Last update : 06.04.2020



On certain changes in the legislation governing investment activities in Uzbekistan

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On certain changes in the legislation governing investment activities in Uzbekistan

With the election of the President Mirziyoyev, one of the key areas of the new Uzbek government policy has been the active attraction of foreign direct investment and foreign investors. This is obvious given that investments are one of the main drivers of the economy and the Uzbekistan is no exception in this regard.


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Author: Daniil Tilepin  Leading consultant of the Department on legal protection of interests of the Republic of Uzbekistan in international and foreign organizations Ministry of Justice of the Republic of Uzbekistan

With the election of the President Mirziyoyev, one of the key areas of the new Uzbek government policy has been the active attraction of foreign direct investment and foreign investors. This is obvious given that investments are one of the main drivers of the economy and the Uzbekistan is no exception in this regard.

Taking into account the fact that the Republic of Uzbekistan needs foreign direct investment and the corresponding benefits that they bring, such as the creation of new workplaces, new infrastructure and the development of existing ones, it is to no surprise that Uzbekistan takes all possible measures to improve conditions for foreign investors, providing guarantees of their activities and protection from nationalization and expropriation.

Thus, one of the most significant steps of the Republic in this direction was the recent adoption of the new Law "On Investments and Investment Activities". This law is a somewhat of a breakthrough for the Uzbekistan in the field of legal regulation of investment activities and investments. For instance, before the adoption of this law, investment activity in the country was regulated by 3 separate laws and more than 50 different regulations.

There is no need to mention that this system was archaic, difficult to comprehend and understand, and moreover, despite the impressive number of legal acts, it lacked some key definitions and guarantees.

The Law "On Investments and Investment Activities" unified and simplified the legislation in the field of regulation of investment activity, replacing the above-mentioned bulk of legal acts with one understandable and clear law.

In addition to the above, the law provides for the following important points and innovations:

- The introduction of a single legal regime for both domestic and foreign investors;

- Legal guarantees of protection of investors from nationalization and expropriation;

- Procedure for concluding investment agreements;

- Guarantees of the free transfer of funds in foreign currency into and from the Republic, without any conditions for the payment of taxes and other payments by them;

- Free repatriation of assets that a foreign investor is entitled to after the termination of investment activity.

Obviously, the full list is not limited to the above items.

The securing of the aforementioned rights and guarantees of investors, especially guarantees for the free repatriation of income, free conversion of funds and protection against privatization and nationalization, are aimed at ensuring investor confidence in the safety of investing in the Republic of Uzbekistan.

In addition, the law also provides for the following provisions, which at first glance may go unnoticed, but nevertheless play an important role in improving the investment climate of the Republic, namely:

- Providing the investor with an investment tax credit and investment subsidies;

- The obligation of state bodies, diplomatic missions and consular institutions of the Republic of Uzbekistan abroad to provide advisory and informational assistance to investors;

- The «Most favored nation» principle is now entrenched in the aforementioned Law.

- If subsequent legislation worsens the conditions for conducting investment activities, then the legislation applicable at the time of investment for a period of 10 years will be applied to investors, in the cases provided for by law;

In particular, it is worth noting the last paragraph of the above list. The introduction of this provision into the law is another guarantee provided to investors allowing them to be sure of the safety of investing in the Republic and in the immutability of the conditions provided by him at least 10 years in advance.

In general, this law should improve the overall investment climate in the country and strengthen the attractiveness of the Republic for investors and also provide investors, both foreign and domestic, with legal guarantees and institutional conditions for their activities.