On additional measures to stimulate attraction of direct foreign investments (DP-4434-son)

10.04.2012

Decree of the President of the Republic of Uzbekistan

To note that over the years of independence in Uzbekistan, a favorable investment climate has been formed, a wide system of privileges, preferences and guarantees has been established by law to protect the rights and interests of foreign investors.

As a result, over 4.2 thousand enterprises with foreign investment in leading industries and sectors of the economy have been created and are successfully operating in the republic. More than 3.0 billion foreign investments are disbursed annually, mostly direct, which account for over 26.6 percent of the total investment in the country's economy, which is concrete evidence of the growing interest and confidence of foreign investors in the stability and reliability of the economy of the republic, and the prospects for its development.

At the same time, the ongoing global financial and economic crisis, toughening competition in global and regional investment markets require additional measures to create a more favorable investment climate in the country, stimulate the attraction of foreign investment for the implementation of projects on modernization, technical and technological renewal of production, as well as liquidation bureaucratic barriers and obstacles in working with foreign investors, preventing illegal interference from the state and regulatory bodies in the activities of enterprises with foreign investment.

In order to create the most favorable investment climate for foreign investors making direct investments in the development of high-tech industries, to strengthen incentives for attracting foreign investments and modern technologies to the regions of the republic, to further strengthen the system of guarantees and benefits for foreign investors and enterprises with foreign investments:

2. It shall be established that legal entities are granted tax incentives in the form of exemption from paying land tax, property tax, and tax for the use of water resources, depending on the volume of direct private foreign investments attracted for a period determined by the decision of the President of the Republic of Uzbekistan.

An enterprise with direct private foreign investment has the right to use other tax incentives provided for in the tax legislation.

3. To establish the procedure in accordance with which, within the framework of investment projects worth more than 50 million US dollars and a share of a foreign investor of at least 50 percent, the construction of the necessary external, outside the production site, engineering and communications networks is carried out at the expense of budgetary funds and other internal sources of financing.

5. Categorically prohibit and consider unlawful the establishment by ministries, departments, state bodies in the field, law enforcement and regulatory bodies, commercial banks of additional requirements and restrictions related to the activities of foreign investors and enterprises with foreign investments.

The General Prosecutor's Office of the Republic of Uzbekistan to establish strict control over unconditional compliance by all bodies of state and economic administration of the current legislation to protect the rights and guarantees of foreign investors, enterprises with foreign investments and take effective measures to prevent violation of the established legislation and bring to justice the guilty officials.

7. The Ministry of Foreign Affairs, the Ministry of Internal Affairs of the Republic of Uzbekistan, at the request of ministries, departments, business associations, must ensure that officials and specialists of foreign companies involved in the implementation of investment projects, entry and multiple entry visas for a period of 12 months are issued.

8. The Cabinet of Ministers of the Republic of Uzbekistan, with the involvement of the Ministry of Economy and Finance, the Ministry of Investment, Industry, and Trade, the National Statistics Committee, and the Central Bank, shall ensure that foreign investors have broad access to necessary economic information on a systematic basis and in the prescribed manner, taking into account the State Budget and its execution, monetary policy, foreign trade, and other indicators for the implementation of their investment activities.

9. The Ministry of Justice of the Republic of Uzbekistan, together with the Ministry of Economic Development and Poverty Reduction and the Ministry of Investment and Foreign Trade, shall establish systematic monitoring over the practical implementation of legislation on guarantees, incentives, and preferences provided for foreign investors and enterprises with foreign investment, and shall quarterly submit information to the Cabinet of Ministers on cases of non-compliance with the provided incentives and preferences by ministries, departments, and other executors.

10. To make amendments and additions to the Decree of the President of the Republic of Uzbekistan dated April 11, 2005 No. DP-3594 “On additional measures to stimulate the attraction of direct private foreign investment” in accordance with Appendix No. 2.

The Ministry of Economy, the Ministry of Foreign Economic Relations, Investments and Trade, together with the Ministry of Justice of the Republic of Uzbekistan and other interested ministries and departments, within one month to submit proposals to the Cabinet of Ministers on amendments and additions to the legislation arising from this Decree.

11. The control over the implementation of this Decree is assigned to the Prime Minister of the Republic of Uzbekistan Sh.M. Mirziyoyev.

President of the Republic of Uzbekistan I. KARIMOV

Tashkent city,

April 10, 2012,

No. DP-4434

APPENDIX No. 2 to the Decree of the President of the Republic of Uzbekistan dated April 10, 2012 No. DP-4434

Amendments and additions, introduced in the Decree of the President of the Republic of Uzbekistan dated April 11, 2005 No. DP-3594 “On additional measures to stimulate the attraction of direct private foreign investment”

1. In paragraph 2:

a) the second paragraph shall be worded as follows:

“The location of these enterprises in all cities and rural settlements of the republic, with the exception of Tashkent city and the Tashkent region”;

b) in the fourth paragraph, the words “50 percent” shall be replaced by the words “33 percent”;

v) the fifth paragraph shall be deleted;

g) to consider paragraphs six and seven as paragraphs five and six, respectively;

d) in the sixth paragraph, after the word “direction”, add the words “at least 50 percent”.

2. The appendix shall be stated as follows:

“LIST sectors of the economy to which privileges are provided for direct private foreign investment

1. Products of the electronics industry and the production of components for computer and computer technology.

2. Light industry:

production of finished cotton, woolen and mixed fabrics, as well as knitted fabrics;

production of finished sewing, knitwear, hosiery and textile haberdashery;

natural leather production, leather and haberdashery industry, footwear industry.

3. Silk industry:

production of silk fabrics and finished silk products.

4. Building materials industry:

production of new types of building materials specified in Appendix No. 1a to the Decree of the President of the Republic of Uzbekistan dated March 24, 2005 No. DP-3586.

5. Industrial production of poultry meat and eggs.

6. Food industry:

production of finished industrial-processed food products from local raw materials (excluding alcoholic, non-alcoholic drinks and tobacco products).

7. Meat and dairy industry:

production of finished types of meat and dairy products, cheese and animal oil, as well as products of processing of the entrails of animals.

8. Processing and preserving of fish and fish products

9. Chemical industry.

10. Petrochemical industry.

11. The medical industry, as well as the production of drugs for veterinary medicine.

12. Production of packaging materials.

13. Construction of power plants based on alternative energy sources.

14. Coal industry:

coal preparation;

production of coal briquettes;

shale industry.

15. Production of electroferroalloys and hardware for industrial use.

16. Mechanical engineering and metalworking:

engineering

tractor and agricultural engineering;

construction, road and municipal engineering;

mechanical engineering for light and food industries and household appliances.

17. Machine tool and tool industry.

18. Glass and porcelain industry.

19. Microbiological industry.

20. Manufacture of toys.”