Uzbekistan approves measures for accelerated development of entrepreneurship
On October 5, Interim President of the Republic of Uzbekistan Shavkat Mirziyoev approved additional measures to ensure the accelerated development of entrepreneurship, the full protection of private ownership and qualitative improvement of the business climate.
This decree is aimed primarily at further strengthening the legal protection of private property, creation of favorable conditions and comprehensive support for small business and private entrepreneurship, increasing the investment attractiveness of the Republic and is a clear evidence of the transition of state policy in this sphere to a qualitatively new level.
In particular, the decree establishes "providing greater freedom to small business and private entrepreneurship, a radical reduction of interference in their activities with a focus on early warning, improving the efficiency of prevention of violations" as a critical priority and of paramount tasks of the state authorities. For these purposes, the state bodies, especially law enforcement and regulatory agencies are instructed to:
- provide the unconditional implementation of the established requirements and the principle of priority of the rights and legitimate interests of business entities, and in connection with the above, to critically review own functions and powers;
- ensure strict compliance with the requirements of the legislation on the responsibility of officials for illegal interference and obstruction of business activities, its unjustified suspension and compensation of the damage caused to business entities directly from the guilty.
This provision obliges the public authorities to apply not only the most stringent disciplinary, administrative or criminal liability, but also to ensure the recovery of the damage caused to business entities directly from the perpetrators.
The implementation of these measures is aimed at preventing the initiation and conduct of illegal inspections, particularly cases of unjustified suspension of the activity of businesses and causing losses due to illegal actions by workers of state organs.
The decree establishes a number of fundamentally new mechanisms of state control, aimed at providing reliable legal guarantees against unjustified interference in the activities of business entities.
In particular, starting from 1 January 2017, following unprecedented measures are to be applied, including the abolition of all kinds of:
– unscheduled inspections over activities of business entities, excluding the inspections in connection with the liquidation of a legal entity, as well as conducted exceptionally by the decision of Republican Council on the coordination of regulatory authorities of short-term inspections based on appeals of individuals and legal entities about the facts of violations of the law;
– counter checks of activities of business entities, including in criminal cases.
Thus, from now on, regulatory authorities may not initiate unscheduled inspections. In order to ensure legal mechanisms for the protection of the rights and interests of citizens, short-term inspections remain limited only on the basis of appeals of individuals and legal entities on violations of the law. Such inspections can be carried out exclusively by the decision of the national Council, and its duration is limited to one working day.
Along with this, continuing the policy towards liberalizing administrative and criminal law, the decree provides for such drastic new measures as the exemption of businesses and their employees, who made financial and economic violations for the first time from all kind of liabilities. Entities carrying out an entrepreneurial activity without state registration are also exempt from liability, in the case of compensation for their damages and of the voluntary elimination of the consequences of violations within the established deadlines.
In addition, a criminal penalty of deprivation of the right to engage in entrepreneurial activities in respect of businesses is prohibited from now on.
These standards not only preclude double punishment of businesses, but also provide an opportunity for citizens, first-time offenders, who compensated their guilt, to continue their business activities without negative consequences, which also intends to stimulate their business activity.
In this regard, appropriate amendments will be made to the Penal code, the Code of Uzbekistan on administrative responsibility, the Tax code and other laws.
To improve the investment attractiveness of the Republic, the newly established industrial enterprises with foreign investments can enjoy tax rates and other mandatory payments in effect on the date of their registration during 5 years of their subsequent activity.
This exemption applies to all enterprises with foreign investment irrespective of the amount invested.
The implementation of the Decree will allow providing continuity and sequence of the course defined by the First President of the Republic of Uzbekistan on the drastic elimination of administrative barriers and artificial obstacles to the development of entrepreneurship as a key factor of sustainable development of the economy.
Embassy of Uzbekistan in London
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