Uzbekistan: Investing

FDI in Figures

The government's pro-active investment policy has been followed for several years and it has led the country to attain a growth of 15.1% of FDI during the nine first months of 2010.  The majority of these investments are in the industry sector and notably in the energy sector, as well as new technologies.  Essentially, they come from China and Russia.  More than 58 mixed companies work in the capital Tashkent.

Why You Should Choose to Invest in Uzbekistan

Strong Points

Uzbekistan is the most populated country in central Asia with 27.73 million inhabitants. Moreover, its population is young, with an average age of 24.7 years. The country is rich in raw materials (copper, zinc, gold, silver, tungsten, lead and natural gas). In terms of consumption, it is potentially the largest market in the region. It is also the world's fourth biggest producer of cotton and the second biggest exporter after the United States.

This country is a regional power in progress, even if the government is long in creating favorable conditions to attract foreign investments. A foreign-investor favorable taxation policy is to be noted and a will to modernize the main sectors of the economy. Also, the Uzbek State had been careful to strengthen the commercial banks, especially eight of the most important ones, before the financial crisis.

Weak Points

Despite government statements confirming their will to encourage foreign investments, the regulatory environment and the legal conditions remain erratic and the guarantees offered in order to benefit from these investments are ambiguous.
Even though outwardly, it gives the impression of good will by putting forward privatization efforts, corruption, the likelihood of a humanitarian crisis due to persistant economic difficulties, as well as the continued State seizures in the key sectors (cotton, gold, hydrocarbons and raw materials), are amongst many of the weak points.
One of the controversial political factors of the current government remains working school children in cotton fields, a fact which gave rise to the boycott of the Uzbek "white gold" by western companies.

Government Measures to Motivate or Restrict FDI

According to Uzbek legislation, the State must guarantee and protect the rights of foreign investors in the country. Investment programs were launched in order to encourage big investments in the priority sectors. Programs include 86 foreign direct investment projects totalling 1.8 billion dollars, of which more than half is for the energy sector. Amongst the investors, China with the CNPC company, is expected to participate in the construction of a section of an oil pipeline. South Korea is involved in a chemical-gas complex and the Russian company Lukoil, in putting into operation gas wells.

Procedures Relative to Foreign Investment

Freedom of Establishment

In principle, it is guaranteed.

Acquisition of Holdings

A majority holding interest in the capital of a local company is legal. Minimum is fixed at a 10% and there is no maximal limitation.

Obligation to Declare

The Agency for the Promotion of Foreign Investment in Uzbekistan provides information on the authorizations required for setting up a company.

The compulsory systematic registration of all import contracts with the Ministry of Foreign Relations, Investments and Trade has been abolished. Only certain import contracts are subjected to it especially if it involves financing from the State budget. However, other import contracts still need to be registered with authorized banks or with the customs authorities.

Requests For Specific Authorizations

It is to be noted that a company receiving foreign investments and a company funded with foreign capital is not treated in the same way, the former having a special status.

Investment Opportunities

Investment Aid Agency

Uzbekistan investment Gateway
Uzinfoinvest, Agency for the promotion of Investments

Tenders, Projects and Public Procurement

Tenders Info, Tenders in Uzbekistan
Globaltenders, Tenders & Projects from Uzbekistan
Asian Development Bank, Proposed Projects in Asia
DgMarket, Tenders Worldwide

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