Uzbekistan Government adopted legal acts in the field of attracting foreign direct investments

The Cabinet of Ministers of the Republic of Uzbekistan by its resolution dated April 30, 2020 No. 264  approved in the new editions of:

  • The Regulation on the conclusion, amendment, termination and implementation of investment agreements between the Government of the Republic of Uzbekistan and foreign investors;
  • The Regulation on the procedure for notification of the application of the guarantee established by Article 19 of the Law of the Republic of Uzbekistan “On Investments and Investment Activities”.

1.  The Regulation on the conclusion, amendment, termination and implementation of investment agreements between the Government of the Republic of Uzbekistan and foreign investors.

Key aspects:

The Regulation determines the procedure for concluding, amending, terminating and implementing investment agreements by the Government of the Republic of Uzbekistan with foreign investors, providing them with additional guarantees and support measures (benefits and preferences) established by law.

Additional guarantees and support measures (benefits and preferences) are provided to foreign investors in each case when investing in priority sectors of economy.

Additional benefits for paying taxes, customs and other obligatory payments are provided to enterprises with foreign investments created by foreign investors only for a clearly defined period and cannot be cannot be perpetual.

Guarantees and support measures (benefits and preferences) may include:

  • providing guarantees by the Government of the Republic of Uzbekistan;
  • creation of special customs, tax and payment regimes;
  • state support in the implementation of projects, including assistance in financing investment projects;
  • inclusion of investment project in the state investment program;
  • other measures in accordance with the legislation of the Republic of Uzbekistan.

Contractual relationship:

A written investment agreement is concluded between a foreign investor and the Government of the Republic of Uzbekistan represented by the Ministry of Investments and Foreign Trade of the Republic of Uzbekistan.

An investment agreement defines the rights, duties and responsibilities of a foreign investor, as well as the rights, duties and responsibilities of the Government of the Republic of Uzbekistan in relation to ongoing projects and establishes mutual contractual obligations.

The procedure for concluding an investment agreement:

To conclude an investment agreement, a foreign investor, independently or jointly with the relevant project initiators, shall submit to the Ministry of Investment and Foreign Trade of the Republic of Uzbekistan or other authorized bodies:

  • a statement indicating information about the intention to conclude an investment contract and invest in the object of investment activity, as well as relevant experience (if any) of implementing investment projects;
  • a draft investment contract in a standard form in accordance with the annex to the Regulation;
  • the business plan of the project, carried out on the basis of a feasibility study (feasibility study), which, in cases established by law, was examined by authorized bodies.

The following authorized bodies carry out the examination:

  • The Ministry of Justice – regarding the legal expertise of the draft investment contract;
  • The Ministry of Finance and the Ministry of Economic Development and Poverty Reduction – in terms of financial and economic evaluation of the investment project;
  • The State Customs Committee and the State Tax Committee – in terms of providing additional guarantees and support measures (benefits and preferences).

An investment agreement with a foreign investor shall enter into force on the date of the decision of the Cabinet of Ministers of the Republic of Uzbekistan on its approval, unless otherwise provided by this decision.

2. The Regulation on the procedure for notification of the application of the guarantee established by Article 19 of the Law of the Republic of Uzbekistan “On Investments and Investment Activities”

 Key aspects:

The Regulation determines the procedure for notification of the application of the guarantee provided to foreign investors and their investments by Article 19 of the Law of the Republic of Uzbekistan “On Investments and Investment Activities”, in other words ‘Stabilization clause’.

In the event that subsequent legislation of the Republic of Uzbekistan worsens the conditions for investment, the foreign investor notifies the relevant authorized body of the application of the guarantee.

Notification procedure:

A notice of application of the guarantee shall be sent in writing to:

  • a servicing bank – in the case of introducing additional requirements that complicate the repatriation procedure or reduce the amount of income (profit) of a foreign investor transferred abroad;
  • a government body carrying out registration of companies – in the case of the introduction of quantitative restrictions on the volume of investments and other additional requirements for the size of investments;
  • The Ministry of Foreign Affairs and (or) the Ministry of Internal Affairs of the Republic of Uzbekistan – in the case of the introduction of additional procedures for processing and renewing visas of foreign investors;
  • The Ministry of Investment and Foreign Trade of the Republic of Uzbekistan – in the presence of an investment agreement that provides a foreign investor with guarantees and support measures additional to those established by law, – under the investment conditions specified in the investment agreement.

Important

The notification of a foreign investor is a ground for the application of legislation that was in force on the date of preliminary investment by the authorized body in relation to the foreign investor . The notification, regardless of the date it was sent to the authorized body, is effective from the moment the act of legislation comes into effect that deprave the conditions for investment.

The Regulation does not apply to the adoption, supplementation or revokation of legislative acts that are directly related to ensuring the protection of the national security interests of the Republic of Uzbekistan determined in accordance with legislative acts and international treaties of the Republic of Uzbekistan.

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