Uzbekistan plans to offer international technology companies tax exemptions on qualifying investment returns and special rules for testing new products, as it seeks to turn Tashkent into a base for expansion across Central Asia.
The country adopted legislation in August establishing Enterprise Uzbekistan, a special business regime for technology companies and investors. It is expected to become operational in early 2027.
Tax breaks, global talent and product testing
Under the new regime, investors will be exempt from tax on dividends and other income earned from investment activity carried out under the special regime.
Companies will also pay no corporate tax on profits from priority activities under Enterprise Uzbekistan’s special regime, while sales within the centre and exports by its participants will be subject to zero-rated VAT.
“It means a lot, but most importantly, it means 100% foreign ownership,” Sultonmurod Rasulov, Head of Strategic Partnerships at Enterprise Uzbekistan, told participants at the Enterprise Uzbekistan Summit during ICT Week in Tashkent.
“You can use investment instruments that your foreign international investors already know. You can hire globally on international employment standards.”
Full foreign ownership is already permitted in Uzbekistan. Enterprise Uzbekistan will also accommodate foreign companies, branches and representative offices.
Foreign specialists who meet the criteria for highly qualified employees will also be exempt from personal income tax on eligible salaries and dividends.
Foreign employees of participating companies will also be able to obtain visas lasting up to three years without requiring separate work permits.
Another significant addition is the regulatory sandbox. Companies will be able to test new technologies, normally for up to 12 months, under specially adapted rules that may include temporary exemptions from certain requirements and simplified licensing procedures.
“And if you are building something that the rules were not designed for, the regulatory sandbox will allow you to test it first,” Rasulov explained.
For developers of artificial intelligence applications or new financial services, that could provide an alternative to navigating regulations written before their products existed.
Attracting international investment
International venture capital funds already operate in Uzbekistan, financing local startups and seeking opportunities in the country’s expanding technology sector.
Golden Gate Ventures opened an office in Tashkent in June, in partnership with the Uzbek-Oman Investment Company. The firm plans to develop its investment activities in Uzbekistan while helping technology companies expand between Central Asia and the Middle East.
Michael Lints, Founding Partner MENA at Golden Gate Ventures, believes the new regime could encourage other international investors to establish operations in the country.
“I think it helps getting foreign investors to launch their funds in Uzbekistan,” he told Euronews. “It’s gonna help with cross-border deal flow as well.”
“So we’ll get more investors, more founders to come and launch here,” he said.
From Uzbekistan to the wider region
Bahodir Ayupov, Vice President of Global Business Development at Enterprise Uzbekistan, said international technology companies may be deterred by their unfamiliarity with Uzbekistan’s legal system.
For Ayupov, a sign of success would be companies seeing Enterprise Uzbekistan “as an integral part of their expansion plans”, rather than simply as a way to enter the Uzbek market.
His longer-term ambition is to see “big tech companies coming to this region through Uzbekistan”, using the centre as a base to expand into other Central Asian markets.
The first test comes in 2027
Although the legal framework has been adopted, many of the detailed regulations governing Enterprise Uzbekistan are still being developed.
Officials are inviting technology companies and investors to help shape those rules before the new regime begins operating.
Farhod Ibragimov, CEO of Enterprise Uzbekistan, identified regulatory stability as one of the principal concerns international investors raise when considering a new market.
“The first question is: how long will these incentives remain in place? Will they still be available over the next ten years?”
The new regime is designed to remain in force until 2100, providing a long-term framework for investment decisions.
Mark Beer, Chairman of the Metis Institute, said attracting companies at launch would be only the beginning. The longer-term challenge will be to maintain investor confidence and remain competitive with other international business centres.
“The real test of any environment is about 10 years from now, because trust takes 10 years to build,” he said.
Beer argued that the centre should review its performance against competing jurisdictions and adjust its rules if growth stalls. “Tweak the regime and monitor again.”