FAQ

Any legal person, registered in the territory of the Republic of Uzbekistan and performing one of the following activities, can be a resident of the Innovation Center:

- CCEA: 58.2 «Software release»;

- CCEA: 62.0 «Computer programming, consultancy and related services»;

- CCEA: 63.1 «Accommodation and data processing services, Web portals».

For the company opening (the legal entity) in the Republic of Uzbekistan, it is necessary to prepare the following documents:

- Application;

  • Foundation documents in the official language (Memorandum of Association, Charter);
  • Payment of State duty (1 minimum salary when coming to the office, 50% of minimum salary via the Internet);

Documents are submitted via the Internet at www.my.gov.uz, either to the Centre of public services at mailing address-for legal entities.

A resident of the Innovation centre can be a legal person, registered in the territory of the Republic of Uzbekistan. In order to pretend to become a resident of the Innovation Center, a foreign company should register as a legal entity in the Republic of Uzbekistan.

No, he cannot because the individual entrepreneur is a natural person, carrying out business activity without establishment of legal entity. Legal entities only can be residents of the innovation centre.

Yes, it can. Legal persons, irrespective of place of their registration by the State within the territory of the Republic of Uzbekistan, can pretend for resident status.

To obtain the status of a resident of the Innovation Center legal person shall submit to the Directorate of the innovation centre (coming to the office,  by mail, or through the page in the section "How to join" on the official Web site of the Center) the following documents:

Application;

Business plan;

A copy of the Charter or other foundation instrument;

A copy of certificate of State registration.

The Directorate of the Innovation Center submits to the Coordinating Council application and documents, provided by legal entities, to consider granting resident status of the Innovation Center. After that, the Coordinating Council, having considered submitted documents, makes decisions on registration of the legal person as a resident of the Innovation Center or registration refusal.

The Centre Directorate considers documents, provided by a legal entity, within seven working days from the moment of their submission.

If necessary, the Directorate has the right to appoint additional scientific and technical examination of the business plan, provided by the legal entity. In this case, the period may be extended for the period of examination, but not more than two weeks.

Coordinating Council holds a meeting once a month to make decisions on registration of legal entities and considers all applications.

Yes, there are. The grounds are: 

- disinformation or false information in the documents;

- activity implementation on morally obsolete, not promising or insignificant directions, as evidenced by the conclusion of the scientific and technical expertise;

- existence of outstanding obligations of a legal person or other related persons before the Innovation centre on previous agreements on the terms of activity of the Innovation Center resident.

Yes, it is. In case of elimination by legal person of causes, which served as the basis for registration refusal as the resident of the innovation centre, reconsideration of applications and other documents is performed in the same manner as when filing an application  for the first time.

In such case, a legal entity provides warranty letter with its obligations for their activities implementation solely for activities, permitted to residents of the Innovation Center according to UP-5099 from 30 June 2017.

No. For residents’ convenience, the Center operates on the principle of extraterritoriality, whereby residents of the innovation centre can register, host and work in any corner of Uzbekistan.

Yes, within 10 days residents should notify the Directorate of the Innovation Center, providing copies of supporting documents by written notification.

Yes, within 10 days residents should notify the Directorate of the Innovation Center, providing copies of supporting documents by written notification.

Yes, within 10 days residents should notify the Directorate of the Innovation Center, providing copies of supporting documents by written notification.

Yes, within 10 days residents should notify the Directorate of the Innovation Center, providing copies of supporting documents by written notification.

Yes, within 10 days residents should notify the Directorate of the Innovation Center, providing copies of supporting documents by written notification.

No, in accordance with the current legislation suspension of resident status is not stipulated.

Yes, sale of someone’s software falls within the scope of CCEA 46.5 and 47.4, that falls within the scope of not permitted activity

Yes, it can. Modification of software falls within the scope of CCEA 62.01 and is not a violation of the conditions of residency.

It is not allowed, as sale of equipment is not permitted type of activity. A resident of the Innovation Center can sell software, but without sale of hardware to it.

Yes, it can. A resident of the Innovation Center has the right to receive income from financial operations, but with payment of taxes.

According to the Civil Code of the Republic of Uzbekistan and the law of the Republic of Uzbekistan "On copyright and related rights" only payments for product creation and the right to use it are understood as " remuneration ". According to the Tax code of the Republic of Uzbekistan, "royalty" refers only to payments for the right to use product. Therefore, if your company receives an order for software development, it is better to use the word "remuneration", and if your company provides the software in use -" royalty ".

Yes, it is, if the amount of referred income in aggregate exceeds the total amount of income from realization of goods (works, services) This activity falls within the scope of CCEA 58.290.

Yes, it is. This activity falls within the scope of CCEA 63.1.

It is applied if the  following is accomplished:

  1. data processing activity includes:

complete processing of data, received from the client

preparation of specialized reports, based on data received from the client

  1. provision of data input services.

It should be noted that in each case a separate consultation with specialists of the Innovation Center is required.

Yes, it is,  when implementation occurs directly on the software level (without solid component). This activity falls within the scope of CCA 62.010.

Yes, it is. This activity falls within the scope of CCEA 63.1. It should be noted that income shall be received from providing for use web portal, site, on which online-booking happens. That is, the resident shall receive income from technical support and maintenance of the site and shall not be engaged itself in sale of the goods and services of third parties.

Residents of the Innovation Center until January 1, 2028 are released from:

- payment of all taxes and mandatory contributions in Government trust funds, as well as single social payment;

- payment of customs duties (except of customs fees) for equipment, imported for their own needs, components, parts, nodes, technological documentation, software, not produced in the Republic of Uzbekistan, on lists, approved in the prescribed manner.

On a monthly basis, from the next month after incorporation in the register, the resident makes deductions from net proceeds  at a rate of 1% (one percent).

For example: If a legal entity is incorporated in the register of residents on April 30 of this year, monthly deductions will be made from the next month (i.e. by the results of May) in the period up to June 25 of this year.

No, monthly payments to deposit account of the Directorate are not connected with the use or non-use of tax or customs privileges. Residents make monthly payments to deposit account of the Directorate in accordance with the concluded agreement with the Directorate of the Innovation Center. Non- payment shall result in exaction of fine and exclusion from the residents of the Innovation Center.

According to UP №-5099, income in the form of payment for labour, received by employees on employment contracts with residents of the Innovation centre, subject to PIT at the fixed rate - 7,5%, and insurance premium  in non-budgetary pension fund - at the rate of 4,5%. These revenues are not included in the aggregate annual income of employees, determined for taxation purposes.

Employees can have other types of income - property, in the form of material benefits and others (art.176, 177, 178 of the Tax Code). Therefore, the resident should maintain separate accounting of employees revenues.

Income tax benefits in the form of payment apply to all resident employees with whom employment contracts have been concluded.

In taxation of employees incomes at the fixed rate of 7,5% of PIT,  tax is levied to full amount of income in the form of labour payment without deduction of 1 minimum salary.

Preferential rates on PIT and insurance contributions apply from the1 day of the month, following the month in which the legal entity is incorporated in the register of the Innovation Center.

For example: a legal entity is incorporated in the register of the Innovation centre residents on November 24, 2017 ., the resident can enjoy tax benefits from December 1, 2017. Until this time employees revenues in the form of labour payment are subject to PIT (including IFPP-individual funded part of pension) and insurance premiums in accordance with the established procedure.

A resident of the Innovation Center has the right to enter with individuals into civil-legal contracts (CLC) to perform those or other works (art. 172 of the TC). In this case, income of individuals is subject to PIT and insurance premiums in the established order, without application of reduced rates.

Yes, they do. Decree of the President of the Republic of Uzbekistan № UP-5099 provides for full exemption from SSP. Therefore, SSP is not levied to income in the form of payment for labour, received by the employees of the Innovation Center resident, operating both on employment contracts and on civil legal agreements.

As residents of the Innovation Center are entitled to exercise exclusively permitted activities, tax benefits can be applied only to permitted activities (on CCEA codes within the groups 58.2., 62.0., 63.1.).

In addition to revenues from permitted activities, residents of the Innovation Center have the right to receive income from financial transactions and real estate. Benefits do not cover these revenues. They are subject to taxes and other mandatory payments in established order.

Revenues from financial transactions and real estate include:

- positive exchange rate difference from revaluation of currency balance sheet items;

- dividends and interests;

- royalty;

- income from renting out real estate;

- other revenues from financial transactions and real estate.

Residents of the Innovation centre in the course of their activity also can receive other incomes, such as from gratuitously received property rights, from property mortality, from cancellation of obligations and others.

Upon receipt of other incomes, referred to in article 132 TC, taxes shall be levied on them.

Revenues from financial transactions and real estate can include:

- positive exchange rate difference from revaluation of currency balance sheet items;

- dividends and interests;

- royalty;

- income from renting out real estate;

- other revenues from financial transactions and real estate.

Residents of the Innovation centre in the course of their activity also can receive other incomes, such as from gratuitously received property rights, from property mortality, from cancellation of obligations and others.

Upon receipt of other incomes, referred to in article 132 TC,  taxes shall be levied on them.

Benefits, granted to residents of the innovation centre, shall apply:

- taxes and mandatory contributions - from the 1 day of the month, following the month, in which the legal entity is incorporated in the Registry;

- on Customs payments - from the date of legal person incorporation in the register

For example: a legal entity is incorporated in the register of the Innovation Center residents on November 24, 201,  the resident can enjoy tax benefits from December 1, 2017

No, this is not necessary. Directorate of the Innovation Center sends legal notice to the State Tax Committee and the State Customs Committee, commercial bank, servicing legal entity, on its registration as a resident of the Innovation Center.

The innovation centre resident shall submit documents, confirming the right to benefits, only upon request of the tax authority (art. 32 TC).

Legal persons, incorporated in the register of the Innovation Center ,transfer to the account of the Directorate of the Innovation Center deductions at the rate of 1% from the net revenue, received from one of the following activities (on CCEA codes, within the Groups 58.2., 63.1. и 62.0,):

No. A legal entity that is engaged in another unauthorized activity (for example, trade of goods), cannot continue dealing with this activity, having become a resident of the Innovation Center. From the date of the innovation centre residency receipt,  a legal entity should stop other activities.

If the Innovation Center resident does not comply with conditions and requirements of the Innovation Center to activities of the Innovation Center resident, according to the decision of the Coordinating Council, organization may be deprived of that status.

Net revenue is revenue from realization of goods (works, services) without inclusion of amounts of value-added tax, excise tax and tax on consumption of gasoline, diesel fuel and gas, included in the price of goods (works, services).

It depends on the amount of income from the core business. For example, resident has transferred the right to use computer software to another person and receives income (royalty) for it and if the amount of income from royalty exceeds the total amount of income from primary activity, this activity falls within the scope of CCEA 58.2 and accordingly, benefits cover it.

Salary can be fixed in foreign currency, but is charged in the national currency. If between the dates of payments and charges  exchange rate difference arises, subsequently income tax recalculation is performed.

Payment of taxes and other obligatory payments is made in national currency and in cases, provided by legislation, in foreign currency. In case, if salary is calculated in foreign currency, for tax purposes, it is converted into "soums" on the date of salary payment.

Revenues of a natural person, denominated in foreign currency,  are transferred into domestic currency at the exchange rate of the Central Bank of the Republic of Uzbekistan at the date of actual receipt of revenues (art. 170 TC RUz.)

If labour payment is stipulated in foreign currency, and payment of salary is made in soums, PIT calculation is made on the exchange rate of the Central Bank, effective on the day of actual payment of salary (art. 170 of the TC). When discrepancy in PIT calculation is detected, accounting shall be adjusted and, if necessary, tax balance shall be paid to the budget. Overpayment of tax on the enterprise shall be set off against future payments.

No. Tax privileges do not apply to dividends. Residents of the Innovation Center and their workers are entitled to receive dividends, but with payment of taxes in accordance with the law.

No, it is not a violation. The Innovation Center residents have the right to receive dividends, but with payment of taxes in accordance with the law.

Excess of income from dividends, subject to the payment of taxes, is not a violation of the residency of the Innovation Center.

Taxation of non-residents of the Republic of Uzbekistan is performed in the order, established by the legislation, i.e. residents of the Innovation Center do not have individual benefits on them.

Taxation of non-residents of the Republic of Uzbekistan is performed in the order, established by the legislation, i.e. residents of the Innovation Center do not have individual benefits on them.

Income from financial transactions and real estate include: positive rate difference from the revaluation of currency balance sheet items, dividends and interests,  income from property assignment for rent, other revenues from financial transactions and real estate.

Residents of the innovation centre in the course of their activities can also receive other miscellaneous income, such as from gratuitously received property rights, from property mortality, from cancellation of obligations and others.

Upon receipt of any other income referred to in article 132 of the Tax Code   Of The Republic Of Uzbekistan, taxes shall be levied on them.

In accordance with UP-5428, a resident of the Innovation Center has the right to exercise, within the limits of revenues from export of goods (works, services) salaries payment in foreign currency to foreign specialists in cashless form on international payment cards, open in foreign banks and dividends in foreign currency in cashless form on international payment cards. Accordingly, IFPP and PIT shall be converted into national currency at the exchange rate of the Central Bank of the Republic of Uzbekistan at the date of actual receipt of incomes by physical persons. With regard to dividends, in accounting dividends are reflected in soums, their recalculation in foreign currency may be carried out only on the day of payment, for dividend withholding tax is also calculated on the actual day of payment.

In this regard, the resident of the innovation centre should calculate dividends, due to a non-resident, in soums, and convert in foreign currency according to the exchange rate of the Central Bank, effective on the day of payment.

Income tax benefit in the form of payment apply to all resident employees with whom employment contracts have been concluded.

When employees’ income is taxed at the fixed rate of 7,5% of IFPP, tax is levied for the whole amount of income in the form of labour payment without deduction of 1 minimum salary.

Procedure of filling and providing payments on taxes and compulsory payments is the same for all taxpayers. Residents of the Innovation Center when filling reports must provide a link in calculations to №UP-5099 from 30.06.2017 and amount of income/expenditure, taxed on a preferential basis.

In accordance with paragraph 5 of the Decree of the President of the Republic of Uzbekistan №UP-5099 from 30.06.2017. residents shall be exempt for a period up to January 1, 2028 from payment of customs duties (except of customs fees) for imported for their own needs equipment, components, parts, nodes, technological documentation, software, not produced in the Republic of Uzbekistan, on the lists, approved in the prescribed manner;

To obtain customs preferences the Innovation Centre residents make their proposals to the Directorate  for inclusion in the list no later than the first day of the last month before the end of the quarter. Resident’s proposals must specify full name of the equipment, parts, components, nodes, technical documentation, software, not produced in the Republic of Uzbekistan, its quantity and brief rationale, required, as well as FEACN code RUz (Version 2017).

It is necessary to make proposals to the Directorate for inclusion in the list of equipment, imported for own needs.

A list is prepared by the Ministry for the development of information technologies and communications of the Republic of Uzbekistan once a quarter.

No, you should not.

In accordance with article 13 of the customs code of the Republic of Uzbekistan product is any movable property, crossing the customs border.

Condition of importation of goods and (or) transport means to the customs territory is actual crossing of the customs border and all subsequent actions with the goods and (or) vehicles before their release by the Customs authorities

Download of software from the Internet is not its physical movement aсcross the customs border, respectively resident is not obliged to declare it and pay customs duties.

See also conclusion of the State Customs Committee of the Republic of Uzbekistan

Depending on the legal entity's accounting policies and the cost of software, a resident can accept it on the balance sheet as an intangible asset (NAS № 7) or write off as the company's expenses. The reason for this is signed agreement and its registration in the Single electronic information system for foreign trade transactions (SEISFTT), invoice, payment order and Act of the executed works (services).

Resident has the right to import software, but with payment of customs duties (except downloading software from the Internet). If software is imported on carrier (USB flash drive, drive, etc.), a resident, in order to receive benefits, must contact the Directorate of the Innovation Center for inclusion in the list of imported software.

No, it cannot. When detecting facts of sale within 5 years of equipment, imported with benefits, components, parts, nodes, process documentation and software amount of privileges on Customs payments will be subject to seizure in the State budget of the Republic of Uzbekistan with charging penalties, in accordance with the established procedure.

Audit is verification by audit organizations of financial statements and related financial information of business entity with a view to establishing reliability and conformity of financial statements and other financial information to the law on accounting.

Audit opinion is a document that expresses in writing opinion of the audit organization about reliability of financial reporting and compliance of the accounting procedures with the requirements of the legislation, available to the users of the financial statements of business entity.

The audit opinion to the residents of the Innovation Center is provided until July 1 for the previous reporting year.

For example, report for 2017 is provided until July 1, 2018.

In audit opinion of standard audit opinion information must also be specified about compliance of proceeds and actual performed activity with permitted activities.

Approximate form of supplementary opinion on the conformity of the proceeds and actual performed activity:

According to audit results, we inform you that net proceeds for the period (the period from 1 date, following the month in which the legal entity is incorporated in the register of the Innovation Center, is specified) from_________ to __________  made up _____________  (amount in words) soums.

A resident of the Innovation Center for the period (the period from 1 date, following the month in which the legal entity is incorporated in the register of the Innovation Center, is specified) from _________ to __________  carried out its activity:

On the whole territory of the Republic of Uzbekistan or outside the Republic of Uzbekistan (specified if available);

Activity is  carried out in accordance with activities under State-level classifier of types of economic activity of the Republic of Uzbekistan, exclusively:

- Computer programming, consultancy and related services (CCEA 62.0);

- Accommodation and data processing services, Web portals (CCEA 63.1);

- Software release (CCEA 58.2);

According to article 24  of the law of the Republic of Uzbekistan "On accounting" reporting period of annual financial reporting is the calendar year from January 1 to December 31.

The first reporting year for the newly created legal persons is the period from the date of acquisition of the legal entity right on December  31of the same year.

If a legal entity is registered after October 1, the first reporting year ends on December 31 of the following year.

Thus, company -the Innovation Center resident, created after October 1 of the reporting year, submits audit opinion until July 1 of the year, following the reporting year.

For example:

Legal entity was created on October 12, 2017, was registered in the State bodies. On October 24, 2017 it gained resident status of the Innovation Center. A resident of the Innovation Center provides audit opinion until July 1, 2019

In accordance with paragraph 27 of the Regulation, If the resident of the innovation centre exercises not appropriate activity, provided benefits shall be cancelled with the restoration of their payment obligations to the State budget of the Republic of Uzbekistan in accordance with the established procedure.

In turn, the Directorate within 5 business days officially notifies bodies of the State tax service, the State Customs Service, as well as makes proposal to the Coordinating Council to divest this legal person of the Innovation Center resident status.

No. Resident may not provide audit opinion for a year and a half, since audit of financial statements of the legal entity is performed for a fiscal year, i.e. from January 1 to December 31 of the reporting year.

 

Audit opinion may be sent via the postal service, at the electronic address of the Innovation Center info@muic.uz or coming to the office with covering letter.

Audit opinion shall be forwarded to the Directorate of the Innovation Center.

Auditor shall issue audit opinion according to the national standard of audit of the Republic of Uzbekistan « Audit report and audit opinion on financial statements » (NAS № 70) and « Auditor's report on audit of the special issue » (NAS № 80).

Audit of financial-economic activity includes establishment of reliability of the accounting and financial reporting of economic entities and compliance of their financial and economic operations with regulatory acts.

Yes, residents of the innovation centre must provide audit opinion for reporting year even in cases of not implementation of financial-economic activities by the residents.

Yes, residents of the innovation centre must provide audit opinion, even not using provided benefits.

Yes, residents of the innovation centre can carry out payment of dividends within proceeds from export of works/services in foreign currency in cashless form on international payment cards.

Resident of the Innovation Center pays salaries to employees -citizens of the Republic of Uzbekistan in national currency (in conversion to soums on the date of payment) and to foreign specialists -in foreign currency in cashless form to international payment cards, open in foreign banks.

Yes, if export of works and services for foreign currency is carried out through online shops in the World Wide information network Internet.

Proof of revenue from export of works and services for foreign currency through online shops in the World Wide information network Internet without export contract is a letter of the resident, addressed to the authorized bank. Revenue in foreign currency, received by the residents of the Innovation Center, including from export of goods (works, service) of in-house production, is subject to compulsory placing to their accounts in the authorized banks.

Purchase and sale of foreign currency on the internal currency market are carried out by residents of the Innovation Centre through authorized banks through submission of the application and related documents in the manner, prescribed by the legislation.

Monitoring of export and import contracts of the Innovation Center residents is carried out by authorized banks through Single electronic information system of foreign trade operations (SEISFTO), except in the case of works and services export for foreign currency through online shops in the World Wide information network Internet

A resident of the Innovation Center chooses independently authorized commercial bank for banking services and has the right to open accounts in foreign currency in one or more authorized commercial banks of the Republic of Uzbekistan.

The resident of the Innovation Center has the right to have an account and keep funds in foreign currency accounts in commercial banks abroad and use them independently in accordance with the legislation of the Republic of Uzbekistan.

Payment for imported software is made through banks, servicing residents of the Innovation Center. Import contract must be registered in the system SEISFTO, except in the case of works and services export for foreign currency through online shops in the World Wide information network Internet

A resident of the innovation centre may, within revenues from export of goods (works, services) or in other cases, stipulated by law (contribution in the authorized fund or obtaining loan in foreign currency, buying foreign currency in the established order, etc.) make payments for imported software in foreign currency.

Commercial banks can withdraw the Commission for transfer in foreign currency, fee for SWIFT and Commission of partner’s Bank (interest rate depends on the servicing banks).