Tashkent, Uzbekistan (UzDaily.uz) — Uzbek President Shavkat Mirziyoyev has signed a decree establishing priority organizational measures to launch the Tashkent International Financial Centre (TIFC).
The decree was issued pursuant to Article 8 of the Constitutional Law “On the Tashkent International Financial Centre” and sets out the initial steps for organizing the centre’s operations.
TIFC leadership and responsibilities
The decree establishes working conditions and benefits for the head of the TIFC that apply to the national political level of the civil service, while remuneration and equivalent payments will be set out in an employment contract.
The head of the TIFC is responsible for coordinating draft priority documents needed to launch the centre, submitting proposals to the TIFC Supervisory Board on regulations governing the centre’s administration and Financial Services Authority, their organizational structures and senior appointments, including the Chief Justice, and coordinating government agencies’ actions related to launching the centre.
The head of the TIFC has also been instructed to organize the first meeting of the Supervisory Board within two months of the decree’s official publication.
Saida Mirziyoyeva, head of Uzbekistan’s Presidential Administration, has previously been appointed Managing Director of the Tashkent International Financial Centre concurrently with her current position. The decision was formalized by a presidential decree signed by Shavkat Mirziyoyev.
Legal status and powers of the Supervisory Board
The decree approves regulations governing the TIFC Supervisory Board. Under the document, the board is the centre’s highest governing body, operates on a permanent basis and consists of at least five members. The president of Uzbekistan serves as its ex officio chair.
The board is responsible for determining the TIFC’s overall strategy, direction and management, as well as implementing the centre’s objectives, tasks and principles established by the Constitutional Law.
No government body, official, centre participant or other person may interfere with the board’s activities except in cases expressly provided for by the Constitutional Law.
The decree also stipulates that board decisions must not undermine the operational independence of the Financial Services Authority in licensing, regulation, supervision, inspections and enforcement, or the judicial independence of the Tashkent International Commercial Court.
The board approves the centre’s annual and medium-term strategic plans, key performance indicators, annual and consolidated budgets of TIFC bodies, as well as their audited financial and other reports.
It also makes decisions on the centre’s legal and institutional framework, including procedures for drafting and publishing TIFC decisions, conducting public consultations, regulatory impact assessments and applying the law of England and Wales.
The board may also establish subordinate or affiliated structures, institutions, committees, commissions, working groups and representative offices, attract investors and develop international cooperation.
The board submits to the president a candidate for Chief Justice of the Tashkent International Commercial Court. On the recommendation of the Chief Justice, it determines the remuneration and other terms of service for judges of the court.
Composition and formation of the board
At least one-third of the board’s members must be individuals who have never held, or currently hold, any position in Uzbekistan’s government system and who are specialists in international finance and commercial law.
Board members, other than the chair, are appointed by the president for five-year terms, with the possibility of reappointment. The term of a board member appointed in this manner may be terminated early only on specified grounds and by a written decision of a majority of board members, with the reasons submitted in writing to the president.
When selecting candidates for the board, experience in international finance, capital markets, financial regulation, banking, insurance, digital assets, fintech, commercial law, dispute resolution, corporate governance, public administration, infrastructure, technology and investment attraction will be taken into account.
Meetings and decisions
The board meets as necessary, but at least twice a year. A meeting is quorate when a majority of members are present. Decisions are adopted by a majority of votes cast by members present. Each member has one vote, while the chair has the deciding vote in the event of a tie.
On matters that do not require discussion at a meeting, as well as in cases provided for by the regulations, board decisions may be adopted through written voting.
Budget, audit and transparency
The board reviews, approves and submits the TIFC bodies’ consolidated annual budget and consolidated annual financial statements. It also approves annual budgets, audit opinions and activity reports of the centre itself.
The board appoints independent auditors recognized in Uzbekistan and internationally, determines the terms of their engagement and reviews audit results. It also determines procedures for monitoring the targeted and efficient use of state budget funds allocated to TIFC bodies, in coordination with Uzbekistan’s Accounts Chamber.
Within four months after the end of each financial year, the board must ensure that annual transparency reports and the centre’s consolidated annual financial statements are published in the official register and on official websites in English, with free public access.
Decisions, orders, regulations, codes and other binding documents of the centre are adopted by the board in English. A document not published in the official register in English has no legal effect for TIFC persons.
Decisions requiring government approval
An annex to the decree contains a list of 10 TIFC decisions that must be approved by Uzbekistan’s government bodies.
These include criteria and procedures for determining activities falling within the centre’s territory; procedures for providing financial services to Uzbekistan’s tax residents; reporting exchange and currency control procedures with the Central Bank; a tax residency programme for investors; tax incentives and requirements for qualified centre participants; tax and customs administration procedures; the recruitment of foreign workers and migration registration; as well as procedures for monitoring the use of budget funds and cooperation with the Central Bank on consolidated supervision.
The responsible government agencies for these areas are the Ministry of Economy and Finance, Ministry of Justice, Central Bank, National Agency of Perspective Projects, Ministry of Investment, Industry and Trade, Tax Committee, Ministry of Internal Affairs, Ministry of Digital Technologies, State Security Service and Accounts Chamber.
Initial-stage decisions
A separate annex approves a list of 31 decisions and rules that the centre must adopt during its initial stage of operations.
The list covers the application of the law of England and Wales; regulation of financial services and markets; company formation and registration; bankruptcy and restructuring; real estate and leasing; labour relations; personal data protection; investment funds; professional services; bank recovery and resolution; administrative matters; beneficial ownership; consumer protection; limited liability companies; takeover regulation; trusts; automatic exchange of financial information under the Common Reporting Standard (CRS); compliance with the Foreign Account Tax Compliance Act (FATCA); trade licences and permits; interpretation of rules; electronic transactions; funds; tax and customs regulation; establishment of the Tashkent International Commercial Court; and procedures for adopting and publishing the centre’s decisions.
The annex specifies that these decisions are necessary to launch the centre at the initial stage and may be adopted as a package. TIFC bodies may also adopt other decisions necessary within their respective powers.
Tashkent International Financial Centre
The legal status of the TIFC is established by the Constitutional Law “On the Tashkent International Financial Centre,” which was signed by President Shavkat Mirziyoyev on 10 July. The law sets out the centre’s operating principles, governance structure and special legal regime.
The TIFC will apply the principles, legislation and judicial precedents of England and Wales where they do not conflict with the Constitution of Uzbekistan. The law also defines the powers of the Tashkent Financial Services Authority and the Tashkent International Commercial Court.
The financial centre is being established within the Tashkent City complex. Work on its creation began in late March following the signing of a presidential decree.
The TIFC’s main areas of activity will include attracting investment, developing the capital market, expanding the range of financial services and creating an ecosystem for innovation and professional services. The centre is expected to develop banking, insurance and Islamic finance, fintech, e-commerce, and digital and crypto-asset markets.
The Tashkent Financial Services Authority will license and regulate TIFC participants. The International Commercial Court will have exclusive jurisdiction over disputes falling within its jurisdiction.
The centre will operate under a special regime for its participants. They will be able to recruit foreign specialists without obtaining work permits and make payments and fulfil monetary obligations in foreign currencies or crypto-assets in accordance with contracts. Foreign employees and their family members will be able to obtain special visas valid for up to five years. Free repatriation of capital and income will also be allowed.
Tax and customs incentives for TIFC participants will remain in effect until 1 January 2076. In particular, the centre’s governing bodies and participants will be exempt from corporate income tax and social tax on income from services provided within the TIFC, except for cryptocurrency exchange activities.
For Uzbekistan tax residents working at the centre, the personal income tax rate is set at 7%. Salaries received by foreign citizens and stateless persons working at the TIFC will be exempt from personal income tax.
The incentives also cover income from the sale of stakes in TIFC participant companies, transactions involving securities included in the official quotation list of the Tashkent Stock Exchange, as well as dividends and interest income from such securities.
A range of activities will be exempt from VAT, including banking, insurance, investment and financial services, payment systems and fintech. Goods imported for use within the TIFC will also be exempt from customs duties.
