Setting Up a Business in Uzbekistan

Setting Up a Business in Uzbekistan

With stable growth rates of around 5 percent per year and a population of 35.6 million people, Uzbekistan is an attractive country for many to do business.

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Why Do Business in Uzbekistan

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Uzbekistan offers a favorable business environment, as discussed below, and has signed a number of free trade agreements with neighboring countries. Therefore, it is quite feasible to serve the entire Central Asian market from Uzbekistan.

Not a Way to Evade Sanctions

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If you knew or should have known that goods subject to sanctions would end up in Russia via Uzbekistan, you are liable. However, much trade with Russia is still permitted, but it proceeds particularly slowly due to practical obstacles. A company in a country like Uzbekistan could provide a solution here.

Can a Foreigner or Foreign Company Be the Sole Shareholder of a Company in Uzbekistan?

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A foreigner or a foreign company can be the sole shareholder of a company in Uzbekistan.

Matryoshka Structure Prohibition

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Just like in Russia, it is prohibited in Uzbekistan for a legal entity with one shareholder to be the sole shareholder of another company.

What Types of Business Entities Are There in Uzbekistan?

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Uzbekistan recognizes the following types of business entities:

  • Limited Liability Company (LLC): Equivalent to the Dutch BV, known as “Mas’uliyati cheklangan jamiyat” (MChJ) in Uzbek.
  • Joint-Stock Company (JSC): Comparable to the Dutch Naamloze Vennootschap, called “Aksiyadorlik jamiyati” (AJ) in Uzbek.
  • Private Enterprise: Known as “Xususiy korxona” in Uzbek, this is a legal entity with a maximum of one shareholder.
  • Sole Proprietorship: Referred to as “Yakka tartibdagi tadbirkor” in Uzbek. Like in the Netherlands, a sole proprietorship in Uzbekistan does not have separate legal personality, and the founder is fully liable for the debts.

Can a Foreigner Register a Sole Proprietorship in Uzbekistan?

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Foreigners can register as sole proprietors in Uzbekistan, provided they first obtain a residence permit.

The rules for doing business as a sole proprietor in Uzbekistan are different, namely:

  • Not more than four employees allowed.
  • Sole proprietorships can only engage in one of the permitted activities specified by the Uzbek government. These activities fall into four main categories and 85 specific activities:
    • Retail
    • Craft activities as per the legislation
    • Other household services
    • Other activities

Can a Foreigner Be the Director of a Company in Uzbekistan?

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A foreigner can be the director of a company in Uzbekistan. If they have a residence permit, no work permit is needed. Without a residence permit, they must first obtain a work permit.

What Are the Requirements for a Legal Address in Uzbekistan?

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Except for certain IT companies, it is mandatory for Uzbek companies to have a physical address (a PO box is not sufficient). If the shareholder lives there, you can consider registering the company at the shareholder’s residential address, but it is unclear if this is officially permitted. Generally, a residential address is only allowed for small businesses.

The address requirements in Uzbekistan are quite stringent, and shell companies cannot exist. Companies under the general tax system and subject to VAT must have an address of at least 18 square meters.

Does Uzbekistan Have Currency Control?

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For those familiar with doing business in Russia, the term ‘currency control’ needs no further explanation. Like Russia, Uzbekistan has currency control.

In Russia, this procedure is characterized by government distrust towards entrepreneurs conducting international business. In Uzbekistan, these rules are somewhat more lenient but still important to know:

  • An Uzbek company cannot open a foreign bank account without special permission (unless a bilateral treaty stipulates otherwise).
  • After opening a foreign bank account, an Uzbek company must notify the tax authorities.
  • Permission is required for foreign investments over $10,000.
  • Permission is required for loans to non-residents.
  • Permission is required to transfer money for purchasing foreign real estate.
  • The following foreign exchange operations are monitored by the Central Bank of Uzbekistan:
    • Import of goods or services into Uzbekistan.
    • Payment of fines by residents for non-compliance with contract terms.
    • Dividend payments to foreign shareholders.
    • Royalty payments to non-residents.
    • Payment for import of services.
    • Payment to non-residents for the sale of shares in Uzbek companies and real estate.
    • Repayment of loans or other credit agreements to non-residents.
    • Transfers of more than 100 million som (approximately €7,350) by individuals abroad annually.
    • Receipt of funds from foreign legal entities into the accounts of individuals residing in Uzbekistan.

Uzbekistan is gradually easing these stringent regulations.

Can an Uzbek Company Hold Foreign Currency or Must It Exchange (Part of) It for Local Currency?

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Since 2017, companies in Uzbekistan are no longer required to automatically convert their foreign currency revenue into Uzbek som. Euro revenue can thus be held in euros. However, it is not allowed to transfer these euros to another bank in Uzbekistan, even if it offers a more favorable exchange rate. The fact that Uzbekistan mandated partial conversion of foreign currency revenue until 2017 indicates that this measure could be reinstated in a crisis.

How Much Tax Does a Company Pay in Uzbekistan?

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There are various special tax regimes for small businesses in Uzbekistan.

Tax Rates for Sole Proprietorships in Uzbekistan

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TurnoverUp to 100 million som per year (approximately €7,500)Between 100 million and 1 billion som per year (approximately €75,000)More than 1 billion som per year
Social Security Contributions1 minimum pension contribution per year (currently 330,000 som, approximately €25)samesame
Income TaxFixed amount or percentage. Entrepreneurs with turnover under 100 million som per year can opt for a fixed tax amount instead of detailed reporting. This fixed amount varies by activity and location, higher in Tashkent than in other regions. In Tashkent, the fixed amount for some activities is 1 million som per month (approximately €75).nonenone
Turnover TaxnoJa (optional)no

Turnover Tax for Sole Proprietorships in Uzbekistan (for turnover between 100 million and 1 billion som)

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General Rate4%
Retailers in Cities
– Cities with over 100,000 inhabitants4%
– Places with fewer than 100,000 inhabitants2%
– Hard-to-reach and mountainous areas1%
For Tobacco Product Trading4%
Pharmacies in Wholesale and Retail
– Cities with over 100,000 inhabitants3%
– Places with fewer than 100,000 inhabitants2%
– Hard-to-reach and mountainous areas1%
Entrepreneurs in Agricultural Procurement and Storage4% of turnover or 25% of profit
Entrepreneurs in E-commerce (Goods or Services)2%
Specific Categories of Disabled Entrepreneurs0%
turnover tax for sole proprietors in Uzbekistan (for legal entities with similar turnover rates are virtually the same)

Tax for Legal Entities in Uzbekistan

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For legal entities, the same rough subdivision applies as for sole proprietorships: turnover between 100 million and 1 billion som can use turnover tax, which is often beneficial. Companies with turnover over 1 billion som per year cannot use turnover tax and must follow the general system:

Tax TypeDescriptionRate
Profit TaxGeneral rate15%
Entrepreneurs in e-commerce (national register required)7.5%
Social enterprises0%
VATGeneral rate12%
Exceptions listed in articles 260 and 264 of the Tax Code0%
Property Tax for Organizations1.5% of taxable value
this is what Uzbek businesses with a turnover of more than 1 billion som (€73,502) would typically pay


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I hope this blog post has provided a good overview of the opportunities that doing business in Uzbekistan can offer. Van Rhijn & Partners can assist with company registration, bookkeeping, and obtaining necessary permits and visas in Uzbekistan.

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