So you have a business idea for booming Uzbekistan (read this) that requires you to start a company locally? You might think it’s very Soviet, complicated, expensive, and that legal help is required. Some lawyers won’t hesitate to overcharge you.
Guess what, it’s really not that complicated.
Uzbekistan is one of the easiest places in the world to start a company
It ranks 8th in the world when it comes to starting a business in the “Ease of Doing Business 2019” report by the World Bank.
Non-resident foreigners should open a IP OOO, which is a special LLC for them. The main difference is that the starting capital must be a minimum of 400 million Uzbek Soms, which is about $42,000 (double check as the Uzbek Som fluctuates a lot).
It’s very easy. You need:
– your passport copy
– the shareholders agreement & the company charter. This is fairly standard, any local lawyer can organize this. You can hire an interpreter and go see a local lawyer, it’ll be much more affordable than going to the lawyers that offer service in English.
– about US50 for various fees
– a registered address (you can use your accountant’s)
You can do it either:
- Online at https://fo.birdarcha.uz/s/ru_landing
- In person at an office called “Одно окно“ (one window). There are multiple such offices across Tashkent. I went to the one near the Minor metro station on Osiyo street 4A and the service was quick & friendly. Once you hand in the documents and proof of fee payment, your company gets registered within……….30 minutes! If you don’t speak Russian, just hire an interpreter; it’ll be cheaper than paying a lawyer to go with you.
You can then head out to a little booth outside and get a company stamp done for about $1-6 depending on how rich you feel that day. You’ll need to wait overnight for your company to be fully loaded in the system, and the next day you can head out to the bank, with your stamp & registration documents, to open the company account. You then have one year to deposit the 400 million Uzbek Som.
Boom. You, as a foreigner, are now operating a company in Uzbekistan. Easy.
Can I get to live in Uzbekistan now that I have a company in Uzbekistan?
No. To get a residence permit, you can go through the same process, but the starting capital must be about 8500 minimum living wages which is about $200,000. That’ll give you a three year residence permit to operate your business. Read this article for more information.
Alternatively you can run your business from a distance, popping into Uzbekistan on a regular basis to see how things are going.
What about the taxes and operating costs of a company?
This is where is becomes more complicated. All accountants I spoke to were in panicky modes as the laws are being completely overhauled. They have changed recently, are changing, and will change again soon. Do understand that there is regulatory risk related to the current tax system.
Overall, a few non-exhaustive points, which you must verify before making a move as this is a make or break topic:
- Flat corporate tax rate of 12%.
- Dividend withholding of 10% for non residents.
- A full time accountant will probably set you back $500-$600 per month. But you can also hire one part time depending on your workload. You can find people from USD50 per month for low workloads.
- You’ll need to pay your director a minimum monthly salary of about 600,000 Soms (+-$65) & the associated taxes and socials contributions.
- There is a simplified tax regime for companies that have less than 1 billion Soms of turnover. ($105,000). In such cases you get charged a 4% tax on turnover.
- A VAT rate that was recently cut to 15%. A company under the simplified tax regime does not have to register for VAT. But beware, the VAT regime is very uncertain and keeps changing.
- Capital gains are typically taxable at the corporate tax rate.
What is a company in Uzbekistan good for?
Though the tax regime is attractive, do not go to Uzbekistan to start a company to be used as an offshore entity. It might look fine on paper, but in reality your main stumbling block will be banking, as the banking system is still not quite there yet. Wiring money in & out of the country, though completely legal & possible, is bureaucratic, and e-banking is barely existent.
An Uzbek company is currently just good for doing business in Uzbekistan. That said, things will change as the government liberalizes the economy and the banking sector moves forward.
More articles on Uzbekistan:
- The Case for Investing in Uzbekistan
- Investing in the stock market in Uzbekistan – a high-growth frontier market
- How to obtain a Residence Permit in Uzbekistan
- A Real Estate Investment in Tashkent, Uzbekistan?
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hello salam! here is sohail bukhari from pakistan and current living in Azerbaijan.i have small perfume business here. i want to open perfume shop in uzbekistan .but i dont have idea about company registration fee + work residence permit fee and all regarding business process.so can i get idea plz about tottaly amount for starting small business in capital of uzbekistan. thank you
Yes you can open it. All you need to know is that you have little bit understanding of russian and most probably the company registration cost will be 1800$ ..
What about if we are buying a local company will it be easier?
I know that there is not a single creamtorium in all Uzbekistan. Will I get a permit to open a creamatorium there ? Preferably not to far from Tsahkent.
I am not a crematorium license expert.
I want to start a repair, maintenance,color,wood work, interior and exterior works. Kindly guide me how can possible to start a small business with your country.
I am exporting to Uzbekistan and want to put certain goods ready in custom bonded warehouse of tashkent.
Do i need to open company in uzbekistan for it?
I do not need any office. Just need to put some material in bonded warehouse and once any client pay I can dispatch required quantity from bonded warehouse.
Can any1 help me with this?
Hello Jinah. Sorry, I really can’t help with this. Good luck
I want to start small business I fully speak russian for the start of I get one year Visa can start with only 1800 $ for registration.?
Thank u in advance
What are the requirements for a restaurant business in Uzbekistan?
May I like to business residence permit in Uzbekistan. Send me details information to my mail address please
Asalam o Alaikum
I want to do business in Uzbekistan. Some kind of Export from Pakistan or some do in Uzbekistan.
Please complete guide me what i can do and what i can export to Uzbekistan which one is profit able. And alao tell me how i can do it.
I have an General good, import&export company in Pakistan. We export good to Uzbekistan too. but now I want to open an Import&export company in Uzbekistan so our client from there shouldn’t come here and they can do business with our entity in Uzbekistan. I dnt have Uzbekistan nationality or any national who would be director there. How can this setup be make and the cost?
Hello, I’m from Uzbekistan and studying business law. I totally agree with your article. This article was published 2 years ago. But year by year doing business getting easy and easy. I can proudly san that it is better investing companies which local companies, because Uzbekistan gives more opportunities residents than foreigners. I’m not going to say foreigners’ doing business in Uzbekistan is bad. There are equal opportunities for both of foreigners and residents. Good luck for all! If you are coming to Uzbekistan or in Uzbekistan, you may contact me, I will be grateful to help you.
my e-mail: email@example.com
I registered a representative office for less than us$100; why all this talk about 400 million soum, 400 thousand dollars, … ?!
It was about $40,000, not $400,000. So you’re saying the starting capital has been lowered since 2019? There are so many reforms in Uzbekistan…
We are placed in Islamabad, Pakistan and work in new ventures development on behalf of our clients. We are looking for the feasibility for setting up industrial units mainly for exports out of Uzbekistan in Food, Cement and Detergent sector. Can you please share with us the list of Industrial Estates/Parks, there facilities and cost of Commercial Electricity and Natural gas costs. Would also appreciate tax rates.