Business administration

Chapter 2. Analysis of investment policy of Uzbekistan
2.1. Investment climate in Uzbekistan
Uzbekistan has long been known as a country with a rich cultural and historical heritage, but in recent years it has also become an attractive destination for foreign investment. The investment climate in Uzbekistan has undergone a major transformation since the country gained independence in 1991. In the early days, the country was largely isolated from the global economy due to its political and economic policies, but since then, it has opened up to foreign investment and adopted a range of reforms to create a more business-friendly environment. The government of Uzbekistan has taken steps to improve the investment climate by introducing a range of reforms and incentives. These include reducing bureaucratic procedures, simplifying tax regulations, and providing various types of financial support for businesses. The government has also established free economic zones, which offer attractive tax and customs benefits to foreign investors. In addition, the government has created a number of special investment funds to attract foreign capital and provide long-term financing for projects. The government has also taken steps to improve the legal and regulatory environment for businesses. It has introduced new legislation to protect intellectual property rights, as well as laws to ensure transparency and good governance. The government has also established an independent judiciary system to ensure that legal disputes are resolved fairly and efficiently. Overall, the investment climate in Uzbekistan has improved significantly in recent years. The government has taken steps to make the country more attractive to foreign investors by introducing a range of reforms and incentives. This has helped attract significant amounts of foreign capital into the country, which has in turn contributed to economic growth and job creation. As a result, Uzbekistan is now one of the fastest growing economies in Central Asia, and is set to become an even more attractive destination for foreign investment in the years ahead. Foreign investors in Uzbekistan are subject to a range of laws and regulations, including those related to investment, taxation, labor and employment, and intellectual property. 1) Investment Law: This law sets out the legal framework for foreign investment in Uzbekistan. It provides for the protection of foreign investments, including the right to transfer profits and repatriate capital, as well as the right to receive compensation in the event of expropriation or nationalization of investments. 2) Tax Law: This law sets out the taxation regime applicable to foreign investors in Uzbekistan. It provides for corporate income tax, value added tax, withholding tax, and other taxes. 3) Labor and Employment Law: This law governs the employment of foreign workers in Uzbekistan. It sets out the requirements for obtaining work permits and other related matters. 4) Intellectual Property Law: This law protects the intellectual property rights of foreign investors in Uzbekistan. It provides for the protection of copyright, trademarks, patents, and other forms of intellectual property. 5) Customs Law: This law sets out the customs regime applicable to foreign investors in Uzbekistan. It provides for the import and export of goods and services, as well as tariffs and other duties. International experts generally have a positive opinion of the investment climate in Uzbekistan. The World Bank’s Doing Business 2020 report ranks Uzbekistan as the 74th easiest place to do business in the world, an improvement from its previous rank of 83rd. The report also notes that Uzbekistan has made significant improvements in areas such as starting a business, getting electricity, and protecting minority investors. The US State Department’s 2019 Investment Climate Statement for Uzbekistan also noted that the country has made progress in improving the investment climate. It noted that the government has taken steps to reduce bureaucracy and improve the legal framework for foreign investors. The statement also noted that the government has increased transparency and access to information, while also introducing incentives to attract foreign investment. Here is SWOT analysis of investment climate in Uzbekistan:

Strengths: 1) Favorable geographic location: Uzbekistan is located in a strategic position between Europe and Asia, with access to multiple transportation routes. This makes it an attractive destination for foreign investors.2) Abundant natural resources: Uzbekistan is rich in natural resources, including oil, gas, gold, copper, uranium, and other minerals. These resources provide a strong base for economic growth and foreign investment.3) Government incentives: The government of Uzbekistan has implemented several incentives to attract foreign investment, such as tax holidays and exemptions, simplified customs procedures, and preferential terms for foreign investors. 4) Growing economy: The economy of Uzbekistan has been growing steadily in recent years, providing a favorable environment for foreign investment.

Weaknesses: 1) Poor infrastructure: The infrastructure in Uzbekistan is inadequate and needs to be improved to attract more foreign investment. 2) High corruption: Corruption is still a major problem in Uzbekistan and can be a deterrent to foreign investors. 3) Weak legal system: The legal system in Uzbekistan is weak and needs to be strengthened to provide greater protection for foreign investors. 4) Low labor productivity: Labor productivity in Uzbekistan is low compared to other countries, which can make it difficult for foreign investors to find skilled workers.

Opportunities: 1) Growing consumer market: The consumer market in Uzbekistan is growing rapidly, providing an attractive opportunity for foreign investors. 2) Expanding tourism industry: The tourism industry in Uzbekistan is growing rapidly, providing an opportunity for foreign investors to capitalize on this growth. 3) Diversifying economy: The economy of Uzbekistan is diversifying and becoming more open to foreign investment, providing an attractive opportunity for investors.

Threats: 1) Political instability: Political instability in Uzbekistan can be a threat to foreign investors, as it can lead to unpredictable policy changes or economic disruptions. 2) Currency risk: The currency of Uzbekistan is not fully convertible, making it difficult for foreign investors to hedge against currency risks. 3) Lack of transparency: The lack of transparency in the business environment in Uzbekistan can be a deterrent to foreign investors, as they may not have access to accurate information about the market or companies they are investing in.