From the outset of Independence, Uzbekistan has been following its own course of development – the Uzbek Model – of transition to socially oriented market economy based on five key principles developed by President of Uzbekistan Islam Karimov: the priority of economics over politics; the state is the main reformer; the rule of law in all areas of life of the society; strong social policy; a step-by-step transition to market relations.
Thanks to successful implementation of this model, today, Uzbekistan has achieved the following milestones:
- macroeconomic stability, equilibrium of domestic and foreign sectors of economy, growth of currency reserves;
- framework for maintaining steady high rates of annual economic growth by 8% at average, predominantly, thanks to internal factors;
- reduction of aggregate tax burden almost 3 times, while the State is providing additional packages of preferences to exporting enterprises, small businesses and entities that increase their investments and introduce new production;
- creation of sustainable banking and finance systems with strict observance of Basel principles of banking supervision. In particular, the degree of sufficiency of banking capital is more than 23%, which is almost 3 times higher of international standards;
- development of new high tech industries through intensive investment policy, technological modernization of industrial facilities and production infrastructures.
The issued strategy of struggle against crisis and neutralization of its consequences allowed the country among few states of the world to ensure for the past period steady economic growth rates over 8 percent.
During the years of independence Uzbekistan has created a broad spectrum of legal guarantees and preferences for foreign investors, developed integral system of measures on encouragement of activity of enterprises with foreign investments.
The state guarantees and protects the rights of foreign investors which carry out investment activity within the Republic of Uzbekistan. In the event, the consequent legislation of Uzbekistan makes investment environment less favorable, then within 10 years from the moment of investment foreign investors will use the legislation, which was in effect as of the date of investment. Upon its discretion, after notifying the authorities, the foreign investor is entitled to apply those provisions of a new legislation which make the investment environment more favorable.
Moreover, in some cases, foreign investors could be provided with additional guarantees and measures of protection of rights in case of investment into priority industries or projects, which ensure sustainable economic growth, strengthening and enhancing export potential of the country, projects in the field of small enterprises.
Since 2001 «one stop shop» has been put in place which simplifies a system of state registration of legal entities. In other words, for the newly established enterprises, all approval procedures are provided with only one instance within 3 business days.
As a result of coherent efforts of the Government in creating favorable conditions for foreign investors, many world-known companies have firmly established their presence in Uzbekistan. Among them General Motors, MAN, Knauf, Itochu, Rieter, Klaas, Nestle, Coca-Cola, KOGAS, LG, Lotte, Korea Telecom, Ariston, CNPC, Ondorama, Gazprom, Lukoil, etc. The total number of enterprises with foreign investments has exceeded 5000.
Over the recent years, the Government has pursued a consistent policy on significant reduction of tax burden for both legal entities and individuals. Unprecedented tax incentives are provided to enterprises which carry out production activity within Navoi Free Industrial Economic Zone, Angren Free Industrial Zone and Djizak Free Industrial Zones that have been established at the initiative of the President of the Republic of Uzbekistan. These incentives include exemption practically from all types of taxes and customs duties imposed in the Republic of Uzbekistan, which makes Free Industrial Economic Zone in these three cities one of the most liberal and attractive free economic zones in the world.
Uzbekistan is one of the leading countries of the world in terms of reserves of gold, uranium, copper, silver, zinc, tungsten, rare metals, natural gas, coal and fossil minerals. It’s the country, which for many years ahead ensured its energy security.
Access to broad spectrum of commodities maximum optimizes the production costs through significant reduction of transportation costs for commodities and raw materials, creates capabilities for deep processing with production of products with high value added and the level of localization of more than 50%.
Uzbekistan discovered more than 2,800 deposits and prospective depositions of minerals, with total mineral-feed potential of the country to be about US$ 3.5 trillions.
On many categories, including non-ore and metallic minerals, agricultural commodities, Uzbekistan is one of the leading countries in the world. In particular, on copper reserves it’s 11th largest, on gold production – 7th, uranium – 7th, production of cotton fiber – 5th.
The Republic of Uzbekistan, is among TOP 10 countries of the world on reserves of gas, coal, uranium and is exporting them. Aggregate reserves of energy carriers of Uzbekistan are sufficient to satisfy demands of the economy at least for 100 years.
Electrical power generated in Uzbekistan fully covers growing needs of the country and on its cost is 4 times lower of average price paid by the industrial consumers in developed countries.
Unlimited potential of alternative sources of energy creates additional capacities. This includes solar, wind, derived as a result of recycling of solid household wastes, which allows generation of more than 51 billion tons of oil equivalent.
Uzbekistan is the crossroads of Central Asia, which creates favorable environment for the development of regional cooperation, participation in regional and transnational projects on development of transport corridors. It’s free trade zone with the CIS countries.
Proximity to broad customer markets and developed transport infrastructure of Uzbekistan, integrated into multimodal system of communications of Eurasia, predetermines perspectives of investment, trade and economic cooperation. Foreign companies investing in Uzbekistan, get access to the 5 largest and the most dynamically developing markets: CIS with the customer market of more than 300 million people, Central and Eastern Europe, South and South East Asia, Middle East.
Favorable geographic location on the intersection of all trade routes among above regions, developed multimodal network, covering the markets, located far outside of Central Asia, including Eastern part of the Middle East, Northern part of India and Western part of China, is an important competitive advantage, which allows to significantly reduce the time and costs of delivery of cargoes through the territory of Uzbekistan.
Today, Uzbekistan is creating all necessary conditions for further development and increase of transit potential. The country is constructing new main railway line and highway inside the country, renovating international main transit railway lines and highways, modernizing international airports, creating specialized international transport terminals, developing corresponding legal framework.
The treaties on creation of the MFN in trade with 45 countries of the world including Japan, China, USA, Korea, EU and Free Trade Zone established among the CIS signatory states, allows to significantly increase the competitiveness of Uzbekistan’s products on foreign markets.
All-in-all, the Republic of Uzbekistan can offer foreign investors not only vast natural wealth, favorable business environment, developed infrastructure, highly educated manpower, but, most importantly, political and economic stability that can be a solid foundation for expanding the horizons of mutually beneficial cooperation with foreign partners.