Uzbekistan - a new regional IT-hub

Uzbekistan is currently at the start of a new era - an era of digitalization and the development of endless technological capabilities. The country is actively working to develop the ICT sector.

The Republic faces new challenges: expanding IT prospects and showcasing its potential as a global hub for the advancement of digitalization and information technologies.

Let’s dive into details on how Uzbekistan is becoming a state with opportunities for IT businesses.

Workforce

Labor resources are crucial to the functioning of the economy. Uzbekistan has a population of over 35 million as of February 1, 2023, 20.3 million of that, or over 56%, are individuals with an average age of 29.

The state has outstanding professionals in a variety of sectors, including finance and economics, medicine, engineering, and IT.

The literacy rate in the Republic is over 99% and more than 60% of сitizens speak at least one foreign language fluently.

The two most widespread and widely used languages among Uzbeks are English and Russian. Schools, colleges, and private language centers all teach them. English proficiency is now required in many companies and organizations due to the language's rising popularity.

Relocation program

There are numerous ways to demonstrate a state's investment appeal. The introduction of the TashRush relocation program was the strategy selected by IT Park Uzbekistan. It aims to draw IT professionals and organizations from abroad to Uzbekistan.

Support starts even before the specialists show up, with the analysis of the flight and, if necessary, house and job hunting. Further, employees of IT Park greet professionals at the airport, issue SIM cards, arrange transportation to hotels, etc.

Several services are made available to IT professionals and their families as part of the relocation program with the goal of assisting them in settling in as easily as possible.

Additionally, they receive support with registration of a company, assistance in hiring suitable employees, allocation of office space with every convenience on favorable terms, etc.

Over four thousand international IT professionals have benefited from the program's services so far. Their expertise and experience allow them to improve the skills of young professionals in Uzbekistan as they only provide services to overseas companies.

Parallel to the Tash Rush program, IT Park introduced the IT Visa, which permits no-hassle entry and departure from Uzbekistan for up to three years. There is a simplified application process for residence permits available to its holders. The visa also gives access to social services - medical care and education on equal terms with the citizens of Uzbekistan.

Three categories of people can obtain such a visa:

- investors who invest in the IT sector;

- founders of IT Park resident companies;

- IT professionals whose annual income for the last 12 months made up at least $30 000.

Visit https://itvisa.uz/ to find out more about the TashRush program and services offered by IT Park for foreign companies and IT professionals.

Business opportunities

Over the years of its existence, IT Park has been able to make a significant contribution to the development of IT business in Uzbekistan due to special conditions.

The fundamental Decree of Uzbekistan’s President (No.5099) was adopted in 2017, according to the document IT companies were granted several benefits and preferences:

-complete tax exemption;

- 5% tax rate reduction on foreign company dividends;

-12% to a 7.5% income tax rate reduction;

-customs-free import of equipment;

- waiver of the requirement to obtain a permit to hire foreign specialists;

- the ability to conduct business remotely without renting an office;

- the ability to pay dividends to founders and wages in foreign currency;

- reduction in corporate taxes from 5%-12% to 0%;

- social tax rate reduction from 12% to 0%;

- Export through electronic trading platforms without an export contract.

A unique opportunity for businesses looking to establish a legal company and a bank account in Uzbekistan was also made available with the introduction of the ONE STOP SHOP service. Applicants are given access to all the services required for a firm to successfully launch in Uzbekistan, and a team of experts will assist with making the required paperwork ready, registering the company, and opening a bank account.

The number of IT services provided by residents in 2022 exceeded over 5 trillion UZS ($454 million) and their exports made up $140 million, demonstrating how benefits and favors offered to IT Park resident enterprises contribute to steady growth. It’s also important to note the growth of the IT businesses which now counts 1335 companies. 

How to become a resident?

A legal entity must be established on Uzbekistan's territory in order to become a resident. The application must be submitted online at my.it-park.uz and should include information on the project’s goals, marketing strategy, sales and production strategy, and financial plan.

Data and indicators should be reasonable, structured, and interconnected.

Applications may only be submitted online through the portal and are considered within 15 working days.

The legal entity applying for residency must be engaged in one of the following activities:

- computer programming, IT consulting and other related IT services;

  - data processing and storage services;

- IT education;

- Services export;

- development and maintenance of multimedia, design and animation products using software;

- Implementation of venture finance programs and acceleration of IT projects by organizations based in IT Park and its branches, registered at a legal address.

Once granted resident status, a company is listed in the resident's register and receives an electronic certificate in their personal account.

Major IT firms like Epam Systems, Exadel, ITechArt, Itransition, Gcore are already on the list of the residents at IT Park Uzbekistan. Each of them is a pioneer in their respective fields, and residence at IT Park Uzbekistan enables them to draw in the top talent, use the experience of local entrepreneurs and all the opportunities to advance their business projects.

“Our business, which was established in July 2022, focuses on IT outsourcing, including the design, development, upkeep, and technical support of information systems built based on ORACLE solutions.

In recent years, the Uzbek market has grown rapidly. I used the data for January 2022 as the guide: in 4 years, the state GDP rose from 4.5% to 6.9%; the economy increased by 24%; and investments in the IT industry surged by four times. At the same time, the gross value added created in the service sector "information and communication" has doubled since 2016 from 4.4 to 8.8 trillion UZS ($770 million), and the volume of services provided by information and communication type of economic activity went up from 6.3 to 12.9 trillion UZS ($1.121 billion)”, - Eduard Gatiyatullin, founder of SMK-SYSTEM LLC.

Eduard claims that his team has recently gained extensive experience in using Oracle solutions, which are used by a significant number of enterprises and government agencies in Uzbekistan. The republic's culture of educating young professionals and boost their enthusiasm has emerged as an essential factor to not just provide services for consumers but, if feasible, to pass on the acquired experience to younger professionals.

“Only three months passed since our first visit to Uzbekistan and the establishment of a firm with obtaining an IT Park resident status. We are happy to be a part of the Uzbek market's present moment of rapid growth and active technological development.

Both the government and the population exhibit a keen interest in the IT sector. This is not surprising given the significant proportion of young people in Uzbekistan who are enthusiastic about integrating technology into daily life.

Some of our employees have already started to relocate and settle. Certainly, the kindness and hospitality our guys are welcomed with should be noted. IT Park offers the most comprehensive help possible. We have high hopes for the future and intend to establish a fully functional office on the territory of IT Park in 2023”, Sergey Zudin, founder and CEO of SaluteDev LLC, an IT Park resident company.

“Several factors coincided at the same time when choosing a country. Firstly, Uzbekistan for us is a large, rapidly developing market and at the same time Russian speaking. Many companies from Uzbekistan have already been our clients, even though we did not accept payments in UZS directly, only local partners could help here.

On the other hand, from our acquaintances we found out about IT Park, the assistance we can receive, and the benefits, including tax incentives. We learned that a non-citizen could start a business, serve as its founder and CEO, and the company would be able to run fully. I must emphasize that this is a crucial factor since our experience in starting a business in Latin America speaks of the potential challenges, our route in Uruguay was long and we couldn't completely resolve all the challenges. With the assistance of IT Park, we nearly immediately achieved resident status in about 1.5 months without having anything prior to this.  

The level of advancement in electronic document management and communication with the government through online portals also amazed me.

The third aspect is political neutrality, which we believe will help us strengthen our presence not just within the state but also allow us to export to other states and establish ourselves as a significant market player going forward.

We only recently have become residents, but we've already been able to create a business, benefit from tax breaks, and relocate a number of staff from Russia. We were able to register them in a company without purchasing a patent because they are highly competent programmers, and we were also able to provide the guys and me with IT cards so we could receive healthcare on an equal terms with citizens.”, Sergey Golovanevski, one of the owners of amoCRM and CEO of IT Park resident company amoEast.

Uzbekistan is the state with enormous potential in IT sector. It has taken significant steps in developing local IT industry and is currently sector’s one of the key participants.

Investment flow into IT sector fosters the growth of startups and companies while also introducing the latest technologies in numerous sectors of the economy and public administration.

The IT Park Export Department is here to assist you in case you have any questions:

Website: https://bpo.it-park.uz/

Talat Akromov
t.akromov@it-park.uz
+998889009060 (Telegram, Whatsapp)

Sultonmurod Rasulov
s.rasulov@it-park.uz
+998901869933 (Telegram)