Investment Climate and Business Opportunities of the Republic of Uzbekistan

Investment Climate and Business Opportunities of the Republic of Uzbekistan Oybek N. Khamraev Deputy Director Uzinfoinvest Agency Ministry for Foreign...
Author: Augusta Tyler
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Investment Climate and Business Opportunities of the Republic of Uzbekistan Oybek N. Khamraev Deputy Director Uzinfoinvest Agency Ministry for Foreign Economic Relations, Investments and Trade of the Republic of Uzbekistan

Sound Legal Base • Main laws regulating investment activity in Uzbekistan: – Law on Foreign Investments; – Law on Guarantees and Measures to Protect the Rights of Foreign Investors; – Law on Investment Activity; – Law on Free Economic Zones;

Legal Base • Enterprises with investment volume for at least 5 million USD reserve the right to pay taxes existing at the date of their registration for 10 years • External engineering-communication networks will be provided by Government for investment projects • Selling low liquid state objects at ZERO cost under concrete investment obligations; • Customs preferences are provided for 2 years for the imported property and goods by enterprises with share of FDI not less than 33% • Consumer goods producers with share of 50% foreign capital are exempted from obligatory payments of sale of revenue in foreign currency within 5 years from registration date • Obtaining multiply VISA for 12 months period

Incentives & Preferences • Main laws regulating investment activity in Uzbekistan: • Tax exemptions for the following sectors of industry:* – – – – – –

electro technical; light industry; machinery construction; chemical & petrochemical; procession of fruit & vegetables; production of building materials & etc.

• if amount of FDI is:

– 0,3 – 3,0 million USD – 3 years – 3,0 – 10,0 million USD – 5 years – more than 10,0 million USD – 7 years

* - all regions except Tashkent region and Tashkent city

Main Trends in % to previous year

10.0%

9.5%

9.5%

9.3%

9.0%

9.0%

8.1%

8.5%

8.5%

8.2%

8.0% 7.5%

7.3%

7.8%

7.0%

6.5%

6.8%

8.0% GDP Growth Rate

7.4%

7.3%

7.6%

Inflation Rate

7.0% 6.8%

6.8%

6.0% 5.5% 5.0%

2006

2007

2008

2009

2010

2011

2012

2013

• During independence GDP at PPP has increased by 3,5 times

Rich Raw Material Basis • Uzbekistan possesses unique resources: – solid raw materials (furious and non-furious); – over 1 644 deposits and 100 sorts of mineral resources.

• Average prices for: – Electricity – 0.05 USD per kWt/h; – Coal – 47.0 USD per MT; – Gas – 70.0 USD per 1000 m3.

Diversified Industry Oil, Gas & Petrochemical

Chemical

Mining & Metallurgy

Automobile

Agricultural Machinery

Electronics

Building Materials

Light Industry

Pharmaceuticals

Food Procession

Education • • • •

66 universities & institutions; 850 directions; 300 thousand graduating students; Affiliates of Foreign Universities: – Westminster International University – Singapore Institute of Management and Development – Turin Polytechnic Institute – Inha University of Korea – Oil & Gas Institute named after Gubkin – Moscow State University

Market Access Free Trade Agreement with all CIS countries and Georgia

Moscow Minsk Berlin Kiev Astana Brussels

London

Paris

Bishkek

Washington

Ankara

Ashgabad

Jerusalem Tehran Amman Cairo Riyadh

Most Favourable Nation Treatment: with 45 countries, including China, Japan, US, EU countries, India, Korea and others

Tokyo

Beijing Seoul

Shanghai

Bangkok Singapore Manila

CA & Afghanistan: 90 million people

CIS: 300 million people

Jakarta

Foreign Investments Growth in Uzbekistan growth in %

112.0

114.0

114.0

116.0

118.0

120.0

FDI & Credits Loans Under Government Guarantee

2496

3062

2875

2757

3025

464

680

893

2011

2012

2013

1423 1014

272

459

446

527

2007

2008

2009

2010

FDI Flow by country as for 2013 (in %) USA 3,0

others 12,6

EU memberstates 7,2

CIS countries 25,2

Asian countries 52,0

Foreign Enterprises in Uzbekistan • There are 4 845 enterprises with foreign investments in Uzbekistan • 96 enterprises (10,0% of EU) with German capital • 29 of them with 100% German capital • 29 accredited (11,8% of EU) German companies

Bilateral trade cooperation with the EU member-states and Germany as for 2013 • Turnover with the EU member-states – 2,5 billion USD: - export – 452,1 million USD (nonorganic chemical and oil products, cotton fiber, fruits and vegetables, services and etc) - import – 2,0 billion USD (mechanical and electro technical equipments, pharmaceutical products, transportation, services and others) • Turnover with Germany – 591,2 million USD (24,0% of EU): - main exporting facilities – animal products, trees & plants, cement, fruits & vegetables, organic chemical products and others - main importing facilities – mechanical and electro technical equipments, chemical products, perfumes, cosmetics, detergents and others

Bilateral trade cooperation with the EU member-states and Germany as for 2013 4%

1,6%

3%

24%

7%

4%

5% 5% 5% 15%

10%

10%

Germany France Latvia Poland Italy Great Britain Czech Republic Lithuania Netherlands Austria Spain others

Special Economic Zones of Uzbekistan

FIEZ NAVOI • Established in 2008 • Territory 564 ha • 19 operating projects: – – – – – – – – – –

Automobile components; Automobile wires; Gas cylinders; LED lams; High-voltage cables ; ADSL modems; Heating boilers; Set-up boxes (TV tuners); Cosmetic products; Polyethylene pipes and etc.

• NAVOI International Airport logistic center: – 1st stage – 300 tones per day – 2nd stage – 1000 tones per day

FIEZ NAVOI: Tax Preferences • FIEZ «Navoi» residents are exempted from all types of taxes: • Period of privileges and incentives: • If amount of FDI is: – 3 to 10 million Euros - 7 years; – 10 to 30 million Euros - 10 years and 50% reduction of profit tax for the following 5 years; – more than 30 million Euros - 15 years and 50% reduction of profit tax for the following 10 years.

SIZ ANGREN & DJIZAK • Established in 2012 • Territory – 4 500 ha • Implemented projects – 7: – – – –

sugar plant cooper pipes LED lamps gypsum cardboard & etc

• Projects being realized – 9 – silicon, basic oil – ceramic & granite tiles – leather goods & etc.

• Logistic centre – 36.7 ha with 5.4 million MT/year

• Established in 2013 • Territory – 524 ha • Implemented projects – 7: – – – –

mobile phones ceramic tiles sanitary ware leather goods & etc

• Projects being realized – 10 – silicon, basic oil – ceramic & granite tiles – leather goods & etc.

SIZ ANGREN & DJIZAK: Tax Preferences • SIZ ANGREN & DJIZAK residents are exempted from all types of taxes, except land tax: • Period of privileges and incentives, if amount of investments is: – 0.3 to 3 million USD - 3 years; – 3 to 10 million USD - 5 years; – more than 10 million USD - 7 years.

State Program on Priorities of Developing Industry in Uzbekistan • This program includes more than 516 new projects at the amount of over 54.0 bln.USD

New Prospects for Cooperation • Oil & gas industry – polymers (polycarbonate, polystyrene, ABS-plastics, and others) on basis of deep procession of hydrocarbons, exploration works and etc.

• Chemical industry: – NPV fertilizers, household chemicals, fluids for automobile industry, chemicals for textile industry and etc.

• Construction and building materials industry: – sanitary ware, porcelain stoneware tiles and so on.

• Light industry: – readymade garments, knitted yarn and others.

• Pharmaceutical and medical products: – medicines for different diseases, vaccines, disposable tests, medical equipments and etc.

• Food industry: – freeze-fried fast foods, diary products and others.

• Tourism: – building and management of hotels.

Thank you for attention!

web: www.uzinfoinvest.uz E-mail: [email protected]

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