DOING BUSINESS IN UZBEKISTAN IN 2023
For over a decade, Healy Consultants Group PLC efficiently and effectively assists our Clients on Uzbekistan company incorporation:
| Compare different Uzbekistan entities | LLC | Fast business setup solution | Free zone LLC | Joint stock company | LLP | Representative office | Foreign legal entity |
|---|---|---|---|---|---|---|---|
| Also known as | LLC | LLC | FTZ LLC | JSC | LLP | RO | FE |
| Best use of company? | All products and services | Close a customer deal now | Manufacturing and export trading | To secure public funding | Professional services | Marketing & research | Restricted products and services |
| How soon can you invoice Clients/sign sales contracts? | 5 weeks | 2 weeks | 5 weeks | 5 weeks | 5 weeks | Cannot | 4 weeks |
| How soon can you hire staff? | 5 weeks | 2 weeks | 5 weeks | 5 weeks | 5 weeks | 8 weeks | 4 weeks |
| How soon can you sign a lease agreement? | Immediately | Immediately | Immediately | Immediately | Immediately | Immediately | Immediately |
| How long to supply corporate bank account numbers? | 4 weeks | 2 weeks | 4 weeks | 4 weeks | 4 weeks | 4 weeks | 4 weeks |
| How long to supply company registration/tax numbers? | 5 weeks | 2 weeks | 5 weeks | 5 weeks | 5 weeks | 8 weeks | 5 weeks |
| Corporate tax rate on annual net profits? | 15% | 15% | 0% | 15% | 15% | 0% | 10% |
| Limited liability entity? | Yes | Yes | Yes | Yes | Yes | No | No |
| Government grants available? | Yes | Yes | Yes | Yes | Yes | No | Yes |
| Government approval required for foreign owners? | Yes | Yes | Yes | Yes | Yes | Yes | Yes |
| Resident director/partner/manager/ legal representative required? | Yes | Yes | Yes | Yes | Yes | Yes | Yes |
| Minimum paid up share capital? | US$1,800 | US$1,800 | US$1,800 | US$400,000 | US$2,250 | None | None |
| Can bid for Government contracts? | Yes | Yes | Yes | Yes | Yes | No | Yes |
| Corporate bank account location? | Asaka Bank | Asia Alliance Bank | Turon Bank | Aloqa Bank | Asia Alliance Bank | Turon Bank | Asaka Bank |
| Can secure trade finance? | Yes | Yes | Yes | Yes | Yes | No | Yes |
| VAT payable on sales to local customers? | 20% | 20% | 0 | 20% | 20% | 0 | 20% |
| Average total business set up engagement costs? | US$15,620 | Inquire a proposal | US$16,600 | US$16,600 | US$13,620 | US$14,990 | US$5,010 |
| Average total engagement period? | 3 months | 4 months | 3 months | 3 months | 3 months | 4 months | 2 months |
| Accounting and tax considerations | LLC | Fast business setup solution | Free zone LLC | Joint stock company | LLP | Representative office | Foreign legal entity |
|---|---|---|---|---|---|---|---|
| Statutory corporate tax payable? | 15% | 15% | 0% | 15% | 15% | 0% | 10% |
| Legally tax exempt if properly structured? | No | No | No | No | No | No | No |
| Group HQ tax incentives? | Yes | Yes | Yes | Yes | Yes | No | No |
| Must file an annual tax return? | Yes | Yes | Yes | Yes | Yes | No | Yes |
| Must file annual financial statements? | Yes | Yes | Yes | Yes | Yes | No | Yes |
| Must appoint an auditor? | No | No | No | Yes | No | No | No |
| Access to double taxation treaties? | Yes | Yes | Yes | Yes | Yes | No | Yes |
| Withholding tax on payments to foreign shareholders? | 10% | 10% | 10% | 0% | 10% | None | 10% |
| Company Registration | LLC | Fast business setup solution | Free zone LLC | Joint stock company | LLP | Representative office | Foreign legal entity |
| Resident director/partner/manager/ legal representative required? | Yes | Yes | Yes | Yes | Yes | Yes | Yes |
| Minimum number of shareholders/partners? | 1 | 1 | 1 | 2 | 1 | Parent company | Parent company |
| Maximum shareholding for foreigners? | 100% | 100% | 100% | 100% | 100% | 100% | 100% |
| Minimum statutory paid up share capital? | US$1,800 | US$1,800 | US$1,800 | US$400,000 | US$2,250 | None | Parent company share capital |
| Security deposit to be kept with Government? | No | No | No | No | No | No | No |
| Shelf companies available? | Yes | Yes | Yes | Yes | Yes | No | Yes |
| Time to incorporate a new entity? | 5 weeks | 2 weeks | 5 weeks | 5 weeks | 5 weeks | 5 weeks | 5 weeks |
| Can easily convert to a JSC? | Yes | Yes | Yes | Yes | No | No | No |
| Public register of shareholders and directors? | Yes | Yes | Yes | Yes | Yes | Yes | Yes |
| Can have preference shareholders? | Yes | Yes | Yes | Yes | Yes | No | No |
| Business Considerations | LLC | Fast business setup solution | Free zone LLC | Joint stock company | LLP | Representative office | Foreign legal entity |
| Good entity for trademark registration? | Yes | Yes | Yes | Yes | Yes | Yes | Yes |
| Can secure an import and export license? | Yes | Yes | Yes | Yes | Yes | No | Yes |
| Sponsorship by a local citizen required? | No |
| Our Client needs to travel to Uzbekistan for business set up? | No |
| Temporary physical office solutions available? | Yes |
| You need a local resident as bank signatory? | Yes |
| Can be wholly foreign owned? | Yes |
| The entity will likely be regulated by? | Local Inspectorate (Khokimiyat) |
| Minimum number of directors/managers? | 1 |
| Monthly VAT reporting to the Government? | Yes |
| Must sign an office lease agreement during incorporation? | Yes |
| Shareholders & directors documents to be attested/translated? | Yes |
| Each foreign director needs a personal income tax number? | Yes |
| Foreign director needs a residence visa? | Yes |
| Maximum number of staff allowed? | No maximum |
| Expatriate to local staff ratio? | 5:1 |
| Can secure residence visa for business owner? | Yes |
| Other useful information | |
| What will be included in my customer sales invoice? | Click link |
| This country has signed free trade agreements? | Yes |
| This country is a member of WIPO/TRIPS? | Yes |
| This country is a member of the ICSID? | Yes |
| Average custom duties suffered? | 30% |
| Government foreign investment approval required? | Yes, for companies with high capital |
| Average monthly office rental? (US$ per sq m) | US$200 |
| Minimum statutory monthly salary (US$)? | US$40 |
| Average monthly US$ salary for local skilled employees? | US$124 |
| US$ deposit interest rate? (1 year average) | 7% |
| Overseas remittance currency controls? | Yes |
| Banking considerations | |
| Multi-currency bank accounts available? | Yes |
| Corporate visa debit cards available? | Yes |
| Quality of e-banking platform? | Fair |
| Crowd funding available in this country? | Yes |
Uzbekistan business setup summary
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Advantages and disadvantages
Advantages of Uzbekistan company registration
- Our Clients may enjoy certain benefits when registering their businesses in Uzbekistan including:
- Uzbekistan has seen consistently high growth over the past decade, with annual growth rates between 7-10% every year since 2004. Demand for foreign expertise to help manage the rapidly expanding manufacturing and resource-processing industries is at an all-time high;
- Uzbekistan has a corporate tax rate of just 15%, with no capital duty or capital acquisitions tax. A withholding tax rate of 10% on dividends and interest exists, but may be significantly reduced thanks to existing tax treaties. Capital gains are only taxed if income is derived through commercial activity;
- Compared to countries of the western world, Uzbekistan is very cheap, including food, transport, utilities, rent, wages, etc. Specifically, office rental and utility costs tend to be a fraction of what they are in most western cities;
- While Uzbekistan is landlocked, it is very close to two major markets – China and Russia. Uzbekistan has established strong trade relationships with both of these countries, as well as other emerging markets in Asia such as South Korea and Kazakhstan;
- The government of Uzbekistan has declared attracting foreign direct investment a priority and is especially welcoming of investments in line with its export-oriented industrialization policies. Uzbekistan company formation processes have been sped up such that incorporation can be completed in just two weeks and minimum share capital has been reduced to under US$400.
Disadvantages of Uzbekistan company registration
- Each Uzbek company must have a resident director. Only the resident director may be the bank signatory.
- Uzbekistan suffers from high corruption which can act as a barrier to completing many standard business practices. Uzbekistan is ranked 158th in the 2018 Corruption Perceptions Index by Transparency International. Entrepreneurs should expect under-the-table bribes in order to expedite business operations;
- Trade in Uzbekistan is made difficult due to high tariffs that are unfairly distributed to certain companies at the government’s discretion. In addition, exporting goods often requires stiff bribes to be paid to border guards and custom officers on a regular basis;
- English is spoken by only a small minority of locals, with Uzbek and Tajik being the most common languages. Though more than half of the country speaks Russian as either a first or second language, most government documents must be translated into Uzbek;
- Uzbekistan’s court system is still underdeveloped with property ownership being one of the few widely respected legal rights. The judiciary in Uzbekistan is highly inefficient and entrepreneurs run the risk of dealing with expropriation by public figures that act with impunity;
- Uzbekistan lacks investment and financial freedom, being ranked 166th in the 2019 Index of Economic Freedom by Heritage Foundation. The Uzbekistan investment policies fail to allow for efficiency or transparency and the financial sector restricts private sector growth through the limited banking sector;
- While utilities are cheap, access to electricity is limited to only the most populated areas of Uzbekistan. Setting up electricity in more rural areas of Uzbekistan can cost in excess of US$30,000 and would be an extra cost for starting a company in Uzbekistan.
- Our Clients may enjoy certain benefits when registering their businesses in Uzbekistan including:
Best uses for an Uzbekistan company
- Uzbekistan has a wealth of natural resources. Uzbekistan is the 7th largest gold produce in the world, and deposits of, copper, lead, zinc, tungsten, and uranium are also abundant. The mining industry represents nearly one third of Uzbekistan’s exports and the burgeoning industry offers plenty of opportunity for foreign investment and encourage Uzbekistan business formation.
