In 2024, the volume of foreign direct investment (FDI) in the economy of Uzbekistan reached $11.9 billion, a historical maximum. The total volume of utilized foreign investment and loans amounted to about $35 billion, and investments in fixed assets – $39 billion. These figures confirm the growing attractiveness of the country for foreign capital, especially from China (27.9% of all FDI) and Russia (13.2%). However, the rapid development of the investment sector is accompanied by complex legal challenges.
Legislative environment: key regulations
The basis for regulating investment activities are:
- Law “On Special Economic Zones” (ZRU-604 of 17.02.2020);
- Law “On Investments and Investment Activities” (ZRU-598 of 25.12.2019);
- Civil Code of the Republic of Uzbekistan;
- International agreements on investment protection (including with the Russian Federation, China, EU and CIS countries).
Full texts are available on lex.uz.
Investment forms: legal mechanisms
Investors can choose the following forms of participation:
- creation of enterprises with foreign participation (analogous to LLC or JSC);
- acquisition of shares/stocks in existing companies;
- investments in real estate, equipment, property complexes;
- financial participation through loans and stock market instruments.
Since 2020, the national circulation regime has been in effect: foreign investors have the same rights as local entities, with the exception of a limited number of strategic areas.
Guarantees and protection of investments
The legislation of Uzbekistan provides for:
- free transfer of profits after payment of taxes;
- protection from expropriation (only by court decision with full compensation);
- stabilization clauses — preservation of conditions at the time of investment in the event of changes in legislation;
- access to judicial and arbitration protection.
Judicial and arbitration instruments: choice of mechanism
Since 2018, the Tashkent International Arbitration Center (TIAC) has been operating in Tashkent, recognized as one of the most promising arbitration platforms in Central Asia. Among the advantages of TIAC:
- neutral status;
- regulations based on UNCITRAL standards;
- cases are considered in Russian, English and Uzbek;
- recognition of decisions under the New York Convention of 1958.
A recommended arbitration clause may be included in the contract to resolve potential disputes.
Special Economic Zones: tax incentives and infrastructure
SEZs are actively developing to attract capital. Residents receive:
- recognition of decisions under the New York Convention of 1958.tax and customs benefits;
- expedited registration;
- infrastructure support;
- access to preferential rent and purchase of land.
Examples: – Navoi SEZ – logistics and air transportation; – Jizzakh SEZ – high-tech production; – Angren SEZ – chemical and construction industries.
Currency regulation and profit repatriation
Since 2017, Uzbekistan has had a free currency conversion regime. Profit repatriation is permitted without restrictions. However, investors should consider the risks of sum volatility and use hedging mechanisms or currency diversification.
Restrictions and licensing requirements
Certain sectors require special permits:
| Industry | Требуется лицензия? | Comment |
| Electric power industry | Yes | The application is submitted through public services, the deadline is up to 15 working days |
| Finance and insurance | Yes | Regulated by the Central Bank |
| Land (agricultural purpose) | Prohibited for direct purchase by foreigners | Only rent through residents |
International guarantees and agreements
Uzbekistan is a party to a number of bilateral agreements on investment protection, which provide for:
- most favored nation treatment;
- protection against discrimination and illegal expropriation;
- access to international arbitration (UNCITRAL, etc.).
Important: the country is not a member of ICSID, but allows other forms of international litigation.
Practical advice: how to minimize risks
1. Due diligence of counterparties and assets: a mandatory step before concluding a transaction.
2. Correct structuring – taking into account tax consequences and regulation.
3. Legally verified arbitration clauses – especially when working with TIAC.
4. Monitoring legislative changes: subscribe to updates on lex.uz.
5. Transparency of currency and tax procedures – compliance with formalities is critical.
The legal system of Uzbekistan creates a stable investment climate, offering investors reasonable guarantees and protection mechanisms. However, successful investments require not only an interest in the market, but also systematic legal training.