock positions)





BEA data available at

Host country’s FDI in the United States ($M USD, stock positions)





BEA data available at

Total inbound stock of FDI as % host GDP





UNCTAD data available at   

* Source for Host Country Data: Uzbekistan Statistics Agency 

Table 3: Sources and Destination of FDI

Direct Investment from/in Counterpart Economy Data

From Top Five Sources/To Top Five Destinations (US Dollars, Millions)

Inward Direct Investment

Outward Direct Investment

Total Inward



Total Outward









Republic of Korea
























“0” reflects amounts rounded to +/- USD 500,000.

Daniel Hall
Economic and Commercial Officer
3, Maykurgan St., Yunusabad District, 100093, Tashkent, Uzbekistan
Telephone Number: +998-71-140-2130
Email address: .

On This Page

  2. 1. Openness To, and Restrictions Upon, Foreign Investment
    1. Policies Towards Foreign Direct Investment
    2. Limits on Foreign Control and Right to Private Ownership and Establishment
    3. Other Investment Policy Reviews
    4. Business Facilitation
    5. Outward Investment
  3. 2. Bilateral Investment and Taxation Treaties
  4. 3. Legal Regime
    1. Transparency of the Regulatory System
    2. International Regulatory Considerations
    3. Legal System and Judicial Independence
    4. Laws and Regulations on Foreign Direct Investment
    5. Competition and Antitrust Laws
    6. Expropriation and Compensation
    7. Dispute Settlement
      1. ICSID Convention and New York Convention
      2. Investor-State Dispute Settlement
      3. International Commercial Arbitration and Foreign Courts
    8. Bankruptcy Regulations
  5. 4. Industrial Policies
    1. Investment Incentives
    2. Foreign Trade Zones/Free Ports/Trade Facilitation
    3. Performance and Data Localization Requirements
  6. 5. Protection of Property Rights
    1. Real Property
    2. Intellectual Property Rights
  7. 6. Financial Sector
    1. Capital Markets and Portfolio Investment
    2. Money and Banking System
    3. Foreign Exchange and Remittances
      1. Foreign Exchange
      2. Remittance Policies
    4. Sovereign Wealth Funds
  8. 7. State-Owned Enterprises
    1. Privatization Program
  9. 8. Responsible Business Conduct
    1. Additional Resources
    2. Climate Issues
  10. 9. Corruption
    1. Resources to Report Corruption
  11. 10. Political and Security Environment
  12. 11. Labor Policies and Practices
  13. 12. U.S. International Development Finance Corporation (DFC), and Other Investment Insurance or Development Finance Programs
  14. 13. Foreign Direct Investment Statistics
  15. 14. Contact for More Information
2023 Investment Climate Statements: Uzbekistan
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