Uzbekistan: A General Business Law Overview

Background

Uzbekistan is consistently reforming its legislation to ensure sustainable economic development, improve the investment climate, and support entrepreneurship. Specifically, a new Tax Code has been in effect since 2000, simplifying taxation, benefits, and electronic tax reporting. In 2021, the new Law “On Public Procurement” transferred public procurement to electronic platforms, making it transparent and competitive. Since 2021, a number of programmes have been implemented to transform state-owned enterprises into business entities and privatise state assets through public auctions with payment in installments, with the provision of external infrastructure. The reform of state-owned companies is accompanied by a transition to international financial reporting standards, the adoption of international procurement and sales rules, corporate governance, and anti-corruption measures, as well as the involvement of foreign specialists in management.

In 2024, the Development Strategy of Uzbekistan for the period up to 2030 was approved, defining the key areas of economic reform, namely: ensuring a favorable investment climate, integrating into global transport and logistics networks, transitioning monopoly sectors to market principles, and increasing the share of the private sector in the economy. The Strategy defines the following economic priorities:

• privatisation of banks, including reduction of state-owned banks to four;
• accelerating development of the securities market, including the introduction of Islamic finance;
• expanding the role of the private sector in healthcare, construction, transport, irrigation, waste management, energy and heat supply management and education;
• creating an independent energy resource regulator, modernising the infrastructure for distribution, generation and supply of electricity, and increasing the share of renewable energy generation to 40%;
• transferring railway transportation, road construction and road management to the private sector;
• attracting private investment in the development of deposits minerals (gold, silver, non-ferrous metals, tungsten and others) through auctions;
• expanding the reach of small and medium-sized businesses into international markets;
• increasing IT product exports to USD5 billion; and
• expanding tourism services exports to USD5 billion dollars .

In the political and legal sphere, the Strategy identified the following priorities:

• expansion of digitalisation of public services, including transferring public services to electronic format, transferring public services to the private sector, and reducing licensing procedures;
• ensuring the rule of law, including streamlining the number of regulatory legal acts, reforming the judicial and legal system, and ensuring the independence of judges and the legal profession; and
• continuation of the fight against corruption.

Current political, economic and legal trends affecting the development of private business in Uzbekistan

The denationalisation and privatisation that began in 2000 affected enterprises in the metallurgy, oil and gas, chemical, transportation, energy, mining, telecommunications, housing and utilities, banking and finance, and several other sectors.

From 2021 to 2024, the amount of state assets sold exceeded USD3.5 billion. This is 30 times higher than the previous decade. The number of enterprises with state participation has been halved, and the state’s presence in the economy has fallen by almost 15%. Plans for 2025-2026 include listing the shares of 40 of the largest companies on international markets.

Key Legal Developments

Privatisation, property and land

• Privatisation of non-agricultural land is permitted under Law “On the Privatization of Non-Agricultural Land Plots” No ZRU-728 dated 15 November 2021.
• Registration of real estate, mortgages and easements has been simplified.
• The unified register of pledged real estate has been transferred to an online format.
• Sublease of land on the secondary market is permitted if the primary right is obtained at an online auction.
• The procedures for privatisation, lease and management of state property have been simplified under:
  • Law “On the Privatization of State Property” No ZRU-907 dated 14 February 2024;
  • Administrative Regulations of State Services for the Privatization of an Object, approved by Resolution of the Cabinet of Ministers of the Republic of Uzbekistan No 627 dated 27 November 2023;
  • Regulations on the Lease of State Property, approved by Resolution of the Cabinet of Ministers of the Republic of Uzbekistan No 660 dated 14 December 2023; and
  • Law “On the Management of State Property” No ZRU-821 dated 9 March 2023.
• Lease terms for non-agricultural land have been extended to 100 years, and for foreign individuals and enterprises with foreign participation to 25 years.

M&A, corporate matters

• A corporate agreement has been introduced to the Civil Code of Uzbekistan.
• Changes are being made to the company law aimed at improving management and protecting shareholders’ rights.

Banking and finance, capital markets

• New financial instruments have been introduced, including escrow accounts and mortgages.
• The regulator’s approach to pledging bank accounts has been simplified.
• The liberalisation of capital market rules and cross-border securities trading continues (including the adoption of a new version of the Capital Market Law).
• The draft Law “On the Capital Market” and a package of regulations governing alternative types of financing have been finalised.

Regulatory environment

• The list of licensed activities is being reduced. The certification procedure for imported goods and equipment is being streamlined. International building codes and regulations are now approved for use in the construction and building industry in Uzbekistan.

Digitalisation, IT sector regulations

• Uzbekistan announced its goal to become a key digital hub in the Central Asian region in the next decade.
• In November 2025, the President of Uzbekistan issued a decree establishing the International Center for Digital Technologies Enterprise Uzbekistan, which operates under a special legal regime based on English law. It will operate as a regulatory “sandbox” for IT companies benefitting from this legal regime.
• Residents of Enterprise Uzbekistan are offered a wide range of opportunities across various areas of activity.

Mining

• A new Law “On Subsoil” was adopted (October 2024), which affirms that subsoil is state property and is subject to rational use.
• The Law introduces transparent conditions for obtaining rights to explore and develop deposits, and for their subsequent transfer, and the contractual component of relations with the state is expanded.
• The emphasis on social responsibility and environmental safety is maintained.
• The conditions for the state commission on reserves (for off-balance sheet mineral reserves) are maintained in parallel with the permissibility of applying the JORC Code and the CRIRSCO framework.

Impacts on the Legal Sector

It is obvious that large-scale economic reform is based on attracting significant public and private investment into economic sectors and infrastructure (energy, water supply, road infrastructure).The implementation of such projects requires the introduction of modern instruments of syndicated financing, agency in collateral relationships, collective investment, securitisation and factoring, the institution of nominal ownership, tax-exempt entities, and others into national law.

The demanded judicial support for freedom of contract and the discretionary nature of law is called upon to play a crucial role in countering the historically established, overly regulated (mandatory) legal framework. We believe that over the next five years, the legal community of Uzbekistan will prioritise the implementation of these and other objectives.