State Support for Investments in Uzbekistan

State support for investments in the Republic of Uzbekistan is one of the priority directions of national economic policy aimed at creating a favorable investment climate and enhancing the attractiveness of the national economy. The Law of the Republic of Uzbekistan “On Investments and Investment Activities” No. ZRU-598 of December 25, 2019, establishes a broad range of instruments for state support, including incentives, preferences, centralized investments, investment subsidies, and tax benefits.

1. Objectives of State Support for Investments

According to Article 30 of the Law, state support is aimed at:

• creating a favorable investment climate;
• stimulating the establishment of competitive, innovative, export-oriented, and import-substituting industries;
• modernizing and upgrading existing enterprises;
• developing infrastructure and increasing employment levels.

2. Forms of State Support

The main forms of support are provided in Chapter 5 of the Law:

• Application of incentives and preferences — tax, customs, and property benefits.
• Centralized investments — state co-financing of projects.
• Investment tax credits — rescheduling tax payments with subsequent phased payment.
• Investment subsidies — provision of engineering infrastructure and preferential conditions.
• Organizational and legal measures — “one-stop-shop” principle, consulting, and informational assistance.
• Institution of the Commissioner for the Protection of Entrepreneurs’ Rights — protection of investors’ rights and out-of-court dispute resolution.

3. Incentives and Preferences for State Investment Support

A special role is played by the system of incentives and preferences established in Chapter 6 of the Law.

• Incentives — include tax and customs reliefs, as well as the transfer of state-owned assets to investors at a preferential or zero buyout cost.
• Preferences — may be granted by decisions of the Council of Ministers of the Republic of Karakalpakstan, regional hokimiyats, and the Tashkent city hokimiyat, including in relation to municipal property.
• Investment tax credit — allows investors to temporarily reduce tax payments.
• Investment subsidy — may take the form of constructing external engineering and communication networks, as well as providing tax and customs privileges.

4. Tables

Table 1. Forms of State Support for Investments

№	Form of Support	Description	Legal Reference
1	Incentives and Preferences	Tax, customs, and property benefits	Art. 34
2	Centralized Investments	State co-financing of investment projects	Art. 30
3	Investment Tax Credit	Rescheduling of tax obligations	Art. 35
4	Investment Subsidy	Infrastructure provision, tax and customs reliefs	Art. 36
5	“One-Stop-Shop”	Organizational support for investors	Art. 31
6	Institution of the Commissioner	Protection of investors’ rights, pre-trial dispute resolution	Art. 33

 

Table 2. Incentives and Preferences for Investment Support

№	Type of Incentive/Preference	Description	Conditions for Granting
1	Transfer of State Property	State assets are transferred at preferential or zero buyout value	By decisions of state authorities
2	Tax Incentives	Reduction of investors’ tax burden	As provided by the Tax Code
3	Customs Incentives	Exemption from duties on imported equipment and technologies	For approved projects
4	Credit Subsidies	State compensation of part of the interest rate	For priority sectors
5	Investment Tax Credit	Temporary reduction of tax liabilities with deferred payment	Upon investor’s application
6	Investment Subsidy	Construction of engineering networks, tax and customs benefits	By Government decision
7	Regional Preferences	Additional benefits depending on investment location	By local authorities’ decisions

5. Summary

The system of state support for investments in Uzbekistan combines financial incentives (subsidies, tax reliefs, credit mechanisms) and institutional guarantees (consulting rights, “one-stop-shop” principle, protection of rights through the Commissioner).

A distinctive feature of the Uzbek model is the decentralization of granting preferences — local authorities are empowered to provide benefits based on regional priorities, increasing the flexibility of investment policy.

At the same time, the system of preferences is target-oriented, preventing the allocation of indefinite or uncontrolled incentives and maintaining a balance between the interests of the state and investors.

State support for investment and investment activities in Uzbekistan thus forms a stable legal and financial foundation for capital attraction. Incentives and preferences are an integral part of this support, ensuring competitive conditions for project implementation.

Consequently, the combination of financial and tax incentives with institutional guarantees enhances the country's investment attractiveness and promotes its integration into the international economic space.