New Opportunities for Entrepreneurs and Investors

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May 25, 2014

New Opportunities for Entrepreneurs and Investors

The principal tasks and priority dimensions defined by President Islam Karimov for the economic development in the country for the year 2014 are dedicated primarily for the maintenance of sustainably high rates of growth and the continuation with the mobilization of the available resources and capacities to further this goal.

As a result of the practical realization of these tasks in the first quarter of 2014, the production of industrial goods grew by 8.9 percent, while the production of consumer goods in particular increased by 12.8 percent. The share of consumer goods in the aggregate volume of industrial production has made up 34.4 percent. A special place and considerable input is made thus by entrepreneurship entities.

The decree of the head of our state “On Additional Measures to Further Refine the Investment Climate and Business Environment in the Republic of Uzbekistan” signed 7 April 2014 facilitates the further promotion of works on this front.

A seminar launched at the Uzexpocenter National Exhibition Complex seeks to address the essence and significance of this document and its execution. Members of the Senate and deputies of the Legislative Chamber of the Oliy Majlis, officials of the ministries of justice, finance, the State Customs Committee, the State Committee for Communications, Information and Telecommunication Technologies, the Central Bank, the Trade and Industry Chamber, a variety of agencies of our country, as well as entrepreneurship entities and foreign investors carrying our activities in the capital city and Tashkent region took part in the event organized by the State Tax Committee of the Republic of Uzbekistan.

Chairman of the State Tax Committee of the Republic of Uzbekistan B.Parpiev and others noted in particular that a favorable business environment has been created in this country under the leadership of President Islam Karimov, with ever improving conditions and opportunities for entrepreneurship. It is instrumental in the steadfast economic development and in securing the wellbeing of the population.

The tax preferences being granted to entrepreneurship entities have been facilitating the further development of their activities and growth in the volumes of production. As the outcomes of the first quarter of the year 2014 indicate, in excess of 34 thousand enterprises have cashed in the tax privileges. As a result, they got an opportunity to retain 2.4 trillion soums in their disposal.

In accordance with the abovementioned decree of the President of our country, the ministries, state committees, agencies, stock companies, associations, local government bodies are tasked with provision of information on their websites regulating the issues of interaction with entrepreneurship entities, and continuous renewal of that information. That will help the entrepreneurs to receive in time and make use of necessary data from the official web portals of relevant organizations.

In accordance with the decree, the moratorium has been extended through to 1 January 2017 on tax inspections of the financial and economic activities of small entrepreneurship entities timely paying taxes and other mandatory payments as well as those securing sustainable growth rates and profitability of production. In particular, such entities are exempt from inspections till January 1, 2017. Except from emergency inspections as part of criminal cases opened during dissolution of corporate bodies, as well as those linked to the use of budgetary and centralized funds and resources.

There is another important novelty. Starting from 1 July 2014, the maximum annual average number of personnel in certain labor-intensive sectors of the manufacturing industry, like the production of construction materials, light and food industries has been increased up to 200 in contrast to the acting norm of 100 people.

Also, the practice of extracting payment for bank services when paying taxes and other mandatory fees into the State Budget by small entrepreneurship entities from their settlement accounts has been canceled.

In addition, now the suspension of operation on accounts of economic entities in commercial banks in cases of their failure to present tax and financial reporting and their absence in declared address is carried out by bodies of state tax service only with an appropriate court verdict. It is directed at reducing the measures of influence on entrepreneurship entities and protecting their legitimate interests.

In order to further improve the investment and business climate, stimulate the development of entrepreneurship activities, the decree has approved the Program of Additional Measures aimed at the further improvement of the state of affairs in the investment climate and business environment for 2014-2015. In accordance with the Program, amendments and addenda are projected to be introduced into the legislation on the reduction of time frames in payment of integrated land tax from three to two times. Also, the amendment on the prolongation of the expiration date of key certificate to electronic signature from 12 to 24 months is intended to be introduced into the acting legislation in the second quarter of 2014.

“Favorable opportunities are created in Uzbekistan for entrepreneurs and foreign investors,” suggests Lee Byub-Yol, general manager of the company Hanjin Co Ltd (South Korea) – director of the joint venture Eurasia Logistics Service. “It is noteworthy that in this direction, taking account the requirements of time and development, documents are adopted to create greater and wider opportunities for business. This facilitates the growth in our interest to Uzbekistan and the implementation of even greater projects in this country.”

The resolution of the President of the Republic of Uzbekistan “On Measures to Further Improve the Procedures Associated with the Conduct of Entrepreneurship Activities and the Availability of Public Services” signed 15 April 2014 creates even more extensive conveniences for entrepreneurship entities. In line with this document, certain types of licensed activities and document of licensing character in the sphere of entrepreneurship activities are being abolished from 1 June 2014. In addition, the procedures when receiving documents of licensing nature and licenses are to be reduced and simplified even more.

Relevant government bodies are tasked with securing – by 1 January 2015 – the introduction of the principle of “Single Window” with regard to 19 licensed types of activities. It is ordered to complete the elaboration and introduction of software by the end of 2014 for the entrepreneurship entities to present periodic reporting on the execution of terms and conditions of licensing agreements in electronic form. Starting from October 1, 2014, financial, tax, statistical and other types of reporting are to be designed in an electronic form on the Integrated Portal of Interactive Public Services of the Republic of Uzbekistan. Payment of taxes and other mandatory fees, public utility payments, fees and government duties for the consideration and release of documents of licensing nature and licenses is to be carried out through the system of internet banking. The operation of personal “entry of entrepreneurship entity” is to be ensured to allow for the registration of references and use of other types of interactive services. As a result of these measures, entrepreneurship entities will be able to carry out payments via the internet and receive needed information in an electronic form.

At the seminar, representatives of entrepreneurship entities received detailed answers to their queries.