April 15, 2015
Uzbekistan is planning to produce 26,000 tons of silk in 2015. 2
2015 YEAR – THE YEAR OF CARE FOR THE SENIOR GENERATION.. 2
Long-livers in Uzbekistan to get bonuses to pensions. 2
446 projects included into the Investment program for 2015 planned for realization in 2015. 3
2018 FIFA World Cup qualification (AFC) draw held. 8
economy
Uzbekistan is planning to produce 26,000 tons of silk in 2015.
The plan surfaced at a meeting in the Ministry of Agriculture and Water Resources on the preparation and conduct of the season of cocoon procurement. The harvest is projected to consist of disease-resistant varieties of silkworm eggs ‘ipakchi-1’, ‘ipakchi-2’, ‘O‘zbekiston-5’, ‘O‘zbekiston-6’.
Silk is well known for its durability, its fibers can withstand much higher load than synthetic fibers. This feature has made it popular in various industries, including those that are currently boosting in Uzbekistan. For example, the domestic light industry has been expanding the application of this unique natural product: just a single contact of silk clothes with skin improves a capillary blood circulation, and reduces the intensity of pain in skin irritation. Silk is also used by domestic enterprises for the manufacture of sewing threads, dress fabrics and finished textile articles. The world-famous Uzbek satin and chiffon are the most common types of fabrics made from silk. The clothing made of them is shiny, smooth and pleasant to the touch.
4,445 hatcheries are currently ready to revitalize silkworm eggs. The mulberry plantations have been laid on 1,240 acres as part of building the fodder capacity. It is envisaged to plant more than 16 million saplings of mulberry trees, of which 11.5 million seedlings have been already planted.
Uzbekistan has been carrying out several projects to improve quality and increase the output of silk. They are partnered by world’s top international organizations and companies. For instance, the Japan International Cooperation Agency is assisting in the implementation of several projects on advancing the technology of cultivation of silkworm cocoons and bringing the quality of yarn to international standards. There are certain ongoing initiatives on improving the varieties of mulberry trees, since the quality of the cocoon directly depends on the forage. For example, each of the Japanese mulberry tree varieties produces thrice more leaves, with much higher protein content and other essential nutrients for silkworm.
Experts point out to the huge demand for silk in the world. Therefore, Uzbekistan has an excellent opportunity to enter international markets and create new jobs.
(Source: «Uzbekistan Today» newspaper)
2015 YEAR – THE YEAR OF CARE FOR THE SENIOR GENERATION
Long-livers in Uzbekistan to get bonuses to pensions
Long-livers in Uzbekistan at the age of 100 or over will receive special bonuses at the size of equal to 100% of minimal salary to their pensions.
The decision was adopted in line with the decree of the President of Uzbekistan Islam Karimov “On additional measures on further strengthening social protection and material support of elder generation” from 14 April 2015.
The decree said that monthly bonuses to pensions of the citizens at the age of 100 or over will be financed due to resources of the off-budget Pension Fund under the Ministry of Finance of Uzbekistan.
Uzbek leader also entrusted to write-off the sum of overpaid pensions and benefits to the citizens at the age of 75 or higher, which were revealed in the result of checks of calculations on assigned pensions and benefits, as well as use of preferences, in 2015.
(Source:UzDaily.uz )
investments
446 projects included into the Investment program for 2015 planned for realization in 2015
The most important tool for a dynamic and balanced economic growth, the implementation of deep structural transformation and diversification of the economy is the conduction of active targeted investment policy. The main priorities of the investment policy for the current year are defined in the Decree of the head of state “On the Investment program of the Republic of Uzbekistan for 2015″ dated November 17, 2014. The head of the Department on monitoring the implementation of investment projects of the Ministry of foreign economic relations investments and trade of the Republic of Uzbekistan Alisher Mursaliyev told about the goals and directions of this document to the correspondent of News agency UzReport.
– According the Investment program, which is adopted each year, significant amounts of investments are attracted to the economy of the Republic. Tell us, please, how the Investment program of Uzbekistan is developed and what are its main goals and objectives?
– In accordance with the regulations the Investment program is a set of interrelated measures designed to achieve sustainable and dynamic development of the economy, the implementation of the main priorities and strategic objectives for the structural transformation of individual industries and regions of the Republic through the rational use of natural, raw, financial and labor resources.
Essentially this program is a tool for the implementation of the state investment policy. It includes a list of priority investment projects and is based on such principles as:
– support of the most important sectors of the economy with priority for production of deep processing of raw materials, agricultural products, production of competitive products;
– priority investment to socially important sectors (education, health);
– further development and improvement of municipal and transport infrastructure.
Sources of funding for the Program, as a rule, are funds of the state budget and state extra-budgetary funds, foreign loans guaranteed by the government, loans from commercial banks, including foreign and direct investments of individuals and legal entities, including foreign.
– What are the total volumes of foreign investments into the economy of our state according to the Investment program for 2015 and what are their sources?
– In the framework of the Investment program for 2015, 446 projects are planned for implementation through all sources. Of these, 156 projects will be implemented through the participation of foreign investments and loans. The total amount of these projects is more than 29 billion dollars.
If you look at the sources of financing of the Investment program for the year 2015, within 80 projects it is planned to attract foreign direct investments of foreign companies and loans from commercial banks of European and Asian countries.
I would like to note, that foreign direct investments are generally attracted for the organization of modern production using advanced technologies for the further development of basic industries and the production of competitive consumer goods, which are in constant demand in domestic and foreign markets.
The remaining 76 projects are financed by concessional loans under the guarantee of the government of the Republic of Uzbekistan. Sources of these investments are loans of such international financial institutions as the World Bank, the Asian Development Bank, Islamic Development Bank and credit institutions of several countries, such as Japan, Korea, China, Japan, Germany, France, Arab countries, etc.
Preferential credits, mainly used for the implementation of projects in the social sector: health, education, drinking water, irrigation and improving land conditions, improvement of municipal and road infrastructure.
– In what industry and what purpose will be directed foreign investment in accordance with the Investment program?
– If to analyze the projects included in the Investment program for 2015, we can see that the largest volume of foreign investments will be attracted to oil, gas and petrochemical industry, followed by energy, ICT, road and transport infrastructure, construction and production of building materials, light and leather industry, chemical industry, etc.
In the social sphere, the largest volume of foreign loans will be utilized in the drinking water supply, followed by irrigation and improving land conditions, as well as health care, education.
It should be noted that the Investment program also includes projects for the construction of housing in rural areas with loans from ADB and IDB. In the current year, the construction of 12 thousand houses across the country is planned.
– One of the priority directions of the economy of our country is an active development of small business and private entrepreneurship. Please, tell us how entrepreneurs can benefit from foreign investments, provided in the program?
– Of course, public policy on support of small business and private entrepreneurship also reflected in the Investment program for 2015.
In addition to supporting entrepreneurship in rural areas, 11 projects on attraction of foreign currency loans with the involvement of funds of the ADB, as well as the leading financial institutions of Germany, Holland, China will be implemented this year. Their total amount is over $500 million.
Loans will be directed for such purposes as the purchase of technological equipment and replenishment of the floating funds of entrepreneurs.
In conclusion, I would like to mention, that the volume of credit lines of international financial institutions and foreign commercial banks for the financing of small business and private entrepreneurship is increasing annually.
(Source: «Business partner.uz» newspaper)
Society
Jobs: Always in Demand
Investment projects imply not just new capacities and manufacture of competitive products, but preeminently jobs. Domestic and foreign investments allow establishing thousands of new jobs in Uzbekistan annually, especially in labor-surplus regions. In 2015, it is envisaged to establish over 232,000 jobs under the socio-economic development program in regions.
Ministry of Economy of Uzbekistan held a press conference to report on the ongoing consistent measures on provision of jobs and employment.
Last year, 154 investment projects provided nearly seven thousand jobs. For instance, a project on the manufacture of Damas cars was completed in Khorezm, a large cement plant was established in Jizzakh region, Syrdarya TPP was upgraded, a spinning manufacture was founded in Karakalpakstan.
This year, it is envisaged to establish over 232,000 jobs under the socio-economic development program in regions. In particular, the program provides for the creation of more than 115,700 jobs as part of more than 5,400 projects worth $5.4 billion in nine areas of industry, 66,800 jobs through the commissioning of new trade and consumer service facilities worth $774.9 million, 48,800 jobs in agriculture, as well as about 14,000 jobs in the service sector.
In order to streamline the ongoing programs, the Ministry of Economy outlines short and long-term demographic forecasting, and builds social policies in line with the results of forecasts. This is particularly relevant in the context of employment of graduates. Every year more than 500,000 boys and girls complete their education. In order to simplify the process of their employment, micro and small businesses get the opportunity to increase the maximum number of employees by 50% as of January 1, 2015, in case if they hire graduates of vocational colleges.
As emphasized at the conference, small businesses and private enterprises are deemed as a determinant sector in terms of the economic growth rates in the country. Namely the private enterprises produce most of the country’s GDP and provide employment to the able-bodied population. Uzbekistan has been stimulating and simplifying the process of establishment of small businesses.
(Source: «Uzbekistan Today» newspaper)
BUSINESS CLIMATE
Privileges and preferences for foreign investors as important condition of solidifying Uzbekistan’s economic potential
Since the first days of independence, the Republic of Uzbekistan worked towards the active attraction of the most advanced technologies and overseas investments to the development of national manufacturing. To realize this task, serious steps were taken to create an auspicious business climate in the country.
In particular, a broad system of legal guarantees and privileges was created for foreign investors and domestic enterprises alike. The Uzbek legislation introduces a national regime for representatives of foreign business circles interested in investing in one or another industry of the national economy, which stipulates the provision of conditions no less favourable than those established for both legal entities and physical persons of the Republic of Uzbekistan.
To date, the legal regulation of issues surrounding the attraction of foreign capital is based on the following Laws of the Republic of Uzbekistan: “On foreign investments”, “On investment activity”, “On guarantees and measures to protect the rights of foreign investors” and “On free zones”, as well as on a number of Presidential Decrees and Resolutions of the Uzbek government.
Uzbek law bans nationalization and expropriation of foreign investors’ assets. Besides, the regulations create no obstacles to investment and guarantee that profits may be freely repatriated.
The Presidential Decree, “On additional measures to stimulate the attraction of foreign direct investments“ dated April 10, 2012 is viewed as one of the major steps towards boosting the inflow of foreign capital to the national economy. In keeping with a given document, overseas investors are granted a wide spectrum of privileges, tax breaks and preferences in the Republic of Uzbekistan.
In particular, in accordance with the Decree, enterprises, which attract foreign direct investments and operate in priority industries such as electrical engineering, light, food, chemical, petro-chemical, coal, medical, pharmaceutical, microbiological, glass and porcelain-faience and toys-production sectors, as well as in machine building and construction of electric-power stations on the basis of alternative sources of energy, are granted exemption from tax on profit received by legal entities, property tax, tax charged on the improvement and development of social infrastructure and unified tax payment intended for micro-firms and small enterprises. In addition, they are exempt from obligatory deductions to the Republican Road Fund for the period from 3 years to 7 years depending on the volume of foreign investments they manage to attract.
The tax concessions referred to above are granted, on condition that:
– The indicated enterprises are based in all towns and rural populated areas across the Republic, with the exception of Tashkent and Tashkent province;
– Private foreign direct investments are not protected by guarantees of the Republic of Uzbekistan;
– The share of foreign participants in the enterprise’s chartered capital is no less than 33 per cent;
– Foreign investments are made in the form of freely convertible currency or modern technological equipment;
– No less than 50 per cent of profit received thanks to the afore-mentioned tax breaks within the entire period of their application, is re-invested in the enterprise’s further development.
Moreover, the Decree in question stipulates that newly created enterprises with foreign investments, with the foreign investor’s monetary contribution being no less than US $5 million, in cases where any changes in the tax legislation create less favourable investment conditions, may remain subject, within the 10-year period, to the legislation in force on the date of their official registration.
A given Presidential Decree is aimed, first of all, at strengthening the system of state guarantees and privileges granted to foreign investors and enterprises set up with a share of foreign investments; eliminating the bureaucratic barriers that are still in place in dealing with foreign investors, as well as at banning the illegal interference by state and controlling authorities in economic activities of enterprises with foreign investments.
Unprecedented investment privileges are provided in the Navoi Free Industrial-Economic Zone and in the Angren and Djizak Special Industrial Zones. Enterprises registered there are granted exemption from land tax, property tax, profit tax, tax charged on the improvement and development of social infrastructure, unified tax payment (for small enterprises), obligatory deductions to the Republican Road Fund and the Reconstruction Fund, tax on major repairs and fitting out of educational and medical establishments, as well as deductions to the Republican Fund of School Education for the period ranging from 3 years to 7 years and from 7 years to 15 years (for the Navoi FIEZ-based enterprises) depending on the volume of invested capital.
Lots of privileges are provided by the Tax Code of the Republic of Uzbekistan. Article 159, for instance, stipulates a reduction of taxable profit, received by legal entities, by an amount of funds ploughed in modernization, technical and technological re-equipment of production, acquisition of new technological equipment and expansion of production by constructing new production facilities and reconstructing the existing premises and structures intended for production purposes. This privilege also applies to the repayment of credits allotted for the afore-named purposes, reimbursement of a leased installation’s cost, minus depreciation charged in a corresponding tax period (this sum, however, should not exceed 30 per cent of the legal entity’s taxable profit). The amount of taxable profit is reduced in the course of 5 years, starting with the taxable period, in which these expenses are made and in the case of technological equipment – from the date of putting it into operation.
In conformity with Articles 208, 209 and 211 of the Tax Code of the Republic of Uzbekistan, exemptions from value-added tax cover:
– Sales turnover of property, transferred in the form of investment obligation under a corresponding agreement signed between the investor and a state body authorized to execute control over the state property;
– Provision of services under the financial lease (leasing) agreement – as concerns the bailor’s interest-bearing income;
– Import of technological equipment to the Republic of Uzbekistan in keeping with a list approved by law, as well as components and spare parts, on condition that their delivery is stipulated in a corresponding contract for the delivery of technological equipment. In cases where the imported technological equipment is sold or transferred abroad on a gratuitous basis within 3 years since the date of its importation, the application of this privilege is cancelled, with the obligation to pay value-added tax being restored;
– Import of property in the form of investment obligation under an appropriate agreement signed between the investor and a state body authorized to execute control over the state property.
Article 269 of the Tax Code of the Republic of Uzbekistan reads that when calculating tax on the legal entity’s property, the taxable base is reduced by the average annual residual cost (the average annual cost) of machinery and equipment exploited within no more than 10 years.
Amenably to a given Article, newly created enterprises are exempt from property tax (for legal entities) for the period of two years since the date of their official registration. The indicated privilege doesn’t cover enterprises, set up on the basis of reorganized legal entities, as well as legal entities that carry out their activity on the territory of other enterprises and use the equipment taken on lease from the latter.
Privileges associated with the payment of customs duties are stipulated in the Law of the Republic of Uzbekistan, “On customs tariff”, passed on August 29, 1997. In accordance with Article 33 of this document, the following goods and property are exempt from customs duties:
– Property imported to the Republic of Uzbekistan for their production needs by enterprises with foreign investments, with the share of foreign investments in their chartered capital being no less than 33 per cent, – within the period of 2 years from the date of official registration;
– Property imported for their own personal needs by foreign investors, foreign citizens and those without citizenship, who live outside the Republic of Uzbekistan and stay in the Republic of Uzbekistan under the labour contracts signed with foreign investors;
– Goods imported by foreign legal entities making direct investments to the economy of the Republic of Uzbekistan to the tune of over US $50 million, on condition that the imported goods are produced by the same foreign legal entities;
– Goods, works and services intended for the implementation of works under the produce sharing agreement and imported to the Republic of Uzbekistan in keeping with project documentation, by the foreign investor or any other entities participating in the implementation of works under the produce sharing agreement, as well as the produce imported by the foreign investor and owned by the latter under the produce sharing agreement;
– Technological equipment imported to the territory of the Republic of Uzbekistan amenably to a list approved by Uzbek law, as well as components and spare parts, on condition that their delivery is stipulated in the contract for the delivery of technological equipment. In cases where the imported technological equipment is sold or transferred abroad on a gratuitous basis within the period of 3 years since the date of importation, this privilege is cancelled and the obligation to pay the prescribed customs duties for the entire period of its application is restored;
– Goods originating and imported from the countries, with which the Republic of Uzbekistan cooperates under the free trade regime.
Additionally, according to the April 7, 2014 Presidential Decree No УП-4609, the moratorium is prolonged, till January 1, 2017, on conducting tax check-ups to examine the state of financial-economic activity carried out by small entrepreneurs that opportunely pay all their taxes and other obligatory deductions and ensure stable growth rates and profitability of production (with the exception of extraordinary check-ups conducted to oversee the liquidation of legal entities, or within the framework of criminal cases and those associated with the use of budgetary and centralized funds and resources).
In pursuance of the Decree, starting July 1, 2014, the maximum personnel is increased at small enterprises operating in the light and food sectors as well as in the building-materials industry – from 100 to 200. The document also establishes a procedure, according to which all transactions by enterprises on their accounts held with commercial banks may be suspended by the State Tax Service only following an appropriate court verdict, in cases where these enterprises fail to present their tax and financial reports or are absent at the indicated address.
Summarizing what has been stated above, it needs to observe that the tax and other privileges granted to foreign investors have a key role to play in improving the business environment in the Republic of Uzbekistan and facilitating the attraction of foreign investments to the national economy.
(Source: «Business partner.uz» newspaper)
sport
2018 FIFA World Cup qualification (AFC) draw held
Asia’s 2018 FIFA World Cup hopefuls learned their fate on Tuesday when the draw for the second round draw of continental qualifiers was held in the Malaysian capital.
Some 40 sides were placed in eight groups of five teams each for the FIFA World Cup qualifying campaign.
Uzbekistan will play in Group H along with Bahrain, Philippines, DPR Korea and Yemen. The teams will compete according to a double round robin format, and the Round 2 qualification matches will be held from 11 June 2015 to 29 March 2016.
The group winners and four best runners-up (total 12 teams) will advance to the final round of qualifying for the 2018 World Cup.
(Source: UzA)
Reference to the source is a must in reproducing materials