With a view of the further improvement of an investment climate in the country, wide attraction of private direct foreign investments for realization the privatization programs, modernization, technical re-equipment and reconstruction of enterprises, creation of new workplaces in labour-redundant regions of the country, as well as maintenance of a reliable legal protection and guarantees for foreign investors:
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Exempt, starting from July 1, 2005 enterprises of sectors of the economy, attracting direct private foreign investments, from income tax, property tax, tax on development of a social infrastructure and an accomplishment of territories, ecology tax, single tax for micro-firms and small enterprises, and compulsory payments to the Republican Road Fund.
Determine that tax privileges, stated above, are given with condition of making direct private foreign investments at following volume and periods:
- from $300, 000 up to $3, 000, 000 - for the period of 3 years;
- from over $3, 000, 000 up to - for the period of 5 years;
- over $10, 000, 000 - for the period of 7 years.
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Establish that the tax privileges, stated in paragraph 1 of this Decree, are applied under following conditions:
location of the mentioned enterprises in such labour-redundant regions as the Republic of Karakalpakstan, Jizzakh, Kashkadarya, Syrdarya, Surkhandarya, Khorezm regions, as well as in rural areas of Navoi, Andizhan, Namangan and Ferghana regions;
making private direct investments by foreign investors without granting a guarantee of the Republic of Uzbekistan;
the share of foreign participants must not be less than 50 per cent of the authorized capital of the enterprise;
making private direct foreign investments after the state registration of the mentioned enterprises;
foreign investments must be in hard currency or in the form of new modern process equipment;
direction of income, received as a result of using above mentioned privileges during the period of their application, to re-investment with the purpose of the further development of the enterprise.
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Entrust the Interdepartmental Council on Foreign Investments and Credits Issues at the Cabinet of Ministers of the Republic of Uzbekistan with a function on definition of conformity of the enterprises, in which direct private foreign investments are involved, to the branches of economy specified in the appendix to the present Decree.
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Establish that:
interests under the long-term loans, involved by the enterprises with foreign investments without a guarantee of the Republic of Uzbekistan, are not included in taxable base at calculation of the income tax;
losses from the primary activity, arising in newly created enterprises with foreign investments, are postponed for up to 5 years by equal shares, for its repayment at the expense of taxable income, within years following the accounting period in which the loss has been received;
at deterioration of conditions of investment by the subsequent legislation, the privileges given as in the paragraph 1 of the present Decree, are valid during all period on which they are given.
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In case of the shutdown of the enterprise, which received privileges stated in paragraph 1 of the present Decree, one year earlier than the date of expiry of given privileges, repatriation of the profit and export of the capital of the foreign investor abroad is carried out only after compensation of the sums of given privileges to the budget.
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Entrust the Ministry of Finance together with the State Tax Committee, the Ministry of Economy, Chamber of Commerce and Industry of the Republic of Uzbekistan within a month to develop and ratify Regulations on the order of implementation of tax privileges for the direct private foreign investments established by the present Decree.
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Take into consideration that the guarantees, established for foreign investors by a part four of article 3 of the Law of Republic Uzbekistan "On guarantees and measures of protection of rights of foreign investors ", are applied in following cases:
increase in the rate of tax on incomes, received as dividends, paid to the foreign investor;
introduction of additional requirements that complicate procedure of repatriation or reduce the size of foreign investor's income (profit), being transferred abroad, except for the cases, when the state stops repatriation of cash of foreign investor on conditions of non-discriminative implementation of legislation acts in case of insolvency and bankruptcy of the enterprise with foreign investments or protection of the rights of creditors, criminal acts or the administrative offences accomplished by the foreign investor - the physical person, or other cases demanding necessity of stoppage of such repatriation according to judicial or the arbitral decision;
introduction of quantitative restrictions to volumes of investments and other additional requirements to the size of investments, including in form of increase in the minimal volume of foreign investments in the enterprises with foreign investments;
introduction of restrictions on share of the foreign investor in authorized capitals of the enterprises of the country;
introduction of additional procedures of registration and prolongation of visas of foreign investors, as well as other additional requirements on making foreign investments.
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Entrust the Cabinet of Ministers of the Republic of Uzbekistan within 10 days to ratify Regulations on the order of implementation of the guarantee, established by part four of the article 3 of the Law of the Republic of Uzbekistan "On guarantees and measures of protection of the rights of foreign investors ".
Envisage, that at approach of any of the above-mentioned kinds of deterioration of conditions of investment, the foreign investor should notify the corresponding authorized body on application of the specified guarantee.
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Entrust the Ministry of Justice of the Republic of Uzbekistan together with the interested ministries and departments within a month to submit to the Cabinet of Ministers proposals on amendments and additions to the legislation acts propceeding from the present Decree.
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Assign the first deputy of the Prime Minister of the Republic of Uzbekistan Azimov R.S. to control over implementation of the present Decree.
Foreign investment 
