ABOUT SPECIAL ECONOMIC ZONES LAW OF THE REPUBLIC OF UZBEKISTAN DD FEBRUARY 17, 2020 No. LRU-604.

LAW OF THE REPUBLIC OF UZBEKISTAN

FEBRUARY 17, 2020

No. LRU-604.

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ABOUT SPECIAL ECONOMIC ZONES

Adopted by the Legislative Chamber on December 9, 2019

Approved by the Senate on December 14, 2019

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CHAPTER 1. GENERAL PROVISIONS

Article 1. Purpose of this Law

The purpose of this Law is to regulate relations in the sphere of organizing the functioning and development of special economic zones.

Article 2. Legislation on special economic zones

Legislation on special economic zones consists of this Law and other acts of legislation.

If an international treaty of the Republic of Uzbekistan establishes rules other than those provided for by the legislation of the Republic of Uzbekistan on special economic zones, then the rules of the international treaty apply.

Article 3. Basic concepts

The following basic concepts apply in this Law:

investment project – a set of interrelated activities aimed at implementing or attracting investments to obtain economic, social and other benefits;

investor – a subject of investment activity that invests its own and (or) borrowed funds or other attracted investment resources into objects of investment activity in order to make a profit;

special economic zone – a territory with certain boundaries and a special legal regime, specially allocated in order to attract foreign and domestic investments, high technologies and management experience for the accelerated socio-economic development of the corresponding region;

special legal regime – a set of legal norms that establish special conditions for the implementation of investment and other business activities in the territory of special economic zones;

Register of participants in the special economic zone – an information database containing information about participants in the special economic zone and investment projects;

master plan of a special economic zone is a project document approved by the administrative council of a special economic zone or the management company of a special industrial zone, on the basis of which planning, development, reconstruction and other types of urban development of the territory of a special economic zone are carried out.

CHAPTER 2. STATE REGULATION IN THE SPHERE OF ORGANIZING THE FUNCTIONING AND DEVELOPMENT OF SPECIAL ECONOMIC ZONES

Article 4. Powers of the Cabinet of Ministers of the Republic of Uzbekistan

Cabinet of Ministers of the Republic of Uzbekistan:

ensures the implementation of a unified state policy in the sphere of organizing the functioning and development of special economic zones;

approves development programs for special economic zones;

forms administrative councils of special economic zones, coordinates, monitors and controls their activities;

approves the charters of the directorates of special economic zones, coordinates, monitors and controls their activities;

determines the authorized state bodies in the field of organizing the functioning and development of special economic zones, exercises control over their activities;

exercises control over the timely implementation of investment projects.

Article 5. Authorized state body in the field of organizing the functioning and development of special economic zones

Authorized state body in the field of organizing the functioning and development of special economic zones:

implements state policy in the field of organizing the functioning and development of special economic zones;

develops draft regulations in the field of organizing the functioning and development of special economic zones;

develops and approves a methodology for assessing the effectiveness of the functioning of special economic zones;

organizes interaction between investors, participants in special economic zones and relevant ministries and departments at each stage of the implementation of investment projects;

organizes work to resolve organizational issues related to the implementation of investment projects, including removing existing bureaucratic obstacles;

monitors the progress of implementation of investment projects in the territory of special economic zones;

assesses the effectiveness of the activities of the directorate and participants of special economic zones;

organizes the implementation of decisions of the President of the Republic of Uzbekistan and the Cabinet of Ministers of the Republic of Uzbekistan on issues of organizing the functioning and development of special economic zones;

makes proposals to the Cabinet of Ministers of the Republic of Uzbekistan on the organization of the functioning and development of special economic zones, as well as on the development of the activities of directorates and administrative councils of special economic zones.

Article 6. Development program of the special economic zone

The development of the special economic zone is carried out in accordance with the program, which includes:

creation of production infrastructure;

providing programs for the development of engineering, communications and road transport infrastructure;

creation of market infrastructure;

a set of measures to attract foreign and domestic investment in accordance with the functional and sectoral specialization of the special economic zone.

Financial support for the development program of the special economic zone is carried out at the expense of the zone’s own resources, private sources, funds from the State Budget of the Republic of Uzbekistan, international financial institutions and foreign government financial organizations, as well as other sources not prohibited by law.

When forming state investment programs of the Republic of Uzbekistan, financial support should be provided for programs for the development of engineering, communications and road transport infrastructure of special economic zones.

Article 7. Management of state property objects located on the territory of the special economic zone

Special economic zones are created based on empty and inactive state-owned properties, territories of administrative-territorial entities, as well as on non-agricultural lands.

Objects of state property, located on the territory of a special economic zone, with the exception of strategic objects of state property that are not subject to privatization, may, by decision of local executive authorities within their competence, be provided to the directorate of the special economic zone for operational management in agreement with the authorized body for the management of state assets. State property objects are provided to the directorate of the special economic zone for operational management for the entire period of operation of the special economic zone.

The administrative council of a special economic zone has the right to make a decision on the sale, including at “zero” redemption value, with the acceptance of investment obligations, of empty and inactive state-owned properties located on the territory of the special economic zone, to participants in the special economic zone.

Agricultural land may be provided in exceptional cases for special economic zones for pharmaceutical and agricultural purposes only for the cultivation of agricultural products and medicinal plants. Special economic zones that have a different functional and sectoral specialization may be provided with agricultural land after changing their category of land fund in the manner established by the Land Code of the Republic of Uzbekistan.

Land plots on the territory of special economic zones, with the exception of the territory of special industrial zones, are provided by the directorate of the special economic zone and are under its jurisdiction.

A land plot in the amount specified in the investment application approved by the decision of the administrative council of the special economic zone is put up for online electronic auctions by the directorate of the special economic zone without the need to coordinate the online electronic auction with other organizations. This procedure does not apply to the provision of land in special industrial zones.

The winner of the online electronic auction acquires the rights to lease a land plot and enter into an investment agreement with the directorate of the special economic zone specified in the investment application.

Urban planning activities on the territory of special economic zones are carried out in accordance with the approved master plans of special economic zones.

Article 8. Public-private partnership in special economic zones

Public-private partnerships in special economic zones are carried out in accordance with the Law of the Republic of Uzbekistan “On Public-Private Partnerships”.

CHAPTER 3. TYPES OF SPECIAL ECONOMIC ZONES AND MEASURES FOR ORGANIZING THEIR ACTIVITIES

Article 9. Types of special economic zones

Special economic zones can be created in the form of:

free economic zones;

special scientific and technological zones;

tourist and recreational areas;

free trade zones;

special industrial zones.

Article 10. Free economic zone

Free economic zone is a territory intended for the creation of new production capacities, the development of high-tech production, active involvement in the development of production of modern competitive, import-substituting, export-oriented finished industrial products, as well as ensuring the development of production, engineering and communications, road transport, social infrastructure and services logistics.

Article 11. Special scientific and technological zone

A special scientific and technological zone is a territory where, for the purpose of developing innovative infrastructure, scientific organizations and other organizations in the field of scientific activity are concentrated (technology parks, technology distribution centers (technology transfer), innovation clusters, venture funds, business incubators and others).

Article 12. Tourist and recreational zone

Tourist and recreational zone is a territory that is created for the implementation of investment projects to create modern tourist infrastructure facilities in it (hotel complexes, cultural, recreational, shopping, entertainment and other tourist facilities), special functional and seasonal recreational zones with the provision of the necessary conditions to serve tourists.

Article 13. Free trade zones

Free trade zones include consignment warehouses, territories with special customs and tax regimes, as well as areas for processing, packaging, sorting, and storage of goods.

Free trade zones are created at border points, airports, railway junctions or other places in the customs territory of the Republic of Uzbekistan.

Article 14. Special industrial zone

A special industrial zone is a territory in which a special regime of management, economic and financial activities is introduced. Special industrial zones include service and production zones, which are formed by allocating land plots to create the necessary administrative, scientific, technological, production, engineering, communications, road transport and social infrastructure.

The rules and procedure for the functioning of a special industrial zone are approved by the Cabinet of Ministers of the Republic of Uzbekistan.

CHAPTER 4. REQUIREMENTS FOR INVESTMENT PROJECTS PROPOSED FOR IMPLEMENTATION IN SPECIAL ECONOMIC ZONES

Article 15. General requirements for investment projects proposed for implementation in special economic zones

The general requirements for investment projects proposed for implementation in the territory of special economic zones include:

compliance with the requirements of legislation in the field of architecture and construction, technical regulation, ecology and environmental protection, labor protection and industrial safety;

availability of funding sources;

compliance with the functional and industry specialization of the special economic zone;

compliance of the parameters of technological equipment and technological processes with modern energy efficiency requirements.

Article 16. Special requirements for investment projects proposed for implementation in the territory of free economic zones

Investment projects proposed for implementation in the territory of free economic zones, by the time the investment application is submitted, must provide for the production of new types of products that are not produced in the Republic of Uzbekistan or the production volumes of which in the Republic of Uzbekistan do not cover the needs of the domestic market.

Investment projects proposed for implementation in the territory of free economic zones must provide for a change in the commodity position of the final product according to the code of the commodity nomenclature of foreign economic activity of the Republic of Uzbekistan in comparison with the feedstock at the level of one of the first four digits or an increase in the volume of value-added products at a level of at least thirty percent.

In free economic zones, it is not allowed to implement investment projects for the production of types of products for which a competitive environment has been created, the domestic market is saturated, or there are domestic manufacturers of similar products, the production volumes of which cover the needs of the domestic market.

The conclusions of the relevant authorized bodies on the absence of domestic manufacturers of similar products in the Republic of Uzbekistan, insufficient production volumes and the level of the competitive environment are requested by the directorate of the free economic zone independently for subsequent submission to the administrative council of the free economic zone.

These requirements do not apply to fully export-oriented investment projects.

Article 17. Special requirements for investment projects proposed for implementation on the territory of special scientific and technological zones

Investment projects proposed for implementation in special scientific and technological zones must meet the following requirements:

availability of registered patent rights;

the presence of scientific and technical novelty and knowledge intensity of the products produced (in terms of characteristics, the goods are fundamentally new or significantly different from the characteristics of a previously produced similar product or in terms of consumer properties of the product they are improved compared to existing analogues or, in the absence of direct analogues, there are qualitatively new consumer (functional) ) characteristics, including those that increase the competitiveness of the product, or a new method of using the product has been identified, allowing to expand the scope of use of such a product).

The conclusions of the relevant authorized bodies on the existence of registered patent rights and scientific and technical novelty and knowledge intensity of manufactured products are requested by the directorate of the special economic zone independently for subsequent submission to the administrative council of the special economic zone.

Article 18. Special requirements for investment projects proposed for implementation on the territory of tourist and recreational zones

Investment projects proposed for implementation on the territory of tourist and recreational zones must include measures to ensure the creation of tourism industry facilities, the safety and health of tourists when organizing tourism services, including by equipping tourism industry facilities with video surveillance, warning (alert) and provision systems, if necessary assistance in case of emergencies.

Article 19. Activities prohibited on the territory of special economic zones

The following types of activities are prohibited on the territory of special economic zones:

production that does not meet environmental and labor safety standards;

production of weapons and ammunition, trade in weapons and ammunition;

production of nuclear materials and radioactive substances, trade in nuclear materials and radioactive substances;

production of alcohol and tobacco products;

rawhide processing, penning or slaughtering of animals;

production of cement, concrete, cement clinker, bricks, reinforced concrete slabs, coal, lime and gypsum products;

processing, decomposition, combustion, gasification, chemical treatment, final and (or) temporary storage and (or) underground burial of all types of waste;

placement of oil refineries, nuclear power plants, nuclear installations, radiation sources, points and installations intended for storage, disposal and processing of spent nuclear fuel, radioactive substances and waste, as well as other radioactive waste.

By decisions of the President of the Republic of Uzbekistan or the Cabinet of Ministers of the Republic of Uzbekistan, prohibitions and restrictions may be introduced in relation to certain types of activities in the territory of special economic zones.

CHAPTER 5. THE PROCEDURE FOR CREATING, EXTENDING THE PERIOD OF OPERATION, CHANGING BOUNDARIES AND LIQUIDATING A SPECIAL ECONOMIC ZONE

Article 20. Creation, extension of the period of operation, change of borders and liquidation of a special economic zone

A special economic zone is created by decision of the President of the Republic of Uzbekistan for a period of up to thirty years. Based on the decision of the President of the Republic of Uzbekistan, the Cabinet of Ministers of the Republic of Uzbekistan makes a decision on the issue of organizing the functioning and development of the special economic zone.

Extension of the period of operation, change of borders and liquidation of the special economic zone are carried out by decision of the President of the Republic of Uzbekistan.

Government bodies, the Council of Ministers of the Republic of Karakalpakstan, khokimiyats of regions and the city of Tashkent may submit to the Cabinet of Ministers of the Republic of Uzbekistan a proposal to create, extend the period of operation, and change the boundaries or early liquidation of a special economic zone.

The Cabinet of Ministers of the Republic of Uzbekistan considers the proposal within thirty days from the date of its receipt and, if approved, submits a proposal to the Administration of the President of the Republic of Uzbekistan.

Article 21. Documents submitted for the creation, extension of the period of operation, change of borders or liquidation of a special economic zone

The proposal to create a special economic zone is accompanied by:

draft decision of the President of the Republic of Uzbekistan on the creation of a special economic zone, which indicates the name of the special economic zone, which of the period for which it is created, the purposes of creation and type of the special economic zone, features of its special legal regime, functional and sectorial specialization, total area and description of boundaries special economic zone, measures to ensure its creation and development;

a draft program for the development of a special economic zone, indicating specific activities, persons and organizations responsible for their implementation, as well as sources of financing for work on the development of the special economic zone;

a copy of the land cadastral plan with the proposed boundaries of the special economic zone marked;

composition of land, a list of landowners, land users, tenants and owners of land plots located within the proposed boundaries of the special economic zone (if any), and their written consent to the transfer of land plots to the Council of Ministers of the Republic of Karakalpakstan, khokimiyats of the regions and the city of Tashkent for the creation of a special economic zone;

a business plan justifying the need and possibility of creating a special economic zone, its type, developed on the basis of an analysis of the social, environmental and economic conditions in the relevant territory, the provision of material and labor resources, communications, as well as a financial and economic justification for the proposed features of the special legal regime of the special economic zone;

draft charter of the directorate of the special economic zone (if the directorate is created in the form of a state institution).

The proposal to extend the period of operation of the special economic zone is accompanied by:

draft decision of the President of the Republic of Uzbekistan on extending the functioning of the special economic zone;

justification of the need and possibility of extending the period of operation of the special economic zone.

The proposal to change the boundaries of the special economic zone is accompanied by:

draft decision of the President of the Republic of Uzbekistan on changing the boundaries of the special economic zone;

a draft master plan for the special economic zone and a copy of the land cadastral plan with the boundaries of the special economic zone, taking into account the proposed change in its boundaries;

composition of land, a list of landowners, land users, tenants and owners (if any) of land plots located in the territories proposed for inclusion in the special economic zone, the boundaries of which will change, as well as their written consent to the transfer of land plots to the administrative council of the special economic zone , and in the case of a special industrial zone – transfer of land plots to the Council of Ministers of the Republic of Karakalpakstan, regional khokimiyats and the city of Tashkent;

a list of legal entities and business entities already operating in the territories proposed for inclusion within the boundaries of the special economic zone;

a list of participants in the special economic zone (if any) operating in the territories proposed for exclusion from the boundaries of the special economic zone;

justification of the need and possibility of changing the boundaries of the special economic zone.

The following is attached to the proposal for early liquidation of the special economic zone:

a draft decision of the President of the Republic of Uzbekistan on the early liquidation of a special economic zone, providing for a set of organizational measures to ensure the liquidation of the special economic zone, as well as, if necessary, providing guarantees and (or) compensation to participants in the special economic zone;

a draft resolution of the Cabinet of Ministers of the Republic of Uzbekistan defining the composition and powers of the liquidation commission, as well as the procedure for liquidating the special economic zone;

a list of participants in the special economic zone indicating the investment projects they are implementing in the event of early liquidation of the special economic zone on the grounds provided for in paragraphs two and six of part two of Article 22 of this Law;

technical, economic, financial and legal justification for the need and possibility of early liquidation of the special economic zone, indicating the reasons and possible consequences of its early liquidation for the relevant administrative-territorial units and the republic as a whole, participants in the special economic zone, developed on the basis of a detailed analysis of social, environmental, economic and other conditions in the relevant territory, as well as indicators of the functioning and efficiency of the liquidated special economic zone.

Article 22. Grounds for liquidation of a special economic zone

The special economic zone is considered liquidated upon expiration of the period for which it was created.

The decision on early liquidation of a special economic zone is made if:

this is caused by the need to protect the life and health of people, protect the environment, ensure state security and defense of the country;

within one year from the date of creation of the special economic zone, not a single legal entity has been registered as a participant in this special economic zone and (or) no jobs have been created as a participant in the special economic zone;

within six months from the date of creation of the special economic zone, the participants of this special economic zone did not carry out activities to implement investment projects;

in the special economic zone there are no participants in the special economic zone due to the loss of the status of a participant in the special economic zone and within one year from the date of loss of such status by the last participant in this special economic zone, not a single legal entity was registered on its territory as its participant;

achieving the goals of creating a special economic zone, determined by the decision of the President of the Republic of Uzbekistan on the creation of a special economic zone, became impossible for other reasons.

In the event of early liquidation of a special economic zone on the grounds provided for in paragraphs two and six of part two of this article, participants in the special economic zone, by decision of the President of the Republic of Uzbekistan, are provided with guarantees and (or) compensation for damage suffered or lost profits, or benefits and preferences granted in accordance with previously existing order.

To resolve property and other issues related to the liquidation of the special economic zone, settle relations between the directorate and participants of the special economic zone, other organizations and individuals, the Cabinet of Ministers of the Republic of Uzbekistan creates a liquidation commission, determines its composition and powers, and also approves the procedure for liquidation of the special economic zone during its early liquidation.

CHAPTER 6. MANAGEMENT OF THE SPECIAL ECONOMIC ZONE

Article 23. Administrative Council of the Special Economic Zone

The Administrative Council of the Special Economic Zone is a collegial body formed from among representatives of the relevant local executive authorities and other organizations, headed by a chairman whose status is the Chairman of the Council of Ministers of the Republic of Karakalpakstan, corresponding to the khokim of the region and the khokim of the city of Tashkent.

Administrative Council of the Special Economic Zone:

coordinates the activities of local executive authorities on issues related to the functioning of the special economic zone, compliance with the special legal regime and providing assistance to participants in the special economic zone;

carries out the selection of investment projects for implementation in the territory of the special economic zone;

makes decisions on the provision of land plots to participants in the special economic zone for the implementation of investment projects;

organizes the timely implementation of projects for the construction of engineering, communications and transport infrastructure of the special economic zone;

reviews and approves the annual estimate of income and expenses of the directorate of the special economic zone.

Decisions of the administrative council of the special economic zone, adopted within its competence, are binding on the management and participants of the special economic zone.

Article 24. Directorate of the special economic zone

The Directorate of the Special Economic Zone is a legal entity in the form of a state unitary enterprise, created to ensure the functioning and management of the special economic zone.

Directorate of the Special Economic Zone:

ensures the operation of a special legal regime in the territory of the special economic zone;

organizes, using the “one window” principle, interaction with potential investors and participants in the special economic zone, including consideration of investment applications, issuance of the necessary permits for connection to engineering and communication infrastructure networks;

monitors the progress of implementation of investment projects, as well as control over the fulfillment by participants of the special economic zone of the obligations included in the investment agreement;

ensures the implementation of the special economic zone development program;

maintains the Register of participants in the special economic zone;

organizes control over compliance in the territory of the special economic zone with legislation on environmental control, as well as on the protection and use of cultural heritage sites;

provides marketing services, as well as services for promoting products to domestic and foreign markets under contracts with participants in the special economic zone;

carries out activities to attract investors to the special economic zone;

provides information support to investors and participants in the special economic zone, including organizing their meetings with representatives of government bodies and other organizations;

provides lease of land plots in the territory of the special economic zone through an electronic online auction, as well as ownership, use and lease of buildings and structures located in the territory of the special economic zone;

participates in public-private partnership projects.

The directorate of the special economic zone is headed a director, appointed and dismissed by the Cabinet of Ministers of the Republic of Uzbekistan on the proposal of the administrative council of the special economic zone, agreed with the authorized government body in the field of organizing the functioning and development of special economic zones. This procedure does not apply to special industrial zones.

The Directorate has no right to interfere with the activities of participants in the special economic zone, carried out in accordance with the law.

Article 25. Management of a special industrial zone

Management of the special industrial zone is carried out by the management company of the special industrial zone, which is vested with the powers of the administrative council and the directorate of the special economic zone provided for by this Law.

The management company of a special industrial zone is a legal entity created in the form of a joint stock company or limited liability company, including with the participation of foreign investors.

The main conditions for managing a special industrial zone are:

provision through electronic online auctions for rent of land plots necessary for the placement of investment projects;

application of international standards and requirements during the construction of facilities;

independent formation of engineering, communication and social infrastructure;

carrying out accounting and mutual settlements for supplied utilities, communication services and energy resources on the basis of a single contract concluded by the participants of the special industrial zone with the management company of the special industrial zone;

organizing the issuance of licenses and permits, including for the design, construction, operation, use of buildings and structures, as well as the use of land plots in accordance with the master plan of a special industrial zone on the “one window” principle.

The authorized state body in the field of organizing the functioning and development of special economic zones coordinates and controls the activities of the management company of the special industrial zone and has the right to study all its activities and operations, as well as make appropriate decisions.

The financial statements and related financial information of the management company of the special industrial zone are subject to mandatory annual audit. Audit reports and audit opinions must be submitted to the authorized state body in the field of organizing the functioning and development of special economic zones.

CHAPTER 7. PROCEDURE FOR SUBMITTING AND CONSIDERING AN INVESTMENT APPLICATION

Article 26. Procedure for submitting an investment application

The investment application is submitted the investor to the directorate of the special economic zone. The investment application form is approved the Cabinet of Ministers of the Republic of Uzbekistan.

The investment application is accompanied by:

a copy of the charter of the legal entity and for a foreign legal entity also a copy of the certificate of state registration of the legal entity;

a copy of an identity document (for an investor – an individual);

business plan or feasibility study of an investment project;

draft investment agreement.

The investment application shall indicate the taxpayer identification number assigned to the legal entity, and for a foreign legal entity, in accordance with the legislation of the relevant foreign state, an analogue of the taxpayer identification number shall be indicated. The investment application may also include the investor’s proposals for the initial price when putting up a land plot for an online electronic auction, as well as the amount of the annual rent.

Foreign legal entities submit legalized documents specified in paragraph two of part two of this article, certifying that the foreign legal entity is a legal entity under the laws of a foreign state, with a notarized translation into the state and English languages.

Legalization of documents submitted by foreign legal entities is not required if:

the documents specified in paragraph two of part two of this article are affixed with an apostle;

International treaties of the Republic of Uzbekistan establish that documents that are produced or certified in the territory of one of the contracting parties by an institution or a specially authorized person within the limits of their competence and in the prescribed form are accepted in the territories of other contracting parties without any special certificate.

Article 27. Preparation of an investment application for consideration by the administrative council of the special economic zone

An investment application received by the directorate of the special economic zone is subject to registration on the same day, and if received after the end of working hours – on the next working day.

The Directorate of the Special Economic Zone reviews the investment application and the documents attached to it within two working days. If the documents do not comply with the requirements of the legislation on special economic zones, the package of documents is returned with a reasoned justification of the reasons for the return. After eliminating the reasons that served as the basis for the return, the investment application can be re-submitted to the directorate of the special economic zone.

If there are no deficiencies, the investment application and the documents attached to it are sent by the directorate of the special economic zone for examination to the authorized state body for conducting the examination (hereinafter referred to as the expert institution).

The examination period is twenty working days. During the examination, the economic feasibility of implementing the investment project is determined, as well as its compliance with the requirements provided for in Articles 15 – 19 of this Law.

Based on the results of the examination, the investment application and the documents attached to it can be returned by the expert institution to the directorate of the special economic zone for revision with a reasoned justification of the reasons for the return. After the investor has eliminated the reasons that served as the basis for the return, the revised documents are sent by the directorate of the special economic zone for re-examination.

The period for re-examination of the investment application and the documents attached to it is ten working days. At the same time, it is not allowed to present new comments in relation to documents on which an examination was previously carried out.

The investment application and the documents attached to it, together with the conclusion of the expert institution, are sent by the directorate of the special economic zone to the administrative council of the special economic zone for consideration within two working days.

This article does not apply to investment projects proposed for implementation in special industrial zones. At the same time, the consideration and examination of the investment application and the documents attached to it are carried out by the management company of the special industrial zone independently in the manner determined by the Cabinet of Ministers of the Republic of Uzbekistan.

Article 28. Consideration of an investment application by the administrative council of the special economic zone

The administrative council of the special economic zone begins to consider the investment application and the documents attached to it only if there is a positive conclusion from an expert institution.

The investment application is considered by the administrative council of the special economic zone within five working days from the date of its submission by the directorate of the special economic zone.

During the consideration of the investment application, the administrative council of the special economic zone may invite the investor to make changes (additions) to the investment project. In this case, the proposals of the administrative council of the special economic zone are reflected in its decision. If the investor disagrees with the proposed changes (additions), the administrative council of the special economic zone reconsiders the investment application with the participation of the investor.

The administrative council of the special economic zone makes a decision on the implementation or inappropriateness of the investment project. The decision is made by a majority vote of the total number of members of the administrative council of the special economic zone.

The decision of the administrative council of the special economic zone is documented in a protocol, which is signed by the director of the directorate of the special economic zone, members of the administrative council of the special economic zone and approved by the chairman of the administrative council of the special economic zone.

An extract from the protocol is sent by the directorate of the special economic zone to the investor who submitted the investment application within one working day from the date of approval of the protocol.

The decision of the administrative council of the special economic zone on the implementation of an investment project on the territory of the special economic zone is the basis for:

putting up for an electronic online auction a land plot necessary for the implementation of the investment project specified in the investment application;

concluding an investment agreement with the winner of an electronic online auction;

provision of a land plot or an empty (inactive) building with determination of the total area and its location.

The directorate of the special economic zone organizes an electronic online auction of the land plot necessary for the implementation of the investment project, based on the decision of the administrative council of the special economic zone on the implementation of the investment project in the territory of the special economic zone.

If false or distorted information is identified in the submitted documents, the administrative council of the special economic zone stops consideration of the investment application, and the investment application must be returned to the investor with a reasoned justification of the reasons for the return.

Submission of an investment application by an investor and its consideration by the directorate and administrative council of the special economic zone can be carried out electronically.

Members of the administrative council and the director of the directorate of the special economic zone are required to maintain confidentiality with respect to information that has become known to them due to the performance of their duties when considering the investment application and the documents attached to it.

The decision of the administrative council of the special economic zone and (or) the conclusion of an expert institution on the inexpediency of implementing an investment project can be appealed by the investor who submitted the investment application in the manner prescribed by law.

CHAPTER 8. PARTICIPANT OF THE SPECIAL ECONOMIC ZONE

Article 29. Acquiring the status of a participant in a special economic zone

In order to implement an investment project, the investor, within five working days from the date of receipt of a lease of a land plot put up for an electronic online auction, or an empty (inactive) building (except for cases when the land plot belongs to the investor), submits to the registration authority at the location special economic zone documents for state registration of a business entity created by it as a legal entity or re-registration of a business entity previously created by the investor.

A legal entity acquires the status of a participant in a special economic zone after signing an investment agreement and inclusion in the Register of participants in a special economic zone.

To be included in the Register of Participants in a Special Economic Zone, a legal entity created by an investor submits an application to the Directorate of the Special Economic Zone after paying a fee for its inclusion in the Register of Participants in a Special Economic Zone in the amount determined by the Cabinet of Ministers of the Republic of Uzbekistan.

The Directorate of the Special Economic Zone, within two working days from the date of receipt of this application, includes the legal entity in the Register of Participants of the Special Economic Zone and issues a certificate of participant of the Special Economic Zone in the form approved by the Cabinet of Ministers of the Republic of Uzbekistan.

The Directorate of the Special Economic Zone, within one working day after the inclusion of a legal entity in the Register of Participants of the Special Economic Zone, notifies the relevant tax, customs and statistical authorities about this.

Article 30. Rights and obligations of a participant in the special economic zone

A participant in a special economic zone has the right to:

enjoy guarantees of legal protection, benefits and preferences provided for by law for participants in special economic zones;

receive land plots for rent through an electronic online auction, for the use of buildings, structures, including on a lease basis, and build infrastructure facilities for carrying out production activities in the manner prescribed by this Law;

demand from the directorate of the special economic zone the timely provision of its engineering, communications and road transport infrastructure in accordance with the investment agreement and network schedules for the implementation of the investment project;

use on equal terms all types of services provided by the directorate of the special economic zone to participants in the special economic zone, including on a contractual basis;

carry out, at their own expense, the construction of infrastructure facilities necessary for the implementation of the investment project, in accordance with the master plan of the special economic zone;

exercise other rights provided by law.

A participant in a special economic zone is obliged to:

fulfill the duties provided for by law and the investment agreement in a timely manner;

comply with legal requirements;

submit to the directorate of the special economic zone a report on the fulfillment of obligations under the investment agreement and business plans.

The transfer by a participant of a special economic zone of its rights and obligations stipulated by the investment agreement to another legal entity before fulfilling all obligations under the investment agreement is not allowed.

A participant in a special economic zone carries out its activities in accordance with this Law and other acts of legislation, as well as the investment agreement.

Article 31. Loss of the status of a participant in a special economic zone by a legal entity

A legal person loses the status of a participant in a special economic zone in the following cases:

liquidation of the special economic zone;

liquidation (termination of activities) of a legal entity;

changing the location of a legal entity if the new location is located outside the territory of the special economic zone;

failure by a participant in the special economic zone to fulfill obligations under the investment agreement;

at the request of a participant in the special economic zone;

in case of reorganization of a participant in a special economic zone, with the exception of a merger or incorporation carried out between participants in a special economic zone that have the same benefits on taxes and customs duties.

The decision to lose the status of a participant in a special economic zone by a legal entity is made by the administrative council of the special economic zone upon the recommendation of the directorate of the special economic zone.

A decision on the loss by a legal entity of the status of a participant in a special economic zone on the grounds provided for in paragraph five of part one of this article may be appealed by a participant in a special economic zone in court.

In accordance with the decision of the administrative council of the special economic zone, the directorate of the special economic zone terminates the investment agreement with the participant of the special economic zone and excludes it from the Register of participants of the special economic zone.

The directorate of the special economic zone, within one working day from the date of exclusion of the participant of the special economic zone from the Register of participants of the special economic zone, notifies about this in writing (including via e-mail) the participant of the special economic zone, the administrative council of the special economic zone, tax, customs authorities and statistical bodies, as well as the authorized state body in the field of organizing the functioning and development of special economic zones and local executive authorities, indicating the date and reason for the loss of the status of a participant in the special economic zone by a legal entity.

The loss of the status of a participant in a special economic zone by a legal entity entails the cancellation of tax, customs benefits and other preferences.

Article 32. The procedure for depriving a legal entity of the status of a participant in a special economic zone in case of failure to fulfill obligations under an investment agreement

If a participant in a special economic zone fails to fulfill its obligations under an investment agreement, a legal entity created by an investor in the territory of a special economic zone may, at the initiative of the directorate of the special economic zone, be deprived of the status of a participant in the special economic zone.

If the directorate of the special economic zone identifies the fact that a participant in the special economic zone has failed to fulfill obligations under the investment agreement (except for cases of force majeure circumstances (force majeure), as well as through the fault of the directorate of the special economic zone), a corresponding act is drawn up with a detailed description of the violations not fulfilled in the terms of obligations established by the investment agreement, which is signed by representatives of the management and the participant in the special economic zone. The act also specifies the period during which the participant in the special economic zone must ensure the fulfillment of obligations under the investment agreement. This period should not exceed ninety days.

If the occurrence of force majeure is confirmed, the management and the participant in the special economic zone draw up a schedule that ensures the fulfillment of investment obligations within a reasonable time, taking into account the actual delays caused by the occurrence of force majeure.

In the event of failure by a participant in the special economic zone to fulfill, within the period provided for in parts two and three of this article, obligations under the investment agreement, the directorate, after written agreement with the administrative council of the special economic zone and the authorized state body in the field of organizing the functioning and development of special economic zones in writing (including including via e-mail) notifies the participant in the special economic zone of the termination of the investment agreement due to its non-fulfillment.

If, after ten days, a participant in the special economic zone has not appealed to the court the decision to terminate the investment agreement, the investment agreement is considered terminated unilaterally.

If a participant in a special economic zone has appealed to the court the decision to terminate the investment agreement, then further disputes related to the fulfillment of obligations under the investment agreement must be resolved in court.

The loss of the status of a participant in a special economic zone by a legal entity due to failure to fulfill obligations under an investment agreement entails the cancellation of tax and customs benefits, the collection of unpaid tax and customs payments in full and the cancellation of the right to use land plots, empty and inactive state-owned objects granted to the legal entity person for the implementation of an investment project.

Article 33. Procedure for losing the status of a participant in a special economic zone based on an application from a participant in a special economic zone

An application for loss of status as a participant in a special economic zone is submitted by a participant in the special economic zone to the directorate of the special economic zone. The Directorate of the Special Economic Zone submits the received application to the Administrative Council of the Special Economic Zone within two working days.

An application for loss of the status of a participant in a special economic zone is considered by the administrative council of the special economic zone within ten days, and in cases where there are signs of material or financial damage to the directorate of the special economic zone – thirty days.

The decision of the administrative council of the special economic zone may provide for measures to compensate for material or financial damage caused by a participant in the special economic zone, including by applying the directorate of the special economic zone to the court.

The loss of the status of a participant in a special economic zone by a legal entity, provided that no material or financial damage is caused to the directorate of the special economic zone, does not entail the termination of its activities in the territory of the special economic zone, as well as the termination of rights to property owned by the legal entity. In this case, this legal entity loses the right to use the special legal regime provided for participants in the special economic zone.

This procedure does not apply to depriving a business entity of the status of a participant in special industrial zones.

CHAPTER 9. INVESTMENT AGREEMENT

Article 34. Conclusion of an investment agreement

The Directorate of the Special Economic Zone enters into an investment agreement in accordance with the terms, conditions and procedures set out in the investment project. The terms of lease of the land plot are provided for in the investment agreement.

The investment agreement must be signed the investor and the director of the directorate of the special economic zone within three working days after the investor receives the protocol (extract from it) of the administrative council of the special economic zone (in the case of leasing an empty (inactive) building or in the case when the land plot belongs to investor) or determining the winner of an electronic online auction for the lease of land plots.

The investment agreement comes into force from the date the legal entity created by the investor acquires the status of a participant in the special economic zone.

Article 35. Extension of the investment agreement

The investment agreement can be extended by the directorate of the special economic zone at the request of a participant in the special economic zone. The application is submitted by the participant of the special economic zone no later than a month before the expiration of the investment agreement.

The application of a participant in the special economic zone to extend the validity of the investment agreement is accompanied by a business plan for the investment project being implemented in the special economic zone, containing justification for the need to continue its implementation.

Article 36. Termination of an investment agreement

The investment agreement is terminated:

upon expiration of the investment agreement;

in case of deprivation of a legal entity’s status as a participant in a special economic zone;

in case of early liquidation of the special economic zone;

in other cases provided for by law or investment agreement.

CHAPTER 10. SPECIAL LEGAL REGIME OF SPECIAL ECONOMIC ZONES

Article 37. Features of a special legal regime

In special economic zones, a special customs and tax regime may be established, as well as a regime for entry, exit and stay of citizens, conditions of labor relations, financial and credit activities and other regime aimed at attracting investment, stimulating the development of entrepreneurship and the socio-economic development of the special economic zone. zones.

A special legal regime is established by laws or by decision of the President of the Republic of Uzbekistan.

Benefits provided to participants in special economic zones apply only to activities carried out on the territory of special economic zones.

Foreign investors registered as participants in the special economic zone can enjoy all the rights, guarantees and benefits provided to them by the legislation of the Republic of Uzbekistan.

Article 38. Special customs regime

A special customs regime may provide for:

temporary exemption or reduction of customs duty rates;

abolition and easing of non-tariff restrictions on exports or imports.

Customs clearance of goods exported or imported by participants of special economic zones with the use of benefits on customs duties is carried out in the manner established by law.

Ensuring a special customs regime on the territory of the special economic zone is carried out by the customs authorities of the Republic of Uzbekistan.

The special customs regime does not apply to the transit of goods through the territory of the special economic zone.

The special customs regime should not lead to the formation of an uncompetitive environment.

Article 39. Benefits on taxes and customs duties

Participants in special economic zones enjoy tax benefits in the manner prescribed by the Tax Code of the Republic of Uzbekistan.

Participants in special economic zones are exempt from paying:

customs payments (except for value added tax and customs clearance fees) for construction materials not produced in the republic and imported in the prescribed manner for the implementation of an investment project in accordance with the investment agreement during the construction period;

customs payments (except for customs clearance fees) when importing technological equipment, analogues of which are not produced in the Republic of Uzbekistan, according to the approved list.

Customs duties (except for customs clearance fees) are not paid when raw materials, materials and components used for the production and sale of products for export are imported into the territory of the Republic of Uzbekistan by participants in special economic zones.

Participants in special economic zones have the right to receive a deferment in the payment of value added tax when importing goods for a period of up to 120 days.

The amount of value added tax resulting from the excess of the amount of value added tax credited over the amount of accrued tax is reimbursed to the participant in the special economic zone according to a simplified procedure within seven days.

The amount of paid value added tax is reimbursed to participants of special economic zones from the republican budget of the Republic of Uzbekistan in the manner determined by the Cabinet of Ministers of the Republic of Uzbekistan.

Article 40. Regulation of labor relations in special economic zones

Labor relations in special economic zones are regulated by the Labor Code of the Republic of Uzbekistan, collective agreements (agreements) and (or) individual labor agreements (contracts).

Collective agreements (agreements) and individual labor agreements (contracts) cannot worsen the situation of employees of legal entities created in the territory of special economic zones, in comparison with the conditions provided for by the legislation of the Republic of Uzbekistan, as well as the conventions of the International Labor Organization, to which the Republic of Uzbekistan is a party.

The staff of legal entities created on the territory of special economic zones must consist of citizens of the Republic of Uzbekistan at least ninety percent of the total number of employees.

Article 41. Budget of the Directorate of the Special Economic Zone

The directorate of the special economic zone has an independent budget, approved annually by the administrative council of the special economic zone in the form of an estimate of income and expenses.

The income of the Directorate of the Special Economic Zone is generated from payments for inclusion in the Register of Participants of the Special Economic Zone, proceeds from the provision of land plots for rent through an electronic online auction, the rental of buildings and structures in the use and management of the Directorate of the Special Economic Zone, from the provision of services under contracts and other sources not prohibited by law.

At the stage of formation of a special economic zone before reaching self-sufficiency, but not more than three years, it is possible to attract funds from the republican and local budgets to maintain the directorate of the special economic zone, loans, as well as from other sources not prohibited by law, in the prescribed manner.

CHAPTER 11. FINAL PROVISIONS

Article 42. Guarantees of legal protection of participants in the special economic zone

Participants in the special economic zone are guaranteed protection of rights and interests, which is ensured by this Law and other acts of legislation, as well as international treaties of the Republic of Uzbekistan.

Participants in special economic zones, when changing tax legislation, have the right to apply, during the period of validity of benefits, but not more than ten years, the rules and regulations for the payment of taxes, fees and other payments that were in force on the date of their inclusion in the Register of participants in the special economic zone, with the exception of rules and provisions of legislative acts regulating the taxation of excisable goods.

Participants in special economic zones have the right to use convenient conditions, forms of payment and settlement for exported and imported goods.

In special economic zones, compliance with all guarantees and benefits for participants in special economic zones provided for by law is ensured. The decision of the President of the Republic of Uzbekistan may provide additional guarantees and benefits.

Losses, as well as lost profits and moral damage caused to legal entities and individuals as a result of unjustified interference in their activities by government and other bodies or officials, are subject to compensation or compensation in court.

Article 43. Dispute resolution

Disputes in the area of ​​organizing the functioning and development of special economic zones are resolved in the manner prescribed by law.

Article 44. Liability for violation of legislation on special economic zones

Persons guilty of violating the legislation on special economic zones bear responsibility in accordance with the established procedure.

Article 45. Recognition as invalid of certain legislative acts of the Republic of Uzbekistan

Declare invalid:

1) Law of the Republic of Uzbekistan dated April 25, 1996 No. 220-I “On free economic zones” (Gazette of the Oliy Majlis of the Republic of Uzbekistan, 1996, No. 5-6, Art. 58);

2) section XV of the Law of the Republic of Uzbekistan dated April 25, 2003 No. 482-II “On introducing amendments and additions to some legislative acts of the Republic of Uzbekistan” (Gazette of the Oliy Majlis of the Republic of Uzbekistan, 2003, No. 5, Art. 67);

3) Article 3 of the Law of the Republic of Uzbekistan dated December 14, 2005 No. ZRU-11 “On amendments to certain legislative acts of the Republic of Uzbekistan in connection with the transformation of the Agency for Foreign Economic Relations of the Republic of Uzbekistan into the Ministry of Foreign Economic Relations, Investments and Trade of the Republic of Uzbekistan” ( Gazette of the chambers of the Oliy Majlis of the Republic of Uzbekistan, 2005, No. 12, art. 410);

4) Article 11 of the Law of the Republic of Uzbekistan dated October 10, 2006 No. ZRU-59 “On introducing amendments and additions to some legislative acts of the Republic of Uzbekistan in connection with improving the legal protection system and liberalizing the financial liability of business entities” (Gazette of the Chambers of the Oliy Majlis of the Republic of Uzbekistan, 2006, No. 10, Art. 536);

5) Law of the Republic of Uzbekistan dated September 23, 2009 No. ZRU-224 “On introducing amendments and additions to the Law of the Republic of Uzbekistan “On Free Economic Zones” (Gazette of the Chambers of the Oliy Majlis of the Republic of Uzbekistan, 2009, No. 9, Art. 338);

6) Article 10 of the Law of the Republic of Uzbekistan dated August 20, 2015 No. ZRU-391 “On introducing amendments and additions to some legislative acts of the Republic of Uzbekistan aimed at further strengthening the reliable protection of private property and business entities, removing barriers to their accelerated development” (Vedomosti Chambers of the Oliy Majlis of the Republic of Uzbekistan, 2015, No. 8, Art. 312);

7) Article 20 of the Law of the Republic of Uzbekistan dated April 18, 2018 No. ZRU-476 “On introducing amendments and additions to some legislative acts of the Republic of Uzbekistan” (Gazette of the Chambers of the Oliy Majlis of the Republic of Uzbekistan, 2018, No. 4, Art. 224).

Article 46. Ensuring the execution of communication, clarification of the essence and meaning of this Law

The Ministry of Investment and Foreign Trade of the Republic of Uzbekistan, the Ministry of Economy and Industry of the Republic of Uzbekistan and other interested organizations must ensure the implementation, communication to the executors and explanation among the population of the essence and significance of this Law.

Article 47. Bringing legislation into compliance with this Law

To the Cabinet of Ministers of the Republic of Uzbekistan:

bring government decisions into compliance with this Law;

ensure the review and repeal by government bodies of their regulations that contradict this Law.

Article 48. Entry into force of this Law

This Law comes into force after three months from the date of its official publication.

Participants in free economic zones registered by the directorates of free economic zones before the entry into force of this Law and implementing investment projects in the territory of free economic zones shall retain the benefits and preferences provided for by law until the expiration of the period for their provision.

President of the Republic of Uzbekistan Sh. MIRZIYOEV

The document presented in an unofficial translation from the database of the law firm “S VERENIN’S LEGAL GROUP”.

The document presented from the database of the law firm “S VERENIN’S LEGAL GROUP”.

The document presented as of _______2024г.

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