Most of Uzbek cotton-processing factories will not attract foreign investment

cotton-spinning_factories-7a3

TASHKENT (TCA) — Foreign investments will not be attracted into charter capitals of 93 cotton-processing factories in Uzbekistan, Novosti Uzbekistana news agency reported.  

In line with the Uzbek Government decree of 10 February 2016, 93 cotton-processing factories have been included in the list of 262 companies that are not subject to the President of Uzbekistan’s decree that requires that joint stock companies in Uzbekistan must ensure that at least 15 percent of their charter capital to belong to foreign investors.

Uzbekistan in the near future plans to reduce the state share in 28 cotton-processing factories down to 51 percent.

In accordance with the President of Uzbekistan’s decree of December 21, 2015, joint stock companies in Uzbekistan must ensure that at least 15 percent of their authorized capital to belong to foreign investors.

The decision was aimed at “wider attraction of foreign investors and managers to joint stock companies, creation of favorable conditions for their active participation in corporate management, modernization and technological re-equipment of production, organization of production of quality and competitive products and their sale in foreign markets, as well as drastic reduction of the state’s presence in the economy by reducing state assets and stakes in the charter capital of joint stock companies”.    

Joint stock companies must fulfill the President’s order before 1 July 2016; otherwise they will be excluded from the Register of joint stock companies and deprived of tax preferences.  

The requirement to have foreign investors’ stake in the charter capital does not apply to joint stock companies engaged in the production and primary processing of strategic raw materials, as well as natural monopolies and suppliers of socially-significant goods and services at regulated prices.   

According to the decree, joint stock companies with foreign investors’ stakes between 15 and 33 percent of the charter capital will enjoy preferences on profit, property and other taxes.

Foreign investors’ dividends on their shares in Uzbek joint stock companies will be exempted from taxes until 1 January 2020.

Sergey Kwan

TCA