Financial Crime World

Uzbekistan Liberalises Access to Bank Ownership by Non-Residents

Uzbekistan Introduces Amendments to Banks’ Capitalisation Requirements

In a move aimed at further attracting foreign investments in the country’s banking sector, Uzbekistan has introduced amendments to its law on banks and banking activities. The new regulations came into effect on April 20, 2023.

Key Changes

  • Increases the minimum charter capital requirement for banks from UZS 100 billion to UZS 500 billion within a four-year timeline.
  • Lifts restrictions on ownership of bank shares by non-residents, indirect owners, and ultimate beneficiaries who meet certain conditions.
  • Direct potential shareholders, including individuals and legal entities, remain prohibited from being founders or shareholders if they are registered or reside in countries with preferential tax regimes or those that do not require disclosure of ultimate beneficial ownership.

Ownership Restrictions Lifted

The amended law lifts the restriction on bank shares’ ownership by non-residents, indirect owners, and ultimate beneficiaries who:

  • Are registered or reside in territories that provide preferential tax treatment
  • Do not require disclosure of the ultimate beneficial owner’s identity

However, direct potential shareholders, including individuals and legal entities, remain prohibited from being founders or shareholders if they are:

  • Registered or reside in countries with preferential tax regimes
  • Those that do not require disclosure of ultimate beneficial ownership

Aim to Attract Foreign Investment

The new regulations aim to attract more foreign investment in Uzbekistan’s banking sector and promote economic growth. However, it is recommended that investors seek specialist advice on their specific circumstances to ensure compliance with the new regulations.

Takeaway

Uzbekistan’s amendments to its law on banks and banking activities are designed to increase foreign investment in the country’s banking sector. While the changes offer more flexibility for non-residents to own bank shares, it is crucial for investors to consult with specialists to ensure compliance with the new regulations.