Monthly Meeting on May 10, 2018

May’s monthly meeting was dedicated towards discussing up-and-coming investment opportunities across Uzbekistan. The American Chamber of Commerce invited all of its members, including honorary spekers, Mr. Alisher Tilyaev – Deputy Mayor of Tashkent, as well as Mr. Rustamkhon Azizov – Head of the Department of Investments, Innovations, Development of Tourism, and Assistance to Privatized Enterprises. Together, they explained which sectors of Uzbek economy were developing and which ones would be the most interesting for future investors.
In the past two decades of Uzbekistan’s existence as an independent country, it was always unfavorable for foreign businesses to establish a presence here. The reason for this was the unfair conversion rate, which gave companies miserly amounts of dollars for the Uzbek soums that were received from profit. As a result, foreign businesses were constantly fighting an uphill battle to make profit, and investors who had not yet put their money into Uzbekistan were understandably discouraged to do so. Fortunately, thanks to the currency law reforms, which were passed in September of 2018 by Uzbekistan’s new President – Shavkat Mirziyoyev, the country was able to open itself to foreign capital.
The first part of Mr. Azizov’s speech centered around Uzbekistan’s GDP growth. A graph by the World Bank demonstrated that, out of the Central Asian region, Uzbekistan had the highest growing GDP rate (7.8%), surpassing Tajikistan (6.9%), Turkey (2.9%), and even Russia (-0.2%). Overall, Uzbekistan officially has the world’s 5th largest growing economy in the world. This bodes well for investors, since a growing economy is a sign that local business ventures will be able to thrive.
During the presentation, Mr Azizov focused heavily on Uzbekistan’s growing tourism industry. He stated that, in 2017, over 2.6 million tourists visited the country, which is 33% more than in 2016. Also, as of May 2018, the number of tourists is expected to increase even more, with visa-free regimes being granted to citizens from 16 countries. Naturally, in order to accommodate all of these new people, Uzbekistan has developed a hotel capacity of 171 hotels.
Mr. Azizov also extended President Mirziyoyev’s guarantee to foreign investors that foreign investments will be inviolable, and that all profits made in Uzbekistan can be transferred for free.
Finally, the Head of the Department of Investments talked about Small Industrial Zones (SIZ), stating that they are being developed in an effort to accelerate modernization in regions outside of Tashkent. These zones, if leased by foreigners, will be given preferential rental rates and will be exempt of property and income taxes for 2 years.
“At the end of the meeting, a small Q&A session was organized, during which representatives of Aggreco inquired as to the possibility of purchasing private property. The Deputy Mayor responded, saying that “once a foreign company has leased property for 10 years, it may apply for permanent ownership.”
After Q&A session guests were invited to a short cocktail party, during which they had a chance to have a private discussion with the representatives of city administration.