Overview
Uzbekistan’s legal environment is undergoing a phase of active modernization. Over the past years, the country has introduced wide-ranging reforms aimed at liberalizing the economy, improving transparency, and aligning local rules with international standards. At the same time, the legal framework remains complex, with sector-specific regulations and compliance obligations that demand careful navigation. For foreign investors, understanding these dynamics is crucial to avoid risks and secure long-term success. This article outlines the main aspects of market entry, including business establishment options, intellectual property protection, personal data rules, sectoral regimes, and dispute resolution mechanisms in Uzbekistan.
Business set-up
Choosing the right legal form of business presence in Uzbekistan depends on the project’s objectives, the scale of investment, and the level of involvement desired in day-to-day management. The most widely used and flexible structure is the limited liability company (LLC). Other available options include a private enterprise (PE), a joint-stock company (JSC), and an individual entrepreneur (IE). In addition, foreign investors may establish a permanent establishment or a representative office, depending on the intended scope of activity. In this section, we briefly outline the main forms of business organization available in Uzbekistan and their key features.
Limited Liability Company (LLC)
A limited liability company (LLC) is the most common and flexible form of business entity in Uzbekistan. It can be established by one or several founders, with charter capital divided into shares as determined by the company’s charter. The participants are not personally liable for the company’s obligations and bear risks only within the scope of their contributions.[1]
LLCs are open for establishment by both local and foreign individuals or legal entities. When foreign investment is involved, companies may obtain additional benefits and incentives, making this structure particularly attractive for international businesses. These advantages may include tax preferences, customs reliefs[2], and simplified administrative procedures, especially for large-scale or strategically important projects[3].
Foreign investors generally enjoy the same rights as local entrepreneurs, with certain supportive measures introduced to encourage international participation, particularly in innovative and technology-related sectors. Thanks to these features, the LLC remains the preferred vehicle for market entry in Uzbekistan.
Joint-Stock Company (JSC)
Joint-Stock Companies (JSCs) are better suited for large-scale projects and raising capital through the issuance of shares. The shareholder liability in this case is limited to the value of one’s shareholdings.[4] However, they are subject to more complex and rigorous corporate governance requirements, including mandatory disclosure and reporting obligations. While this form offers access to broader financing opportunities, it also entails higher compliance costs compared to LLC structures.
Representative offices
Foreign companies may establish representative offices in Uzbekistan. However, such offices do not have the status of a legal entity and cannot engage in commercial, entrepreneurial, or other economic activity.[5] Their primary function is therefore limited to representing and protecting the interests of the parent company in Uzbekistan.
Permanent establishments
A permanent establishment (PE) arises when a foreign company carries out business activity in Uzbekistan without creating a separate legal entity. While a PE is not considered an independent company, it allows foreign businesses to conduct commercial operations, hire staff, open bank accounts, and maintain a local presence. This model can be a practical alternative to setting up a subsidiary for companies seeking a long-term footprint.
PE status may result from having a management office, branch, construction site, service provision beyond certain time limits, or activities in resource extraction.[6] Registration with the State Tax Committee is mandatory, after which the PE is treated as a local taxpayer with the same obligations as domestic entities.[7]
Intellectual Property (IP)
Protecting intellectual property (IP) is a cornerstone of safeguarding brand identity and securing the long-term commercial value of a business. In Uzbekistan, the local market continues to face challenges in the form of counterfeit goods and the activities of “trademark squatters” – applicants seeking to register well-known brands without authorization to exploit their reputation. In the following sections, we will briefly outline the core elements of IP protection in Uzbekistan, including the first-to-file principle, issues surrounding parallel imports, and available remedies for infringement of intellectual property rights.
First-to-File System
Uzbek legislation does not expressly codify either the first-to-file or first-to-use principle. However, prevailing interpretation suggests that Uzbekistan effectively operates under a first-to-file system. This means that trademark priority is granted to the applicant who first files an application, regardless of prior commercial use. Businesses are therefore strongly advised to make timely filings to secure protection.
At the same time, if the rights holder acts in bad faith against a party that can demonstrate earlier use of a brand, such conduct may be treated as an act of unfair competition. In these cases, the law provides a basis for challenging registrations and protecting the interests of the genuine user.
Parallel import
In 2017, Uzbekistan formally recognized the principle of international exhaustion of trademark rights, thereby legalizing parallel imports.[8] However, the legislation does not explicitly define whether the exhaustion of trademark rights in Uzbekistan is national or international. As a result, the rule remains open to interpretation. In practice, courts have occasionally accepted arguments in favor of international exhaustion, while competition authorities have tended to apply a national exhaustion approach. While this approach has facilitated market access, reduced barriers to trade, and lowered consumer prices, it has also limited the ability of trademark owners to fully control distribution channels within Uzbekistan.
Liability for breach of rights
Uzbek law imposes civil, administrative liability for intellectual property infringements. Rights holders may seek remedies such as injunctions, damages, and seizure of counterfeit goods. Administrative sanctions may also include fines and confiscation of unlawfully marked products.[9]
In addition, the legislation provides for compensation as a separate form of liability, particularly in cases involving trademark and copyright infringements.[10] This mechanism enables rights holders to recover monetary amounts without the need to prove actual damages, offering a more efficient route to enforcement.
Recent legislative reforms have further strengthened the framework, introducing criminal liability in severe cases of repeated infringement across a wide range of IP rights. These amendments, entering into force in late 2025, mark a clear step towards alignment with international standards.[11]
Personal Data
Uzbekistan is undergoing a profound transformation in the sphere of personal data protection, driven by the rapid digitalization of e-commerce, finance, communications, and public services. In recent years, the government has introduced a series of reforms aimed at strengthening the enforcement of data protection rules, tightening requirements for financial institutions, and embedding cybersecurity standards into everyday business practices. Businesses entering the Uzbek market must be prepared to navigate a legal environment that imposes robust personal data compliance obligations, including mandatory database registration and localization of personal data.
Key requirements
Uzbek law establishes several legal grounds for the processing of personal data, including contractual necessity, statutory obligations, legitimate interest, and use of data for research purposes. Nevertheless, consent remains the central basis for most processing activities, including transfer, dissemination, or cross-border transmission of personal data. Consent must be informed, explicit, and tied to a specific purpose, with separate approval required where processing goes beyond the originally declared scope.[12] In addition, all personal data databases are subject to mandatory registration in the State Register of Personal Data Databases, a requirement that forms an integral part of Uzbekistan’s compliance framework.[13]
Data localization requirements
One of the central features of Uzbekistan’s personal data regime is the obligation to store the data of Uzbek citizens on servers physically located within the country.[14] This rule applies equally to local and foreign companies operating in the market and has become a significant compliance challenge, particularly for digital service providers and businesses relying on cross-border data flows. Non-compliance can expose companies to regulatory risks and hinder their ability to operate effectively.
To meet these requirements, businesses are encouraged to explore practical solutions that balance legal certainty with operational efficiency. Common approaches include working with certified local data centers, implementing hybrid cloud models that ensure primary hosting in Uzbekistan, and planning infrastructure in advance to avoid costly adjustments in the future.
Licenses and Permits
In Uzbekistan, business activities are regulated through three main formats of authorization: licenses, permits, and the notification procedure. Depending on the sector, companies may be required to obtain one of these forms of approval before starting operations. These mechanisms apply primarily to strategically important or sensitive industries, such as banking, healthcare, education, construction, and natural resource extraction.
At the same time, all business activities that do not fall under these categories may be carried out freely and without any special authorization. In such cases, companies are entitled to commence operations immediately upon state registration, which significantly simplifies market entry and reduces administrative barriers for most entrepreneurs.
IT Park
In Uzbekistan, a special technology hub – IT Park – has been established in Tashkent, offering its residents substantial tax and administrative incentives. The initiative was created by the government to attract investment, boost the export of IT services, and foster a favorable ecosystem for technological development.
Residents benefit from wide-ranging advantages, including exemptions from key taxes and mandatory contributions[15], reduced personal income tax rates, the ability to hire foreign specialists without work permits, and the option to operate through a virtual office. Companies can also pay salaries and dividends in foreign currency and export services with minimal barriers. These measures position IT Park as one of the most attractive entry points for international companies seeking to enter Uzbekistan’s technology sector.
PPP (Public–Private Partnership)
In Uzbekistan, the PPP framework is actively functioning and has become an important tool for attracting private investment into large-scale projects. It is regulated by the Law “On Public–Private Partnership”, along with concessions, production sharing agreements (PSAs), and rules on natural monopolies.
Concessions grant private companies long-term rights to use and manage state-owned assets such as land, infrastructure, or natural resources, while ownership remains with the state.[16] PSAs are widely applied in the oil, gas, and mining sectors, giving investors the ability to recover costs and share production in return for assuming development risks.[17]
To further stimulate investment, Uzbekistan offers a system of legal guarantees and sector-specific incentives, ensuring stability and creating a secure platform for long-term cooperation between the state and private investors.[18]
Advertisement & Unfair competition
Advertising legislation and competition rules in Uzbekistan are of significant importance, as they affect almost every area of business. Since trade and commerce are closely tied to advertising, companies must pay careful attention to compliance in this field. The specific rules governing advertising are set out in a separate Law “On Advertisement”. A key requirement is that advertisements must be distributed in the state language – Uzbek.[19] An exception applies to registered trademarks, which may be used in the form in which they are officially registered. In addition, there are product-specific restrictions, for example in relation to pharmaceuticals, alcohol, tobacco, and financial services.
Competition is governed by a separate law, recently adopted in a completely new edition. This law and its associated regulations cover multiple aspects of business activity, including restrictions on mergers and acquisitions, regulation of monopolies, and rules on dominant market positions. These provisions are especially relevant for investors and large companies, as they set the boundaries for fair competition and ensure a level playing field in Uzbekistan’s market.
E-commerce
E-commerce in Uzbekistan has expanded rapidly in recent years, driven by state support for the IT sector, the growth of fintech solutions, and the increasing role of telecom services and digital public platforms. With the expansion of e-commerce platforms, fintech solutions, telecom services, and digital public services, the volume and sensitivity of collected personal data have surged, intensifying the need for robust safeguards.
Notably, in December 2024, the Cabinet of Ministers adopted a resolution further refining the regulatory landscape for e-commerce. Under this act, only resident legal entities are permitted to operate e-commerce platforms in Uzbekistan.[20] The requirement for local incorporation applies not only to online marketplaces, but also to order aggregators and digital streaming services, marking a significant step in strengthening state oversight over the sector.
Dispute Resolution
Uzbek legislation allows contracting parties to choose both the applicable law and the forum for resolving disputes. This flexibility provides foreign investors with greater certainty when structuring agreements and helps ensure enforceability of contractual rights within the local legal framework.
In addition to state courts, parties may resort to arbitration. Both domestic arbitration institutions and international arbitration mechanisms are available, provided that such clauses are expressly included in contracts. The Tashkent International Arbitration Centre (TIAC) has become a recognized forum for cross-border disputes.
Mediation and other pre-trial procedures are also actively promoted in Uzbekistan as cost-effective alternatives to litigation. These mechanisms aim to encourage amicable settlements, reduce judicial backlog, and provide businesses with faster, less adversarial ways of resolving conflicts.
Conclusion
To sum up, Uzbekistan offers substantial opportunities for international investors, combining a growing market with a regulatory environment that is gradually becoming more transparent and investor-friendly. The government continues to introduce reforms aimed at improving the business climate, simplifying procedures, and encouraging foreign participation in key sectors of the economy.
At the same time, success in this market requires more than enthusiasm or capital investment. A carefully structured legal and strategic approach is essential to ensure compliance with local requirements while also taking full advantage of the incentives available. Businesses that pay attention to the nuances of regulation are far better positioned to avoid risks and secure sustainable growth.
It is also important to note that not every aspect of the law will be equally relevant for every investor. However, sector-specific rules, whether related to licensing, competition, intellectual property, or data protection, can be decisive in shaping the success of a project. For this reason, companies should approach Uzbekistan’s market with both flexibility and legal awareness, tailoring their strategy to the particular industry in which they operate.
References
[1] Law of the Republic of Uzbekistan “On Limited Liability Companies” № 310-II dated 06 December 2001, Art. 3 (1).
[2] Law of the Republic of Uzbekistan “On Guarantees and Measures for the Protection of Rights of Foreign Investors” № 611-I dated 30 April 1998.
[3] Presidential Decree No. UP-4434 of 10 April 2012 “On Additional Measures to Stimulate the Attraction of Foreign Direct Investment”.
[4] Law of the Republic of Uzbekistan “On Joint-Stock Companies and Protection of Shareholders’ Rights”, Art. 4 (2).
[5] Resolution of the Cabinet of Ministers of the Republic of Uzbekistan “On Approval of the Regulation on Accreditation of Representative Offices of Foreign Commercial Organizations in the Territory of the Republic of Uzbekistan and the Procedure for Their Activities” dated February 7, 2024, No. 76, para. 7.
[6] Tax Code of the Republic of Uzbekistan, Art. 36 (2).
[7] Tax Code of the Republic of Uzbekistan, Art. 36 (14).
[8] Civil Code of the Republic of Uzbekistan, Part Two, adopted on 1 March 1997, Art. 11071.
[9] Code of the Republic of Uzbekistan on Administrative Liability adopted by the Law of the Republic of Uzbekistan dated September 22, 1994, No. 2015-XII, Art. 177, 1771, 1772.
[10] Law of the Republic of Uzbekistan “On Amendments to Certain Legislative Acts of the Republic of Uzbekistan in Connection with the Further Improvement of the System of Legal Protection of Intellectual Property Objects” No. ZRU-959 dated 10 September 2024.
[11] Law of the Republic of Uzbekistan “On Amendments and Additions to Certain Legislative Acts of the Republic of Uzbekistan” dated August 8, 2025, No. ZRU-1080.
[12] Law of the Republic of Uzbekistan “On Personal Data” No. ZRU-547 dated 2 July 2019, Art. 14 (2), 15 (3)(1).
[13] Resolution of the Cabinet of Ministers of the Republic of Uzbekistan No. 71 of 8 February 2020 “On the Approval of the Regulation on the State Register of Personal Data Databases”, para.4.
[14] Law of the Republic of Uzbekistan “On Personal Data” No. ZRU-547 dated 2 July 2019, Art. 271.
[15] Regulation on the Procedure for Organizing the Activities of the Technological Park of Software Products and Information Technologies, Annex to the Resolution of the Cabinet of Ministers of the Republic of Uzbekistan, 15 July 2019, No. 589, para. 25 (а) (b).
[16] Law of the Republic of Uzbekistan “On Concessions”, 30 August 1995, No. 110-I, Art. 1, 6 (1).
[17] Law of the Republic of Uzbekistan “On Production Sharing Agreements”, 7 December 2001, No. 312-II, Art. 3 (1).
[18] Law of the Republic of Uzbekistan “On Guarantees and Measures to Protect the Rights of Foreign Investors” No. 611-I of 30 April 1998.
[19] Law of the Republic of Uzbekistan “On Advertising”, 7 June 2022, No. ZRU-776, Art. 6 (1).
[20] Resolution of the Cabinet of Ministers of the Republic of Uzbekistan “On Measures for the Further Development of E-Commerce in the Republic of Uzbekistan”, 26 December 2024, No. 885, para. 2.