According to the Decree of the President of Republic of Uzbekistan “on measures to improve the regulation of organizing and conducting lotteries and games based on risk” dated on April 19, 2024, in order to implement advanced foreign experience and modern technologies starting from January 2025, it is permitted to carry out activities on organizing games based on risk, lotteries and online games on the Internet, as well as, bookmaker activity.

Licensing of such as activity is going to be carried out by The National Agency of Perspective Projects of the Republic of Uzbekistan.

Government bodies and organizations, as well as charitable foundations and private organizations are going to be allowed to conduct lotteries exclusively through lottery organizers on a contractual basis.

Only residents and non-residents of the Republic of Uzbekistan who have reached the age of 18 are allowed to participate in lotteries, online games and bookmaker bets.

The National Agency of Perspective Projects of the Republic of Uzbekistan and General Prosecutors Office of the Republic of Uzbekistan will perform full monitoring and controlling of the compliance of organizers of lotteries, online games and bookmaking activities with legislative acts on combating the legalization of proceeds from criminal activity, the financing of terrorism and the financing of the proliferation of weapons of mass destruction.

Starting from January 01, 2025 and for the period of 5 (five) years:

legal entities engaged in the organization of lotteries, online games or bookmaker activities are going to pay a turnover tax at a rate of 4 (four) percent, levied on the total income from such activity minus all paid winnings and returned bets.

income of individuals received from winnings in lotteries, online games, bookmaker bets, conducted on the basis of licenses issued by the above mentioned Agency, is exempt from paying personal income tax.

Upon from the Presidential Decree, The National Agency of Perspective Projects of the Republic of Uzbekistan along with other Ministries are supposed to submit to the Cabinet of Ministers of the Republic of Uzbekistan a draft of a government decision regulating:

– procedures for organizing lotteries; online games and bookmaker activities, including licensing requirements;

– procedures for creating Unified Government Register of Bets and Players, as well as its maintenance by the licensing authority;

– amendments and additions to the Tax Code of the Republic of Uzbekistan, the Laws “On State Duty”, “On licensing, permitting and notification procedures”, “On advertisement” and others.

Most Important General Provisions. Chapter I. General Legal Entities.

According to a Law №. LRU-959 dated 09.10.2024 “On amendments and additions to certain legislative acts of the Republic of Uzbekistan in connection with further improvement of the system of legal protection of intellectual property”, a copyright holder may request a violator to pay a compensation instead of indemnification (damages), for the illegal use of intellectual property objects.

Compensation amount could vary from 7.500.000 to 375.000.000 UZS (approx. from 585 to 29.000 USD), depending on different circumstances.

In this case, compensation is paid regardless of the fact of causing any damages (losses).

According to the Resolution of the President of the Republic of Uzbekistan “On the Approval of the Strategy for the Development of Artificial Intelligence Technologies until 2030”, during next 6 years following goal have to be achieved:

* software products and services based on artificial intelligence have to be brought up to a 1.5 billion USD;

* services provided by the unified portal of interactive public services based on artificial intelligence have to reach 10 percent;

* bringing the number of scientific labs operating in the field of artificial intelligence to 10 units;

* launch of high-performance computing servers;

* bringing the country into the top 50 states in the Government AI Readiness Index for artificial intelligence.

Priority goals and objectives for the development of artificial intelligence technologies include:

* formation of a regulatory legal framework;

* improvement of standards and strengthening international cooperation;

* creation of technical infrastructure for data processing and launching projects;

* implementation of priority projects in social sphere and economic sectors;

* improving the knowledge and skills of the population, as well as developing human resources.

Prioritized areas for introduction and implementation of artificial intelligence technologies are:

* in banking and financial sector: fraud prevention, assessment of users’ solvency, forecasting market trends;

* in tax and customs sector: reducing the share of the shadow economy, forecasting suspicious customs operations and risk management;

* in healthcare sector: determination of diagnosis methods, disease treatment, medical images analysis and patient’s data management;

* in agriculture sector: yields forecast, agriculture resource management, monitoring of growing sowings, poultry, fish and livestock processes;

* in energy sector: energy management, optimization of energy production and distribution, development of use of renewable energy sources.

For the achievement of above mentioned goals, starting from January 01, 2025, the Fund for Reconstruction and Development of Uzbekistan will provide The Ministry of Digital Technologies of the Republic of Uzbekistan with an interest-free 5 years’ loan in the amount of 50 million USD for the development of an artificial intelligence technologies.

According to the Resolution of the President of the Republic of Uzbekistan № PR-3832, “On measures to develop the digital economy and the sphere of turnover of crypto assets in the Republic of Uzbekistan”, mining considered to be one of the activities in a field of crypto assets.

Mining is an activity of maintaining a distributed data registry, creating and confirming the integrity of blocks by performing computational operations.

Mining could be carried out exclusively by a legal entity using electricity generated by a solar photovoltaic power plant.

In case of using electricity with connection to a unified electric power system, payment for consumed electricity is carried out using an increasing coefficient to the established tariff.

During the peak period, surcharges to the corresponding tariffs for electricity consumption established by the Cabinet of Ministers of the Republic of Uzbekistan are applied.

Electricity consumption is recorded with the installation of a separate metering device.

Mining is subject to mandatory registration by the National Agency of Perspective Projects of the Republic of Uzbekistan and does not require any licensing.

Legal entities engaged in mining (miners) are required to register in accordance with the procedure established by the legislative acts of the Republic of Uzbekistan.

Registration of miners is carried out exclusively in electronic form via the Internet.

Miners have the right to carry out their activities exclusively at the address specified during registration, in compliance with fire safety and sanitary norms, rules and guidelines.

Starting from January 1, 2023, physical persons and legal entities of the Republic of Uzbekistan are allowed to can carry out a purchase, sale and (or) exchange of crypto assets exclusively through national service providers in accordance with the procedure established by legislative acts of the Republic of Uzbekistan.

Licensing procedures, issuance, registration of issuance and circulation of crypto assets by residents of the Republic of Uzbekistan, amount and procedure of payment of government fees are determined by the National Agency of Perspective Projects of the Republic of Uzbekistan.

Miners using solar photovoltaic power plants have the right to tax, customs and other preferences as well as benefits in field of renewable energy sources in accordance with the procedure established by legislative acts of the Republic of Uzbekistan.

It is prohibited to carry out hidden mining as well as anonymous mining of crypto assets.

All the other procedures covering licensing activity of service providers in the field of turnover of crypto assets are governed by the Regulation “on the procedure for licensing the activities of service providers in the field of turnover of crypto assets” as a part (Annex) of the Order of the Director of the National Agency of Perspective Projects of the Republic of Uzbekistan № 3380.

Short legal summary on regulation of outstaffing (outsourcing) services in Uzbekistan covering aspects of governance of such an activity under Uzbek Law, including outstaffing service provisions, types of unauthorized outstaffing services, terms of oustaffing contracts and agreements, regulation of labor (employments) relations between outstaffing company, accepting (hosting) company and the employees.

For more detailed information, please read attached legal report.

Revised Law on Subsoil in Uzbekistan will take effect in February 2025.

President of the Republic of Uzbekistan has signed a new edition of the Law on Subsoil aimed to renew and update legislative provisions related to the possession, use, protection of mineral resources as well as disposal of mineral wealth.

Under this edition, the subsoil, including all found minerals naturally occurred in the subsoil, will remain state’s property, despite of someone’s land and water rights and are subject to rational usage protected by the government.

Uzbek legislation prohibits inheritance, sale, gifting, donation, pledge and usage of the subsoil resources as a collateral, with only one exception, an ability to transfers the rights of usage of subsoil resources in accordance with permissive procedures governed by the law.

Simplification and transparency of potential investor’s rights and obligations, as well as rationalization of licensing and permit obtaining process, including provisions governing geological data possession, ownership and sharing and those aspects governing subsoil usage rights could be one of the key factors attracting more foreign investors.

According to the Law № LRU-954, the Law “On Competition” № LRU 850, as part of the reforms on advancement in the field of competition development and consumer protection, is being amended, where business entity’s activities belonging to the subject of natural monopoly are going to be considered as entity’s main activity.

In order to liberalize the punishment system, those business entities with low economic impact degree, that committed a violation of competition law for the first time, will not be a subject to financial sanctions (penalties), instead, it will be getting a warning, preventing such an offence for the second time.

Financial sanctions in form of a fine shall be applied judicially, except when the offender admits the guilt and pays it voluntarily.

Receiving of warning, as well as paying a fine, does not exempt a person (entity) committing a violation of competition law from the obligation to comply with a decision (instruction) of an authorized state body or perform other actions covered by the competition legislature.

Competition Promotion and Consumer Protection Committee of the Republic of Uzbekistan will have to coordinate projects on competition in commodity and financial markets and provide related government support.

Cases of violations of competition law with a low economic impact degree are determined by the Cabinet of Ministers of the Republic of Uzbekistan.

Based on a Resolution of the Cabinet of Ministers No. 720 “On Measures to Improve and Comprehensively Systematize the Sphere of Public – Private Partnership” new Regulation covering implementation of Public-Private Partnership (PPP) projects has been approved.

It defines following aspects:

* Initial Project Evaluation;

* Implementation of Project Initiative;

* PPP Project Preparation by Private and Public Initiator;

* Tender Documentation and Commission;

* PPP Agreement;

* Negotiation Procedures;

* PPP Projects Registry;

* PPP Projects Prices and Services Determination;

* PPP Projects Monitoring and Reporting Procedures;

* Project Financing Procedures;

* Cost Assurance and others.

For more detailed information, please read attached legal report.

According to the Presidential Decree № DP 109 «On Measures to Accelerate the Development of Factoring Services Market», starting from January 2025 it is allowed to establish factoring organizations engaged in financial activities for the assignment of monetary claims.

Factoring organization’s activity will be carried out after registration at the Central Bank of the Republic of Uzbekistan, carried out by entering it into the registry as a non-bank credit organization.

Starting from January 2025, it will be allowed to:

– carry out factoring operations in foreign currency, if the client’s counterparty is a non-resident;

– to resell (refactoring) monetary claims acquired under factoring agreements to credit institutions.

Liability for violation of the prohibition on assignment of a monetary claim will be revoked.
In order to ensure the priority of claims for the assigned rights, notifications of the assignment of monetary claims are going to be registered in a collateral registry.

Change of currency of monetary obligations and the country of payment without the consent of the debtor will not be allowed.

Introduction of electronic platform for factoring services was also approved by the President.

Factoring platform will have following features:

– introduction by business entities of information and documents on monetary requirements for the use of factoring services;

– automation of financing process by verifying the authenticity of documents that are the basis of monetary claims, as well as ensuring the prompt collection of information about debtors and its analysis in real time;

– providing a convenient, fast and secure technological infrastructure for the provision of factoring services by credit institutions to participants in the supply chain.

In order to popularize and develop factoring services, develop industry standards, and strengthen ties between factoring market participants, based on initiative of commercial banks and microfinance organizations a National Factoring Association will be established.

In order to create opportunities for the widespread use of factoring in the implementation of foreign trade operations starting from January 1, 2025 on the basis of an agreement on the acquisition of receivables under an export contract:

– if the credit institutions providing factoring services (financial agents) are residents, information about them is entered into the Unified electronic information system for foreign trade operations as a recipient of foreign currency funds under the export contract and these financial agents are responsible for ensuring the fulfillment of the requirement to repatriate assets;

– If the financial agents are non-residents, the obligation to enforce the asset repatriation requirement remains with the exporter.