Investment Agreement with the Government of Uzbekistan

The Investment Agreement with the Government of the Republic of Uzbekistan is a special legal instrument aimed at creating stable and predictable conditions for foreign investors. Its regulation is enshrined in Chapter 8 of the Law of the Republic of Uzbekistan “On Investments and Investment Activities” dated December 25, 2019, No. ZRU-598. This agreement represents a form of cooperation between the State and the investor, under which the State provides additional guarantees and support measures — including benefits and preferences — in exchange for the investor’s fulfillment of investment obligations.

1. Legal Nature of the Investment Agreement

The Investment Agreement with the Government of Uzbekistan:

• is concluded exclusively when the State provides additional guarantees and support measures (tax, customs, or other benefits);
• has a public-law nature, since one of the parties is the State represented by an authorized body;
• ensures a balance of interests: the investor gains legal stability and economic incentives, while the State receives guarantees for implementing priority investment projects.

2. Parties to the Investment Agreement

According to Article 41 of the Law:

• Foreign investor – an individual or legal entity implementing a project in the territory of Uzbekistan;
• The Government of Uzbekistan, acting through an authorized state body in the field of investment regulation and activity.

3. Key Terms of the Investment Agreement

The Investment Agreement must include:

• the object and amount of investment, and the timeline for project implementation;
• rights and obligations of the parties, including anti-corruption and antimonopoly clauses;
• investor’s obligations (investment volume, localization, product quality, export indicators, etc.);
• State’s obligations (additional guarantees and support measures);
• monitoring and reporting procedures;
• liability mechanisms of the parties;
• terms for amendment and termination of the agreement;
• dispute resolution procedures, including the choice of jurisdiction and arbitration.

4. Procedure for Concluding the Investment Agreement

According to Article 43 of the Law:

• The initiative to conclude the agreement may come from the foreign investor or jointly with state authorities.
• The investor submits to the authorized body:
  • an application expressing intent to conclude an agreement;
  • a draft agreement;
  • a business plan and feasibility study.
• A legal and financial-economic review of the project is conducted.
• Upon a positive conclusion, the agreement is approved by the Government or the President.
• The agreement enters into force upon approval.

5. Termination of the Investment Agreement

Under Article 44:

• the agreement expires upon the end of its term;
• it may be terminated early by mutual consent or unilaterally;
• in case of breach of obligations by the investor, the State may initiate termination;
• upon termination, the investor must reimburse benefits and preferences obtained under the agreement.

6. State Obligations Regarding Foreign Investments

According to Article 45:

• the State is liable only for obligations stipulated in the investment agreement;
• it does not bear responsibility for the debts of residents attracting investments, except where a state guarantee is provided;
• no additional restrictions may be imposed on investors beyond those specified in the agreement.

7. Tables

Table 1. Parties and Subject of the Investment Agreement

Party	Function	Obligations
Foreign Investor	Provides investments, introduces technologies, creates jobs	Fulfillment of investment volume, compliance with quality standards, localization of production
Government of Uzbekistan	Provides guarantees and support measures	Ensures legal stability, grants benefits and preferences

 

Table 2. Main Terms of the Investment Agreement

№	Term	Content
1	Volume and Object of Investment	Financial contributions, project start and completion deadlines
2	Rights and Obligations of the Parties	Anti-corruption clause, obligations on production and export
3	State Guarantees	Additional benefits, tax and customs preferences
4	Performance Control	Investor reporting, supervision by the authorized body
5	Liability of the Parties	Compensation for damages, sanctions for breach of conditions
6	Disputes	Resolution through Uzbek courts or international arbitration

The institution of the investment agreement serves as a legal stabilization and investor-protection mechanism, comparable to production sharing agreements and other forms of public-private partnership. Unlike ordinary contracts, the investment agreement enshrines State guarantees, including tax and customs benefits, making it a strategic tool of investment policy. Its inclusion of arbitration clauses aligns national legislation with international standards and enhances the confidence of foreign investors.

Rights and Obligations under the Investment Agreement with the Government of Uzbekistan

Party	Rights	Obligations
Foreign Investor	- To receive additional guarantees and support measures (benefits, preferences, tax and customs reliefs). - Right to legal stability: maintenance of investment conditions throughout the contract term. - Right to repatriate products and profits outside Uzbekistan. - Access to judicial and arbitration protection mechanisms, including international arbitration (if stipulated). - Right to propose amendments to the agreement.	- To invest the agreed amount within the established timeframe. - To comply with applicable laws (anti-corruption, antimonopoly, labor, environmental, etc.). - To localize production and introduce modern technologies and equipment. - To create jobs and train local personnel. - To maintain reporting and submit progress reports. - To meet export and production indicators as stipulated in the agreement.
Government of the Republic of Uzbekistan (represented by the authorized body)	- To monitor investor performance. - To unilaterally terminate the agreement in case of material breach by the investor. - To claim compensation for damages caused by non-performance.	- To provide additional guarantees and support measures (tax, customs, property incentives). - To ensure legal protection and stability of conditions for the duration of the agreement. - To create necessary infrastructure and implementation conditions. - To compensate damages caused by unlawful actions of public officials. - To guarantee non-discrimination and equality of investors. - To ensure transparency and openness of all procedures related to the agreement’s implementation.

The table demonstrates that the Investment Agreement establishes mutual obligations:

• the investor undertakes to inject capital, introduce modern technologies, and create jobs,
• while the State commits to providing benefits, ensuring legal stability, and protecting the investment.