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Why Uzbekistan!

Uzbekistan is, above all, political stability, confidence in the future and the succession of reforms in all spheres of public and political life. This is a state where representatives of more than one hundred nationalities and dozens of religious confessions live in peace and harmony. Thanks to the successful implementation of this model, Uzbekistan managed to achieve and ensure:

01
Macroeconomic stability, the balance of the domestic and external sectors of the economy, the growth of currency savings;
02
To create conditions for maintaining a sustained high rate of annual economic growth, an average of 9% per year, mainly due to internal factors;
03
To create a stable banking and financial system with strict observance of the Basel principles of banking supervision. In particular, the level of sufficiency of bank capital is more than 25%, which is almost 3 times higher than international standards;
04
Snizit total tax burden by almost 3 times, while the state provided additional benefits to exporting enterprises, small businesses and enterprises, making investments and entering new types of products;
05
Develop new high-tech industries through active investment policy, technical modernization of industries and production infrastructure.

The adopted strategy of combating the crisis and neutralizing its consequences allowed Uzbekistan to ensure, in the number of the few countries of the world, stable rates of economic development over the past period.

Over the years of independent development, the country's economy has attracted more than 120 billion dollars of investment, of which more than 60 billion dollars - the funds of foreign investors.

In Uzbekistan, in 2017, more than $ 4.505 billion of foreign investments were disbursed for 199 projects. At the expense of foreign loans under the government guarantee, $ 1.854 billion was spent on 79 projects, due to foreign direct investments - $ 2.65 billion for 120 projects.

In 2018 the largest volume of foreign investments - $ 10.8 billion on 37 projects - planned to master the energy sector .. In particular, the "Lukoil" in the beginning of 2018 to invest $ 3 billion in the implementation of two PSAs a total value of more than $ 8 billion and gas project development Central Asia (GPD, a subsidiary of Gazprom International) started the implementation of two projects with a total value of about $ 1.3 billion - the development of gas fields in the Ustyurt region and Surkhandarya region. Japanese Mitsubishi Corporation and Mitsubishi Hitachi Power SystemsLtd launched two projects with a total value of about $ 1.5 billion - the construction of thermal power plants Turakurgan in Namangan region with the capacity of 900 MW and the construction of the combined cycle plant of 450 MW at Navoi TPP. Also, the Chinese ZhuhaiSingyes Green BuildingTechnology will begin construction of a solar power plant in the Samarkand region.

Uzbekistan until 2021 plans to invest $ 30.4 billion in the oil and gas industry. "Through the implementation of these projects is expected to master the production of 15 new types of products - PVC, ABS plastic, synthetic rubber, aromatics, and other superabsorbent", - said the "Uzbekneftegaz".

The number of the largest projects includes additional exploration and development of the field "25 years of Independence" with the construction of a gas processing complex in Surkhandarya region worth 5.8 billion dollars, the production of synthetic fuel (GTL) based on the Shurtan gas chemical complex (GCC) for $ 3.7 billion and construction a new oil refinery in the Jizzakh region for $ 2.2 billion.

In 2018-2020 it is planned to attract financial resources of the World Bank for the amount of three billion dollars for the implementation of 27 projects, by 2019 - funds of the Asian Development Bank to the amount of 3.7 billion for the implementation of 25 projects. Until 2021, Uzbekistan intends to attract loans from international financial institutions worth more than 7.7 billion dollars.

Tax policy

Unprecedented tax privileges are created for enterprises that carry out production activities in the territories of the newly created Free Industrial Economic Zone in the Navoi, Jizah, Angren and Tashkent regions initiated by the President of the Republic of Uzbekistan. Benefits, including exemption from virtually all taxes and customs duties levied on the territory of the Republic, make them economically attractive zones in the world.

In particular, PPE participants are exempt from income tax, property tax on legal entities, tax on improvement and development of social infrastructure, single tax payment for small businesses, mandatory contributions to the Republican Road Fund, as well as customs payments (other than customs duties) for equipment, components and materials not produced in the Republic (according to the lists approved by the Cabinet of Ministers) for a certain period, depending on the amount of investments made, including:

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

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

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

A rich mineral resource base and energy independence
Human and intellectual potential
Tourism and rest
Favorable investment climate

During the years of independence, Uzbekistan has created a broad system of legal guarantees and benefits for foreign investors, an integrated system of measures to stimulate the activities of enterprises with foreign investment.

The state guarantees and protects the rights of foreign investors carrying out investment activities in the territory of the Republic of Uzbekistan. If the subsequent legislation of the Republic of Uzbekistan worsens the terms of investment, then to the foreign investors within 10 years from the date of investment the legislation that was in force at the date of investment is applied. A foreign investor has the right, at his discretion, to apply, in a notification procedure, those provisions of the new legislation that improve the conditions for his investment.

In addition, in some cases, foreign investors may be provided with additional guarantees and rights protection measures when investing in priority industries and projects that ensure sustainable economic growth, strengthening and expanding the export potential of the republic, and projects in the field of small business.

In recent years, there has been a consistent trend towards a significant reduction in the tax burden of both legal entities and individuals. In particular, the tax rate on corporate income has decreased five-fold since 1992 and currently stands at 8-7.5%.

Representatives of small business and private entrepreneurship were granted a number of privileges and preferences for taxation and lending. In accordance with the Tax Code of the Republic of Uzbekistan, microfirms and small businesses can choose a simplified form of taxation, allowing instead of generally established taxes and other mandatory payments to pay a single tax payment. The single tax payment rate for 2013 is only 5%.

Favorable geographical location
The best place to stay

Investment potential of economic sectors

Uzbekistan has a huge investment potential. During the years of independence, new industries have been developed such as automotive, agricultural machinery, biotechnology, the pharmaceutical industry, and information technology. Uzbekistan is rich in various kinds of minerals. In the bowels of the republic more than 100 types of mineral raw materials have been identified. By reserves of gold, uranium, copper, silver, lead, zinc, tungsten, natural gas and some other minerals our country occupies one of the leading places in the world. Only the proven reserves of mineral resources are estimated at about 3.3 trillion dollars. To carry out modernization and technical re-equipment of the processing industry enterprises, it is only necessary to raise $ 3.7 billion in investments in the next three years. In general, the investment attractiveness of the industries is due to relatively low costs of factors of production (electricity, natural gas, labor), a significant domestic sales market (more than 26.3 million permanent residents), duty-free access to the markets of the CIS (280 million. people of the population).

Branches of the economy

The enterprises of oil and gas industry are united in the national holding company "Uzbekneftegaz". Uzbekneftegaz includes 6 joint-stock companies: Uzgeoburneftegazdobycha (oil and gas production), Uztransgaz (transportation), Uznefteprodukt (processing), Uzneftegazmash (manufacturing equipment for the industry), Shurtan gas chemical complex (production of polyethylene, liquefied gas, sulfur and commercial gas). The oil and gas industry of Uzbekistan provides 93% of the republic's energy resources with primary fuel resources. Annually in the republic it is extracted about 65 billion cubic meters of gas (the eighth place in the world), 5.9 million tons of liquid hydrocarbons. Only 5% of extracted raw materials are processed, 197 thousand tons of liquefied gas, 125 thousand tons of polyethylene are produced. The export potential of all produced gas is currently $ 1.4 billion, and the organization of its processing into finished products (polyethylene, polypropylene and other petrochemical products) will increase the cost of manufactured products by 10 times. In the industry there are such well-known foreign companies as Lukoil, Gazprom (Russian Federation), CNPC (China), Korean National Oil and Gas Corporation KOGAZ (Korea), GTL SilkRoad, etc. Foreign companies involved in exploratory and exploration works for oil and gas are exempt from:
  • all types of taxes, deductions and payments in force on the territory of the Republic of Uzbekistan for the period of geological exploration;
  • customs payments for the import of equipment, material and technical resources and services necessary for conducting prospecting, exploratory and other related works. Joint ventures for oil and gas production, formed with the participation of foreign companies, performing prospecting and exploration for oil and gas, are exempted from:
    • payment of income tax (profit) for a period of seven years from the beginning of oil or gas production. At the end of this period, the tax rate on income (profit) of the said joint ventures is set at 50 percent of the current rate; • payment of property tax and foreign participants' income from equity participation in joint ventures;
    • mandatory sale of part of the currency proceeds from the sale of products obtained as a result of activities for the extraction and processing of oil and gas, for the period of recovery of invested capital for exploration and exploration.

To date, about 50% of the generating capacity of the United Energy System of Central Asia is concentrated in Uzbekistan. This system also includes the energy systems of Turkmenistan, Tajikistan, Kyrgyzstan and the South of Kazakhstan. The power industry of Uzbekistan functions within the framework of the State-Joint Stock Company "Uzbekenergo", formed in the form of an open joint-stock company, which also includes enterprises of the coal industry. At present, the company includes 53 enterprises and organizations, including 39 open joint-stock companies, 11 unitary enterprises, 2 limited liability companies and a branch of the company - Energosotish. The basis of the energy system of Uzbekistan are thermal power plants with a total capacity of 10.6 million kW. Five large thermal power plants have installed power units from 150 to 800 MW. The length of the company's transmission lines exceeds 235 thousand km. The configuration of power transmission lines with a voltage of 220-500 kV and a length of 7.5 thousand km ensures a stable operation of the electric power system. The main directions of the industry development are the construction of new sources of generating capacity, replacement of the energy resources of the generation facilities that have worked off the estimated energy resources, meeting the needs of the forecasted growth in energy consumption, the introduction of modern energy production technologies, and reducing the negative impact of energy facilities on the environment. The industry plans to implement a number of major investment projects for the production and distribution of electricity: the modernization of the Tashkent TPP with the attraction of loan funds from the Japan Bank for International Cooperation, the construction of external power supply facilities in Tashkent city (worked with the Eximbank of the People's Republic of China), construction of high-voltage power lines (being worked on with IDB).

One of the priority directions is the development of the textile industry. The enterprises of the industry produce and export such products as cotton yarn, cotton hard fabrics, knitted fabrics, knitted garments and garments. The industry has a stable raw material base - in the republic annually more than 1 million tons of cotton fiber is produced, of which about 25% are currently processed. In Uzbekistan, the bulk of production capacity is concentrated in spinning production, and there is an excellent opportunity to invest in the creation of weaving and sewing industries. The target for further development of the industry is to increase the volume of processed cotton fiber to 50%, as well as to organize the production of cotton fabric and finished products, for which it is necessary to attract more than 700 million dollars of investment. In the industry there are enterprises created with the participation of investors from countries such as Germany, Italy, South Korea, Turkey, the United States, India, Great Britain, Austria, etc. In order to stimulate investment activity in light industry, Uzbekistan legislation provides for a number of privileges and preferences, including including: • enterprises specializing in the production of ready-made garments (sewing, knitted and leather goods), hosiery and footwear, are exempted from paying all kinds of taxes and fees to the budget, except for the tax on the addition valued cost; • Enterprises are exempt from customs payments (except for customs clearance fees) for technological and auxiliary equipment, technological equipment and spare parts imported for their own needs.

Agriculture, including the fruit and vegetable sector, is developing due to the ongoing structural changes, the growth of the number and activation of the activities of farms, the implementation of mechanisms for their concessional lending, timely financial support, and improving the efficiency of the use of material and technical resources. Uzbekistan has a significant agricultural resource potential and is able to produce over 10 million tons of fruit and vegetable products a year. More than 1.7 million tons of gardening and viticulture products are produced annually in the republic, about 5 million tons of vegetables and grains and potatoes. Fruit and vegetable products produced in the republic have unsurpassed taste qualities. Uzbekistan has long been famous on foreign markets for its grapes and apples, peaches and pears, cherry and plum, quince, watermelon and melons. Such subtropical crops as figs, pomegranates, persimmons, etc. are grown in the republic. Enterprises that are created with the participation of investors from such countries as Germany, Holland, Austria, USA, Turkey, Russia, Switzerland, Italy, Spain, etc. are active in the industry. Potential of fruits and vegetables The branch of the republic far exceeds the current figures. Organized deep processing of fruit and vegetable produce, with the production of competitive goods on foreign markets, for example, such as juices, jams, freshly frozen, freeze-dried and other dried fruits.

The food industry of Uzbekistan is based mainly on the processing of local agricultural raw materials and is represented by enterprises of fat and oil, confectionery, processing industries. The enterprises of the industry are united in the Association of Fat and Oil Industry, which unites 87 enterprises, in particular 20 joint-stock companies, 36 joint ventures, 28 private business enterprises, and 3 unitary enterprises.

 

In Uzbekistan, the main types of electrical products produced are cable-conductor products, electric lamps, electronic equipment, power transformers, various electric appliances and electric motors. In Uzbekistan, the production of copper, silver, gold, zinc, secondary aluminum, which are raw materials for the electrical industry, is established. Promising directions are the production of semiconductors, dry cast transformers, halogen light bulbs and integrated circuits.

Uzbekistan has significant reserves of construction materials: 49 deposits of building stone, 76 - sand and gravel materials, 198 - brick and tile raw materials, as well as limestone, construction sand, gypsum, expanded clay, chalk, talc, etc.

 

Enterprises of the automotive industry in the republic are united in the joint-stock company "Uzavtosanoat", which includes 20 enterprises. The company cooperates with a number of enterprises that are not part of it. During the entire period of the company's activity, about 682 thousand cars were produced, including 140 thousand cars in 2006. At JSC "UzDaewooAuto" and localization enterprises it is planned to assimilate 253 new parts and parts for the products.

The professional branch organization in the field of mechanical engineering is the association "Uzselkhozmashholding". The industry employs dozens of industrial enterprises that produce excavators, tractors, trailed and mounted agricultural machinery. To implement with the involvement of foreign investment, the organization of production of transmission for tractors up to 120 hp is proposed. and above, cotton seeders of precise seeding, as well as the sale of shares in Compressor, Suvmash and others. One of the leading industries of Uzbekistan is non-ferrous and ferrous metallurgy, which includes the production of copper, refractory and heat-resistant metals, and gold. The largest enterprises of the industry are Navoi and Almalyk Mining and Metallurgical Combines. On the basis of tungsten ores and molybdenum discovered in the republic, the Uzbek Combine of refractory and heat-resistant metals (the city of Chirchik) operates. It produces steel and rolled metal based metallurgical plant in the city of Bekabad, Tashkent region.

Guarantees of a newly established enterprise with foreign investments

(Presidential Decree No. UP-4434 of 10.04.2012)

Newly established enterprises with foreign investments, which include foreign investors in cash at least $ 5 million, are subject to change of tax legislation within 10 years from the date of their registration for value added (turnover in the sale of goods, works, services), tax on property, a tax on improvement and development of social infrastructure, unified social payment, single taxes and mandatory contributions to the Republican Road Fund and an extrabudgetary fund for reconstruction, capital repair and equipping of general education schools, professional colleges, academic persons and medical institutions that operated on the date of their state registration.
At the request of ministries, departments of economic associations, officials and specialists of foreign companies involved in the implementation of investment projects representing entry and multiple-entry visas for a period of 12 months.
As part of investment projects and projects in the field of investment (Presidential Decree No. UP-4434) of 10.04.2012).

For manufacturing enterprises with foreign investment, exporting their own production for freely convertible currency, establish the following additional benefits and preferences:

01
Export customs duties on products of own production are abolished;
02
The right to export their products without prepayment and the opening of a letter of credit is granted, subject to the availability of guarantees by authorized banks serving customers, and observes the timing of the receipt of foreign exchange earnings, the number of current legislation;
03
Registration in the Ministry of Economic Relations, Trade and Trade of the Republic of Uzbekistan of export contracts for the supply of products of own production (except for the export of licensed goods) has been canceled, while maintaining the current procedure for their registration with authorized banks and customs authorities.

Foreign companies that carry out prospecting and exploration for oil and gas, as well as attractive foreign contractors and subcontractors are exempt from payment of:

01
All types of state and mandatory contributions in state trust funds for the period of geological exploration;
02
Customs payments (except for customs clearance fees) for the import of equipment, material and technical resources and services necessary for conducting prospecting, exploration and other related works.

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