NEWS AND EVENTS
December 29, 2015
JSC with share of foreign investors less than 15% to be converted
On December 21, the President of the Republic of Uzbekistan signed a Decree \"On additional measures to attract foreign investors in joint-stock companies\".
The document was adopted in order to ensure broad involvement of foreign investors and managers in joint stock companies, create conducive environment for their active participation in corporate governance, modernization, technical and technological re-equipment of production, organization of production of quality, competitive products and their promotion in foreign markets, and to radically reduce the state presence in the economy by reducing government assets and shares in authorized capitals of joint stock companies.
The resolution introduced the order, according to which joint-stock companies should have a share of a foreign investor in the authorized capital not less than 15%.
The Cabinet of Ministers of the Republic of Uzbekistan has been instructed in the period up to April 1, 2016 to amend the established by the order proposals on the relevant amendments to the Law of the Republic of Uzbekistan \"On joint-stock companies and protection of shareholders \'rights\" and other legislative and normative-legal acts following from this resolution. Following the above measures, the Cabinet of Ministers will approve the model JSC Charter.
Joint stock companies have also been charged in the term up to 1 July 2016 to ensure the appropriate amendments in their charters and internal regulations, bringing them into compliance with the requirements of the above document.
The document defined:
- previously established joint stock companies with the share of foreign investors in the authorized capital less than 15%, until 1 July 2016 have to implement the requirements of the resolution, except for joint stock companies operating in the production and primary processing of strategic raw materials and natural monopolies and suppliers of socially important goods and services at regulated prices by the lists approved by the Cabinet of Ministers of the Republic of Uzbekistan;
- joint stock companies that do not provide the above terms and conditions, are subject to conversion into other organizational-legal forms with their exclusion from the register of joint stock companies, with all the implications regarding the provision of tax benefits and preferences;
- starting from 1 July 2016, the newly established joint stock company can be formed only with the share of a foreign investor in the authorized capital of not less than 15%, except for the cases provided by decisions of the President of the Republic of Uzbekistan and the Cabinet of Ministers.
According to the resolution, the joint stock companies which a share of foreign investors ranging from 15 to 33% of the share capital, will be able to enjoy tax exemptions on profit, property, for the improvement and development of social infrastructure, unified tax payment and obligatory deductions to the Republican road fund, depending on the share amount of foreign investments.
In addition, according to the resolution, revenues of foreign investors in the form of dividends on shares are exempt from tax for a period up to 1 January 2020.
Joint stock companies with foreign investments are also exempt from payment of state duties for appeals to courts with the claim about violation of their rights and legitimate interests, and their subsequent recovery.