Requirements for Investment Projects in Special Economic Zones

Investment projects play a key role in the functioning of special economic zones (SEZs), which are established to accelerate the socio-economic development of regions, attract domestic and foreign investments, and promote innovative technologies and management experience. According to the Law of the Republic of Uzbekistan “On Special Economic Zones” (Law No. ZRU-604 of February 17, 2020), the implementation of such projects is regulated by specific requirements and procedures for their review and approval.

Basic Requirements for Projects in SEZs

The main requirements for investment projects within SEZs include:

• Compliance with legislative standards in the fields of architecture, construction, ecology, labor protection, and industrial safety;
• Availability of reliable sources of financing;
• Consistency with the functional and sectoral specialization of the SEZ;
• Use of modern energy-efficient technological equipment and processes.

These requirements ensure the sustainability of projects and their integration into the strategic development of the zones.

Special Requirements Depending on the Type of SEZ

Legislation defines a number of specific conditions depending on the type of SEZ:

Free Economic Zones (Industrial SEZs)

• Production of new types of goods that are not yet produced in Uzbekistan or expansion of the output of scarce goods;
• Change in the customs classification of the final product or an increase in value added by at least 30%;
• Prohibition of projects that duplicate products already saturating the domestic market. Exception: export-oriented projects are not subject to this restriction.

Scientific and Technological Zones

• Availability of registered patent rights;
• Innovative and high-tech nature of products with fundamental novelty or improved consumer properties.

Tourist and Recreational Zones

• Mandatory development of tourist infrastructure ensuring safety and protection of tourists’ health;
• Installation of video surveillance, alert, and emergency assistance systems.

Thus, the approach varies depending on the zone’s specialization, supporting diversification of the national economy.

Prohibited Activities

To prevent ecological and social risks, it is prohibited to implement projects involving:

• Production of weapons, nuclear materials, tobacco, and alcoholic products;
• Activities violating environmental standards;
• Processing or disposal of hazardous waste.

Procedure for Submitting and Reviewing Investment Applications

The process of implementing an investment project in an SEZ includes several stages:

1. Submission of the Investment Application

The investor submits an application to the SEZ Directorate, attaching the charter, business plan (or feasibility study), and draft investment agreement. For foreign investors, legalization or apostille of documents is required.

2. Review by the SEZ Directorate

The Directorate registers the application on the day of receipt and, within ten working days, assesses its economic feasibility and compliance with legal requirements. Documents may be returned for revision if inconsistencies are found.

3. Decision-Making

Based on the review, a protocol is issued and approved by the SEZ Director.

A positive decision serves as the basis for:

• Placing a land plot on an electronic auction;
• Concluding an investment agreement;
• Allocating vacant buildings for the project.

4. Conclusion of the Investment Agreement

The agreement is signed within three working days after the auction winner is determined or if the investor already owns the land plot. It comes into force after the legal entity’s registration and inclusion in the SEZ Participant Register.

5. Appeal of Decisions

An investor may appeal a refusal to implement the project in court, ensuring the protection of legal rights and interests.

Legal and Institutional Framework

The system of requirements and approval procedures for investment projects in Uzbekistan’s SEZs ensures a balance between encouraging entrepreneurship and safeguarding national interests. Clear regulations make it possible to:

• Minimize risks of inefficient investments;
• Direct capital into priority sectors;
• Guarantee the legal protection of investors.

Thus, the SEZ legal regime creates a favorable investment environment by combining state control and market mechanisms.

Table of Requirements for Investment Projects

Type of Requirement	Content
General Requirements (for all SEZs)	• Compliance with architectural, construction, environmental, labor, and industrial safety norms. • Availability of financing sources. • Consistency with the zone’s sectoral and functional specialization. • Use of energy-efficient equipment and technologies.
Free Economic Zones (Industrial SEZs)	• Production of new goods not manufactured in Uzbekistan, or expansion of scarce goods output. • Change in customs classification or ≥30% increase in value added. • Prohibition of duplicating products already saturating the domestic market. • Exception: fully export-oriented projects are not restricted.
Scientific and Technological Zones	• Availability of registered patent rights. • Products must be innovative, high-tech, and fundamentally new or improved compared to existing analogs. • Potential for broader application due to new properties.
Tourist and Recreational Zones	• Development of modern tourist infrastructure (hotels, cultural and health facilities, etc.). • Ensuring tourist safety and health protection. • Installation of video surveillance, alert, and emergency assistance systems.
Prohibited Activities (for all SEZs)	• Production violating environmental standards. • Manufacture of weapons, ammunition, nuclear materials. • Production of alcohol and tobacco. • Processing of raw hides, animal slaughter. • Manufacture of cement, concrete, bricks, etc. • Waste processing or burial. • Construction of nuclear power plants, oil refineries, or nuclear installations.

 

Rights and Obligations of the State and SEZ Participants

Party	Rights	Obligations
State (Cabinet of Ministers, authorized bodies, SEZ Directorate)	• Defines and implements state policy in SEZs. • Establishes and enforces a special legal regime. • Provides tax and customs incentives. • Organizes electronic land and property auctions. • Monitors and controls project implementation. • Guarantees legal protection and compensation for unlawful interference.	• Provide engineering, communication, and transport infrastructure. • Explain SEZ legal regime features to investors. • Compensate losses and lost profits caused by illegal actions of authorities. • Monitor compliance with environmental and cultural norms. • Timely approve SEZ development programs.
SEZ Participants (Investors and their established legal entities)	• Enjoy legal protection, incentives, and preferences. • Lease land plots and infrastructure facilities. • Request connection to engineering networks. • Construct facilities within the general plan at their own expense. • Use Directorate services (marketing, product promotion, etc.).	• Comply with investment agreement terms and legislation. • Fulfill project deadlines and performance indicators. • Submit implementation reports to the SEZ Directorate. • Ensure environmental safety of production. • Not transfer rights or obligations to third parties until fully fulfilled.