There are several important points to keep in mind when establishing and operating a foreign-owned company in Uzbekistan. The key points are summarized in the table below, so please refer to it first.
| Points to Note | Details and Requirements | Major Basis/Reasons |
|---|---|---|
| Certification of Foreign Capital Ratio | One of the conditions for a company to be considered a “foreign company” is that it has foreign investment of 15% or more. | Article 6 of the Foreign Investment Law (Republic Act No. 598). |
| Capital Requirements | The minimum capital required to be considered a foreign company is 400 million soums (approximately $34,000). For the Republic of Karakalpakstan and Khorezm Oblast, it is 200 million soums. | The Foreign Investment Law (Republic Act No. 598), etc. |
| Restrictions on Land Ownership | Foreign companies cannot own land. Land leases are limited to a maximum of 25 years (extendable to 49 years in special economic zones). | The Republic’s Land Code (Republic Act No. 598-I), etc. |
| Regulated and Permitted Industries | Some industries require permits and licenses, such as gambling (licensed), drug-related businesses, and pyrotechnics. | Various presidential decrees and cabinet decisions. |
| Applying for Tax Incentives | Incentives are available based on the size of investment and contribution to the economy, but they are not automatic and require prior application. | Based on the Investment Law. |
| Utilizing Special Economic Zones | Special economic zones (SEZs) may offer preferential tax and customs duties. | Depending on the regulations of each special economic zone. |
| Visa and Registration | Japanese nationals do not need a visa for stays of up to 30 days. However, registration is required within three business days of entry (please note this when staying outside a hotel). | Immigration regulations. |
| Local Labor Laws | There are labor laws that differ from those in Japan, such as the requirement that salaries be paid at least twice a month in local currency. | Uzbekistan Labor Law. |
The following explains each item in more detail.
🧾 Licenses and Permits Required
Before starting a business, the first step is to determine whether your industry requires licenses or permits.
- Gambling businesses have been legal since January 2025, requiring individual licenses from government authorities, but they remain heavily regulated.
- In addition, certain industries may be prohibited or restricted to state-owned enterprises, such as the manufacture of narcotic painkillers and the development and manufacture of certain pyrotechnic devices.
💰 Capital and Investment Ratio
- The condition for being considered a “foreign company” is that the foreign investment ratio must be 15% or more.
- To be recognized as a foreign company, a minimum capital of 400 million soums (200 million soums for the Republic of Karakalpakstan and Khorezm Oblast) is required. This means that even if a company chooses a common legal entity, such as a joint stock company or limited liability company, it must meet this standard to be considered a foreign company.
⚖️ Land Ownership Restrictions
Foreign companies cannot own land in Uzbekistan. If you need land for your business, you’ll need to acquire a land lease.
- Land leases typically last up to 25 years.
- For land within a Special Economic Zone (SEZ), a legal amendment is being considered to extend this period to 49 years.
📝 Tax Incentives and Special Economic Zones
In Uzbekistan, businesses that are recognized as making large investments and contributing significantly to the local economy may be granted tax incentives. However, these incentives are not granted automatically; prior application and approval are required. Locating in a Special Economic Zone (SEZ) increases the likelihood of receiving tax and customs incentives.
🧳 Visa and Residence Registration
- Japanese nationals staying in Uzbekistan for up to 90 days do not require a visa, but they must complete residence registration within three business days of entering the country.
- This residence registration will be handled automatically by the hotel if you’re staying in a hotel, but you’ll need to arrange it yourself if you’re renting an apartment, so be sure not to forget. Failure to register may result in fines or deportation.
👥 Local Labor Customs
When hiring local employees, you must comply with Uzbekistan’s labor laws. For example, please note that certain regulations differ from those in Japan, such as the requirement that wages be paid in the local currency (sum) and at least twice a month.
🔁 Antitrust Law Review
Large mergers and acquisitions (M&A), or companies of a certain size acquiring 25% or more of a company’s shares, may require prior agreement with antitrust authorities. If you’re planning a transaction that could be subject to this requirement, we recommend consulting with an antitrust expert early on.
✅ Pre-entry Checklist
Careful preparation is essential for a successful entry into Uzbekistan.
- Conduct Thorough Preliminary Research: Reduce risk by conducting credit checks on potential local companies and registering your company’s intellectual property rights before entering the market.
- Utilizing Experts: Local laws, tax systems, and licensing procedures are often complex. Obtaining advice from local lawyers, consultants, and support organizations such as JETRO (Japan External Trade Organization) will ensure a smooth entry into the country.
- Understanding Culture and Customs: Uzbekistan has a relatively strong pro-Japanese sentiment, and people tend to be friendly. However, there are also subtle differences in culture and customs, such as time, commitment, and work approaches. Respecting local culture and being flexible is the key to long-term success.
💎 Summary
Uzbekistan is a relatively stable country in Central Asia. It is proactively improving its business environment, focusing on developing IT human resources and actively attracting foreign investment in areas such as renewable energy. However, there are certainly some points to be aware of when expanding into the country, such as restrictions on land ownership, the need for permits and licenses, and unique labor laws.
The most important thing is to obtain accurate and up-to-date local information and, if necessary, seek expert support as you proceed with your planning. Investing in Uzbekistan has the potential to be a great opportunity if you manage these considerations properly.
(Note) Exchange rates and laws are subject to change. Always consult an expert for the latest information before investing.
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