Uzbekistan: Economic Risks and How to Mitigate Them (Currency, Regulatory, Cultural)

Key takeaways

  • The economy grew 7.7% in 2025, with year-end inflation of 7.3% (National Statistics Agency).
  • Core tax rates are unchanged for 2026: corporate income tax 15%, VAT 12%, personal income tax 12%.
  • 2026 brought targeted changes that matter for foreign companies: AI-based risk scoring of VAT invoices, higher tax for e-commerce, and a new dividend withholding offset.
  • Most risks are manageable if they are assessed before capital is committed.

Since the currency liberalisation of 2017, Uzbekistan has become one of the fastest-growing economies in Central Asia. Tax reform, record foreign investment and industrial programmes have made the country a regional growth hub. For an international company, the question is not whether risks exist, but how to structure the business so that they stay under control. In practice, they fall into three groups: currency, regulatory and cultural.

Facts and figures

  • Growth: GDP grew 7.7% in 2025 and reached about 1,850 trillion soums (roughly $147 billion at the average 2025 exchange rate of about 12,577 UZS/USD).
  • Inflation: 7.3% at the end of 2025 — still above the Central Bank’s target, which keeps interest rates high.
  • Taxes in 2026: corporate income tax 15%, VAT 12%, personal income tax 12%, social tax 12%, property tax for legal entities 1.5%.
  • Incentive zones: as of 1 July 2026, there were 34 special economic zones, 400 small industrial zones and 27 technology parks, with more than 8,600 participating companies.
  • Licensing: energy, natural resources, finance, pharmaceuticals and several other sectors have separate licensing and compliance regimes.

Currency risk

The som floats, and the economy is exposed to external prices and remittance flows. Importers of equipment and raw materials face exchange-rate differences between contract signature and payment; investors face translation risk on profits and dividends.

How to mitigate: currency adjustment clauses in contracts; partial indexation of prices to USD or EUR where permitted; matching currency of revenues and costs; stress-testing the financial model at several exchange-rate scenarios; planning the timing of dividend repatriation.

Regulatory risk

The main tax rates are stable, but secondary rules change often. Examples from 2026 alone:

  • From 1 January 2026, an AI system rates every VAT invoice as low, medium or high risk; input VAT on high-risk invoices can only be recovered after the supplier pays it to the budget. Supplier due diligence now has a direct cash impact.
  • E-commerce entities pay 15% corporate income tax instead of 10%.
  • CIT incentives granted by presidential decisions are now limited to accelerated depreciation.
  • Non-residents can offset dividend withholding tax against tax already paid on dividends the Uzbek company received from other Uzbek entities (subject to holding conditions).

Product regulation is another source of delay: technical regulation rules for imported goods were reformed in 2024–2025, and some importers had goods held at customs for months while the new procedures were being implemented. If you import equipment, plan Uzstandard certification into the timeline.

How to mitigate: legal and tax due diligence before investment; monitoring of secondary legislation; a sector-specific permit map; contracts that allocate regulatory risk; ongoing legal and tax support once operations start.

Cultural and management risk

Uzbek business culture combines formal procedures with the strong influence of personal relationships. Decisions can take longer than in Western markets, and communication is often indirect. Foreign managers who ignore this lose time and partners.

How to mitigate: adapt corporate standards to local practice; invest in long-term relationships; involve local managers in key negotiations; recruit local managers who can bridge headquarters and local partners.

Practical conclusion

Entering the Uzbek market is not about avoiding risk but about structuring it. Companies that model currency scenarios, assess regulatory constraints before investing and adapt management to local culture gain an advantage already at launch. These elements belong in a market entry strategy for Uzbekistan, not in a list of problems to solve later.

This article is for general information and is not legal or tax advice.

If you are planning to enter the Uzbek market or scale an existing project, assess the risks before committing capital. Yasdar Consulting provides business support in Uzbekistan — from risk assessment to day-to-day operations. Contact us to discuss your project.