Uzbekistan Introduces Changes to Banking Law to Attract Foreign Investments
New Law Aims to Boost Economic Growth through Increased Foreign Investment
Tashkent, Uzbekistan - On April 19, the President of Uzbekistan signed a new law aimed at attracting more foreign investments into the country’s banking sector. The amended law introduces significant changes to the minimum charter capital requirement for banks and allows non-residents to own shares in banks.
Key Provisions of the New Law
- Increased Minimum Charter Capital: The minimum charter capital requirement for banks has been increased from 100 billion UZS (approximately USD 8.78 million) to 500 billion UZS (around USD 43.9 million).
- The increase will be phased in, with different deadlines set for each level of increase:
- By September 1, 2023: Minimum charter capital of 100 billion UZS
- By March 31, 2024: Minimum charter capital of 200 billion UZS
- By December 31, 2025: Minimum charter capital of 350 billion UZS
- From January 1, 2025 onwards: Minimum charter capital of at least 500 billion UZS
- The increase will be phased in, with different deadlines set for each level of increase:
- Foreign Ownership of Bank Shares: The new law allows non-residents of Uzbekistan to own shares in banks.
- However, individuals and companies from countries that provide preferential tax treatment or do not require disclosure of ultimate beneficial owners will be prohibited from being founders or shareholders of a Uzbek bank unless they have procured shares through a foreign stock market.
Impact on the Banking Sector
The new law is expected to make the banking sector in Uzbekistan more attractive to foreign investors, which could lead to economic growth and development. By increasing the minimum charter capital requirement and allowing non-residents to own shares in banks, the government aims to attract more foreign investments into the sector.
Conclusion
The introduction of these changes to the banking law is a significant step towards making Uzbekistan’s banking sector more attractive to foreign investors. With its strategic location and growing economy, Uzbekistan has the potential to become a major player in the region’s financial markets.