"It's time to bring order here." The President on regulating commercial rents

“It’s time to establish order here.” The President on regulating commercial leases

On August 18, at an open dialogue between the President of Uzbekistan and entrepreneurs, Zafar Hoshimov, founder of the Korzinka supermarket chain and chairman of the Savdo va Servis association, proposed improving the regulation of commercial leases of real estate.

The entrepreneur noted that the stability of lease relations is very important, especially for small businesses. Zafar Hoshimov said: “An entrepreneur invests money in a rented room, repairs it, advertises it, and trains customers to this place. If the lease relations are unstable, this becomes a big risk for him. Today, there are serious problems in this area, and I think it’s time to regulate them at the legal level.”

According to him, one of the problems is the short lease terms, which do not correspond to the long-term plans of the business. “For example, under pressure from the landlord, lease agreements are concluded for a short period, while the business plan and business prospects are designed for a long period. If the business starts to go well, there are cases when the owner unjustifiably and excessively overstates the rent,” he said.

Hoshimov drew special attention to the practice of unofficial payment of part of the rent. “The second problem, I think, concerns the entrepreneurs themselves: there is a “white” part of the rent, a “black” part, and money given in an envelope. I want to tell entrepreneurs: we need to stop this,” he said.

The entrepreneur noted that officially reflecting the entire amount of the rent in expenses allows businesses to reduce their taxable base. “Full official payment is beneficial for both the tenant and the lessor. Although the lessor pays taxes, for the entrepreneur these expenses reduce the taxable base. "Many people still don't understand this and continue to work according to the old practice," said the founder of Korzinka.

He mentioned the protection of the funds that the tenant invests in the premises as another issue. Zafar Hoshimov said: "If the lease agreement is terminated without reason, the entrepreneur's investment in this facility should be protected."

In his opinion, it is necessary to create a separate legal regime for commercial leases that provides for longer-term relationships and additional guarantees for the business. "We need to create such a legal regime for commercial leases in which entrepreneurs can enter the premises for a long period, have the opportunity to extend the contract and receive more guarantees. I'm not talking about the confrontation between owners and entrepreneurs. I think it's time to strike a balance between them,” he said.

**The President has instructed to prepare proposals within two months**

President Shavkat Mirziyoyev supported the need to improve the regulation of real estate leasing. The head of state said: “On improving real estate leasing and implementing the proposal that Zafar [Hoshimov] has just made: [Deputy Prime Minister Jamshid] Kuchkarov, [Minister of Justice Akbar] Tashkulov, together with the Ministry of Justice and the Public Council, to put it in its place when the time comes. If you all formulate proposals together, discuss them with our representatives and present concrete solutions within two months, I am ready to support them.”

During his speech, Hoshimov also spoke about the activities of the Trade Academy established under the “Trade and Service” association. According to him, the academy has already trained 6,000 specialists, and another 1,200 are undergoing training. “Of the 6,000 specialists we have trained, 82 percent have already found jobs in the last eight months,” the businessman said.

Shavkat Mirziyoyev called this indicator a great achievement. The President said: “The fact that 82 percent of the 6,000 trained specialists have been employed is a great achievement.”