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Business Environment

Country information
Economic Indicators and statistic data
Projects for business
Telecommunications
Banking information: checks, Cash and ATM
Taxes

Country information

Official name	Conventional long form: Republic of Uzbekistan Conventional short form: Uzbekistan Formerly known as: Uzbek Soviet Socialist Republic
Area	Total: 447,400 km2 Land: 425,400 km2 Water: 22,000 km2
Capital	Tashkent
Population	27,780,059 (July 2007 est.)
Life expectancy at birth	Total population: 64.98 years Male: 61.57 years Female: 68.56 years (2007 est.)
Language	Uzbek 74.3%, Russian 14.2%, Tajik 4.4%, other 7.1%
Ethnic groups	Uzbek 80%, Russian 5.5%, Tajik 5%, Kazakh 3%, Karakalpak 2.5%, Tatar 1.5%, other 2.5%
Religion	Muslim 88% (mostly Sunnis), Eastern Orthodox 9%, other 3%
Currency	Uzbek Som/Soum (UZS)
Exchange Rate (January 2008)	1 EUR = 1,866.21 UZS	1 USD = 1,291.23 UZS	1 GBP = 2,561.28 UZS
GDP growth rate	7.3% (2006 act.)	8.8% (2007 est.)	7.5% (2008 est.)
Inflation rate	14.2% (2006 est.)	12.2% (2007 est.)	9.8% (2008 est.)
Unemployment rate	3% official rate published by the Ministry of Labor, plus another 20% underemployed (2006)
Form of state	Republic
Time difference	GMT +5
Electricity	220V 50 Amp
System of measurement	Metric

Uzbekistan is the country located in the heart of Central Asia. Uzbekistan is developed agricultural country, specializing mainly on agriculture. Industry is presented by mining and machinery, as well as the light industry and food industry. Automotive industry is presented mainly by General Motors Uzbekistan, SamKocAuto, and Uzautosanoat.

In the foreign policy Uzbekistan follows the principles of good neighboring relations with the countries, based on mutually beneficial cooperation.

Economic Indicators and statistic data

Last years economic growth exceeds 7 percent. These growth rates are the results of production growth, not the growth of energy export. As a result, the GDP structure has changed. The share of production in GDP grew from 11% to 24%, services 18% to 42%.

Presently, there are more than 21 thousand of manufacturing production enterprises, which are operating on a constant basis.

However, these indicators do not completely show the picture of economic potential in Uzbekistan. The country still has a lot of uncovered and underestimated opportunities.

Some statistics:

Consumer credits in 2007 = 57.5 Bln UZS.
Small enterprises got their credits on the amount 2.5 Bln UZS.
Mortgage credit = 1.8 Bln UZS.

Young people at the age 18 or younger compose 10.36 Mln people or about 40% of population.
Young people at the age 30 or younger compose 17.8 Mln people or about 64% of population.

GDP Growth overall in the first half of 2007 – 9.7%.
Industrial Production Volumes Growth – 11.6%.
Consumer Goods production growth – 19%.
Paid services growth 25.1 %.
Export Growth – 39%.

Projects for Business

Chamber of Commerce and Industry of Uzbekistan organizes the annual fair of local production, which takes place in UxExpoCenter in Tashkent. Industrial Fair helps the local and foreign investors to find the proper partners for further cooperation. The first day of such an exposition in 2007 resulted in 62 signed contracts for the total amount of 111.6 Bln UZS in the first day of fair. The second day – 160 signed contracts for the total amount of 134 Bln UZS. Altogether the total amount of the contracts signed made up 607 contracts for the total amount of 430.5 Bln UZS.

To make the information about business in Uzbekistan more available for the foreign partners and investors exim.uz website was developed. The website contains information about the local manufacturers of goods and services (both export oriented and local oriented). There are a lot of sections containing information which might be very needed by business, including database – statistics, analyses and researches.

Telecommunications

Uzbekistan has been struggling to bring its telecoms system up to the standard found in more developed countries. Although steadily improving, a substantial portion of the telecoms infrastructure remains outmoded and inadequate. Since 2002 the situation has markedly improved, due largely to the government giving priority to the ICT sector. Consequently, the country's telecom market has been boosted over recent years, with rising revenues and increased investment.

For a comprehensive list of telecommunication companies you can get in touch with upon your arrival in Uzbekistan, please refer to: www.investment.uz/content/view/58/43/

Note that most information on telecommunication and utilities services in Uzbekistan is available in either Uzbek or Russian only.

Cash, Traveler’s Checks and Credit Cards

Uzbekistan is predominantly a cash economy. You should exchange any unspent amounts of local currency prior to departure as there is no exchange office at the international airport. Credit cards and travelers' checks are not widely accepted. Check with your bank whether your ATM card will work overseas.

Credit cards are accepted only at the main hotels and a few shops and restaurants. Travelers’ checks can be cashed into dollars at the National Bank of Uzbekistan. The commission fee is 2%.

It is sometimes possible to buy/sell using USD and you may even get change in USD. However, this practice is becoming less frequent.

Taxes

As of January 2007, Uzbekistan is a signatory to double taxation treaties with about 40 countries. A foreign party to an Uzbek joint venture or a foreign legal entity which is entitled to receive full or partial tax exemption under a double taxation treaty must submit to the Uzbek tax authorities an official confirmation of the permanent location of such entity in the country which has concluded the relevant double taxation treaty with Uzbekistan. This confirmation may be submitted to the tax authorities either prior to the payment of tax or within a year of payment becoming due.

Under the tax treaties currently in force, withholding tax rates are applicable to dividend, interest and royalty payments made by Uzbek legal entities to non-residents. Rates of withholding taxes vary depending on the country and if it is concerning dividends, interest or royalties. Countries which have tax treaties with Uzbekistan are:

Austria	Finland	Israel	Luxembourg	Slovak Republic
Azerbaijan	France	Italy	Malaysia	Switzerland
Belarus	Georgia	Japan	Moldova	Thailand
Belgium	Germany	Kazakhstan	Netherlands	Turkey
Bulgaria	Greece	Korea, Republic	Pakistan	Turkmenistan
Canada	India	Kyrgyzstan	Poland	Ukraine
China	Indonesia	Latvia	Romania	United Kingdom
Czech Republic	Iran	Lithuania	Russia	Vietnam

Sources:
Newspapers: Narodnoe Slovo www.narodnoeslovo.uz
Legislative database: norma.uz
External Information Sources: Uzbekistan Report done by Mercer management consultants