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Uzbekistan simplifies business registration

24 June 2014

Starting a business in Uzbekistan now only takes 15 minutes.

Ever since the government launched a business-friendly website at the beginning of the year, small-business people have been able to register a new company without having to wait several months or to collect heaps of various documents.

"Reducing the burden of paperwork and of bureaucracy ... is essential in promoting business, and this is an area where we've made visible progress in the past few years," Justice Ministry spokesman Salimjon Dosmatov told Central Asia Online.

The government has also worked to remove legal barriers that hinder economic activity because "The first thing a would-be entrepreneur considers is the difficulty of keeping documents in order and of passing official inspections," Dosmatov told Central Asia Online.

For example, the government in May imposed legislative restrictions on the passing of new rules and regulationscapable of hindering entrepreneurs.

"As of June 1, any bill, act or decree regulating business activity will be screened for clauses potentially complicating entrepreneurship; if any such clauses are found, the document will be forwarded to the Justice Ministry for review," Dosmatov said. "If complications happen to be unavoidable, the new rules will take effect no sooner than three months after they are published on official websites."

Simplifying business owners' lives

Online business registration has been praised for simplifying the process.

"Thanks to this innovation, Uzbekistan ranks 21st in ease of 'Starting a Business' according to the World Bank," Chamber of Commerce and Industry of Uzbekistan official Feruza Zufarova said. "Anyone can register a business online through the Common Portal of Government Services. To become an entrepreneur, you won't have to meet with a single government official."

The system is part of the on-going introduction of e-government. An entrepreneur can file all documents online, sign them electronically and pay with a debit card.

"The procedure takes only 15 minutes!" Zufarova said. "To make registration even simpler, we are planning to reduce the fees for registering your business online and to eliminate many other requirements."

Moving to online options

Businesspeople have been actively using online instruments.

Since January, the number of entrepreneurs' complaints and applications filed through the Common Portal has nearly doubled compared to the number of such documents filed during the same period last year, saving time, money and the environment.

"The State Tax Committee [GNK] this year has been able to save about 5 billion UZS (almost US $2.2m) and about 100 tonnes of paper," GNK spokesman Aleksandr Tsoi told Central Asia Online.

To launch a business in Uzbekistan is relatively inexpensive: an individual entrepreneur has to pay a registration fee of 92,000 UZS (US $40); a limited liability company, the country's most popular form of business, pays 460,000 UZS (US $200).

"When I was starting up my business in 1998 ... it was very difficult and required a lot of documents," Tashkent entrepreneur Muzaffar Nazimov, who sells clothing, said. "Every official demanded money, threatening otherwise to shut down my business."

"Today, the situation is drastically different," Nazimov said. "We feel protected by the state, and the opportunity to file reports and complaints through the Common Portal has truly lightened our load."

Tangible benefits

"I never even imagined it would be that easy [to work]," Abror Muminov, general director of a Tashkent restaurant, who registered his business online, said. "For the first two years, all the newly established companies, including my own, are exempted from tax audits. So nobody's going to bother me."

The results of legislative innovations also show in the National Business Perception Index of Uzbekistan - a list of rankings compiled by the Tashkent-based Centre for Economic Research based on polls of 700 entrepreneurs from across the country.

"The National Business Perception Index for the first quarter of 2014 recorded the highest figures ever," Zufarova said. "Companies are reporting an increase in product orders and profits."