The President of Uzbekistan has signed a decree titled «On measures to support large urban development projects with a high multiplier effect in New Tashkent and the regions». The Ministry of Justice said the document is intended to provide comprehensive support for major construction projects worth $50 million or more, improve the country’s investment appeal and strengthen its tourism potential. On designated territories listed in an annex to the decree, the authorities will introduce a special legal framework described as a regulatory sandbox for large construction investments.
Key Takeaways: Projects worth at least $50 million will pay a 1% profit tax on income from leasing and selling project facilities; the incentive period is five years for $50 million, 10 years for $100 million and 15 years for $500 million. Legal entities will be exempt from property and land taxes for 20 years, certain services purchased from foreign contractors and designers will be exempt from VAT, and reinvested dividends will be tax-exempt until January 1, 2040.
The decree is built around the principle of «the state as an investment partner». For investors, the package is meant to reduce the tax burden and offer more predictable conditions for long-term construction projects. The authorities expect the measures to accelerate the launch of large facilities, improve confidence in the construction sector and attract more capital to New Tashkent and the regions. However, the practical effect will depend on how quickly the annex territories, selection criteria and administrative procedures are clarified in secondary legislation.
The tax terms are set out in detail. Legal entities implementing urban development projects under the special framework will pay profit tax at 1% on income received from leasing and selling project facilities. The larger the direct investment, the longer the benefit: five years for at least $50 million, 10 years for at least $100 million and 15 years for at least $500 million. Properties used in projects with investments of at least $50 million will be exempt from property tax and land tax for 20 years. The general contractor and general design organization will be allowed to buy certain services from foreign individuals and legal entities not operating in Uzbekistan without VAT.
A separate incentive covers dividends. Income received by investors or project initiators in the form of dividends will be exempt from taxation until January 1, 2040, provided the funds are reinvested in Uzbekistan. The measure is designed to encourage investors to return profits into the domestic economy rather than withdraw them. Analysts are likely to watch whether the package is matched by transparent project selection, ready infrastructure and clear land allocation rules, since tax benefits alone may not guarantee faster construction or stronger investor confidence.
The next step is to define the exact list of special territories, the criteria for selecting projects and the procedures for applying the incentives. Relevant agencies are expected to issue guidance for investors and establish monitoring of the decree’s implementation. The progress of major projects in New Tashkent and the regions will serve as a medium-term signal for Uzbekistan’s construction market, employment and tourism infrastructure.
Source: uznews.uz