Joint Ventures 2025 - Uzbekistan
1. Market Conditions
1.1 Geopolitical and Economic Factors
The economic and legal system of Uzbekistan has been very stable and, as confirmed by various international institutions, including the World bank, it has been showing steady growth since 2017 despite geopolitical turbulence surrounding the region. The situation in Ukraine and the Middle East has not negatively impacted the country and traditional sources of investment continued expanding their presence in Uzbekistan by means of establishing solely owned enterprises or making joint ventures (JVs) with other international investors and local partners. The government of Uzbekistan continued to show commitment to strengthening business and investment in the country and new legislative reforms are planned to be carried out in 2025–2026. Furthermore, several international events in the oil and gas, mining, and energy industries have gathered quite a lot of interest in the country.
1.2 Industry Trends and Emerging Technologies
The 2025–2026 period has so far seen an increase in the number of enterprises solely owned by foreign investors as well as an increased number of joint ventures in the energy, infrastructure, and automobile industries in addition to the IT and banking and financial sectors. Special economic zones, such as IT Park, have reported a significantly increased turnover in 2024–2025 and aim to double the number of private companies and private investments in the IT industry by 2030.
2. JV Structure and Strategy
2.1 Typical JV Structures
Traditionally, there are two options for investors intending to set up a legal entity in Uzbekistan. These include a limited liability company (LLC) and a joint-stock company (JSC). Each of these forms has an underlying legislative document regulating the main principles of establishment and operation of the company:
the Law on Limited Liability Companies; and
the Law on Joint-Stock Companies and Protection of Shareholders’ Rights.
Partnerships, for example, have not gained popularity in Uzbekistan in the light of investment interests and aims, but partnerships or various kinds of consortiums are frequently employed mainly in one-off, single projects.
When choosing between an LLC or a JSC, investors, in the vast majority of cases, tend to opt for an LLC as it is significantly easier and cheaper to establish and maintain its activities. The law allows use of an LLC in almost all kinds of business operations. Whereas JSCs have a lot more procedures to comply with at all stages of their operations due to the composition of share capital of a JSC. Share capital of a JSC consists of shares – ie, equity which requires compliance with special issuance, registration, circulation and storage requirements. In some industries, setting up a legal entity in the form of a JSC is compulsory, for example, when establishing banks, certain financial institutions, insurance companies, commodity and stock exchanges, and energy market operators. In some instances, using the form of JSC is forbidden, for example, auditing companies, tax consulting companies, and ecological inspection companies cannot be set up in the form of a JSC.
Despite a JSC being a more complex and financially burdensome form of business in Uzbekistan, in 2025, the authors have seen a growing number of investors converting their businesses to JSCs on a voluntary basis due to various tax benefits and the possibility to raise funds by means of issuing privileged, non-voting shares. Tax benefits applicable to shareholders of JSCs under Article 16 of the Law on the Equities (Securities) Market include full exemption from payment of corporate and individual income taxes in respect of profits/income received by sellers of shares through the stock exchange.
