State support for entrepreneurs expanded

The law signed by President Shavkat Mirziyoyev on August 17 expanded state support for entrepreneurship. This law is called "On Amendments and Amendments to Certain Legislative Acts of the Republic of Uzbekistan to Strengthen Guarantees of Freedom of Entrepreneurship and Improve Mechanisms for Supporting Entrepreneurs."

The main purpose of the law is to create additional guarantees for the effective operation of entrepreneurial entities, legally strengthen the mechanisms for their state support, and improve relations in the industry.

The document clearly defines the basic principles of freedom of entrepreneurship. These include legality, freedom of entrepreneurship, equality of entrepreneurial entities, protection of trust, inviolability of private property, stability and clarity of legislation on entrepreneurship.

According to the law, entrepreneurial entities are divided into small, medium, and large categories. Small business entities include individual entrepreneurs, micro-firms and small enterprises. For medium-sized businesses, the total revenue criterion for the calendar year is set at 10 billion soums to 100 billion soums, and for large businesses, it is set at more than 100 billion soums. The category of a business entity is determined based on its total revenue for the calendar year.

The new law also defines the main types of state support for entrepreneurship. In particular, entrepreneurs may be provided with financial, property and infrastructural support, as well as state grants, loans and tax and customs privileges established by law.

Financial support includes the allocation of grants for projects of economic and social importance, the allocation of financial resources for loans to commercial banks, compensation for part of the interest costs on loans, and the attraction of funds from international financial institutions. Entrepreneurs are also provided with the opportunity to attract preferential loans under state guarantees. In addition, in order to support business entities, laws may provide for tax and other mandatory payment incentives.

The law also provides for mechanisms for property support for entrepreneurs. In particular, the possibilities of leasing state facilities, allocating grants for socially and economically significant projects, as well as giving certain priority to products of local manufacturers in public procurement are established. Support measures related to the demand for the use of local goods instead of imported goods may also be applied.

Within the framework of infrastructural support for entrepreneurs, it is envisaged to connect the territories where they operate to external engineering and communication networks, and to establish or develop roads and other infrastructure facilities.

The law also provides for state support for innovative entrepreneurial projects aimed at solving economic, social and environmental problems. Such entrepreneurs may be granted tax, customs and other benefits and preferences, state subsidies for social projects, and reimbursement of training and retraining costs for employees. A mechanism for issuing state social orders to social entrepreneurship entities is also provided for.

The document also strengthens the concept of a sustainability rating for business entities at the legal level. A sustainability rating is maintained in order to assess and encourage the activities of entrepreneurs operating in compliance with the requirements of the legislation. The procedure for determining and maintaining it is determined by the legislation.

At the same time, the concept of "responsible business conduct" has been introduced. This takes into account criteria such as the entrepreneur's respect for human rights, taking measures to avoid harm to the environment, introducing effective anti-corruption mechanisms, complying with business and advertising rules, and paying taxes on time. A separate register of entrepreneurs conducting responsible business will be formed. Such entities may be provided with grants, tax benefits, priority in public procurement, and other support measures in accordance with the procedure established by law.

The law also revised the norms related to the suspension of the activities of business entities. Suspension of the activities of a business entity as a measure of legal influence is applied, as a rule, by the court. In certain emergency situations, supervisory bodies may suspend activities for a short period of time, but then they are required to apply to the court. It is established that the requirements of legality, reasonableness and proportionality must be observed when applying control and legal influence measures to business entities.

The law will enter into force three months after the date of its official publication.