We have compiled a list of Uzbekistan's main M&A laws from an expert's perspective. The main laws and their key points are summarized in the table below.
| Law/Regulation Name | Year of enactment/amendment | Main contents | Key impacts on M&A |
|---|---|---|---|
| Competition law (Закон "О конкуренции") | 2023 | Competition regulation and merger and acquisition (M&A) regulation in commodity and financial markets | M&A transactions above a certain size may require prior approval from competition authorities. |
| Civil law | Basic provisions regarding corporate reorganization (mergers, divisions, etc.) | We provide the legal basis for basic M&A methods and procedures. | |
| Cabinet Order on Simplifying Voluntary Liquidation Procedures for Companies | 2023 | Simplifying the procedures for voluntary liquidation of companies (Cabinet of Ministers Decree No. 348 dated August 9, 2023) | This will increase flexibility when disposing of unnecessary businesses before an M&A and when restructuring businesses after an acquisition. |
| Order on the Rules for Procedures for Setting Bonds for Payment of Customs Duties | 2024 | Rules on the Procedure for Setting Up Security for Customs Duties (Order of the Minister of Economy and Finance No. 187 of November 7, 2024) | This law will stipulate procedures for cross-border M&A and acquisitions by foreign investors that guarantee the fulfillment of customs-related obligations. It will come into effect on February 23, 2025. |
| Government decision to simplify business licensing procedures | 2024 | Relaxation of mandatory requirements for business activities and simplification of licensing procedures (Government Decision No. 780 dated November 22, 2024) | This may reduce the administrative burden associated with business integration and license succession after M&A acquisition. |
| Personal Information Protection Act | 2019 | Act establishing uniform rules in line with international standards for the protection and handling of personal information (effective October 1, 2019) | It sets out rules that must be followed regarding the handling of personal information during M&A due diligence and the management of data after acquisition. |
💡 Key points for M&A execution
When conducting M&A in Uzbekistan, compliance with the above laws and regulations is essential. In particular, the following points should be kept in mind:
- Prior competition law review : If market share or transaction volume exceeds a certain threshold, prior notification and approval from competition authorities may be required. We strongly recommend consulting with competition law experts beforehand.
- The importance of due diligence : In addition to the target company's financial, legal and business operations, due diligence should also focus on the company's handling of personal information , its compliance with customs and tax obligations , and the validity of any necessary business licenses and permits .
- Contractual precision : It is crucial that acquisition agreements clearly address anticipated risks (e.g., personal data breaches, licensing issues, unpaid tariffs, etc.) through representations and warranties , conditions precedent clauses, indemnification clauses , etc.
- Leverage local expertise : Local legal systems and practices are subject to frequent changes. Early engagement with local lawyers and consultants who are familiar with Uzbekistan's laws and practices is essential to ensure a smooth M&A process and avoid potential risks.
🔍 Other related information
- Uzbekistan is continually deregulating and streamlining procedures to stimulate the private sector and attract foreign investment , so it is important to keep up with the latest developments.
- In certain industries (such as mining), sector-specific laws, regulations, permits and licenses can have a significant impact on M&A.
💎 Summary
In Uzbekistan, M&A activities are based on competition law and civil law , and are also affected by numerous other laws and regulations, such as the Personal Information Protection Act and ministerial and government ordinances related to customs duties and licenses . Since laws are sometimes revised, the key to success is to obtain the latest information and proceed with the project carefully while receiving advice from local experts .
If you have any questions about M&A in Uzbekistan or would like to discuss a specific project, please feel free to contact us.
In addition to the major laws and regulations previously introduced, we have also compiled a list of other important laws and points to keep in mind when considering or implementing M&A in Uzbekistan. The table below summarizes the main laws and their key points.
| Legal and regulatory fields | Main related laws and regulations | Key impacts and considerations for M&A transactions |
|---|---|---|
| Foreign Investment Restrictions | Foreign Investment Law and related government ordinances | Certain strategic industries (energy, mining, defense, etc.) may have restrictions on foreign investment or require prior government approval . Be sure to check the entry requirements for each industry. |
| Securities Law and Listing Rules | Law on the Securities Market, Regulations of the Central Securities Depository of Uzbekistan (CDC) | When acquiring a listed company , rules regarding tender offers , the obligation to report large-scale holdings , insider trading regulations, etc. apply. |
| tax law | Tax Code | We will check the reorganization tax system , loss carryforwards , and tax implications of the transaction (stamp duty, registration tax, etc.). Tax due diligence is essential, and we will consider tax guarantee clauses and tax risk provisions in the acquisition agreement. |
| Labor Law | Labor Code | When reducing workforce after an acquisition, restrictions on dismissal procedures (notice period, restrictions on reasons for dismissal) and obligations to pay severance pay may arise. Labor-management agreements and individual consent may also be required, so labor due diligence and a post-acquisition personnel reduction plan are important. |
| Intellectual Property Law | Patent law, trademark law, copyright law, etc. | M&A due diligence involves examining the ownership and validity of key intellectual property (IP) rights and the terms of license agreements (including restrictions on modification and transfer), particularly when the IP is essential to the operation of the acquired business. |
| environmental law | Environmental Protection Laws | For industries that require environmental permits or licenses for business activities (such as manufacturing), we will confirm the possibility of transferring these permits and licenses. We will also conduct environmental due diligence to ensure that liability for past environmental pollution (such as cleanup obligations) does not arise after the acquisition. |
💡 Other important considerations when executing M&A
In addition to the legal areas mentioned above, the following points are also important for a successful M&A:
- Thorough due diligence : This is the core of the M&A process . We investigate the target company from multiple angles, including financial, legal, tax, labor, IT, and environmental aspects, to discover and assess potential risks (liabilities, litigation, contractual issues, regulatory compliance, etc.). The results of due diligence are directly reflected in the negotiation of the purchase price and the terms of the acquisition agreement (warranty clauses, indemnification clauses, etc.).
- Importance of the Purchase and Acquisition Agreement (SPA) : The purchase and acquisition agreement is the most important document that defines the rights and obligations of the seller and the buyer .
- Representations and Warranties : The seller makes representations and warranties about the target company's financial, legal, assets, contractual, etc. If any facts contrary to these representations are discovered, this opens the door to claims for damages , etc.
- Conditions Precedent : Specifies the conditions that must be met for the transaction to be completed (such as obtaining regulatory approvals).
- Covenants : These are promises made by the seller to conduct business in the ordinary course from the time of agreement until completion. How these clauses are negotiated and agreed upon will have a significant impact on how well risk is mitigated.
- Understand the regulatory approval process : Some M&A transactions may require prior approval from competition authorities (anti-monopoly agencies) or industry regulators . It is important to understand early on the cases in which approval is required, the timing of application, review period, and approval conditions, and incorporate these into your planning.
- Consideration for cultural and linguistic differences : Local business practices and negotiation styles may differ from those in Japan. Engaging competent local advisors (legal, accounting, and consulting) early on is extremely effective not only in avoiding legal risks but also in bridging cultural and linguistic differences .
🔍 Summary
When considering M&A in Uzbekistan, a wide range of laws come into play, and as the legal system can change rapidly , it is essential to stay up to date with the latest information .
To ensure your success, we strongly recommend that you seek the advice of experienced local lawyers and consultants, who can provide essential support in the detailed interpretation of laws and regulations, practical practices, and negotiations with authorities.
If you have any further questions about M&A in Uzbekistan or would like to discuss your specific scenario, please feel free to contact us.
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