Uzbekistan’s Decade of Business Reform Draws Closer UK and EU Attention

Uzbekistan has spent the past decade rewriting many of the rules that govern private enterprise, in a policy shift that is increasingly relevant for British and European companies assessing Central Asian growth markets. From 2016 to today, the country has introduced a broad series of laws, presidential decrees and government decisions that have changed the conditions for doing business, from company registration and foreign-currency access to taxation and licensing.

The changes followed the election of President Shavkat Mirziyoyev in 2016, after which economic liberalisation became one of the main directions of state policy. The legal basis for that process was set on February 7, 2017, with the adoption of the 2017-2021 Action Strategy. Its second pillar was dedicated to economic development and liberalisation, and many of the business-related measures adopted in later years were presented as a continuation of that policy.

Key policy frameworks cited over the period include the 2017-2021 Action Strategy, the New Uzbekistan Development Strategy from 2022, and the Uzbekistan-2030 strategy adopted at the end of 2023.

For UK and EU businesses, the significance lies less in any single incentive and more in the cumulative effort to reduce administrative friction and redefine the relationship between the state and entrepreneurs. The source material argues that reform was never limited to tax cuts or credit programmes. It also involved rebuilding oversight mechanisms, establishing new institutions to protect business rights, and creating legal foundations for entering foreign markets and attracting investment.

Institutional protections and administrative simplification

One of the earliest priorities was to build institutional mechanisms that would allow entrepreneurs to defend their rights in dealings with state bodies. On August 29, 2017, Law No. O‘RQ-440 created the office of the representative for the protection of the rights and legitimate interests of business entities under the president, commonly referred to as the Business Ombudsman. According to the source, the institution was designed to create a dedicated mechanism for protecting entrepreneurs’ interests in relations with government agencies.

That framework was expanded on July 27, 2018, through Decree No. PF-5490, which further improved the system for protecting the rights and legitimate interests of business entities. Among other measures, it provided for the write-off of certain tax arrears. A later decree, No. PF-5690 of March 15, 2019, was aimed at fundamentally improving the system for protecting entrepreneurial activity and optimising the role of prosecutorial bodies in that process.

Reforms in this area have continued. The source says that Decree No. PF-184, adopted on November 14, 2024, set out additional measures to more reliably protect entrepreneurs’ rights. Under that decree, financial sanctions for conducting business activity without state registration of a legal entity were abolished from 2025.

Administrative burden was another major target. Lengthy and complex procedures had been one of the main obstacles to starting a business, so a subsequent phase of reform 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.

Decree No. PF-5409 of April 11, 2018, then aimed to reduce and simplify licensing and permit procedures. It also provided for the introduction of G2G and G2B electronic interaction mechanisms between state agencies and businesses. In 2020, Uzbekistan added a requirement to assess the impact on business before introducing new categories of licensed activity, with participation envisaged for both the Business Ombudsman and the Chamber of Commerce and Industry.

The licensing system entered another stage from 2024. Under Decree No. PF-8, 22 types of licences and permit documents were abolished from March 1, 2024. For two categories of activity, a “licence-free business” regime was introduced. Further administrative reforms beginning in 2025 are intended to cut the time and expense involved in dealing with state bodies. According to the plans cited in the source, linking registration, the Licence system, electronic archives and ID-card databases should reduce entrepreneurs’ administrative costs by about 90 billion soums and save up to 15 days in dealings with government offices.

Tax overhaul and European investor relevance

Among the decade’s reforms, the tax policy changes launched in 2018 stand out as one of the largest systemic shifts. Tax rates were reduced, some payments were consolidated, and at the same time a large share of businesses was moved to the general tax system. The source says this both simplified the entrepreneurial environment and reshaped tax relations across the economy.

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

Another major change took effect on January 1, 2019. The scope for applying the unified tax payment was narrowed and retained only for legal entities and sole proprietors with annual turnover not exceeding 1 billion soums. Other entities were transferred 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 readers in London and across Europe, these measures matter because they alter how market entry, compliance and local structuring are judged by exporters, manufacturers, logistics groups and frontier-market investors. A more predictable registration system, lighter licensing burden and more clearly defined tax framework can improve the practical case for commercial engagement. That does not by itself guarantee stronger capital inflows or immediate effects on sterling, but it does shape the background against which UK and EU firms evaluate risk, cost and legal enforceability in Uzbekistan.

The same is true for London market participants watching emerging and frontier economies for long-term allocation themes. The source does not describe an immediate market reaction, and no direct move in sterling is cited. Still, the policy direction it outlines is the kind of structural signal that can influence how European businesses, trade advisers and investors assess Central Asia’s commercial landscape over time. What stands out in Uzbekistan’s case is the breadth of the reform agenda: not a single headline measure, but a decade-long attempt to remake the rules, institutions and administrative systems that underpin private enterprise.