Unicase Law Firm
As the weeks go by, it gets increasingly easier and faster to start a business in Uzbekistan.
The article looks at how to launch a company and at the legal entities commonplace across
the country.

The local legislation does not impose any restrictions on doing business in the country’s territory on foreign legal entities, except for the registration of a subsidiary. A legal entity can be opened and operated through a limited liability company, an LLC, a representative office, or a branch. However, each type has its own limitations. LLC One of the most popular forms of doing business in Uzbekistan for foreign entrepreneurs is an LLC. Consider the following to make certain you have what it takes:
  • the company is created for an indefinite period;
  • members of the company are legal entities and/or individuals;
  • the number of participants should be no more than fifty (from 1 to 50);
  • the size of the authorised capital of an LLC is not limited;
  • registration takes 1 to 2 business days after the documents are submitted.
  • adopt Resolution/Minutes on the LLC registration;
  • prepare LLC foundation docs (article of association / the charter / regulations); prepare
  • documents confirming the address / location (the rent agreement or a letter of guarantee issued by the tenant and confirming their intention to rent an office (indicating the terms of the lease);
  • reserve the LLC name in the central database of the State Committee For Statistics of the Uzbekistan Republic (stat.uz);
  • prepare primary documents (orders, labour contracts etc.), receipt of electronic digital signature (EDS) if necessary;
  • open a bank account;
  • wire the charter capital payment to the bank account (receipt of a payment certificate);
  • obtain a sketch of the seal (the sketch is made by a stamping company);
  • file the documents for registration (possible via EDS online, fo.birdarcha.uz or my.gov.uz);
  • registre the company in tax authorities;
  • have the stamp made according to the sketch;
  • complete the registration.
  • through an registration system (my.gov.uz /fo.birdarcha.uz);
  • at the “Centre of State Services”, operating in all regions and cities of the Republic.

Registration Steps (after preparing a package of
  • pay the state duty – 1 basic calculated value (270 000 UZS/approx.27 USD); apply for registration and submit the said documents;
  • complete registration;
  • open a bank account and ready the seal.
Procedure for opening a rep. office of a foreign
A representative office of a foreign company in
Uzbekistan is established through its accreditation in
the Ministry of Investment and Foreign Trade of the
Uzbekistan Republic.

Rep. offices of foreign banks on the territory of the
Republic are accredited in accordance with the
Uzbekistan Central Bank procedure. As for the
employees of a rep. office, they also need to be
accredited in accordance with the state regulations. It
is important to know that such accreditation lasts from
1 to 3 years, and an extension should be applied for a
month before its end.

It is possible to open a rep. office solely for the
purpose of representing the interests of a foreign
company, but not for the purposes of commercial
activity. Thus, a rep. office has its limitations.
A foreign company wishing to open a rep. office in
Uzbekistan should submit the following documents:
  • an application containing information about the company and the rep. office (full name, address, main activities, information about owners (shareholders), management, etc.);
  • resolution/minutes of the meeting of the head company on rep. office registration;
  • foundation documents (regulations of the rep. office (equivalent to the charter), approved by the management of the company);
  • the power of attorney issued by the company to the director of the rep. office (full name, address of permanent residence, date of birth, name of the authority issuing the passport), as well as with a list of powers; a copy of the passport of the head and two-colour photographs measuring 3x4 cm;
  • document confirming the address / location (the rent agreement or a letter of guarantee issued by the tenant (indicating the terms of the lease).;
  • sketch of the branch seal (stamp);
  • complete registration;
  • open a bank account and obtain a seal.
Foreign organisations cannot establish branches in
Uzbekistan. At the moment, there are no approved
legal mechanisms for such a registration.
Uzbekistan Law provides for the concept of “Permanent Establishment” for the purpose of foreign 3companies' taxation.

In accordance with the Art.20 of the Tax Code of Uzbekistan, a permanent establishment of a non- resident is a presence of a non-resident running business activities in Uzbekistan, including activities made via authorised persons.

Permanent Establishment is also recognised as the implementation of business activities, which lasts more than 183 calendar days during any consecutive 12- month period.

The term permanent establishment" is used only to determine the tax status and has no organisational and legal significance.
Permanent Establishment includes:
  • 1
    any place of activity related to the production,
    processing, assembly, packaging, sale of goods;
  • 2
    any place of management, representative office, branch, agency, factory, workshop, laboratory, shop, warehouse;
  • 3
    any place of activity related to the extraction of natural resources: mine, oil and/or gas, quarry;
  • 4
    any place of activity (including control or observation) related to the pipeline, gas pipeline, exploration and/or development of natural resources, installation, assembly, commissioning and/or maintenance of equipment;
  • 5
    any place of activity related to the operation of slot machines (including consoles), computer networks and communication channels, attractions, transport or other infrastructure;
  • 6
    a construction site (construction, installation or assembly facility), as well as services related to the supervision of the performance on these facilities. Each construction site is considered forming a separate permanent establishment from day 1. If the subcontractors are other non-residents of Uzbekistan, their activities from the date are also considered as a separate permanent establishment of subcontractors;
  • 7
    PE carrying out activities with non-resident of Uzbekistan and represents its interests, including, regularly uses authority to conclude contracts on behalf of that non-resident of Uzbekistan;
  • 8
    selling goods from warehouses located in Uzbekistan and owned by a non-resident, leased by them or otherwise used (including customs warehouses);
  • 9
    performing other works, rendering other services, with the exception of those provided for in the part five of this article. In certain cases, such as road construction or mineral exploration, where there are regular relocations, other criteria for determining a permanent place are used. In such cases, the entire project is treated as a permanent establishment, regardless of its mobility.
In terms of income, the Permanent Establishment is
treated as a payer of VAT and income tax.
  • A local as well as a foreigner citizen can be appointed as the director of the company. Please, note that in accordance with the legislation, in order to protect the domestic labour market, the Government has established a special procedure for foreign labour and requires obtaining permission for and confirmation of the work from the Ministry. Agency for External Labour Migration Matters is the authorised government body that issues work permits for foreigners.
  • Requirement does not apply to heads of representative offices since they are hired within the framework of accreditation in the manner established by the State Investments Committee of the Uzbekistan Republic. However, we do not exclude requirements on obtaining a work permit before appointing a foreign citizen to the position of the Director.
  • The Uzbekistan legislation does not provide forany special conditions/obligations regarding the number of employees. It is allowed to have one employee and to be represented by the director of the LLC / PE / rep office.
Concept and definitions foreign investments — tangible and intangible benefits and rights to them, including intellectual property rights, as well as reinvestments invested by a foreign investor in objects of the social sphere, entrepreneurial, scientific and other types of activity; foreign investors — foreign states, administrative or territorial bodies of foreign states, international organisations founded in accordance with agreements or other treaties between states or being subjects of international public law, legal entities, any other partnerships, organisations or associations founded and operating in accordance with the laws of foreign states, citizens of a foreign state and stateless persons permanently residing outside
Uzbekistan; enterprises with foreign investments in Uzbekistan
- enterprises in which foreign investments account for at least fifteen percent of shares (shares, units) or the authorised capital (authorised capital). Enterprises with foreign investments are enterprises in which foreign investments account for
at least 15% of the share or authorised capital. In order to attract foreign investors and develop the process of transformation of the economic system, the Republic of Uzbekistan grants certain privileges to such enterprises. In accordance with Law No.598 dated 25.12.2019 “On Investments and Investment Activities”, privileges primarily consist in granting certain rights to an investor, such as: Free implementation of investment activity that does not contradict the legislation of the Republic of Uzbekistan;
• Conclusion of contracts with legal entities, as well aswith individuals;
  • Ownership, use and disposal of their investments and the results of investment
  • activities, as well as for the sale and export of the results of investment activities;
  • Independent and free disposal of income, upon payment of all necessary payments provided for by law;
  • Use of property and property rights owned;
  • Attraction of loans and borrowings;
  • Receiving compensation for losses in cases of illegal actions or omissions and decisions of public administration bodies, public authorities, as well as receiving adequate compensation in case of requisition (expropriation) of its investments and other assets.

The state provides a number of guarantees to the subjects of investment activity in the Republic of Uzbekistan. The state guarantees the absence of third-party non-interference and non-discrimination.
Benefits and preferences
applied for state support of investments and investment activities may include:
  • transfer of state-owned objects or property rights to investors at a preferential or zero redemption value;
  • provision of tax and payment benefits;
  • subsidising interest rates on loans received by an investor for the implementation of an investment project.
  • Benefits and preferences are provided depending on: the volume of investments;
  • conditions of the area in which the investment project is being implemented;
  • expected socio-economic effect and creation of new jobs;
  • spheres and branches of the investment project implementation.

Enterprises with foreign investments have the right to long-term lease of non-agricultural land or up to fifty years.
Depending on the form of ownership, the recipients of
dividends may be shareholders who are registered in
the register of a joint-stock company, members of a
limited liability company, owners of a private enterprise
or members of a family enterprise.

Dividends, regardless of the form of ownership, can be
paid both in money and other assets of the enterprise.

Dividends are income, so taxes must be paid from
them. Therefore, the founders and participants of the
companies receive their income in the form of
dividends with minus taxes.

The taxation procedure does not depend on whether
the recipient of dividends is an individual or a legal
entity. But the tax rate depends on whether the
recipient is a resident of Uzbekistan.
However, despite the same taxation procedure,
reporting differs. Since personal income tax will be
withheld from an individual, and income tax or EPP will
be withheld from a legal entity.

In accordance with recent Presidential Resolution, from
1 April 2022 to 31 December 2024 income accrued in
the form of dividends on shares of individuals -
residents and non-residents of the Republic of
Uzbekistan are exempt from income tax.

In addition, income accrued in the form of dividends on
shares of non-resident legal entities is subject to a 5%
income tax rate similar to that of resident legal entities.
Income in the form of accrued interest on bonds of
economic entities of individuals and legal entities -
residents and non-residents of the Republic of
Uzbekistan are exempt from personal income tax and
corporate income tax.