Uzbekistan among TOP 10 countries-reformers of conditions for business

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November 6, 2017

Uzbekistan among TOP 10 countries-reformers of conditions for business

In accordance with the Strategy for Actions of the development of Uzbekistan along five priority directions in 2017-2021, large-scale reforms are being implemented aimed at improving the investment climate, creating an enabling business environment and stimulating the accelerated development of small business and private entrepreneurship.
For such a short period of time, were adopted a number of laws of the Republic of Uzbekistan, more than 20 decrees and 35 resolutions of the President of the Republic of Uzbekistan, aimed at improving the business climate in the country and development of business activities. Measures are being taken to dramatically simplify and improve the transparency of registration of licenses and permits and the provision of public services. Strengthened measures of legal protection of business entities, financial support for the development of entrepreneurial activities. In other words, all reforms are based on the well-known principle “if the people are rich, then the state will be rich and strong”.
The effectiveness of last year’s measures to improve the business climate is confirmed by the latest release of the World Bank’s Doing Business international report.
According to the report “Doing Business 2018: Reforming for Job Creation” published on October 31, 2017, Uzbekistan took 74th place among 190 countries, having improved its rating by 13 positions in comparison with the previous year. Moreover, our country has entered the first ten reforming countries to create the most favorable conditions for doing business. At the same time, the ongoing reforms allowed Uzbekistan to become a leader among the countries of Europe and Central Asia to improve the business environment and simplify the business environment.
The scale and effectiveness of the measures taken to create a favorable business environment are confirmed by a significant improvement in 6 out of 10 indicators of the World Bank’s Doing Business 2018 report.
Uzbekistan ranked 11th among the countries of the world in terms of “Registration of Enterprises” due to the radical improvement of the procedure for state registration and registration of business entities, ahead of such developed countries as USA, Japan, France, Germany, Italy, Spain, Denmark and others.
So, from April 1, 2017 in our country began to operate online registration of business entities, which takes only 30 minutes against the previous two working days. It is important to note that registration of the business entity is carried out on the basis of an application filled in online. In this case, applicants are given the opportunity to make out the constituent documents at their discretion on the basis of standard forms through this system.
The ease of opening a business is also indicated by the fact that in just 9 months of this year, the number of newly created small business entities increased 1.3-fold as compared to the previous year.
Establishment from January 1, 2016 of a new procedure for connecting business entities to electricity networks on a “turnkey” basis facilitated the simplification of administrative procedures requiring direct involvement of business entities. If before, when connecting to the power supply system, entrepreneurs were required to pass 7-10 instances, today it is enough to apply to one-stop shops with one application. All other steps – from preparation of technical specifications to connection to networks – are carried out by the services of territorial enterprises of electric networks without the participation of applicants.
As a result, according to the indicator “Connection to electric networks”, Uzbekistan rose by 56 positions and took the 27th place in the rating, ahead of this indicator countries such as the USA, Netherlands, New Zealand, Spain, Latvia, Turkey, Kazakhstan, Canada, Israel and others.
Thanks to the introduction in the beginning of 2016 of a new procedure for granting land plots to carry out entrepreneurial activities on the basis of a tender, the procedure for obtaining permits for all stages of construction has been considerably simplified, from the stage of preparing the project documentation to putting the facilities into operation. As a result, the number of procedures necessary to obtain land and construction permits was reduced from 23 to 17, which affected the country’s rating upgrade by 12 positions in the indicator “Obtaining construction permits.”
Issues of simplifying tax administration and reducing the tax burden on business entities are at the center of the constant attention of the leadership of our country. Thus, by the Decree of the President of the Republic of Uzbekistan “On Measures to Improve Tax Administration Essentially, Increase the Collection of Taxes and Other Compulsory Payments” of July 18, 2017, the first major direction of reforming the tax system is the widespread introduction of modern information and communication technologies in the tax administration process, transition to contactless electronic servicing of taxpayers, primarily business entities.
Completion of the full transition to the electronic form of tax reporting and expansion of the practice of distance payment of taxes made it possible to achieve a significant improvement in the country’s rating in terms of “Taxation” (to rise from 138th to 78th place). According to the experts of the Doing Business team, the level of tax burden on business entities in Uzbekistan is much lower than in the US, Australia, Germany, Sweden, Turkey, China and Russia.
In terms of “Registration of property”, which is also carried out through the “one-stop-shop” centers, Uzbekistan has strengthened its positions, ranking 73rd in the world rating.
At the same time, it is necessary to emphasize the effectiveness of the activity of the single centers for rendering state services to business entities on the principle of “one window”. Their functioning helped to ensure transparency and promptness of licensing procedures and licensing, the introduction of electronic forms of interaction between government agencies, as well as a significant reduction in bureaucratic obstacles and financial expenses of applicants. Given the positive experience in 2017, the number of public services provided exclusively through the “one-stop-shop” centers has been doubled – from 16 to 34 species.
Along with improving the system of rendering public services, active work is carried out to strengthen the protection of the rights and legitimate interests of investors. Strengthening the requirements for increasing the transparency of corporate governance and disclosure of information on the activities of joint-stock companies, including accrued and paid remuneration to the members of the executive body, the supervisory board and the audit committee of the company, allowed Uzbekistan to rise to 62nd place on the indicator “Protection of minority investors “.
As a result, Uzbekistan entered the first hundred countries in such areas as registration of the enterprise (11th place), connection to electric networks (27), enforcement of contracts (39), lending (55), protection of minority investors (62), registration property (73) and taxation (78).
Doing Business 2018: Reforming for Job Creation is the 15th annual edition of the World Bank Group that conducts an assessment of business regulations. The world rating for ease of business conditions is headed by New Zealand. The top five also included Singapore, Denmark, the Republic of Korea and Hong Kong (China).