Uzbekistan works a lot on the creation of a favorable business environment for the effective development of small business and private entrepreneurship. Special attention is paid to the export potential of domestic enterprises.

Today, the country is implementing a number of programs aimed at technological modernization, improvement of product quality, increasing competitiveness of local manufacturers in the world markets. In addition, the government continues to simplify registration procedures for exports, as well as to lower fees for these services.

There are special departments working to assist exporters, particularly small businesses, in matters of standardization and certification of products, promotion in foreign markets.

As a result of these measures only for the first half of this year, exports of goods and services by small businesses and private enterprises realized more than $1 billion, or a 14.1% rise vis-à-vis the same period of 2011.

One of the most important legal documents in support of exporters was the decree of the President of Uzbekistan on additional measures to promote exporting enterprises and expand exports of competitive products.

Since April 1, 2012, this document exempted exporting companies from the mandatory sale of foreign exchange earnings to the authorized banks, directed by current payments on principal repayment of foreign currency loans for new construction, modernization and technological upgrading of existing facilities, until full payment of the principal.

Moreover, the domestic manufacturers are granted the right to participate in international tenders on projects executed in Uzbekistan by means of the international financial institutions, donors, foreign governments, and other non-residents on equal terms with foreign participants, including with subsequent conclusion of contracts in foreign currency for the supply of manufactured goods, works and services. They can enter into contracts with non-residents in foreign currency under the direct contracts for the supply of their own goods and provided for the use within the republic.

In this case, these contracts equal the export contracts, with the registration only in the authorized bank and granted tax incentives applicable for exporters.

To stimulate and increase exports, Uzbekistan has created a system of tax credits and incentives for exporters. For example, sale of excisable goods for export by their producers is not subject to the excise tax, except for certain types of excisable goods, defined by the Cabinet of Ministers. Foreign currency raised from exports is subject to VAT at the zero rate.

Income and property tax rate for exporting enterprises is reduced depending on the share of exports of goods and services of their own production for hard currency in total sales: export share between 15%-30% reduce tax by 30%, 30% or more exports drop the tax rate by 50%. Single tax payment for micro and small enterprises decreases in the same differential. In addition, micro-firms and small businesses are exempt from the mandatory sale of 50% of foreign exchange earnings coming from exports of goods (works, services) of their own production. This allows them to retain foreign currency at their disposal and direct them toward development of production capacities.

Further impetus to the development of the export potential of the textile industry was given by the rule that until January 1, 2016 the textile industry of the country, selling more than 80% of their products and semi-finished products for hard currency, are exempt from paying property tax. An additional incentive for the participation of enterprises in exports was the abolition of export duties on all products and the licensing of exports of goods, except for specific ones. Since August 2011, the parliament approved the new rates of customs clearance fees paid during the export of goods, which now are twice as less then the previous rates.

Much attention is paid to the enterprises with foreign investment engaged in export-import deals. Thus, companies with foreign investments can themselves run export-import business in compliance with the law of Uzbekistan. Besides exports of their own products are not subject to licensing and quotas.

Also, this category of business entities has the right, without a license, to import products for their own production needs in accordance with the laws of the Republic of Uzbekistan. (Source: Uzbekistan Today newspaper)