Tashkent, Uzbekistan (UzDaily.com) — Today, on 20 August, an open dialogue between the President of the Republic of Uzbekistan and entrepreneurs took place in Nukus.

This dialogue, which has become a tradition in recent years, is a much-anticipated event for entrepreneurs, serving as an effective platform for addressing systemic issues in the sector, discussing proposals, and creating new incentives.

It can be said that this time the open dialogue continued throughout the year. The President himself, as well as the Prime Minister, his deputies, ministers, khokims, the head of the Chamber of Commerce and Industry, and the Business Ombudsman, maintained constant contact with entrepreneurs.

As a result of this interaction, more than 700 questions, initiatives, and new projects proposed by entrepreneurs were supported, and an additional 8 trillion soums were allocated. Moreover, another 18 trillion soums were directed towards the development of industry, agriculture, services, and business infrastructure. The most significant achievement has been the establishment of a new support system ranging from small projects in mahallas to megaprojects.

In the past, 60% of new entrepreneurs ceased operations in their first year due to problems with loans, finding markets, infrastructure, and endless inspections. Currently, the share of enterprises operating for more than three years has reached 76%, with the number of such businesses reaching 300,000 for the first time. This also applies to 100,000 individual entrepreneurs.

This year alone, the turnover of entrepreneurs increased by 25% compared to the previous year, reaching 986 trillion soums. The number of medium-sized enterprises with an annual turnover of 10 to 100 billion soums has doubled, and the number of large enterprises with a turnover of more than 100 billion soums has exceeded 2,200, twice as many as last year.

Thanks to the fact that tax, banking, financial, and economic systems work in the context of mahallas and clients, 16,000 previously unprofitable enterprises have generated 6.5 trillion soums in profits over six months.

To date, the number of enterprises with more than 100 employees has approached 3,000, and the number of jobs in them has increased by 440,000 over the year. In the private sector, more than 1 million workers receive salaries of over 5 million soums, of which 370,000 earn over 10 million soums. This indicates that entrepreneurs are moving out of the shadows, transitioning to legal activities, and engaging in healthy competition.

Another example is that in the entrepreneurship rating, the number of enterprises in categories "A" and "B" increased by 91,000, while 170,000 enterprises were excluded from the lowest category "D." As a result, tax inspections have halved compared to last year. During this period, the tax payments from large taxpayers increased by 10%, regional-level enterprises by 25%, and district-level businesses by 40%. This is the result of a change in the working style of tax authorities and the liberalization of business practices.

Relations with neighboring countries have reached an unprecedented level. Uzbekistan has already become a significant market for both local enterprises and foreign companies, as well as an industrial hub in the region.

Recently, the country’s gross domestic product exceeded US$100 billion for the first time. In the first six months of this year, the volume of direct foreign investments doubled compared to the previous year, reaching US$14 billion. Such figures have never been seen in the entire 33-year history of independent development.

— All this is the result of reforms initiated eight years ago, based on mutual trust, working side by side with entrepreneurs, and continuous dialogue. We still have many opportunities. Most importantly, we have patriotic and dedicated entrepreneurs like you who can realize them, said Shavkat Mirziyoyev.

The head of state announced new initiatives in five areas.

First Direction — Increasing Financial Resources for Small and Medium Enterprises

First and foremost, all banks and microfinance organizations will now be able to participate in supporting small and medium-sized businesses. The size of microloans will be tripled, reaching up to 300 million soums, and no collateral will be required for loans up to 100 million soums.

Additionally, "Microcreditbank," through its microfinance organizations, will attract another 1 trillion soums by the end of the year. It will also become possible to create microfinance banks with a charter capital of no less than 50 billion soums.

Further, additional opportunities will be created for microfinance organizations: entrepreneurs will be allowed to provide services in foreign currency and operate as a payment organization based on a license.

Thirdly, according to the decree of the President of Uzbekistan dated August 12 of this year, factoring organizations will now have wide-ranging opportunities. They will be able to serve clients in foreign currency. An electronic platform will be launched where entrepreneurs can choose the financial product that suits them best.

Overall, thanks to the popularization of factoring, entrepreneurs will have access to 20 trillion soums for working capital, and exporting enterprises will gain an additional 1 billion dollars in financial resources.

Fourthly, a law on Islamic finance will be developed. This will facilitate the provision of new financial services, attract more investors, and create additional resources amounting to 5 billion dollars.

Fifthly, the practice of transferring funds attracted by the state to large enterprises will be gradually phased out. The allocation of such funds will be reduced by at least 40% within two years. As a result, banks will direct at least 30 trillion soums to private businesses.

Second Direction — Providing Businesses with Infrastructure, Land, and Energy

Two thousand inquiries received during the open dialogue were related to land and infrastructure. The cost of acquiring land for new investment projects has risen sharply.

As a result, when an entrepreneur purchases land at auction, value-added tax (VAT) will no longer be charged. In Tashkent and regional centers, it will be allowed to pay for acquired land in installments for up to three years, in other regions — up to five years, and in districts of the 4th and 5th categories — up to ten years.

Secondly, when allocating new land, the deadlines from building design to project completion will be specified.

Thirdly, for each plot of land, it will be clearly determined what types of activities can replace the main activity, and what auxiliary structures can be placed. For this purpose, a unified classifier of land plots and capital construction objects will be introduced from January 1.

Fourthly, restrictions on electricity and natural gas for industrial enterprises will be reduced. The base tariff will remain unchanged, even if electricity and gas consumption exceeds the limit by 20%. If the limit is exceeded by more than 20%, the tariff for the excess portion will increase by 20%. Also, the payment for utilities will not be suspended even in the presence of an encashment order.

Third Direction — Creating a Level Playing Field in the Domestic Market and Expanding Opportunities for Access to Foreign Markets

To this end, the process of joining the World Trade Organization will continue, and competition will be developed. Exclusive rights in the metallurgical, chemical, energy, and telecommunications industries have already been abolished.

From now on, the price preference for products purchased for production will be eliminated during corporate procurement. No one, whether a state-owned strategic enterprise, a private enterprise, or a foreign investor, will have special rights — everyone will operate under equal economic conditions.

Secondly, of the funds allocated for the development of industries, 200 million dollars will be directed towards pre-export financing. Of these, 50 million dollars will be provided as guarantees for bank loans. Thanks to these funds, an additional 1 billion dollars worth of products will be exported within a year.

Thirdly, the "E-logistics" platform for cargo transportation will be launched, allowing exporters to see which enterprise has how many transportation permits and to conclude direct contracts.

Fourthly, when importing equipment and components, no debt will accrue if the contract term is not violated. From now on, the electronic certificate from the customs authority confirming the export will be sufficient grounds for VAT refunds, and no other unnecessary documents will be required.

Fifthly, cooperation between exporting enterprises and our compatriots with extensive business experience abroad will be expanded.

Sixthly, the share of domestic products in state procurement will be stimulated to increase. In particular, large enterprises in the energy, oil and gas, chemical, metallurgical, and railway sectors will place orders for 2-3 years on the cooperation portal. Local enterprises will establish the production of new types of products based on these orders. Initially, 100 million dollars will be allocated for their projects.

Seventhly, the private sector will be involved in managing regional power grids. In particular, a tender will be announced in October to attract a private operator to the power grid of the Samarkand region. Next year, similar work will be carried out in the Jizzakh and Syrdarya regions.

Eighthly, by the end of the year, 300 more deposits and sites with mineral resources will be offered to entrepreneurs. Additionally, 172 deposits with reserves of 110 million cubic meters will be allocated to meet the demand for sand and gravel.

Fourth Direction — Giving a New Impetus to the Service Sector

In Uzbekistan, 52% of the employed population works in the service sector. Now, artificial intelligence technologies will be widely implemented across all areas. An Artificial Intelligence Center will be established in the IT Park, with US$50 million allocated to finance projects.

Secondly, an ecosystem to support startup projects will be created. Venture funds will be set up for this purpose. Additionally, the government will provide one dollar of resources for every dollar of investment that a startup attracts from abroad. Expenses such as patenting startup developments and registering trademarks will be covered by the state.

Thirdly, to localize services, 3,000 specialists will be sent for training at production companies in Germany, Japan, South Korea, China, and Turkey within a year. A program will be developed to increase the participation of local enterprises in the service maintenance of large companies.

Fourthly, starting from January 1, part of the value-added tax (VAT) for catering businesses will be refunded to the entrepreneur in the form of cashback. The profit tax for restaurants and cafes that switch to paying such a tax will be reduced by half.

Moreover, from 1 December, no documents will be required for the purchase of agricultural products in cash by these businesses. Restaurants and cafes will be able to hire workers under short-term, simplified labor contracts.

Fifthly, from 1 October, the "Shaffof Qurilish" system, similar to the Entrepreneurship Rating, will be managed by entrepreneurs themselves. The functions of consulting centers will be fully transferred to the private sector.

Fifth Direction — Further Reduction of Barriers and Obstacles for Businesses

Firstly, to eliminate barriers for entrepreneurship, a registry of criteria that pose a real threat to the life and health of the population will be developed. Officials who suspend a business based on a criterion not listed in the registry will be held accountable.

Secondly, the criminal liability of entrepreneurs will be further liberalized.

Thirdly, from now on, in case of delays in loan repayments, the current market value of the collateral will be determined before the collateralized property is put up for auction. If the unpaid debt is less than 15% of the collateral’s value, the property will not be seized. The bank will allow the client to repay the debt from another source.

Fourthly, proceeds from land sales will now primarily be used to repay entrepreneurs’ debts for building demolitions.

The President emphasized that this year’s open dialogue is being held specifically in Karakalpakstan and noted the advantages of doing business here. More than 50 benefits are provided to businesses in Karakalpakstan, which are not available in any other region. A simple land allocation system has been implemented in Karakalpakstan, and the region is well-positioned for access to larger markets.

It was noted that to effectively utilize these opportunities, the "Do Business in Karakalpakstan" program will be adopted.

The event continued in the form of an open dialogue. Entrepreneurs from central and regional studios, as well as compatriots conducting business abroad, expressed their opinions. Problems were discussed, and proposals were supported.