The President of Uzbekistan signed the Investments and Investment Activities Bill into Law “. The law was passed by the Legislative Chamber on December 9, 2019, and approved by the Senate on December 14, 2019.
The basic principles of investment activity are:
- legality;
- transparency and openness;
- freedom of investment activity;
- fairness and equality of investment actors;
- non-allowance of discrimination against investors;
- presumption of investors’ good faithness.
The basic principles of the regulation on investments and investment activities shall apply at all stages of the investment and investment activities.
Investments can be divided into capital, financial and social types based on the purpose.
Investors may also invest in other ways that are not contrary to the law.
Investment activity can be carried out by combining different forms of investment.
Changing the primary or secondary forms of investment does not lead to change of the form of investment.
Investment resources include:
- cash (including foreign currency) and other financial assets, including loans, stakes, shares and other securities;
- movable and immovable property (buildings, structures, equipment, machinery and other material values) and rights to them;
- intellectual property, technical documents, skills and R&D products necessary for organization of a particular type of production units;
- right of possession and use of land plots and other natural resources, as well as other property rights arising from property rights.
Investor has the right to:
- freely carry out investment activity, not contrary to the Uzbekistan legislation, independently determine the volume, types, forms, areas of investment;
- enter into agreements with legal entities and individuals for investment activities;
- own, use and dispose of their investments and the results of his investment activities, as well as to sell and export the results of his investment activities;
- independently and freely dispose of the income received from investment activity after taxes, fees and other payments provided for by the legislation;
- use the property and any proprietary rights, which he/she owns as security/collateral for all assumed obligations, including debt obligations;
- get adequate compensation in the event of expropriation of his/her investments and other assets;
- attracting cash in the form of loans and borrowings;
- get compensation for damage caused by unlawful actions (inaction) and decisions by state authorities, local authorities and their public officials.
Investor is obliged to:
- pay taxes and duties;
- perform contractual obligations accepted by him in connection with investment;
- comply with the legislation, including the regulations on competition, anti-corruption, investment and investment activities, labor, urban planning, environmental protection, as well as industrial, health & safety norms and rules;
- indemnify damage cause to participant of investment activity due to his non-performance or improper performance of some contract terms and conditions;
- perform the requirements of the authorities and local authorities within their competence.
Guarantees of the rights of subjects of investment activity
The state guarantees the investors’ rights. State bodies and their officials are not entitled to interfere in the investors activities carried out in accordance with the law.
If state bodies and their officials find violations of the law in the activities of investors, they can take the measures to which they are authorized and which are directly related to the elimination of a specific violation.
State bodies and their officials cannot use the fact of a violation as a basis for interference or restriction of other, not related to investment, activities of investment entities.
The state guarantees non-discrimination against investors on their citizenship, place of residence, place of business, and also depending on the country of origin of investors or investments.
The exercise of rights by an investor should not violate the rights and legally protected interests of other investors. Moreover, the state, as a co-founder (shareholder, participant) of a business entity, has equal rights and obligations along with other founders (shareholders, participants).
These guarantee provisions shall not apply to the adoption, amendment or cancellation of regulations that are directly related to ensuring the national security of the Republic of Uzbekistan, determined in accordance with generally recognized principles and norms of the international law.
Protection of investments
The state guarantees protection of investments in accordance with the legislation and international treaties of the Republic of Uzbekistan.
Investments and other assets of investors cannot be nationalized.
Investments and other assets of investors are not subject to requisitioned (expropriated), with the exception of natural disasters, accidents, epidemics, epizootics and in other circumstances of an emergency nature.
The decision on requisition and expropriation of investments shall be taken by the Cabinet of Ministers of the Republic of Uzbekistan subject to the requirements for which requisition or expropriation shall be:
- limited by the minimum size of investments or other assets of investors necessary to solve the problems arising from the cases specified in part three;
- not carried out on a discriminatory basis;
- accompanied by the payment of compensation adequate to the loss. The state acts as a guarantor of the timely implementation of these compensatory payments.
Investor have the right to dispute in court and arbitration, in particular:
- the legality of the purpose used to carry out the requisition (expropriation);
- size of requisition (expropriation);
- assessment of requisitioned (expropriated) investments and other assets;
- compliance of the payment of compensation payable;
- the procedure followed by government and local authorities in the requisition (expropriation).
Investment and investor risk insurance is carried out on a voluntary basis.
