2017 currency liberalisation

Uzbekistan conducted a significant currency liberalisation in September 2017 — unifying the official and black-market exchange rates and introducing current account convertibility for the Uzbek som (UZS). Since 2017, foreign investors may freely convert UZS into freely convertible currency and repatriate investment income through the banking system. This reform was a watershed for foreign investment in Uzbekistan — eliminating the currency convertibility risk that had previously deterred many international investors. Residual currency control obligations remain — Bond Stone advises on current compliance requirements.

Statutory repatriation right — Law No. ZRU-598

EFI status entities have a statutory right under the Law on Investments and Investment Activity No. ZRU-598 to freely transfer abroad: dividends and other income from investments; amounts received from the sale or partial sale of investments; and compensation received in connection with expropriation or nationalisation. This right is exercised after payment of applicable Uzbek taxes. The right is reinforced by Uzbekistan’s BIT network — most of Uzbekistan’s 50+ BITs contain explicit free transfer of funds guarantees.

Dividend repatriation procedure

The dividend repatriation procedure in Uzbekistan requires: a participants’ meeting resolution distributing profits; calculation and withholding of dividend withholding tax (10% standard rate under Uzbek domestic law — subject to DTT reduction); and transfer of the net dividend to the foreign shareholder’s bank account abroad through an Uzbek bank. Bond Stone advises on the procedural requirements, tax optimisation, and documentation for compliant dividend repatriation.

Withholding tax and DTT relief

Dividend payments from an Uzbek entity to a foreign shareholder are subject to 10% withholding tax under Uzbek domestic law. Uzbekistan has concluded double taxation treaties with numerous states — including China, Germany, France, Russia, UAE, and UK — which reduce the applicable withholding tax rate on dividends for qualifying shareholders. Bond Stone advises on DTT eligibility analysis as part of every investment structuring mandate.

Intercompany transactions — transfer pricing

Intercompany transactions between an Uzbek subsidiary and its foreign parent — including service fees, management fees, royalties, and intercompany loans — are subject to Uzbek transfer pricing rules. The arm’s length principle applies. Deductibility of related-party payments is limited where transactions are not at arm’s length. Bond Stone advises on structuring intercompany transactions to comply with Uzbek transfer pricing requirements while achieving commercial objectives.

Dividend Repatriation — Chinese Parent

Repatriation · Uzbekistan · China

Advising a Chinese parent company on dividend repatriation from an Uzbek subsidiary — China-Uzbekistan DTT withholding tax rate, beneficial ownership analysis, participants’ meeting resolution, and bank transfer procedure.

UZS Conversion — Currency Compliance

Repatriation · Uzbekistan · Currency

Advising a foreign investor on UZS to USD conversion for profit repatriation — 2017 liberalisation framework, current account convertibility, residual control obligations, and bank documentation requirements.

DTT Analysis — European Investor

Repatriation · Uzbekistan · Tax

Advising a European investor on applicable double taxation treaty rates for dividend repatriation from Uzbekistan — beneficial ownership requirements, treaty documentation, and withholding tax optimisation.

Management Fee Structure — Transfer Pricing

Repatriation · Uzbekistan · Corporate

Advising on structuring management fee payments from an Uzbek subsidiary to its foreign parent — arm’s length analysis, transfer pricing documentation, deductibility assessment, and withholding tax on service fee payments.

EFI Repatriation Right — Investment Protection

Repatriation · Uzbekistan · EFI

Advising an EFI status investor on the scope of the statutory repatriation right under Law No. ZRU-598 — analysis of covered payment categories, BIT free transfer guarantee complement, and documentation for repatriation.

Royalty Repatriation — Technology Licence

Repatriation · Uzbekistan · Technology

Advising on repatriation of royalty payments from an Uzbek licensee to a foreign licensor — withholding tax treaty analysis, transfer pricing compliance, and currency control documentation.