Uzbekistan, a country located in Central Asia, is considered one of the developing nations. According to the World Bank, Uzbekistan had a GDP of 69.2 billion US dollars and a GDP per capita of 1,980.2 US dollars as of 2021.
With a total population of approximately 33.5 million, Uzbekistan is known to be a significant producer of gold, oil, and natural gas. The country has taken significant steps to reform its economy, which has led to growth in the private sector, with industries like textiles, machine building, metallurgy, and mining contributing to the country’s GDP.
The country offers tax incentives and streamlines registration processes to encourage entrepreneurship and investment. Setting up a sole proprietorship in Uzbekistan may be a good opportunity for small business owners and entrepreneurs.
Here’s a detailed guide on how you can register a sole proprietorship in Uzbekistan!
Who Can Be a Sole Proprietor in Uzbekistan?
Uzbekistan’s Constitution states that individuals 18 years or older are eligible to register for a sole proprietorship in Uzbekistan. Uzbekistan’s constitution guarantees legal protection to all citizens within and abroad, and foreign citizens are guaranteed certain rights and freedoms while staying within the country’s territory. There are no set restrictions on the nationality of the sole proprietor, and both the citizens of Uzbekistan and foreigners can set up a sole proprietorship in Uzbekistan.
Citizens can carry out business without forming a legal entity as individual entrepreneurs or establishing a legal entity under the legislation. Sole proprietors can carry out business activities after confirmed state registration.
Benefits of Sole Proprietorship in Uzbekistan
Setting up a sole proprietorship in Uzbekistan offers several benefits to entrepreneurs.
- Adaptable business model: One of the greatest advantages of opening a sole proprietorship in Uzbekistan is that it allows citizens, including foreign citizens, to carry out business activities without forming a legal entity as an individual entrepreneur.
- Cost-effective: It is one of the simplest and most cost-effective business forms, making it a popular choice for small businesses and startups.
- Easy business registration: Registering a sole proprietorship in Uzbekistan is easy and fast. The registration process is simple, and the registration cost is relatively low compared to other business entities.
- Complete control: The sole proprietor has complete control over the business, including decision-making, management, and profit-sharing.
- Tax advantages: A sole proprietorship also has a lower tax burden than other forms of business entities. According to the Uzbekistan tax laws, sole proprietors are subject to a simplified tax regime, which means that they pay a fixed tax amount based on the type of activity they engage in.
- Minimal regulatory requirements: Individuals looking to start a sole proprietorship in Uzbekistan are not required to prepare and file annual financial statements or audit reports, reducing the compliance burden.
- Limited liability: The debts and liabilities of a sole proprietorship are individually liable to the owners. As the only owner, however, one might restrict their liability by keeping personal assets distinct from corporate assets.
Documents Required for Registering Your Business in Uzbekistan
To register as a sole proprietor in Uzbekistan, one must complete an application through an automated government registration system – (my.gov.uz / fo.birdarcha.uz). Sole proprietors also need to fill in the Tax Administration form and submit various documents, including:
- Business Stamp
- Bank account information (business)
- A valid tax identification number (TIN)
- Adaptation of the Resolution/ Minutes on Registration
- Articles of Association or Memorandum of Understanding
- Confirmation of address/location (of a physical entity in Uzbekistan)
- Proposed business name, business activities, share par value, and number of employees
Other Criteria for Registering a Sole Proprietorship in Uzbekistan
Some additional criteria to start a sole proprietorship in Uzbekistan include the following:
A foreigner with an investment visa
An investment visa may be granted to shareholders/participants or founders of firms with foreign investments, as well as members of their families, for a duration of three years, which may be extended. Moreover, shareholders, participants, or founders of businesses with foreign assets, and foreigners who’ve already invested at least USD 3 million in Uzbekistan’s production or service industries, are eligible to apply for a sole proprietorship in Uzbekistan.
How to Register a Sole Proprietorship in Uzbekistan?
To register a Sole Proprietorship in Uzbekistan, the following steps need to be followed:
- Choose a business name: The first step is to choose a name for the business. The name should be unique and not already registered by another company in Uzbekistan.
- Obtain necessary licenses and permits: In Uzbekistan, depending on the type of business, licenses and permits may be necessary for operation. For instance, a restaurant may require a food service permit to operate legally.
- Register with the tax authority: After obtaining the necessary licenses and permits, the business owner in Uzbekistan must register with the tax authority by submitting an application and providing all the required documents and information.
- Register with the Statistics Committee: Businesses must also register with the Statistics Committee by submitting an application and providing the necessary documents and information.
- Register with other relevant authorities: To comply with the regulations specific to their industry, some businesses may need to undergo registration with other relevant governmental bodies, such as the Ministry of Health or the Ministry of Education.
Conclusion
The government of Uzbekistan has implemented legal reforms to attract foreign investments and promote economic development, which includes providing expert input to draft investment agreements and negotiating investment deals with various countries. Although setting up a sole proprietorship in Uzbekistan may seem easy, overlooking the finer details of local laws and regulations can be costly. In order to comply with local laws, many companies looking to establish themselves in Uzbekistan turn to EOR platforms.
Multiplier is a global PEO-EOR platform that operates in more than 150 countries. Our strong SaaS-based infrastructure provides an easy and simplified way to manage employees and payroll. With Multiplier, you can rely on them to handle your company’s payroll processing and management if you want to begin or register a sole proprietorship in Cambodia. This approach will enable you to concentrate on core business activities and enhance productivity and efficiency.