New Initiatives in Finance and Digital Technologies Presented

On March 25, President Shavkat Mirziyoyev examined a presentation regarding the creation of the Tashkent International Financial Center, the initiation of the International Center for Digital Technologies, and the incorporation of Islamic finance mechanisms into the banking sector.

In light of escalating global geopolitical tensions, the competition to attract investment is becoming more pronounced. The nation's abundant natural resources, economic potential, and ongoing reforms provide it with a considerable advantage in this area.

“Many international companies, having assessed regional risks, have already begun exploring new markets. This is a historic opportunity for us. In such a situation, we must seize this opportunity and act swiftly to attract international financial institutions,” the President remarked.

To meet this year’s goal of securing over $50 billion in investments, it is essential to enhance investors’ access to the Uzbek market, provide modern infrastructure, establish a legal framework that aligns with international standards, offer additional incentives, and, crucially, ensure a dependable and transparent business environment.

In this context, three key areas aimed at further improving the country’s investment appeal were discussed: the establishment of international financial and digital technology centers and the introduction of Islamic finance services.

Tashkent International Financial Center

During the discussion, it was highlighted that this center will serve as an effective mechanism for attracting new forms of investment and promoting sustainable economic growth. Projections indicate that by 2030, the financial center could draw an additional $20–25 billion into the economy, contribute up to 1 percent to annual GDP growth, create as many as 15,000 high-skilled jobs, and facilitate the training of 10,000 specialists.

A special legal regime is planned for the center’s operations. Specifically, the principles of English common law will be applicable, provided they do not conflict with the governing laws of the center. The governing bodies of the center will have the authority to establish their own regulations. Additionally, a Tashkent International Commercial Court and an international arbitration center focused on dispute resolution will also be created.

Residents of the center will be provided with extensive opportunities, which will include the free movement and repatriation of capital, unrestricted foreign exchange transactions, access to modern payment methods (including digital assets), preferential tax policies, and a streamlined visa process.

The primary focus areas of the center will encompass financial services, investment and banking, insurance, digital asset and securities transactions, payment systems and services, as well as services related to fintech.

International Digital Technology Center — “Enterprise Uzbekistan”

The second key focus area is the establishment and growth of the International Digital Technology Center branded as “Enterprise Uzbekistan.”

A unique legal framework is planned for this center, lasting until 2100. Within its regulatory sandbox, it will allow for the testing of innovative solutions, payment of salaries in foreign currency, adherence to international labor standards, and the processing of personal data in line with global standards using cloud technologies.

Supportive conditions will be established for the safeguarding of intellectual property, investments, startups, and exports, along with customs and tax incentives.

The main areas of focus will include artificial intelligence, digital transformation, research and development, certification, startups, and data centers.

By 2030, the center aims to attract up to 1,000 companies, generate over 300,000 jobs, and reach an export potential of up to $5 billion. It has been noted that several prominent international technology firms have already shown interest in this initiative.

Introduction of Islamic Banking

The third priority area addressed was the implementation of Islamic banking.

Plans are in place to introduce financial instruments such as murabaha, muzaraba, wakala, salam, musharaka, Islamic leasing, and other Islamic finance mechanisms that align with national legislation.

Additionally, it is anticipated that value-added tax will not apply to trade margins, income from investment deposits will be tax-exempt, and Islamic lease agreements will be classified as financial leasing transactions.

To ensure effective governance in this sector, a Council on Islamic Finance will be formed under the Central Bank. Similar councils will also be established within banks that provide Islamic financial services.

These entities will be tasked with establishing standards, aiding in the formulation of regulatory frameworks, offering guidance on intricate matters, examining contracts and internal documents, and ensuring adherence to compliance.

This year, there are plans to introduce an Islamic “window” in at least one commercial bank. From 2026 to 2030, the establishment of two fully operational Islamic banks is anticipated. Collectively, these initiatives are projected to draw in around $1 billion in additional investments and deposits during this timeframe.

The Head of State highlighted that these three sectors will play a crucial role in fostering a contemporary financial and technological ecosystem in the nation and has directed that their practical execution be expedited.