Uzbekistan Moves to Boost Foreign Investment with New Banking Law Amendments

Tashkent, Uzbekistan - In an effort to attract more foreign investment in its banking sector, Uzbekistan has introduced significant changes to its laws governing banks and banking activities. The amendments, signed into law by the President on April 19, 2023, come into effect immediately.

Key Changes

• Increased Minimum Charter Capital Requirement: The minimum charter capital requirement for banks has been increased from 100 billion UZS (approximately USD 8.78 million) to 500 billion UZS (approximately USD 43.9 million) over a five-year period.
• Authority to Set Compliance Timeline: The Central Bank of Uzbekistan has been given the authority to set a different timeline for compliance in cases of bank privatization.

Liberalized Access to Ownership

• Non-Residents Eligible to Own Shares: Restrictions on non-residents holding shares in Uzbek banks have been lifted, provided they meet certain criteria. Non-residents whose ultimate beneficial owners are registered or reside in territories that provide preferential tax treatment and/or do not require disclosure of their identity will now be eligible to own bank shares.
• Exceptions: Direct potential shareholders, including individuals and legal entities, from countries with a preferential tax regime or those that do not require the disclosure of ultimate beneficial ownership remain prohibited from being founders or shareholders of Uzbek banks. This restriction does not apply to non-residents who have acquired shares in an Uzbek bank on a foreign stock market.

Aim to Create Attractive Environment for Foreign Investment

The amendments aim to create a more attractive environment for foreign investment in Uzbekistan’s banking sector, paving the way for increased economic growth and development. By liberalizing access to ownership and increasing the minimum charter capital requirement, Uzbekistan is taking steps to boost foreign investment and drive its economy forward.