By: Trends Editorial Team
The law of the Republic of Uzbekistan on investments and investment activities (or “Law on Investments” for short) governs both domestic and foreign investments in the country. It establishes the fundamental principles for investment activities in Uzbekistan, such as legitimacy, transparency, freedom, fairness, equality, non-discrimination, and good faith. The Law on Investments and relevant investment regulations define as an “enterprise with foreign investments” a legal entity whose charter capital amounts to at least 400 million UZS (approximately 38,000 USD) and in which at least 15% of shares correspond to foreign investment. Moreover, the law stipulates the following guarantees for investors: • General rights • Use of funds • Free transfer of funds • Return of foreign investment in connection with the termination of investment activities • Protection from unfavorable changes in national legislation • Publicity and transparency • Investment protection, including the possibility to obtain additional guarantees and measures for this purpose • Protection against conflicting provisions The bilateral investment treaties (BITs) signed by Uzbekistan serve as additional sources to regulate investment activities. It has signed BITs with 54 states so far, 45 of which are in force. Other laws regulate specific areas of investment activity in Uzbekistan. The following are the most important: • Civil Code of the Republic of Uzbekistan, which provides the general framework for the majority of transactions between entities or individuals (including property acquisition by foreign investors) • Law on Special Economic Zones, which provides investors with additional incentives and benefits in relation to projects established in SEZs • Law on Public-Private Partnerships, which stipulates the rights, responsibilities and state support incentives for foreign investors as private partners • Law on Investment and Mutual Funds, which provides mechanisms for diversified investment activities • Law on Production Sharing Agreements, which delimits foreign mining investment activities domestically • Law on Licensing, Permitting and Notification Procedures, which supplies information on licensing regulations and a list of activities to be conducted exclusively based on licenses, permits or notification • Law on Nature Conservation, which lays out provisions for environmental and natural resource use clearance.
Overview The main sources of law in Uzbekistan are codified sets of legal and regulatory acts. Local and foreign companies may resort to traditional means (state courts) or alternative methods (arbitration and mediation) of dispute resolution.
Laws and regulations
The Uzbek judicial system is regulated by the Constitution, the Law on Courts, Law on Enforcement of Judicial Decisions and Decisions of Other Authorities, among others. The Plenum of the Supreme Court issues binding resolutions on various aspects of law and dispute resolution, to ensure a single and correct interpretation of legislation. Moreover, the procedural requirements of dispute resolution litigation processes are established by the respective procedural codes which vary by the type of the case to Economic Procedural Code, Code on Administrative Court Proceedings, Civil Procedural Code, and Criminal Procedural Code. The Uzbek judicial system consists of the constitutional court, supreme court, military courts as well as administrative, civil, criminal and economic courts of different levels. Judicial assembly for investment disputes and Compe on Cases (“Judicial Assembly”) The Judicial Assembly was established in 2020 and is empowered to resolve the investment disputes between major investors (natural or legal persons, whose investments exceed 20 Million USD) and state authorities, as well as competition cases. Upon the request of major investors, the Judicial Assembly shall resolve the investment disputes and competition cases as the court of the first instance. Domestic arbitration courts are non-governmental bodies which resolve disputes arising from civil legal relations between business entities in accordance with Uzbek law.
Such courts are divided into two categories: temporary and permanent. International commercial arbitration in Uzbekistan is governed by the Law on International Commercial Arbitration, dated February 16th, 2021. It sets forth a regulatory framework for the incorporation and operation of international arbitration courts. Because Uzbekistan is a signatory party to the New York Convention, the decisions of foreign arbitration tribunals can be enforced in the country. Uzbekistan is a party to other international multilateral and regional treaties governing international commercial and investment arbitration, including the ICSID Convention. The TIAC, Tashkent International Arbitration Centrehas, competences to resolve disputes through arbitration and mediation. It provides consulting services to domestic and foreign business entities and investors, aimed at preventing investment-related disputes (including investor-state disputes). Uzbekistan adopted the Law on Mediation on July 3rd, 2018, as its regulatory framework for mediation proceedings.
Also Read: The Path to Building New Uzbekistan