Explanations for foreign investors on participation in privatization the enterprises of Uzbekistan

Investment cooperation with foreign partners provides their participation in privatization the enterprises and objects of Uzbekistan in way: 

• participations on the tenders on realization of not control share holdings of the enterprises by the decision of the State tender commission;
• participations at the exchange tenders of the Republican Stock Exchange "Toshkent" (for purchase of share holdings) and the Republican Real Estate Exchange (for purchase of objects of the real estate and shares in authorized funds of societies with limited liability).
• establishment the enterprises with foreign investments with individual share of the foreign companies.

1. Share holdings and the enterprises entirely, subject for the sale by individual projects, are realized by means of organization of the international tenders which spent by the State commission on tendering at realization of the state property to foreign investors (State Customs Committee) which makes a decision for sale of this or that object.

The practical organization of work of the State Customs Committee is realized the labour body in the person of the State Property Committee of the Republic of Uzbekistan (SPC).

For the announce the tender at first confirm the documentation, conditions of the tender and an initial price of the object. Further advertise the tender for 2 months period, during which accept the offers from investors of redemption the object of the tender. In the presence of two and more tender offers SPC together with a corresponding Complex of the Cabinet Ministers, consider their conformity to the conditions for the tender, carries out an expert estimation with a view of selection and submit for consideration to the State Customs Committee for decision-making on the statement the winner of the tender to sale the object to investor. At presence of the only thing or absence the offers, to the State Customs Committee bring the question on decision-making on opening the available unique offer with carrying out of direct negotiations - in case of its conformity to the conditions of tender, or realization of individual search of the investors.

Conditions of realization of the state property to foreign investors besides investors payment of redemption payment, as a rule, include acceptance by the investor of additional investment obligations as money resources for updating a working capital and financial improvement, and also deliveries of the modern process equipment in an effort of modernization, renovation manufactures of the privatized enterprise. The right to make a decision also is given to the State Customs Committee on re-structuring saved up before sale of the enterprise of duties to the budget and the state enterprises, including delay of theirs payments. To the investor which getting not control share holding and bringing significant investment into the enterprise, by the decision of the State Customs Committee could be given the opportunity to receive the stayed state share holding into the confidential management.

По проектам приватизации предприятий, имеющих стратегическое значение, как правило, издаются отдельные правительственные решения, предусматривающие льготы, гарантии и преференции для иностранного инвестора.  Under the projects of privatization of the enterprises having strategic value, as a rule, the separate governmental decisions providing privileges, guarantees and preferences for the foreign investor are issued.

2. The decision for sale to the foreign investors of share holdings (contribution) or the objects exposed for sale on exchange and out exchange tenders, is accepted SPC by the edition of the corresponding order on exhibiting object to the tenders. The mechanism of purchase of the state actives and objects in the exchange market includes realization:

• share holdings on the tenders of Republican stock exchange "Toshkent";
• objects of the real estate and shares of authorized capitals of societies with limited liability
• on the tenders of the Republican real estate exchange.

The following circuit operates at purchasing of shares of the privatized enterprises on the share market:

• the foreign investor has the right to make transactions with securities only as the buyer;
• for fulfillment of the transaction (purchase of securities) the foreign investor should conclude the contract the assignment with broker firm on purchase of the specified kinds of securities;
• on the basis of the contract of the assignment the broker opens to the client the trading account of the client and account-depot of the client on the second level of depositary.

For purchase the securities the foreign investor preliminary deposits 30 % from the sum of the transaction on the special currency account of State Property Committee of the Republic of Uzbekistan. Term of payment of the other sum of the perfect transaction makes 15 bank days.

At the sale of the state objects of the real estate and a share in authorized funds of societies with limited liability, the object is exposed on the auction or exchange tenders on the basis of the SPC order or its territorial department. 15 days prior to exhibiting object to the tenders, SPC sale agent - investment firm "Davinkom" publishes the information in mass-media about object and gives to Republican real estate exchange the application of exhibiting the given object to the exchange tenders. In turn Republican real-estate exchange also publishes the information in mass-media about exposed object and brings it to the exchange tenders listing. In case of sale the object, on the basis of the tender report make the contract between brokers and register in Republican real estate exchange. After payment of commission gathering the documents concerning to the contract, transfer to SPC or its territorial department for making the contract of sale and purchase between the buyer and the seller.

At absence of the demand of buyers during certain time for the objects exposed on the exchange tenders, apply the mechanism of step-by-step decrease of the initial price of sale.

3. Attraction the foreign capital to the enterprises of Uzbekistan also can be carried out by formation of the enterprise with foreign investments with the state share in the authorized fund by creation of the new legal person when the existing enterprises unite the capital with foreign partners. On creation of the enterprises with foreign investments the founder - the legal person of the Republic of Uzbekistan (the state enterprise), having intention to transfer the state property in authorized fund of the enterprises with foreign investments, invites experts of SPC for the negotiating. By the results of the negotiations the founder - the state enterprise together with foreign partners prepares constituent documents of the enterprise with foreign investments.  The decision is accepted by bodies of SPC when due hereunder of representation by founders of the corresponding documents.

On positive decision of SPC transfer of the state property to the authorized fund of the enterprises with foreign investments is made out by the order of SPC.