Uzbekistan

Investing in Uzbkistan

FDI in figures | Why you should choose | Administrative procedures relative to foreign investment | Finding assistance or further information

FDI in figures

Foreign investments increased by 20% in 2006 as compared to 2005. 68.3% of these were in the industrial sector, especially that of New Technologies, whereas almost 35% was devoted to the fields of Energy, Chemical Industries and Metallurgy.

Foreign Direct Investment	2005	2006	2007
FDI of inward flow (millions USD)	88	195	262
FDI inward stock (millions USD)	1,191.9	1,386.4	1,648.4
Performance Index*, world ranking	114	118	124
Potential Index**, world ranking	111	98	n.c.
Number of Greenfield investments	14	17	11
FDI inwards (in % of GFCF)	7.1	2.8	5.5
FDI stock (in % of GDP)	8.7	8.7	8.7

Source: UNCTAD, World Investment Report

Note: * The UNCTAD Inward FDI Performance index is based on a ratio of the country's share in global FDI inflows and its share in global GDP. ** The UNCTAD Inward FDI Potential index is based on 12 economic and structural variables such as GDP, foreign trade, FDI, infrastructures, energy use, R&D, education, country risk.

Why you should choose Uzbkistan

Strong points

Uzbekistan, with almost 27 million inhabitants, is the most populated country in central Asia. It is rich in raw materials such as copper, zinc, gold, silver, tungsten, lead and natural gas. It is potentially the largest market in the region in terms of consumption. It is also the 4th largest producer of cotton in the world and the second largest exporter after the United States. This country has high potential in the region even if the government has delayed creating favorable conditions for attracting foreign investments. It is to be noted that a favorable fiscal policy is necessary for foreign investors.

Weak points

Despite government declarations confirming their will to encourage foreign investments, the regulated environment and the judiciary conditions remain unstable and the guarantees offered are ambiguous. It is to be noted that key sectors (cotton, hydrocarbons, raw materials) are controlled and taken-over by the State, that there is corruption and humanitarian crises exist, possibly due to the persisting difficult economic conditions.

Government measures to motivate or restrict FDI

According to the Uzbek legislation, the State must guarantee and protect the rights of foreign investors in the country. This legislation includes the following 5 decrees: " foreign investors" , "guarantees and protection measures of the rights of foreign investors" , "guarantee of the freedom of entrepreneurial activities" and "agreements for the sharing of production".

An investment programme was launched in 2007 in order to encourage important investments in the priority sectors.

Read the Presidential decree (in English) on the government website.

Also read the law texts (in Russian) on the website of the Chamber of Commerce of Uzbekistan.

Administrative 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.