Understanding Uzbekistan Investment Law Changes
On January 23, the Senate (upper house) of the Oliy Majlis (Uzbek parliament) approved a new edition of the Law “On Investments and Investment Activities”.
Developed jointly with experts from the World Bank and the International Finance Corporation, the document ensures that investment legislation complies with international standards, including the rules of the United Nations Conference on Trade and Development (UNCTAD) and the World Trade Organization (WTO).
The bill introduces internationally recognized practices and principles in the field of investment and establishes principles for encouraging responsible business conduct (RBC) of investors.
The uncertainty of terminology in the field of investment in the legislation is eliminated by bringing the main concepts and terms in the Law into line with international standards and modern requirements.
A number of amendments were made based on an analysis of investor appeals received by the Ministry of Investment, Industry, and Trade. Solutions are being introduced to eliminate factors and risks that cause the greatest concern among investors, and unnecessary restrictions are removed.
A classification of investment projects is introduced: priority small investment project (up to $3 million), priority medium investment project (up to $10 million), priority large investment project (up to $100 million), priority strategic investment project (over $100 million).
The Law raises the status of the Council of Foreign Investors under the President of Uzbekistan.
All interactions between investors and government agencies are organized on the basis of a “one-stop shop” principle. A system of primary and secondary support for foreign investors is also being introduced.
The term of land use rights for foreign investors was increased from 25 to 49 years.
Local and foreign investors are granted equal benefits and preferences, which is one of the most important requirements of the WTO.
The requirement for the equity participation of foreign investors in an enterprise with foreign investments was reduced from 15 to 10 percent.
The draft law approved by the country’s parliament aims to bring investment activities in Uzbekistan to a strategically new level, increase investor confidence, and contribute to the implementation of the key objectives of the Uzbekistan-2030 Strategy, the fundamental basis for the country’s development.
