Investment Guide to Uzbekistan 2009 Undp
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INVESTMENT GUIDE TO UZBEKISTAN 2009 UNDP United Nations Development Programme is the UN’s global development network, an organization advocating for change and connecting countries to knowledge, experience and resources to help people build a better life. We are on the ground in 166 countries, working with them on their own solutions to global and national development challenges. As they develop local capacity, they draw on the people of UNDP and our wide range of partners. UNCTAD The United Nations Conference on Trade and Development (UNCTAD) was established in 1964 as a permanent intergovernmental body. Its main goals are to maximize the trade, investment and development opportunities of developing countries, to help them face challenges arising from globalization, and to help them integrate into the world economy on an equitable basis. UNCTAD’s membership comprises 196 States. Its secretariat is located in Geneva, Switzerland, and forms part of the United Nations Secretariat. ICC The International Chamber of Commerce (ICC) is the world business organization. It is the only body that speaks with authority on behalf of enterprises from all sectors in every part of the world, grouping together thousands of members, companies and associations from 130 countries. ICC promotes an open international trade and investment system and the market economy in the context of sustainable growth and development. It makes rules that govern the conduct of business across borders. Within a year of the creation of the United Nations it was granted consultative status at the highest level (category A) with the United Nations Economic and Social Council. This is now known as General Category consultative status. © Publication materials can not be reproduced in whole or in part, without prior permission of UNDP. The analysis and recommendations expressed in this publication do not necessarily represent the views of UNDP. This Guide is an independent publication produced by groups of experts commissioned by UNDP. © United Nations Development Program Country Office for Uzbekistan, 2009. Leges Advokat INVESTMENT GUIDE TO UZBEKISTAN contents Preface....................................................................................................................vii Acknowledgements..............................................................................................viii Note to readers.....................................................................................................viii Why invest in Uzbekistan?......................................................................................ix Uzbekistan at a glance...........................................................................................xii Chapter 1. The Republic of Uzbekistan – an overview...........................................1 1.1 History, geography, people, cultural monuments..........................................................2 1.2 Political system and the government..............................................................................4 1.3 Economic context: transition policies, recent economic results, future goals.............8 1.3.1 Transitional policies.................................................................................................8 1.3.2 Recent economic results.........................................................................................10 1.3.3 Future goals of the transition strategy..................................................................12 Chapter 2. Locational advantages........................................................................13 2.1 Human resources............................................................................................................14 2.2 Natural resources............................................................................................................18 2.3 Regional markets............................................................................................................19 2.4 Infrastructure..................................................................................................................22 2.4.1 Transport.................................................................................................................22 2.4.2 Telecommunications..............................................................................................24 2.4.3 Real estate and utilities.........................................................................................26 Chapter 3. Business support services...................................................................29 3.1 Banking...........................................................................................................................30 3.2 International finance......................................................................................................32 3.3 Uzbekistan Reconstruction and Development Fund...................................................34 3.4 UzEmiratHolding............................................................................................................34 3.5 Credit unions and microfinance....................................................................................35 3.6 Leasing............................................................................................................................35 3.7 Securities market............................................................................................................36 3.8 Insurance.........................................................................................................................37 3.9 Auditing, accounting and consulting services.............................................................38 Chapter 4. Business environment..........................................................................39 4.1 Promotion of the private sector......................................................................................40 4.2 Registration and licensing.............................................................................................42 4.3 Taxation...........................................................................................................................44 4.4 Currency conversion and circulation............................................................................50 4.5 Foreign trade..................................................................................................................52 Chapter 5. Investment climate..............................................................................55 5.1 Investment regulations and the definition of foreign investors and enterprises with foreign investment................................................................................................56 5.2 Investing in a business entity........................................................................................56 5.3 Investment protection..................................................................................................57 5.4 Incentives for foreign investment.................................................................................61 5.5 Production sharing agreements...................................................................................64 5.6 Restrictions on foreign investment...............................................................................64 iii INVESTMENT GUIDE TO UZBEKISTAN Chapter 6. Opportunities under privatization....................................................65 6.1 Results so far...................................................................................................................66 6.2 Priority areas for privatization......................................................................................68 6.3 The privatization process...............................................................................................68 Chapter 7. Successful investment stories in Uzbekistan....................................71 7.1 FDI inflows: current situation.........................................................................................72 7.2 Company case studies....................................................................................................73 Appendices 1. Major foreign investment legislation 2. List of foreign investment and foreign trade treaties of Uzbekistan 3. List of activities subject to licensing and state agencies involved 4. Travel regulations 5. Useful contacts 6. Useful information Bibliography iv INVESTMENT GUIDE TO UZBEKISTAN Abbreviations ADB Asian Development Bank CBU Central Bank of Uzbekistan CER Center for Economic Research CJSC Closed joint stock company CCI Chamber of Commerce and Industry CIS Commonwealth of Independent States EBRD European Bank for Reconstruction and Development EurAsEC Eurasian Economic Community FDI Foreign direct investment GDP Gross domestic product IDB Islamic Development Bank IFC International Finance Corporation IFI International financial institutions IMF International Monetary Fund JSC Joint stock company JV Joint venture MFERIT Ministry of Foreign Economic Relations, Investments and Trade NAC National Airline Company NBU National Bank for Foreign Economic Activity of Uzbekistan NHC National holding company OIBDA Operating income before depreciation and amortization OJSC Open joint stock company PSA Production sharing agreement S&P Standard & Poor’s rating agency SCO Shanghai Cooperation Organization SPC State Property Committee SSC State Statistics