Economic Concentration: Acquisition of Shares in an LLC in Uzbekistan

Publication date: 28.09.2026

The acquisition of interests in the charter capital of a limited liability company (LLC) is one of the most common methods of investment, changing the composition of the company’s participants, and establishing corporate control.

From the standpoint of corporate law, such a transaction results in the transfer to the acquirer of a set of rights associated with participation in the company. These include the right to participate in the management of the company, vote at the general meeting of participants, receive a portion of distributed profits, and claim a portion of the company’s assets upon its liquidation.

However, the acquisition of a significant interest in an LLC may have consequences not only for corporate relations within the company but also for the state of competition in the relevant commodity or financial market. In certain cases, such a transaction results in the concentration of corporate control, consolidation of economic resources, and strengthening of the market position of a particular person or group of persons.

Therefore, the legislation of the Republic of Uzbekistan provides for preliminary state control over certain transactions involving the acquisition of interests in limited liability companies. The principal special regulatory act in this area is the Regulation on the Procedure for Obtaining Preliminary Consent for Economic Concentration, approved by Resolution No. 256 of the Cabinet of Ministers of the Republic of Uzbekistan dated May 1, 2024.

Concept of Economic Concentration in Relation to an LLC

Economic concentration means the conclusion of transactions or performance of other actions that result in the predominance of a business entity or a group of persons and affect the state of competition in a commodity or financial market. In relation to a limited liability company, economic concentration primarily takes the form of the acquisition by a person or group of persons of a significant interest in the charter capital of the company.

At the same time, economic concentration is not limited exclusively to the formal transfer of ownership of an interest. The economic result of the transaction is also relevant, including:

the ability to influence decisions of the general meeting of participants;
the ability to determine the company’s business strategy;
the establishment of direct or indirect corporate control;
the integration of the business activities of the acquirer and the company;
changes in the market shares of the relevant group of persons;
strengthening the position of the company or investor in a particular market.

Accordingly, when conducting a legal assessment of a transaction, it is necessary to consider not only the size of the interest being acquired but also the corporate, economic, and competitive consequences of its acquisition.

Acquisition of More Than One-Third of Interests as a Form of Economic Concentration

State control over economic concentration applies where a person or group of persons acquires the right to dispose of more than one-third of the interests in the charter capital of an LLC. Thus, the formal corporate threshold is the acquisition of an interest exceeding one-third of the company’s charter capital.

This criterion means that the acquisition of exactly one-third of the interests does not, in itself, meet the threshold established by the Regulation. The obligation to obtain preliminary consent arises where the acquired interest exceeds one-third.

The threshold is determined not only by reference to a specific transaction but also taking into account interests already held by the acquirer. For example, if a person owns 20 percent of the interests in an LLC and acquires an additional 15 percent, its aggregate interest will amount to 35 percent. In such a case, the corporate threshold will be exceeded.

Similarly, interests held by other persons belonging to the same group of persons as the acquirer must also be taken into account. Therefore, splitting interests among affiliated companies or individuals does not exclude the application of economic concentration rules.

Concept of Acquisition of the Right to Dispose of Interests

For the purposes of antimonopoly control, not only the formal acquisition of ownership of an interest is relevant, but also the acquisition of the right to dispose of the relevant interest. Such right may arise on the basis of:

an interest purchase and sale agreement;
a donation agreement;
an exchange;
contribution of an interest to the charter capital of another legal entity;
an agreement between participants;
trust management;
pledge of an interest, where the pledgee obtains the right to determine how voting rights are exercised;
option agreements and other contractual arrangements;
other transactions resulting in a person obtaining the ability to determine the exercise of corporate rights.

Accordingly, when determining whether preliminary consent is required, the actual structure of the transaction must be analyzed. The formal name of the agreement is not decisive if its result is the transfer of control over more than one-third of the interests in an LLC.

Financial Criteria for Mandatory Approval

Exceeding the corporate threshold of one-third does not always automatically give rise to an obligation to obtain preliminary consent from the antimonopoly authority. At least one of the prescribed financial conditions must also be met.

Preliminary consent is required if:

the book value of the assets of one of the parties to the transaction or its revenue from the sale of goods for the preceding calendar year exceeds 250,000 Basic Calculation Values (BCV), approximately USD 9,165,000; or
the aggregate book value of the assets of the parties to the transaction or their aggregate revenue from the sale of goods for the preceding calendar year exceeds 500,000 BCV, approximately USD 18,330,000.

Thus, the requirement for approval is determined by applying two groups of criteria simultaneously:

corporate criterion — acquisition of more than one-third of the interests in an LLC;
financial criterion — exceeding the prescribed threshold for assets or revenue.

If the corporate threshold is exceeded but the financial indicators do not reach the prescribed values, preliminary consent is generally not required. However, the assessment must be conducted not only with respect to the direct acquirer but also taking into account the composition of the group of persons to which it belongs.

Investor and Parties to the Transaction

An investor is an individual, legal entity, or group of persons acquiring interests in the charter capital of a business entity in its own name and at its own expense. The parties to the transaction include:

the investor;
the LLC whose interests are being acquired;
where applicable, other persons belonging to the same group as the investor or the company.

For the purposes of antimonopoly analysis, not only the activities of the investor itself are examined, but also the activities of persons controlled by it or persons controlling it. This is particularly important where the acquirer is:

a holding company;
a foreign company;
a special purpose vehicle;
a company established specifically for the acquisition of interests;
an individual controlling other business entities;
a member of an international corporate group.

The antimonopoly authority assesses the entire economic group rather than only the formal acquirer of the interest.

Significance of a Group of Persons in the Acquisition of Interests in an LLC

A group of persons is a combination of individuals and legal entities having a common economic interest and meeting the statutory criteria for interconnection. The concept of a group of persons is intended to prevent circumvention of antimonopoly requirements by distributing corporate participation among interdependent entities. When calculating the amount of interests being acquired, the following may be taken into account:

interests held directly by the investor;
interests held by its subsidiaries;
interests held by persons controlling the investor;
interests held by persons under common control;
interests held by other interconnected members of the group.

For example, if one company within a group owns 20 percent of the interests in an LLC and another company within the same group acquires an additional 20 percent, the aggregate participation of the group will amount to 40 percent. In such a case, the threshold of more than one-third will be exceeded.

The antimonopoly authority may request information regarding the ownership structure, composition of participants, corporate control, and the investor’s participation in other business entities.

Ultimate Beneficial Owners

When filing an application, the parties to the transaction are required to provide information regarding individuals who effectively control legal entities through direct or indirect ownership of more than 25 percent of the interests. Such persons are regarded as principal beneficial owners.

Disclosure of beneficial owners enables the antimonopoly authority to determine:

who actually controls the investor;
whether there are connections between the parties to the transaction;
whether the parties to the transaction belong to the same group of persons;
whether the acquisition is being made in the interests of a third party;
which other business entities are controlled by the same beneficial owners.

Disclosure of the beneficial ownership structure is particularly important in cross-border transactions where the direct investor may be incorporated in a foreign jurisdiction and may constitute an intermediate holding company.

Exceptions for Certain Transactions Involving Interests in an LLC

The Regulation provides for a number of cases in which its requirements do not apply. With respect to transactions involving LLCs, the following exceptions apply in particular.

1. Acquisition of Interests by Founders upon Establishment of the Company

The allocation of interests among founders at the time of establishment of an LLC is not regarded as a transaction requiring preliminary consent under the economic concentration procedure. This is because the company is only being established and there is no pre-existing independent business entity over which control is being transferred to another person.

2. Acquisition by the Company of Its Own Interests

The preliminary consent requirements do not apply to the acquisition by an LLC of interests in its own charter capital. However, any subsequent distribution or transfer of such an interest to a third party must be assessed separately.

3. Reorganization of an LLC by Transformation

The requirements do not apply where the company is transformed into another legal form, provided that the amount of the charter capital remains unchanged. In this case, the legal form changes, but the control structure does not necessarily change.

4. Acquisition of Interests by an Individual

The Regulation provides for an exception for the acquisition of interests by an individual where, at the time of application, such individual does not have the right to dispose of more than 25 percent of the interests in any business entity.

This exception requires careful application. It is necessary to take into account not only the individual’s direct ownership but also his or her possible participation in a group of persons and indirect control over legal entities.

Timing for Obtaining Preliminary Consent

The application must be submitted before completion of the transaction involving the acquisition of interests. This means that the parties may not complete the transfer of the interest before obtaining a decision from the antimonopoly authority if the transaction meets the corporate and financial criteria for economic concentration.

In practice, it is advisable to include a preliminary approval condition directly in the interest purchase agreement. The agreement may provide that:

its entry into force is conditional upon receipt of preliminary consent;
transfer of title to the interest takes place after consent is obtained;
payments are made after satisfaction of the condition precedent;
the parties undertake jointly to prepare the necessary documents;
refusal by the antimonopoly authority constitutes grounds for termination of the agreement.

Such a structure reduces the risk of the transaction being deemed completed before mandatory consent has been obtained.

Authority Reviewing the Application

Jurisdiction to review the application depends on the geographical scope of the parties’ activities and the status of the investor. The central office of the Committee for the Development of Competition and Consumer Protection reviews the application if:

the parties to the transaction conduct activities in several regions;
the parties to the transaction are located in different regions;
interests in the LLC are being acquired by a foreign individual or legal entity.

A territorial body of the Committee reviews the application where all parties conduct activities within a single region. Accordingly, the acquisition of an interest in an Uzbek LLC by a foreign company or foreign citizen falls within the competence of the central antimonopoly authority.

Procedure for Applying for Preliminary Consent

The application is submitted electronically through a Public Services Center or the Unified Portal of Interactive Public Services. The applicant may be one of the parties to the transaction or its representative whose authority is confirmed by an appropriate document.

The application must be accompanied by:

information about the investor;
information about the LLC whose interests are being acquired;
information about the size of the interest being acquired;
information about the composition of the company’s participants;
state registration documents;
financial and statistical reports;
information about types of activities;
information about goods produced and sold;
information about the composition of the group of persons;
information about ultimate beneficial owners.

For a non-resident legal entity, a copy of its state registration document or equivalent document must be provided. For a foreign individual, a copy of the passport must be provided.

Financial statements in a foreign language must be officially translated into the state language and notarized. At the same time, the applicant may not be required to provide information and documents that are not expressly provided for by the Regulation.

Financial and Business Information

The parties to the transaction must provide information regarding their activities for the two years preceding the filing of the application. If the activities have been conducted for less than two years, the information must be provided for the actual period of operations. The following must be disclosed:

principal types of activities;
types of goods produced;
types of goods sold;
production volumes;
sales volumes;
financial indicators;
assets;
revenue;
information about related business entities.

Such information is necessary to determine whether the investor and the LLC being acquired operate:

in the same commodity market;
in adjacent markets;
in supply and consumption markets;
as potential competitors.

Review of the Application

The application is reviewed by a special commission of the antimonopoly authority. If the transaction does not affect competition, a decision must be made no later than 30 calendar days from the date of receipt of the necessary documents and information. If the acquisition of interests may result in restriction of competition, the review period may be extended for additional analysis, but for no more than two months.

When reviewing the transaction, the antimonopoly authority assesses:

the size of the interest being acquired;
the investor’s ability to influence decisions of the LLC;
the market shares of the investor and the company;
connections with other business entities;
the level of concentration in the relevant market;
the presence of existing competitors;
the possibility of entry by new competitors;
administrative, economic, and technological barriers to entry;
the impact of the transaction on prices, quality, and range of goods;
the consequences of the transaction for consumers.

Grounds for Refusal

The antimonopoly authority refuses to grant preliminary consent if:

the acquisition of interests may result in the creation or strengthening of a dominant position of a business entity or group of persons;
the transaction may result in restriction of competition in a commodity or financial market;
inaccurate or distorted information is identified in the documents submitted.

Refusal on other grounds in the course of reviewing transactions involving the acquisition of interests is not permitted. Accordingly, a refusal must be based either on the competitive consequences of the transaction or on the unreliability of the information submitted by the applicant.

Possibility of Approving a Transaction Where Consumer Benefits Exist

Even where the acquisition of an interest may strengthen a dominant position or restrict competition, the transaction may be approved if the parties demonstrate that it will provide substantial benefits to consumers.

Such benefits may include:

reduction of prices;
improvement of the quality of goods or services;
modernization of production;
introduction of new technologies;
expansion of the product range;
increased availability of goods;
development of new distribution channels;
increased production volumes;
improved reliability of supplies.

The benefits must be specific and capable of substantiation.

A general statement that the transaction constitutes an investment or contributes to business development is insufficient. The applicant must substantiate the connection between the acquisition of the interest and the anticipated benefits for consumers.

Conditional Consent and Remedial Measures

The antimonopoly authority may grant consent subject to compliance with requirements aimed at preserving competition. Such requirements may be structural or behavioral in nature.

Fee for Granting Consent

Upon filing the application, an initial fee equal to one Basic Calculation Value (BCV) is payable. After a decision approving the transaction is adopted, the final amount of the fee is calculated. For the acquisition of interests by a resident legal entity, the fee is calculated at 0.05 percent of the aggregate revenue of the parties to the transaction for the preceding calendar year.

Where there is no revenue, the calculation is based on the aggregate book value of assets. The minimum fee is 7 BCV and the maximum fee is 1,000 BCV. A special calculation procedure applies to foreign investors, taking into account their financial statements and the exchange rate of the Central Bank. The remaining portion of the fee must be paid within 30 calendar days after the relevant notification is sent. If the fee is not paid within the prescribed period, the decision granting preliminary consent is cancelled.

Validity Period of the Consent

The transaction involving the acquisition of an interest must be completed within 1 (one) year from the date of the decision granting preliminary consent. If the transfer of the interest is not completed within this period, the decision ceases to be valid.

In order to subsequently complete the transaction, a new application for approval must be submitted. Therefore, when planning the transaction, it is necessary to take into account:

timelines for corporate approvals;
timelines for notarization;
timelines for state re-registration;
obtaining other approvals;
performance of contractual conditions;
possible changes in the composition of participants.

Inheritance and Legal Succession

A special notification procedure applies to unilateral transactions or legal events involving inheritance and legal succession. If, as a result of inheritance or legal succession, a person acquires the right to dispose of an interest exceeding the prescribed threshold, that person must notify the antimonopoly authority within 15 calendar days from the date on which the relevant right arises.

The notification must specify:

the name of the LLC;
the size of the acquired interest;
information regarding the person’s participation in other business entities.

Thus, in such cases, subsequent notification rather than preliminary approval applies.

Consequences of Acquiring an Interest Without Preliminary Consent

If a participant acquires more than one-third of the interests in an LLC without obtaining mandatory preliminary consent, the antimonopoly authority initiates proceedings for violation of competition legislation.

Following consideration of the case, a special commission may decide:

to deny the right to own the acquired interest;
to restore the position that existed before the transaction;
to subsequently approve the acquisition of the interest;
to apply other measures provided for by law.

Irrespective of the decision adopted, a fine may be imposed on the violator for completing the transaction without preliminary consent. If the transaction has resulted in restriction of competition, it may be declared invalid by a court upon a claim filed by the antimonopoly authority.

As a result, the parties may be required to:

return the interest to the seller;
refund the purchase price paid;
reverse corporate changes;
restore the previous composition of participants;
cancel decisions adopted using the acquired interest;
comply with an order of the antimonopoly authority;
pay a fine.