Investment climate of Uzbekistan

7/27/2019 Investment climate of Uzbekistan

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Investment climate of Uzbekistan and prospects

in investment cooperation with Lithuaniancompanies in implementation of high-tech

investment projects

Mr. Djamshed AbdurakhimovActing Director of the Uzinfoinvest Information Support & Foreign

Investments Promotion Agency under the Ministry for Foreign

Economic Relations, Investment and Trade of

the Republic of Uzbekistan

July, 2013


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1. Political & macroeconomic stability

3. Rich raw material base

4. Energy advantageous

5. Diversified industrial base

6. Advantageous geographical location

7.

Intellectual potential

2. Sound legal base

Factors of success in Uzbekistan


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GDP growth

(% to previous year)

Inflation rate

1. Main

macroeconomic parameters


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Law On Foreign Investments in 1998

Law "On Investment Activity in 1998

Law "On Guarantees and Measures to Protect the Rights of Foreign

Investors in 1998

Decree of the President of the Republic of Uzbekistan #1731 "On

additional measures for stimulation of export manufacturers and

expansion of export supplies of competitive output, March 2012

2.

Sound legal base

Decree of the President of Uzbekistan On additional measures to

stimulate attracting foreign direct investments #UP-4434, April 2012

Over 50 normative legal documents on regulating of investment

activity adopted in Uzbekistan

6 legal documents on regulating of investment

and business activity adopted in Uzbekistan in 2012


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Decree of the President of Uzbekistan

On additional measures to stimulate attracting

foreign direct investments #UP-4434

1. Enterprises with the investment volume for at least 5 million USD

reserve the right to pay for 10 years for all type of taxes that

operated at the date of their registration

2. Investment projects

- more than 50 million USD

- share of foreign investors no less than 50%,

external engineering-communication networks will be provided by

state budget.

3. Selling low liquid state objects at zero redemption cost through

signing direct contracts with the investor under concrete investment

obligations

4. Obtaining of multiply visa for a period of12 months


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I. For all regions of Uzbekistan (except Tashkent region and

Tashkent city)

II. Tax and obligatory payments exemption


On additional measures to stimulate attracting

foreign direct investments #UP-4434

5. Extension of incentives and privileges of the Presidents

Decree #UP-3594 on April 11, 2005

Period of Tax Exemptions :

3 years, if amount of direct investments is 0,3 - 3 mln. USD;

5 years, if amount of direct investments is 3 - 10 mln. USD;

7 years, if amount of direct investments is more than 10 mln. USD.


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On measures on radical reduction of statistics,

tax, financial reporting, licensable businesses

as well as permit issues procedures #UP-4453

In accordance with the Decree, 80 licensing procedures (26% of

the total number) and 15 licensable activities (20%) have been

canceled


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1. Enterprises are exempt from obligatory sale of foreign

exchange earnings:

a) for a period of 5 year's from the moment of the

registration of enterprise, involved in production of consumergoods and, where share of foreign capital exceeds 50%;

b) by microfirms, small and medium enterprises, from

export of goods of own production

c) investments in the form of cash in foreign currency

in the sale of state assets with investment commitments

Decree #245 On measures to develop and

strengthen off-the-board exchange market


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Uzbekistan possesses unique resources:

solid raw materials, including metallic and

non-metallic

Over 1 644 of deposits and 100 sorts of

mineral resources

3. Rich raw material base


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4. Energy advantageous

solar energy

wind energybiofuel

Alternative energy sources

in Uzbekistan:

Average prices for:

Gas - $56per 1000 m3

Electricity - $0.05per kWt/h

Coal - $21per 1 ton

13thermal stations and 28hydropower

plants fully provide the needs of theeconomy.

Total energy capacity 12 472 MWt

Additional capacity1 101 MWt

(2013-2016)

Coal reserves80-100 years

Water - $0.12per 1 m3


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Oil, gas & petrochemicalMining & metallurgy

Chemical

Automobile

Construction materials

Electrical

engineering ElectronicsAgricultural

machinery

PharmaceuticalsTextiles Food processing

5. Diversified industrial base


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East As iaLondon

Paris

Berlin

Moscow

Beijing

Tokyo

Seoul

Singapore

Jakarta

ManilaBangkok

Phnom Penh

Muscat

Cairo

AbuDhabi

Doha

Jerusalem

Baghdad

Riyadh

Amman

Tehran

Europe

South -East andSouth Asia

Ankara

Shanghai

Minsk

Kiev

CIS

Middle East& A f r ica

Central As ia

Astana

Ashgabat

Kabul

Bishkek

CA & Afghanistan: 90 mln. people

CIS: 300 mln. people

Brussels

Most Favorable Nation

Treatment

with 46 countries, including US, EU

countries, Japan, China, India,Republic of Korea, and others

6. Central geographical location to the

largest markets


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65 universities and

institutions

affiliates branches of

foreign universities:

Moscow State University

Westminster International

University

Singapore Institute of

Management Development

Turin Polytechnic Institute

850 directions

300 thousand students

Oil&Gas Institute named

afterGubkin

Russian Economic

University named after

Plekhanov

7. Intellectual potential


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CNPC

over 4500 enterprises with

foreign capital, 16 in

cooperation with Lithuania

Foreign enterprises in Uzbekistan
http://www.cnpc.com.cn/enghttp://ru.wikipedia.org/wiki/%D0%98%D0%B7%D0%BE%D0%B1%D1%80%D0%B0%D0%B6%D0%B5%D0%BD%D0%B8%D0%B5:GM_logo.pnghttp://www.cnpc.com.cn/enghttp://www.beeline.ru/index.wbp


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368 435 421 201 212 272459 446 527 464

68080 167 334 547 684

1 014

1 423

2 4962 757

3 165

3 270

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Foreign direct investments and credits

Foreign loans under Government guarantee

Foreign investments in Uzbekistan

3 284

3 629

2 942

1 882

1 286

896748755602448

3 950


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Foreign direct investments in Uzbekistan

by country in 2012

35,7

26,8

19,5

3,32,8 2,5 1,9

7,6

in %


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Amount of bilateral trade volume in 2012 was 47,2 million USD:Export 7,7 million USD (fertilizers, cotton fiber, services & etc.)

Import 39,5 million USD (mechanical and electrical equipments, plastics & etc.)

Investment cooperation:

16 functioning companies with Lithuanian direct investments in Uzbekistan2 accredited in Uzbekistan representatives of Lithuanian companies

Trade turnover & investment cooperation between

Uzbekistan and Belgium


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Newly implemented investment projects

Steam-gas plant on

Navoi thermal power-

station in cooperation

with Japan Mitsubishi

Second stage of a newcomplex for the

production of trucks in

cooperation with

German MAN

First stage of liquefied

gas production on the

base of Mubarek Gas

Processing Plant

Production of enginesfor automobiles jointly

with GM

Construction of an

unique complex

Ustyurt Mubarek Gas

Processing Plant on

the base of Surgil fieldin cooperation with

Korean companies

consortium started in

2012


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3,000km

2,000km

1,000km

Navoi

FIEZ Navoi: Location

Within a radius of 2 thousand kilometers from the airport Navoi there are 10

capitals of various states with a total population of100 mln. people.


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Destination to:

Airport 2 km

KAL Complex2 km

Samarkand 120 km

Bukhara 95 km

Territory - 564 ha

FIEZ Navoi: Location


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29 flights per week

(Delhi, Mumbai, Bangkok, Frankfurt,Istanbul, Dubai, Doha, Dhaka, Hanoi,

Moscow, Milan, Brussels, Vienna, Zaragoza,

Incheon, Paris)

Navoi International Airport

1st stage Cargo processing ability300 tons/day

2nd stage Cargo processing ability1000 tons/day
http://www.airlinereviews.net/logos/korean_air.gifhttp://www.airlinereviews.net/logos/korean_air.gifhttp://www.airlinereviews.net/logos/korean_air.gif


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Pharmaceutical industry & Medical products

Precision machinery & OEM parts for automobiles

Electronic & electrical products

Food processing and packaging

Plastic goods and polymers

FIEZ Navoi: Profile


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Navoi FIEZ residents are exempted from all type of taxes

and customs duties

FIEZ Navoi: Tax preferences

7 years

if amount of direct investments is from 3 mln to 10 mln euro

10 years and 50% reduction of profit tax for the following5 years

if amount of direct investments is from 10 mln to 30 mln euro

15 years and 50% reduction of profit tax for the following 10

years if amount of direct investments is more than 30 mln euro


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12 operating projects

10 projects in progress

FIEZ Navoi: Current projects

Enterprises working in FIEZ Navoi

started production of such good as:

Automobile components

LED lampsADSL modems

Set-up boxes

Polyethylene pipes

50 new projects


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Establishment of Special Economic Zone Angren

(Degree of the President of the Republic of Uzbekistan April 13, 2012 No.UP-4436)

Distance between large cities:

Tashkent 80 km

Ferghana 240 km

Samarkand 220 km

Special industrial zone Angren

Total territory of SIZ Anger more than 1 634,0 ha

500 ha

178 ha


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Creating a competitive advantage for the country in the

international logistics market

Capacity of storage facilities5,4 mln. tn./year

Total area 36,7 hectares

Registered about 400 vehicles

SIZ Angren: Logistic center


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Angren SIZ residents are exempted from all type of taxesand customs duties (except custom fees):

Period of privileges and incentives:

3 years

if amount of direct investments is from 0.3 mln to 3 mln USD

5 years

if amount of direct investments is from 3 mln to 10 mln USD

7 years

if amount of direct investments is more than 10 mln. USD

SIZ Angren: Tax preferences and

incentives


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Synthetic motor oil Automobile tires

Ceramic tile Silicon

SIZ Angren: Current projects

Cooper pipes

Electro diode bulbs


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Construction of confectionary & procession of cocoa beans

Production of stoneware tiles

Production of architectural glass

Production of detergents

Production of textile machinery (weaving equipment)

Production of polycarbonate, ABS-plastics & other polymers from

natural gas

1,4 butanediol production from natural gas for subsequent usage in

production of polymers (rubber, spandex, etc.)

Production of disposable test (pregnancy test, alcohol test and etc.)

Production of LED light bulbs


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Project name Production of stoneware tiles

Project cost 16,0 million USD

8,5 million for purchase of equipment7,0 million for construction works

0,5 million working assets & others

Plan of financing FDI 16,0 million

Sales of products 60,0 % - domestic market40,0 % - export

Annual production capacity 2,0 million square meters

Existing infrastructure electricity, water, gas, sewage system


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Project name Production of detergents


12,0 million

for purchase of equipment4,5 million for construction works3,5 million working assets & others

Plan of financing FDI 10,0 millionLocal partner 10,0 million


Annual production capacity 30,0 thousand tone



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Project name Production of textile machinery (weavingequipment)




Annual production capacity 42,0 thousand units



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Project name Production of disposable test (pregnancy test,alcohol test and etc.)

Project cost 5,5 million USD3,0 million for purchase of equipment1,5 million for construction works1,0 million working assets & others



Annual production capacity 20,0 million units



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Project name Production of LED light bulbs


2,0 million

for purchase of equipment1,0 million for construction works0,5 million working assets & others


Sales of products 50,0 % - domestic market

50,0 % - export

Annual production capacity 2,5 million units



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mailto:[email protected]://www.mfer.uz/http://www.investuzbekistan.uz/

Investment climate of Uzbekistan

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