Tax incentives for startups and foreign investors in Uzbekistan’s IT sector

Tawney Kruger, a media specialist at Financial IT and a tech entrepreneur associated with initiatives such as PraaktisGO, Zaytra.ai, and kpi.com, previously discussed her experiences in establishing and operating in Uzbekistan. She has addressed the challenges of being a foreign founder, launching a business, and managing visas alongside IT Park support. In this article, she continues her exploration, emphasizing what many founders and investors view as the most critical factor in selecting Uzbekistan: its tax incentives.

Tawney Kruger, Tashkent, media expert and tech entrepreneur, linkedin

When I discuss Uzbekistan’s tech ecosystem, I consistently highlight one key theme: opportunity. Unlike numerous emerging markets, the concept of opportunity here transcends mere rhetoric; it is being formalized into legislation, integrated into fiscal policies, and facilitated through the state-supported IT Park. For startups and international investors, the most significant advantage remains the country's extensive package of tax incentives, which has transformed IT Park residency into a strategic benefit.

If you have been following my series on establishing and working in Uzbekistan, you are aware that I have already explored the realities of being a foreign founder, launching a business, and navigating visas and IT Park support. This article continues that narrative with a focus on what many founders and investors deem the most pivotal factor in selecting Uzbekistan: its tax incentives.

Since its establishment in 2019, IT Park has provided one of the most favorable tax regimes in the region. Member companies benefit from complete exemptions from corporate income tax, VAT, social tax, and turnover tax until January 1, 2028. Additionally, employee income taxes are reduced to a preferential rate of 7.5%, compared to the national rate of 12%. For founders, these exemptions decrease burn rates and extend runway during crucial development phases. For foreign investors, they offer stability in a jurisdiction actively seeking to align with global digital markets. Furthermore, export-oriented companies, which generate over 50% of their revenue from abroad, can secure long-term tax relief through 2040. Dividends distributed to foreign shareholders are subject to a capped tax rate of 5% until January 1, 2040, and from 2028 onward, these firms will remain exempt from all taxes except VAT. In a region where tax systems can often be unpredictable, Uzbekistan is delivering a clear message: stay, build, and export.

Broadening Opportunities for Global Participants

The government has taken additional measures to enhance the appeal of incentives for international entities. A new clause introduced in Presidential Decree No. 157, which was signed in October 2024, enables foreign IT service providers to qualify for corporate income tax exemptions from 2025 to 2030, provided they offer services to IT Park members whose annual export volume surpasses USD 10 million. This initiative is specifically aimed at attracting international service providers that do not benefit from double tax treaties, positioning Uzbekistan as a more viable hub for outsourcing collaborations.

Customs Relief and Infrastructure Support

In addition to tax incentives, the government is addressing another major obstacle: the costs associated with infrastructure and equipment. Until January 1, 2040, IT Park members are exempt from customs duties on imported technology equipment and components. For startups requiring servers, networking devices, or specialized hardware, this exemption facilitates access to top-tier infrastructure without the burden of duty expenses. It also reduces entry barriers for foreign companies that might otherwise encounter significant capital-intensive import costs.

Operational Assistance: The Zero-Risk Program

The tax framework is complemented by operational support, particularly through the Zero-Risk Program. This initiative provides new IT Park members with complimentary office space for up to 12 months in regional branches, assists in furnishing their workspaces with deferred payment options, and subsidizes payroll by covering between 5% and 15% of employee salaries based on company size. Additionally, it reimburses up to 50% of staff training expenses. For early-stage businesses, these initiatives work in tandem with tax incentives to lower fixed overheads and create a safety net against initial growth challenges. Collectively, the fiscal and logistical support packages offer startups a de-risked launchpad (IT Park Programs Guide).

The effects of these policies are already evident in the statistics. By the end of 2025, IT Park Uzbekistan had gathered over 3,400 member companies, including more than 970 firms with foreign investment. Uzbekistan's IT services were exported to 90 countries globally, highlighting the sector's expanding international presence. North America remained the largest market, representing 45% of exports, followed by Asia-Pacific and CIS countries at 26%, Europe and the UK at 24%, and the MENA region at 5%.

Developing a Sustainable Model

These incentives extend beyond mere short-term attraction; they constitute a multi-layered fiscal strategy aimed at sustainability. Immediate relief measures, such as tax holidays and customs exemptions, alleviate initial financial burdens. Mid-term strategies, including long-term dividend relief and partial exemptions post-2028, ensure that export-driven companies remain competitive. Operational supports, like payroll subsidies and complimentary office space, offer concrete assistance beyond tax incentives. This structured approach is what sets Uzbekistan’s model apart. Unlike other emerging markets that may depend on one-time benefits to draw in investors, Uzbekistan is establishing a system that evolves alongside the businesses it accommodates.

Importance for Founders and Investors

For entrepreneurs, the benefits are evident: reduced operating expenses, predictable tax obligations, and an extended financial runway. For investors, the transparency of dividend taxation and long-term exemptions mitigates uncertainty and enhances returns. Although challenges persist—ranging from infrastructure enhancements to scaling local talent—the government's fiscal strategy reflects a long-term vision. Tax incentives are not merely temporary attractions but foundational elements of an ecosystem aimed at positioning Uzbekistan as the leading IT hub in Central Asia.

A Global Perspective

In the wider global landscape, Uzbekistan’s strategy stands out favorably against other startup-friendly regions. While countries like Estonia and Georgia have earned reputations for efficient regulations, Uzbekistan sets itself apart with a unique blend: substantial tax relief, customs exemptions, and operational support, all underpinned by a state-backed institution.

Uzbekistan is not merely seeking fleeting attention; it is establishing a foundation for sustained growth and attracting founders and investors who are prepared to thrive in a rapidly maturing market.

Enterprise Uzbekistan

Enterprise Uzbekistan aims to reduce the cost and complexity of conducting business for technology firms. Companies that become part of the center benefit from tax reductions, customs relief, and streamlined administrative processes via a centralized one-stop system that includes English-language tax assistance. Firms outside the membership framework can still operate within the ecosystem, albeit without these fiscal benefits.

In conjunction with a well-defined legal framework, the model seeks to provide international enterprises with enhanced cost predictability and assurance when entering the Uzbek market.

Uzbekistan’s Next Chapter: From Incentives to Long-Term Competitiveness

Uzbekistan's strategy for developing its technology sector has transitioned from experimental to structural. By combining generous tax incentives with customs exemptions, operational assistance, and a developing institutional framework, the country is establishing conditions that many entrepreneurs spend years seeking in other markets. The aforementioned policies are not random perks or temporary boosts; rather, they constitute a deliberate system that mitigates risk, encourages export aspirations, and allows both startups and multinational corporations to scale confidently.

What is particularly noteworthy is the consistency of this approach. While many emerging markets oscillate between incentives and restrictions, Uzbekistan is charting a different course: one that emphasizes clarity, predictability, and long-term alignment with global digital economies. Whether you are a founder selecting your next operational hub or an investor assessing opportunities in frontier markets, the message is becoming increasingly difficult to overlook. Uzbekistan is positioning itself not merely as an alternative, but as a formidable contender — a destination where technology firms can establish, hire, export, and remain for the long term.

As new institutions like Enterprise Uzbekistan emerge, the ecosystem is evolving from promising to practical. It is no longer solely about incentives; it is about fostering a business environment where global companies feel they can operate with the same confidence they experience in more established markets. This may indeed be the most compelling incentive of all.