Uzbekistan’s Decade of Business Reform Signals a Broader Economic Pivot

Uzbekistan has spent the past decade rewriting the rules of doing business, turning what was once a heavily managed administrative environment into a more liberalized system aimed at supporting private enterprise, attracting investment and integrating the economy more deeply with external markets. The changes, tracked by Vaqt.uz, extend from business registration and foreign-currency access to taxation, licensing and the legal protection of entrepreneurs.

Since 2016, the country has adopted a series of laws, presidential decrees and government decisions that significantly altered the framework for entrepreneurship. The reforms were not limited to new incentives or lending programs. They also sought to change the relationship between the state and business by redesigning oversight mechanisms, creating institutions to defend entrepreneurs’ rights and establishing legal foundations for accessing foreign markets and drawing investment.

That shift gained momentum after Shavkat Mirziyoyev was elected president in 2016, when economic liberalization became one of the main directions of state policy. Its legal foundation was laid by the 2017–2021 Action Strategy, adopted on February 7, 2017. The strategy’s second pillar was devoted to economic development and liberalization, and many later documents related to entrepreneurship followed directly from that policy line.

From 2022, the process continued under the New Uzbekistan Development Strategy. At the end of 2023, the government adopted the Uzbekistan-2030 strategy, defining the country’s long-term economic and social goals. Taken together, these policy documents suggest that business-climate reform is not being treated as a short-cycle stimulus measure, but as part of a broader state-led restructuring of the economy.

Institutional protections and lower transaction costs

Officials concluded that changing the business environment would require more than cutting taxes or allocating credit. Entrepreneurs also needed institutional mechanisms to defend their rights in dealings with state bodies. For that reason, one of the earliest reform tracks focused on legal protection for business activity.

On August 29, 2017, Law No. O‘RQ-440 established the institution of the Representative for the Protection of the Rights and Legitimate Interests of Business Entities under the President, known as the Business Ombudsman. The creation of that office was intended to provide a dedicated mechanism for protecting предпринимor interests in relations with state agencies.

The reform agenda increasingly treated entrepreneurial rights not as a secondary issue, but as a precondition for a functioning market economy.

That institutional architecture was expanded further by Presidential Decree PF-5490, adopted on July 27, 2018, which improved the system for protecting the rights and legitimate interests of business entities and included measures to write off certain tax debts. A subsequent decree, PF-5690 of March 15, 2019, was aimed at fundamentally improving the system of protecting entrepreneurial activity and optimizing the role of prosecutorial bodies in that process.

Reform in this area has continued into the current decade. Under Presidential Decree PF-184, adopted on November 14, 2024, additional measures were set to strengthen protection for entrepreneurs’ rights. Under that decree, financial sanctions for conducting entrepreneurial activity without state registration of a legal entity were abolished from 2025.

For senior economic decision-makers, this matters because legal predictability and dispute-management capacity are central to long-term investment planning. A business environment that reduces arbitrary pressure from administrative bodies can lower perceived risk, improve capital allocation and support more durable private-sector expansion.

Licensing, registration and the formalization of growth

Another major obstacle to starting a business had been lengthy and complex administrative procedures. Reformers therefore turned to simplifying registration, permits and licensing.

On February 9, 2017, Cabinet of Ministers Resolution No. 66 approved a new procedure for the state registration of business entities. On April 11, 2018, Presidential Decree PF-5409 sought to reduce and simplify licensing and permit procedures, while also mandating the introduction of G2G and G2B electronic interaction mechanisms between state bodies and businesses.

In 2020, the government added a requirement that the business impact of newly introduced licensable activities be assessed in advance, with participation from the Business Ombudsman and the Chamber of Commerce and Industry. That step suggested an effort to build regulatory discipline into the policy process itself, rather than merely remove existing barriers.

A further phase began in 2024. In accordance with Presidential Decree PF-8, 22 types of license and permit documents were abolished from March 1, 2024. For two types of activity, a “license-free business” regime was introduced.

Administrative reforms launched in 2025 were also aimed at reducing the cost and time burden of business interaction with the state. According to the plans, linking registration, the “License” system, the electronic archive and ID-card databases would reduce entrepreneurs’ administrative costs by approximately 90 billion soums and save up to 15 days in communication with government agencies.

From a macro-economic perspective, such changes can have effects beyond the domestic SME segment. Lower transaction costs and faster formalization improve the efficiency of the private sector, widen the tax base over time and make the economy more legible to foreign investors evaluating operating conditions.

Tax reform as a systemic shift

Among the reforms of the past ten years, changes in tax policy launched in 2018 were among the most systemic. Tax rates were reduced, some payments were consolidated and, at the same time, a large share of business was moved to the generally established tax system. This did not simply simplify the entrepreneurial environment; it also reshaped tax relations across the economy.

On June 29, 2018, Presidential Decree PF-5468 approved the Concept for Improving Tax Policy. Under the concept, a single 12% income tax rate for individuals was to be introduced. Social payments were also reduced, with the rate falling from 25% to 12%. For certain entities under the simplified tax regime, a 15% arrangement was established.

Another major tax-system change took effect on January 1, 2019. The scope of the unified tax payment was narrowed and retained for legal entities and sole proprietors with annual turnover not exceeding 1 billion soums. Other entities were transferred to the value-added tax and profit-tax system. In 2019, additional measures were adopted to improve tax administration, and a new version of the Tax Code entered into force on January 1, 2020.

For the broader economy, the tax overhaul points to a dual objective: making compliance more manageable while also deepening formal fiscal capacity. That balance is significant for a country trying to sustain liberalization without weakening state revenue. If implemented consistently, the combined reforms in taxation, legal protection and administrative simplification could support a more productive private sector and strengthen Uzbekistan’s position as a more credible destination for regional trade and investment over the long term.