Clare Nuttall in Almaty
April 12, 2012
Foreign investors in Uzbekistan are to receive additional tax breaks and a promise that the government will refrain from interfering in their businesses, under a new presidential decree.
The edict "On additional measures to stimulate foreign direct investments" was signed by President Islam Karimov on April 10, and published on the government's website on April 11. It appears to be an attempt by the Uzbek government to reverse some of the damage done to the country's reputation as an investor destination in recent years.
While some enterprises - notably US-Uzbek joint venture GM Uzbekistan - have proved notable successes, other investors have withdrawn after struggling to deal with state bureaucracy, acquisitive tax officials and other bureaucrats, and the long-standing problem of currency convertibility. Oxus Gold left last year complaining that it was being forced out by JV partners Goskomgeology and Navoi Mining & Metallurgical Combinat, both of which are owned by the government..
According to government data, Uzbekistan is attracting over $3bn in foreign investments each year - over one quarter of total investment in the country. There are currently around 4,200 Uzbek enterprises that have received foreign investment.