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NEWS AND EVENTS
April 13, 2009
DECREE OF THE PRESIDENT OF THE REPUBLIC OF UZBEKISTAN On the establishment of Free Industrial-Economic Zone in Navoi region
In order to create favorable conditions to attract foreign investments, especially direct investments, to organize modern high-tech industries for manufacturing of products that meet world standards and demand in world markets, as well as to development of the industrial opportunities, manufacturing, transportation, transit and social infrastructure in Navoi region :

1. Accept the proposal of the Ministry of Economy, Ministry of Foreign Economic Relations, Investments and Trade, Ministry of Finance of the Republic of Uzbekistan and Municipality of Navoi region on the establishment in the area of Navoi International Airport źNavoi╗ Free Industrial-Economic Zone (hereinafter - FIEZ).

Identify the main activity of economic entities on the territory of źNavoi╗ Free Industrial-Economic Zone manufacturing of a broad spectrum of high technological and competitive in world markets products through application of modern foreign high-performance equipment and technique, technological lines and modules, innovative technologies.

2. To take into consideration that:

- terms of operation of źNavoi╗ Free Industrial-Economic Zone is 30 years with the possibility of further extension for additional period;

- during operation period, within the territory of FIEZ special customs, monetary and fiscal, simplified procedure for entry, stay and departure, as well as obtaining permits to non-resident citizens of the Republic of Uzbekistan to carry out labor activity regimes are applied;

- effectiveness of special legal regime, including fiscal, monetary and customs, applies only to activities carried out by business entities registered by the Directorate of FIEZ exclusively on the territory of FIEZ;

- coordination and operational management of FIEZ is carried out respectively, by the Administrative Council, set up from Government representatives and Directorate of FIEZ. Personal composition of the Administrative Council approved by the Cabinet of Ministers;

- entire territory were źNavoi╗ FIEZ was established, is provided to Administrative Council for use and management for the full existing term of FIEZ;

- Directorate of FIEZ provides business entities with the land parcels on the territory of FIEZ for rent but with ex-rights for sub rent, transferring their rights and obligations under the rent contract to another person, transferring the rent rights to pawn, making them as a contribution to a authorized capital stock. The sale and other alienation of land parcels on the territory of FIEZ is prohibited.

3. Exempt business entities registered in źNavoi╗ FIEZ from paying of land, property, profit, social infrastructure development taxes, as well as unified tax payment (for small businesses), compulsory contributions to the Republican Road Fund and Republican School Fund depending on the volume of invested foreign direct investment:

- in the amount from 3 to 10 million Euros - for 7 years; - from 10 to 30 million Euros - for 10 years. Over the next 5 years the rates of profit and unified taxes payment shall be fixed at 50 percent level below current rates;

- more than 30 million Euros - for 15 years. Over the next 10 years the rates of profit and unified taxes payment shall be fixed at 50 percent level below current rates.

4. Set up the procedure were business entities registered in FIEZ are exempted from paying customs duties (excluding charges for customs clearance) for equipment, raw materials and components imported for the production of export oriented goods for the full existing term of FIEZ.

Determine that for raw materials and components, imported for manufacturing of goods to be sold in Uzbekistan market customs duties are levied at the rate of 50 percent of the existing rates (excluding charges for customs clearance) with prolonging their payment terms up to 180 days if more favorable treatment does not established by national law.

In the event of sale or donation of equipment, raw materials and components being imported into the territory of FIEZ with the use of aforesaid exemptions, customs duties shall be fully charged for the Budget in accordance with the procedure established by national legislation.

5. Allow business entities, registered within FIEZ: - exercise payments in foreign currencies within FIEZ in accordance with the agreements and contracts concluded between them;

- pay in freely-convertible currency the supply of goods, works and services performed by the business entities - residents of the Republic of Uzbekistan;

- apply convenient terms and forms of payments for exported and imported goods.

6. Determine that acts of tax legislation (with exception of acts governing the taxation of excise goods), exacerbating taxpayers situation shall not applied towards business entities, registered in FIEZ.

7. Municipality of Navoi region together with State Committee on land resources, geodesy, cartography and state cadastre, State Architect-construction Committee, the Ministry of Foreign Economic Relations, Investments and Trade of the Republic of Uzbekistan, other concerned ministries, agencies and business associations shall:

- within two weeks to submit to the Cabinet of Ministers proposals on the area of land needed to accommodate FIEZ, with a clear definition of its borders;

- within one month after selection of land to allotter of the area of land for establishing FIEZ with necessary cadastral clearance and providing it to Administrative Council for using and managing for the functioning period of FIEZ;

- until 1st of March, 2009 developing and submitting for approval to the Cabinet of Ministers a preliminary building up plan of the specified land area, including of establishment of necessary engineering communications and service entities;

- until 1st of January, 2010 approving the General Layout of FIEZ and necessary project design estimates.

8. The Cabinet of Ministers of the Republic of Uzbekistan shall:

- with one month to approve Regulations of the źNavoi╗ Free Industrial-Economic Zone and passing decrees on measures for organizing its activity;

- until 1st of January, 2009 to establish the Administrative Council of FIEZ for efficient management and implementation of Government regulation of FIEZ in Navoi Region;

- within the three months ensuring the measures for working out and adoption of regulations governing the operation of the FIEZ, according to the Annex to this Decree.

9. Granting to the Administrative Council of FIEZ the rights:

- to select in coordination with the Cabinet of Ministers the internationally recognized management company as Directorate of FIEZ in order to transfer for this company management rights of FIEZ on a contracting basis;

- to establish an independent budget of FIEZ compiled by the proceeds from providing services and other unprohibited earnings, and, in consultation with the Ministry of Finance of the Republic of Uzbekistan, part of income coming from land, buildings rents in its use and management;

- to establish within the independent budget Development Fund of FIEZ devoted to infrastructure development and improving of effectiveness of functioning of a Free Industrial-Economic Zone.

10. Ministry of Economy, Ministry of Finance, Uzbekistan Fund for Reconstruction and Development in the formation of Investment programs to provide funds when it is necessary to create a manufacturing infrastructure of FIEZ in accordance with the approved General plan of development of FIEZ and the project estimates.

11. The Ministry of Foreign Economic Relations, Investments and Trade jointly with the Ministry of Economy, Ministry of Justice and other concerned ministries and departments within one month submit to the Cabinet of Ministers proposals on changes and necessary additions to be made in legislation arising from this Decree.

12. Control over the implementation of this decree to entrust to the Prime Minister of the Republic of Uzbekistan Mirziyoev Sh.M.



President

of the Republic of Uzbekistan

I.Karimov



2 December 2008, Tashkent


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