Uzbekistan’s Decade of Business Reform Reshapes Startup and VC Landscape

Uzbekistan has spent the past decade rewriting the rules of doing business, in a policy shift that is now becoming more relevant to startups, venture investors and acquirers looking at Central Asia. From company registration and foreign-currency access to taxation, licensing and legal protections, the country has steadily reworked the institutional foundations that shape how new companies are formed and scaled.

According to an analysis by Vaqt.uz, the reforms since 2016 have gone beyond tax breaks and credit programs. They have also altered the state’s relationship with entrepreneurs by redesigning oversight mechanisms, establishing institutions to protect business rights, and creating legal groundwork for entering foreign markets and attracting investment.

The turning point came after Shavkat Mirziyoyev was elected president in 2016, when economic liberalization became one of the main directions of state policy. The legal foundation for that shift was laid on February 7, 2017, with the adoption of the 2017–2021 Action Strategy. Its second pillar was dedicated to economic development and liberalization, and many later measures affecting entrepreneurship followed directly from that agenda.

From 2022, the process continued through the New Uzbekistan Development Strategy. At the end of 2023, the country adopted the Uzbekistan-2030 strategy, setting out long-term economic and social goals.

Institutions, not only incentives

For founders and investors, one of the more consequential elements of the reform cycle is that it sought to build institutional protections rather than rely only on incentives. The logic is straightforward: lowering taxes or expanding lending is not enough if entrepreneurs cannot defend their rights in dealings with state bodies.

That is why protection of entrepreneurial rights was shaped as a distinct reform track in the early phase. 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, commonly referred to as the Business Ombudsman.

The creation of the Business Ombudsman was aimed at providing a dedicated mechanism to protect предпринимors’ interests in relations with state bodies.

The system was further refined by Presidential Decree No. PF-5490, adopted on July 27, 2018, which improved protections for business entities and included measures to write off certain tax arrears. A later decree, No. PF-5690 of March 15, 2019, was aimed at fundamentally improving the system for protecting entrepreneurial activity while optimizing the role of prosecutorial bodies in that process.

Reforms in this area have continued. Presidential Decree No. PF-184, adopted on November 14, 2024, set out additional measures to strengthen the protection of entrepreneurs’ rights. Under that decree, financial sanctions for conducting business activity without registering a legal entity were abolished from 2025.

For startup ecosystems, these changes matter because early-stage companies often face the greatest friction from legal ambiguity, compliance burdens and uneven state enforcement. A clearer rights framework can reduce perceived regulatory risk for both domestic founders and outside capital.

Simplifying market entry

Another major barrier to entrepreneurship had been lengthy and complex administrative procedures. A key reform direction therefore focused on 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. Then, on April 11, 2018, Presidential Decree No. PF-5409 targeted the reduction and simplification of licensing and permitting procedures. It also called for the introduction of electronic G2G and G2B interaction mechanisms between state authorities and businesses.

In 2020, Uzbekistan added a requirement that the business impact of newly licensed types of activity be assessed before they are introduced. The process was designed to involve both the Business Ombudsman and the Chamber of Commerce and Industry.

A new phase in licensing reform began in 2024. Under Decree No. PF-8, 22 types of licenses and permit documents were abolished from March 1, 2024. For two types of activity, a “license-free business” regime was introduced.

The next round of administrative reforms, launched in 2025, was directed at cutting the time and cost businesses spend dealing with state agencies. The plan envisaged linking registration systems, the License system, electronic archives and ID-card databases. Authorities projected that this integration would reduce entrepreneurs’ administrative costs by about 90 billion soums and save up to 15 days in interactions with government offices.

For venture-backed companies, that kind of back-office compression can have outsized effects. Lower setup friction and faster compliance workflows can improve company formation rates, shorten time to revenue and make smaller experimental ventures more viable.

Tax changes with ecosystem implications

Among the decade’s reforms, the tax-policy changes launched in 2018 stand out as some of 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 general tax system. In effect, the reforms both simplified parts of the entrepreneurial environment and restructured tax relations across the economy.

On June 29, 2018, Presidential Decree No. PF-5468 approved the Concept for Improving Tax Policy. Under the concept, a unified 12% income-tax rate for individuals was introduced. Social payments were also reduced, with the rate falling from 25% to 12%. For some entities under the simplified tax regime, a 15% arrangement was established.

Another important tax change took effect on January 1, 2019. The application of the unified tax payment was restricted and retained only for legal entities and individual entrepreneurs with annual turnover not exceeding 1 billion soums. Other entities were moved to the value-added tax and profit-tax system.

Additional measures to improve tax administration were adopted in 2019, and a new version of the Tax Code entered into force on January 1, 2020.

For the innovation economy, the headline is not merely that tax burdens shifted, but that the state spent years standardizing the operating environment. That can influence how investors underwrite expansion risk, how strategic buyers evaluate targets, and how founders assess the tradeoff between staying informal and scaling through formal structures.

Uzbekistan’s reform story is still a work in progress, and the source material does not claim that implementation challenges have disappeared. But over 10 years, the direction is clear: the country has moved to formalize protections, reduce administrative drag, digitize state-business interactions and update the tax framework. For a market seeking to attract more investment and support more outward-looking companies, those are the kinds of shifts that can shape the next generation of startups, funding rounds and eventual M&A activity.