Uzbekistan’s Business Reset: How a Decade of Reform Recast the Market

Uzbekistan has spent the past decade redesigning the operating environment for business, moving from a system defined by heavy administration and state control toward one built around liberalization, procedural simplification and stronger legal protections for entrepreneurs. From company registration and foreign currency access to taxation and licensing, the rules governing commerce have been substantially revised since 2016.

The shift began after Shavkat Mirziyoyev was elected president in 2016, when economic liberalization became one of the central directions of state policy. Its legal foundation was set by the 2017-2021 Action Strategy, adopted on February 7, 2017. The strategy’s second pillar was devoted specifically to economic development and liberalization, and many of the documents adopted in subsequent years on entrepreneurship followed directly from that policy line.

From 2022, that process continued under the New Uzbekistan Development Strategy. At the end of 2023, the government also adopted the Uzbekistan-2030 strategy, setting out the country’s long-term economic and social goals. Together, those frameworks suggest that business reform is not being treated as a temporary stimulus measure, but as a longer-term state-building project with implications for domestic competition, investment flows and corporate expansion.

From incentives to institutional redesign

One of the more consequential aspects of the reform cycle is that it has not been limited to tax breaks or credit programs. The relationship between the state and entrepreneurs has itself been reworked. Oversight mechanisms were reshaped, new institutions were established to protect business rights, and legal foundations were created to help companies access foreign markets and attract investment.

That institutional logic matters for the competitive landscape. Lower taxes or subsidized lending can improve margins, but they do not by themselves create a predictable environment for long-term capital allocation. For companies considering expansion, partnerships or acquisitions, the more important question is whether administrative risk is becoming manageable. Uzbekistan’s reform agenda appears to have recognized that point early.

In the initial phase, the protection of entrepreneurial rights was developed as a separate policy direction. A notable step came with Law No. ORQ-440, adopted on August 29, 2017, which created the institution of the Representative for the Protection of the Rights and Legitimate Interests of Business Entities under the President, commonly known as the Business Ombudsman.

The creation of the Business Ombudsman marked an attempt to establish a dedicated mechanism for defending предпринимательские interests in dealings with state bodies.

That institutional addition was followed by further measures. Presidential Decree No. PF-5490, adopted on July 27, 2018, further improved the system for protecting the rights and legitimate interests of business entities and included steps to write off certain tax arrears. Then, on March 15, 2019, Presidential Decree No. PF-5690 sought a more fundamental improvement of the entrepreneurship protection system while optimizing the role of prosecution authorities in that process.

Recent reforms show that the state is still refining this architecture. Presidential Decree No. PF-184, adopted on November 14, 2024, introduced additional measures to more reliably protect entrepreneurs’ rights. Under that decree, from 2025 financial sanctions for engaging in entrepreneurial activity without state registration as a legal entity were abolished.

Cutting entry barriers and transaction costs

If investor protection is one side of market development, market entry is the other. One of the main obstacles to starting a business in Uzbekistan had been long and complex administrative procedures. As a result, another major reform track focused on simplifying registration, permits and licensing.

On February 9, 2017, Cabinet of Ministers Resolution No. 66 approved a new procedure for the state registration of business entities. A year later, Presidential Decree No. PF-5409 of April 11, 2018, targeted the reduction and simplification of licensing and permit procedures. It also called for the introduction of G2G and G2B electronic interaction mechanisms between state bodies and business.

From a corporate strategy perspective, that matters because administrative friction functions like a hidden tax. It raises the cost of launching subsidiaries, entering adjacent sectors and integrating newly acquired assets. Digitization and standardized interfaces with government, if consistently implemented, can therefore do more than improve convenience: they can widen the field for formal-sector growth and consolidation.

In 2020, the government added a requirement to assess the impact on business before introducing new types of licensed activity. The Business Ombudsman and the Chamber of Commerce and Industry were both envisaged as participants in that process. This move is significant because it introduces a discipline often associated with more mature regulatory systems: ex ante review of business impact before new compliance burdens are imposed.

Another phase began in 2024. Under Presidential Decree No. PF-8, from March 1, 2024, 22 types of licenses and permit documents were abolished, while a “license-free business” regime was introduced for two types of activity. Administrative reforms launched in 2025 were then aimed at reducing the time and cost businesses spend dealing with the state. The plan envisaged linking registration systems, the License platform, electronic archives and ID-card databases in order to lower entrepreneurs’ administrative costs by about 90 billion soums and save up to 15 days in interactions with public agencies.

Tax reform as a structural market signal

Among the reforms of the past decade, changes in tax policy that began in 2018 stand out as one of the most systemic. Tax rates were reduced, some payments were consolidated, and at the same time a large share of business was moved to the general taxation system. This simplified parts of the entrepreneurial environment while also reshaping tax relations across the economy.

The framework was set by Presidential Decree No. PF-5468 of June 29, 2018, which approved the Concept for Improving Tax Policy. Under that concept, a flat 12% income tax rate for individuals was to be introduced. Social payments were also cut, with the rate reduced from 25% to 12%. For certain entities under the simplified tax regime, a 15% arrangement was established.

A further major change took effect on January 1, 2019. The scope for applying the unified tax payment was restricted and preserved only for legal entities and individual entrepreneurs with annual turnover not exceeding 1 billion soums. Other entities were shifted to the value-added tax and profit tax system. Additional measures to improve tax administration were adopted in 2019, and a new version of the Tax Code entered into force on January 1, 2020.

For businesses, that transition carried a mixed but strategically important message. Lower rates can support investment and formalization, while movement into a broader VAT and profit-tax framework can increase transparency and comparability across firms. In competitive terms, the direction points toward a more standardized corporate environment, one in which scale, reporting discipline and legal compliance increasingly matter.

Viewed as a whole, Uzbekistan’s reform decade has been less about isolated pro-business measures than about building the institutional plumbing of a more formal market economy. The open question for executives and investors is no longer whether the rules have changed, but how consistently the new framework will be applied in practice. For now, the pattern is clear: the state has been trying to reduce friction, codify protections and make market participation less dependent on opaque administrative processes.