Since 2017, Uzbekistan has embarked on a significant transformation aimed at fostering a more business-friendly environment. The country’s government has introduced over 3,000 regulations to support and empower entrepreneurs. These changes are characterized by a reduction in state control and an emphasis on facilitating free enterprise. This progressive shift has dismantled barriers that previously hindered business activities, promoting a vibrant entrepreneurial ecosystem.
One of the most notable reforms includes the liberalization of penalties against businesses and the elimination of unjustified interference in their operations. The government has also established stronger diplomatic ties, simplified export-import procedures, and abolished unscheduled inspections of business entities. A key feature of this reform is the implementation of a moratorium on inspections, providing a stable and predictable environment for entrepreneurs.
Uzbekistan’s leadership is not complacent; the country has set ambitious targets to increase the private sector’s contribution to the GDP to 80% and its share in exports to 60% by 2027. These goals underscore the government’s commitment to fostering a robust private sector.
Presidential dialogue: A platform for business voices
A unique aspect of Uzbekistan’s business reforms is the annual dialogue between the President and entrepreneurs. This open forum allows business leaders from across the country to voice their concerns and suggestions directly to the highest authority. Such interactions are crucial in addressing challenges that arise in the dynamic landscape of economic development.
Over the past three years, this dialogue has received over 33,000 requests and proposals from entrepreneurs, resulting in more than 150 initiatives to eliminate barriers and promote business growth. For instance, in 2021, reforms were introduced to mitigate the pandemic’s impact, including extending tax and customs benefits and providing deferrals for mandatory payments.
The 2022 dialogue further supported businesses by introducing tax reforms such as reducing the VAT rate to 12%, shortening the VAT refund period to seven days, and implementing a flat tax rate of 4% to replace a variable turnover tax. Additionally, a significant step was taken to protect business rights by mandating that decisions on land and property allocation can only be reversed through judicial processes.
This annual dialogue has become a cornerstone event, eagerly anticipated by the business community. Each year, new initiatives are announced, reinforcing the government’s ongoing support for entrepreneurship.
Digitalization: A new era in business protection
Uzbekistan has also embraced digital solutions to enhance business protection and reduce bureaucratic red tape. The “Unified State Control” system is a digital platform that monitors inspections conducted by government bodies on businesses. This system registers inspections, their outcomes, and any complaints from business entities, ensuring transparency and accountability.
Government agencies are prohibited from conducting unregistered inspections, with violations leading to administrative penalties. The system also features an Electronic Inspection Registration Book, enabling full oversight of inspections by the authorized body. Moreover, an electronic database of officials authorized to conduct inspections has been established, allowing businesses to verify the legitimacy of inspectors.
This digital framework aims to combat corruption and unauthorized inspections, fostering a fairer business environment. By providing full access to the system, entrepreneurs can stay informed about their rights and the legal requirements they must meet.
Looking ahead: The Uzbekistan 2030 strategy
The Uzbek government has outlined a forward-looking strategy to further support the business sector, encapsulated in the Uzbekistan 2030 Strategy. This plan emphasizes the efficient use of local resources, the development of industries with advanced technologies, and the gradual transition of monopolistic sectors to market principles.
A significant aspect of the strategy is the complete digitalization and simplification of the tax system, designed to create a level playing field for all entrepreneurs. This initiative aims to make the official business sector more attractive and profitable compared to the informal economy.
The government also plans to introduce a simplified and coherent legislative framework that is user-friendly for both businesses and the general public. This comprehensive approach seeks to ensure that the business environment in Uzbekistan remains conducive to innovation, growth, and fair competition.
By focusing on these reforms and initiatives, Uzbekistan is positioning itself as a dynamic and attractive destination for business. The ongoing efforts to support entrepreneurs are not only revitalizing the domestic economy but also enhancing the country’s global economic footprint.
Author: Dilmurod Kasimov, who serves as the Commissioner on the Protection of Rights and Legitimate Interests of Business Entities. His insights reflect a deep understanding of the challenges and opportunities facing businesses in Uzbekistan and underscore the government’s commitment to supporting entrepreneurial ventures.
