Doing Business 2019 Uzbekistan Economy Profile Uzbekistan Page 1 Doing Business 2019 Uzbekistan Economy Profile of Uzbekistan Doing Business 2019 Indicators (in order of appearance in the document) Starting a business Procedures, time, cost and paid-in minimum capital to start a limited liability company Dealing with construction permits Procedures, time and cost to complete all formalities to build a warehouse and the quality control and safety mechanisms in the construction permitting system Getting electricity Procedures, time and cost to get connected to the electrical grid, and the reliability of the electricity supply and the transparency of tariffs Registering property Procedures, time and cost to transfer a property and the quality of the land administration system Getting credit Movable collateral laws and credit information systems Protecting minority investors Minority shareholders’ rights in related-party transactions and in corporate governance Paying taxes Payments, time, total tax and contribution rate for a firm to comply with all tax regulations as well as post-filing processes Trading across borders Time and cost to export the product of comparative advantage and import auto parts Enforcing contracts Time and cost to resolve a commercial dispute and the quality of judicial processes Resolving insolvency Time, cost, outcome and recovery rate for a commercial insolvency and the strength of the legal framework for insolvency Labor market regulation Flexibility in employment regulation and aspects of job quality Page 2 Doing Business 2019 Uzbekistan About Doing Business The Doing Business project provides objective measures of business regulations and their enforcement across 190 economies and selected cities at the subnational and regional level. The Doing Business project, launched in 2002, looks at domestic small and medium-size companies and measures the regulations applying to them through their life cycle. Doing Business captures several important dimensions of the regulatory environment as it applies to local firms. It provides quantitative indicators on regulation for starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. Doing Business also measures features of labor market regulation. Although Doing Business does not present rankings of economies on the labor market regulation indicators or include the topic in the aggregate ease of doing business score or ranking on the ease of doing business, it does present the data for these indicators. By gathering and analyzing comprehensive quantitative data to compare business regulation environments across economies and over time, Doing Business encourages economies to compete towards more efficient regulation; offers measurable benchmarks for reform; and serves as a resource for academics, journalists, private sector researchers and others interested in the business climate of each economy. In addition, Doing Business offers detailed subnational reports, which exhaustively cover business regulation and reform in different cities and regions within a nation. These reports provide data on the ease of doing business, rank each location, and recommend reforms to improve performance in each of the indicator areas. Selected cities can compare their business regulations with other cities in the economy or region and with the 190 economies that Doing Business has ranked. The first Doing Business report, published in 2003, covered 5 indicator sets and 133 economies. This year’s report covers 11 indicator sets and 190 economies. Most indicator sets refer to a case scenario in the largest business city of each economy, except for 11 economies that have a population of more than 100 million as of 2013 (Bangladesh, Brazil, China, India, Indonesia, Japan, Mexico, Nigeria, Pakistan, the Russian Federation and the United States) where Doing Business also collected data for the second largest business city. The data for these 11 economies are a population-weighted average for the 2 largest business cities. The project has benefited from feedback from governments, academics, practitioners and reviewers. The initial goal remains: to provide an objective basis for understanding and improving the regulatory environment for business around the world. More about Doing Business (PDF, 5MB) Page 3 Doing Business 2019 Uzbekistan Ease of Doing Business in DB 2019 Rank Region Europe & Central Asia 190 1 Uzbekistan Income Category Lower middle income 76 DB 2019 Ease of doing business score Population 32,387,200 0 100 City Covered Tashkent 67.40 DB 2019 Ease of Doing Business Score 0 100 77.89: Kazakhstan (Rank: 28) 77.37: Russian Federation (Rank: 31) 73.54: Moldova (Rank: 47) 72.34: Regional Average (Europe & Central Asia) 68.33: Kyrgyz Republic (Rank: 70) 67.40: Uzbekistan (Rank: 76) Note: The ease of doing business score captures the gap of each economy from the best regulatory performance observed on each of the indicators across all economies in the Doing Business sample since 2005. An economy’s ease of doing business score is reflected on a scale from 0 to 100, where 0 represents the lowest and 100 represents the best performance. The ease of doing business ranking ranges from 1 to 190. Rankings on Doing Business topics - Uzbekistan 1 12 28 35 41 55 60 64 64 71 82 91 Rank 109 134 136 165 163 190 Starting Dealing Getting Registering Getting Protecting Paying Trading Enforcing Resolving a with Electricity Property Credit Minority Taxes across Contracts Insolvency Business Construction Investors Borders Permits Ease of Doing Business Score on Doing Business topics - Uzbekistan 100 95.79 86.05 80 76.92 66.60 65.00 67.26 61.37 60.00 Score 60 49.79 45.21 40 20 0 Starting Dealing Getting Registering Getting Protecting Paying Trading Enforcing Resolving a with Electricity Property Credit Minority Taxes across Contracts Insolvency Business Construction Investors Borders Permits Page 4 Doing Business 2019 Uzbekistan Starting a Business This topic measures the number of procedures, time, cost and paid-in minimum capital requirement for a small- to medium-sized limited liability company to start up and formally operate in each economy’s largest business city. To make the data comparable across 190 economies, Doing Business uses a standardized business that is 100% domestically owned, has start-up capital equivalent to 10 times the income per capita, engages in general industrial or commercial activities and employs between 10 and 50 people one month after the commencement of operations, all of whom are domestic nationals. Starting a Business considers two types of local limited liability companies that are identical in all aspects, except that one company is owned by 5 married women and the other by 5 married men. The ranking of economies on the ease of starting a business is determined by sorting their scores for starting a business. These scores are the simple average of the scores for each of the component indicators. The most recent round of data collection for the project was completed in May 2018. See the methodology for more information. What the indicators measure Case study assumptions Procedures to legally start and formally operate To make the data comparable across economies, several assumptions about the a company (number) business and the procedures are used. It is assumed that any required information is readily available and that the entrepreneur will pay no bribes. • Preregistration (for example, name verification or reservation, notarization) The business: • Registration in the economy’s largest business - Is a limited liability company (or its legal equivalent). If there is more than one type city of limited liability company in the economy, the most common among domestic firms • Postregistration (for example, social security is chosen. Information on the most common form is obtained from incorporation registration, company seal) lawyers or the statistical office. - Operates in the economy’s largest business city. For 11 economies the data are • Obtaining approval from spouse to start a business or to leave the home to register the also collected for the second largest business city. company - The entire office space is approximately 929 square meters (10,000 square feet). - Is 100% domestically owned and has five owners, none of whom is a legal entity; • Obtaining any gender specific document for has a start-up capital of 10 times income per capita and has a turnover of at least company registration and operation or national 100 times income per capita. identification card - Performs general industrial or commercial activities, such as the production or sale of goods or services to the public. The business does not perform foreign trade Time required to complete each procedure activities and does not handle products subject to a special tax regime, for example, (calendar days) liquor or tobacco. It does not use heavily polluting production processes. • Does not include time spent gathering - Leases the commercial plant or offices and is not a proprietor of real estate and the information amount of the annual lease for the office space is equivalent to the income per capita. • Each procedure starts on a separate day (2 procedures cannot start on the same day) - Does not qualify for investment incentives or any special benefits. - Has at least 10 and up to 50 employees one month after the commencement of • Procedures fully completed online are recorded operations, all of whom are domestic nationals. as ½ day - Has a company deed that is 10 pages long. • Procedure is considered completed once final document is received The owners: • No prior contact with officials - Have reached the legal age of majority. If there is no legal age of majority, they are assumed to be 30 years old. Cost required to complete each procedure (% of - Are sane, competent, in good health and have no criminal record. income per capita) - Are married and the marriage is monogamous and registered with the authorities. - Where the answer differs according to the legal system applicable to the woman or • Official costs only, no bribes man in question (as may be the case in economies where there is legal plurality), the • No professional fees unless services required by answer used will be the one that applies to the majority of the population. law or commonly used in practice Paid-in minimum capital (% of income per capita) • Funds deposited in a bank or with third party before registration or up to 3 months after incorporation Page 5 Doing Business 2019 Uzbekistan Starting a Business - Uzbekistan Standardized Company Legal form Limited Liability Company Paid-in minimum capital requirement UZS 0 City Covered Tashkent Indicator Uzbekistan Europe & OECD high Best Regulatory Central Asia income Performance Procedure – Men (number) 3 5.2 4.9 1 (New Zealand) Time – Men (days) 4 12.9 9.3 0.5 (New Zealand) Cost – Men (% of income per capita) 3.1 4.6 3.1 0.0 (Slovenia) Procedure – Women (number) 3 5.2 4.9 1 (New Zealand) Time – Women (days) 4 12.9 9.3 0.5 (New Zealand) Cost – Women (% of income per capita) 3.1 4.6 3.1 0.0 (Slovenia) Paid-in min. capital (% of income per capita) 0.0 2.3 8.6 0.0 (117 Economies) Figure – Starting a Business in Uzbekistan and comparator economies – Ranking and Score DB 2019 Starting a Business Score 0 100 95.79: Uzbekistan (Rank: 12) 95.55: Moldova (Rank: 14) 93.04: Russian Federation (Rank: 32) 92.97: Kyrgyz Republic (Rank: 35) 92.96: Kazakhstan (Rank: 36) 90.02: Regional Average (Europe & Central Asia) Note: The ranking of economies on the ease of starting a business is determined by sorting their scores for starting a business. These scores are the simple average of the scores for each of the component indicators. Page 6 Doing Business 2019 Uzbekistan Figure – Starting a Business in Uzbekistan – Procedure, Time and Cost Time (days) Cost (% of income per capita) 4 2.5 3.5 Cost (% of income per capita) 2 3 Time (days) 2.5 1.5 2 1 1.5 1 0.5 0.5 0 0 1 2 3 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a different procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://doingbusiness.org/en/methodology ). For details on the procedures reflected here, see the summary below. Page 7 Doing Business 2019 Uzbekistan Details – Starting a Business in Uzbekistan – Procedure, Time and Cost No. Procedures Time to Complete Associated Costs 1 Register at the Single Window Center under the Ministry of Justice (one- 2 days UZS 172,240 (equal stop shop) and obtain the Certificate of State Registration to one minimum Agency : Public Service Center under the Ministry of Justice wage salary) Starting from April 1, 2017, the new online platform for the companies registration was introduced: fo.birdarcha.uz The company can be registered online or in-person by visiting the Public Service Center of the relevant district. The following registration documents should be submitted: (1) application form; (2) constitutive documents: shareholders agreement and charter (for LLC); (3) confirmation of registration fee payment (if not done at the moment of registration). In case of online registration, each founder should electronically confirm that (s)he is becoming the founder of the company. Within 30 minutes after the documents are submitted and payment is made, the company is registered. Registration certificate and constitutional documents are sent electronically to the applicant. Registration fee is levied in the amount of 1 minimum wage in case of registration in person, or 0.5 minimum wage in case of registration online. After the LLC is registered, the local registering authority automatically provides the data on the registered LLC to the state statistics authorities, state tax authorities, and internal affairs agencies at place of location of the LLC. 2 Make a company seal 1 day UZS 50,000 - Agency : Specialized seal-making company 100,000 According to Article 5 of the Law "On limited liability company" (http://lex.uz/Pages/GetAct.aspx?lact_id=18793), small companies are not legally required to have a seal. However, most companies still prefer to do so in practice. Starting from April 1, 2017, small companies are no longer required to approve the seal design with the registration authorities. The company’s seal must be made by a specialized seal-making company. For ordering a seal, the company should provide the Registration Certificate. 3 Open a permanent bank account with a local bank 1 day no charge Agency : Commercial Bank Companies open bank accounts in order to conduct official business, and because in practice Tax Authorities expect a notification regarding company’s corporate account number. In addition corporate bank account is required for notification of Xalq bank. To open a permanent bank account, it is required to submit the Decision of the newly registered company on nomination of the director of the company and the accountant. Requirement to submit originals and copies of the certificate of registration and constituent documents was abolished. When opening a bank account, banks independently gain access to information about the business entity (registration certificates and constituent documents). After opening a permanent bank account for the company, the bank notifies Tax Authorities and Khalk bank (People's bank) regarding the company's bank account. Takes place simultaneously with previous procedure. Page 8 Doing Business 2019 Uzbekistan Dealing with Construction Permits This topic tracks the procedures, time and cost to build a warehouse—including obtaining necessary the licenses and permits, submitting all required notifications, requesting and receiving all necessary inspections and obtaining utility connections. In addition, the Dealing with Construction Permits indicator measures the building quality control index, evaluating the quality of building regulations, the strength of quality control and safety mechanisms, liability and insurance regimes, and professional certification requirements. The most recent round of data collection was completed in May 2018. See the methodology for more information What the indicators measure Case study assumptions Procedures to legally build a warehouse To make the data comparable across economies, several assumptions about the (number) construction company, the warehouse project and the utility connections are used. • Submitting all relevant documents and obtaining The construction company (BuildCo): all necessary clearances, licenses, permits and certificates - Is a limited liability company (or its legal equivalent) and operates in the economy’s largest business city. For 11 economies the data are also collected for the second • Submitting all required notifications and receiving largest business city. all necessary inspections - Is 100% domestically and privately owned; has five owners, none of whom is a • Obtaining utility connections for water and legal entity. Has a licensed architect and a licensed engineer, both registered with sewerage the local association of architects or engineers. BuildCo is not assumed to have any • Registering and selling the warehouse after its other employees who are technical or licensed experts, such as geological or completion topographical experts. - Owns the land on which the warehouse will be built and will sell the warehouse Time required to complete each procedure upon its completion. (calendar days) The warehouse: • Does not include time spent gathering information - Will be used for general storage activities, such as storage of books or stationery. - Will have two stories, both above ground, with a total constructed area of • Each procedure starts on a separate day— approximately 1,300.6 square meters (14,000 square feet). Each floor will be 3 though procedures that can be fully completed meters (9 feet, 10 inches) high and will be located on a land plot of approximately online are an exception to this rule 929 square meters (10,000 square feet) that is 100% owned by BuildCo, and the • Procedure is considered completed once final warehouse is valued at 50 times income per capita. document is received - Will have complete architectural and technical plans prepared by a licensed architect. If preparation of the plans requires such steps as obtaining further • No prior contact with officials documentation or getting prior approvals from external agencies, these are counted Cost required to complete each procedure (% of as procedures. income per capita) - Will take 30 weeks to construct (excluding all delays due to administrative and regulatory requirements). • Official costs only, no bribes The water and sewerage connections: Building quality control index (0-15) - Will be 150 meters (492 feet) from the existing water source and sewer tap. If there • Quality of building regulations (0-2) is no water delivery infrastructure in the economy, a borehole will be dug. If there is • Quality control before construction (0-1) no sewerage infrastructure, a septic tank in the smallest size available will be installed or built. • Quality control during construction (0-3) - Will have an average water use of 662 liters (175 gallons) a day and an average • Quality control after construction (0-3) wastewater flow of 568 liters (150 gallons) a day. Will have a peak water use of 1,325 liters (350 gallons) a day and a peak wastewater flow of 1,136 liters (300 • Liability and insurance regimes (0-2) gallons) a day. • Professional certifications (0-4) - Will have a constant level of water demand and wastewater flow throughout the year; will be 1 inch in diameter for the water connection and 4 inches in diameter for the sewerage connection. Page 9 Doing Business 2019 Uzbekistan Dealing with Construction Permits - Uzbekistan Standardized Warehouse Estimated value of warehouse UZS 398,838,381.30 City Covered Tashkent Indicator Uzbekistan Europe & OECD high Best Regulatory Central Asia income Performance Procedures (number) 17 16.0 12.7 None in 2017/18 Time (days) 246 170.1 153.1 None in 2017/18 Cost (% of warehouse value) 3.3 4.0 1.5 None in 2017/18 Building quality control index (0-15) 11.0 12.0 11.5 15.0 (3 Economies) Figure – Dealing with Construction Permits in Uzbekistan and comparator economies – Ranking and Score DB 2019 Dealing with Construction Permits Score 0 100 77.10: Kyrgyz Republic (Rank: 29) 75.77: Kazakhstan (Rank: 35) 74.61: Russian Federation (Rank: 48) 69.02: Regional Average (Europe & Central Asia) 61.37: Uzbekistan (Rank: 134) 52.19: Moldova (Rank: 172) Note: The ranking of economies on the ease of dealing with construction permits is determined by sorting their scores for dealing with construction permits. These scores are the simple average of the scores for each of the component indicators. Figure – Dealing with Construction Permits in Uzbekistan – Procedure, Time and Cost Time (days) Cost (% of warehouse value) 3 2.5 Cost (% of warehouse value) 200 2 Time (days) 150 1.5 100 1 50 0.5 0 0 1 2 *3 4 5 6 7 8 9 * 10 11 12 13 14 15 16 17 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a different procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://doingbusiness.org/en/methodology ). For details on the procedures reflected here, see the summary below. Page 10 Doing Business 2019 Uzbekistan Figure – Dealing with Construction Permits in Uzbekistan and comparator economies – Measure of Quality 15 14.0 13.0 12.0 12.0 11.0 11.0 Index score 10 5 0 Uzbekistan Kazakhstan Kyrgyz Republic Moldova Russian Federation Europe & Central Asia Details – Dealing with Construction Permits in Uzbekistan – Procedure, Time and Cost No. Procedures Time to Complete Associated Costs 1 Request and obtain land clearance from Tashkent City Hokimiyat 38 days no charge (submission of an application for a land plot and of approved materials) Agency : District Governor's Office Starting on January 1, 2016, the government changed the way land plots of up to 1 hectare are allocated to legal entities and individuals. Land plots are now assigned on the basis of a competitive selection process. Local authorities (municipalities) select land plots that are available for allocation. Then, each Municipality has the local Department of Architecture and Construction obtain all preliminary approvals of land allocation (previously separate procedures) from the relevant authorities, depending on the environmental, architectural and zoning requirements of the individual plots. Once all approvals are obtained internally by the Department of Architecture and Construction, a complete set of documents is prepared for each land plot and submitted to the contest organizer within the Municipality. The time is 38 days (30 days after announcement is made to apply + 3 days for the committee to evaluate the bids + 5 days to announce the decision). Per the new process, an announcement is made in the mass media that there are land plots allocated for a specific type of construction (e.g., kindergarten, produce store, a warehouse etc.). Subsequently, these land plots, with all the necessary characteristics, are made available on the website of the State Committee of Uzbekistan on Architecture and Construction: http://1kms.uz/kms/announcementnew/list/11. There is only one committee that organizes the bid. The announcement about the bid is made 1 month before the start of the bidding process, so bidders have 1 month to prepare the application and submit the bid. The committee takes 3 days to evaluate all the bids and then it has 5 days to announce the allotment decision. Once the decision is made, it is announced in mass media (in the same national and local newspapers where the bid was announced in the first place). The committee will inform the winners within 2 days after the official announcement. Those who were not selected will find out in the papers and on the website. The announcement is also sent by mail to all bidders. The announcement of the auction / competition is made only 2 times a year (May and November). This announcement is determined based on demand and supply of available land plots. The Hokimiyat signs a contract with the winner and the winner can go ahead and sign a contract with the project design company. 2 Obtain topographic survey of the land plot and the land plot's precise 21 days UZS 1,200,000 location (red lines) by "UzGAShKLITI” Agency : State Design Research Institute of Engineering Studies in Construction, Geoinformatics and Urban Cadastre - "UzGAShKLITI" A specialized agency draws the precise location of the land plot on a map (usually in red color, hence the name "red lines"). Page 11 Doing Business 2019 Uzbekistan 3 Request and obtain technical conditions for the connection to water and 7 days no charge sewerage Agency : Water and Sewerage Authority BuildCo must obtain technical terms for the connection to the water and sewerage systems. The terms are necessary for preparing project documentation. BuildCo must submit the following information to the local water and sewerage authority: • For water: the load of water demand, the calculation of water height, and the expected date of commencement of water consumption • For sewerage: the calculation of sewage volume, qualitative composition of the sewage, specification of whether the any plans for internal treatment, and the expected date the sewerage system is to be put into operation By law, this procedure should be completed in 3 business days. However, in practice, it takes longer. 4 Request and obtain architectural and technical objectives 30 days UZS 688,960 Agency : Main Department of Architecture and Construction Based on the terms for designing the building in accordance with engineering supply norms and regulations, the technical conditions, and the decision of the Hokimat on the land plot (all provided by the department on architecture and construction of the city), the Main Department of Architecture and Construction develops the architectural planning terms (APZ, parts I and II). The fee is established by Government Resolution No. 150 (dated May 30, 2013) was set at 4 MMW. 5 Request ecological examination 20 days UZS 725,000 Agency : Private Licensed Organization BuildCo should submit the project and pre-project documentation for ecological examination to a private expert firm. The expert firm will provide the examination and will also obtain the conclusion from The State Ecological Examination body of the Committee on the Protection of Nature of the city of Tashkent will issue the conclusion of the ecological examination. This document is necessary for subsequent submission to the territorial Inspection of State Architectural Building Supervision of the city of Tashkent and to the servicing bank (to allow financing). It is also necessary for obtaining the fire safety and earthquake stability compliance. 6 Request and obtain examination of project documents on their compliance 14 days UZS 344,480 with fire safety and seismic stability Agency : State Architectural and Construction Inspection (GASN) After obtaining an ecological evaluation, BuildCo can submit the construction plans for state examination on their compliance with fire safety and earthquake stability. 7 Request and obtain sanitation clearance for the project 14 days no charge Agency : State Sanitation and Epidemic Supervision Authority BuildCo must obtain project clearance from the state sanitation and epidemic supervision authority. This document can only be obtained after obtaining the fire safety and earthquake stability compliance. 8 Request and obtain project clearance from the local water and sewerage 7 days no charge authority Agency : Water and Sewerage Authority BuildCo must obtain project clearance from the local water and sewerage authority. This authority checks whether the project and other relevant documentation conform to construction rules and technical terms. BuildCo enters into a contract with the local water and sewerage authority on technical supervision of the construction. This document can only be obtained after obtaining a sanitation clearance. Page 12 Doing Business 2019 Uzbekistan 9 Request and obtain construction permit from State Architectural and 10 days UZS 119,652 Construction Inspection (GASN) Agency : State Architectural and Construction Inspection (GASN) The permit for construction works is issued by the local branch of the architecture and construction authority. Although the permit should be issued within 5 days, in practice it takes longer. An inspector from the local branch of the architecture and construction authority undertakes oversight of the construction. There is no permit application fee. However, for the oversight/inspection phase, the company enters into a contract with the authority at a cost of 0.03% of the value of the warehouse. The company must submit the following documents: • Application form • Positive evaluation summary from the public examination bodies on the working project • Copy of the general plan and elevations of the building approved by the architectural bodies, or the protocol of the Town-Planning Council of the Main Department on Architecture and Construction of the city of Tashkent • Address list of construction sites The Inspectorate registers the construction project and issues the building permit. BuildCo starts construction of the warehouse and notifies the Inspectorate of the commencement of works within a month of receiving the building permit. Hire a technical supervision company for construction supervision 1 day UZS 9,970,960 10 Agency : Private construction supervision company There are three levels of construction supervision in Uzbekistan: (1) internal supervision or author's supervision, (2) technical supervision conducted by an external firm and (3) government supervision. The technical supervision companies usually charge around 2-3% of the construction costs. 11 Receive inspection from the State Architectural and Construction 1 day no charge Inspection (GASN) Agency : State Architectural and Construction Inspection (GASN) Inspection is carried out by State Architectural and Construction Inspection (GASN). GASN will assign one inspector for the specific construction who will be responsible for conducting the inspections throughout the construction period. 12 Connect to water and sewerage services 5 days no charge Agency : Water and Sewerage Authority 13 Obtain updated topographic map 7 days no charge Agency : State Design Research Institute of Engineering Studies in Construction, Geoinformatics and Urban Cadastre - "UzGAShKLITI" Once the construction works and complete and the water and sewage connection is obtained, the State Design Research Institute "UzGAShKLITI" conducts a survey of the land plot and of the building to develop a new topographic map of the area with the new construction on it. This is called executive mapping. 14 Call and establish Working Commission and submit documents to the 14 days no charge Commission Agency : Working Commission After completion of the construction works, BuildCo requests the creation of a Working Commission composed of the representatives of district architects, the sanitation supervision authority, the state fire supervision authority, the ministry on emergency situations, the city committee on nature protection, and others. The timeframe under the Construction rules, registered by Ministry of Justice No.545, for establishing Working Commission is 5 working days. However, in practice it takes 14 days, as the Commission only meets once every two weeks and in case the file doesn’t make it to the first meeting, it would almost certainly be reviewed at the second one. BuildCo must submit the following documents to the Working Commission: • The list of organizations that participated in the building and construction works, along with the type of work done by these organizations, the family names of the responsible engineers and technical employees • The full set of design drawings of the property developed by the project organizations • Certificates, technical passports, and other documents certifying the quality and safety of the materials, constructions, and details used in the building and construction works • Other relevant documents Page 13 Doing Business 2019 Uzbekistan 15 Receive inspection and obtain certificate of completion from Working 21 days no charge Commission Agency : Working Commission After the inspection, an act of acceptance is drafted and endorsed by all members in no more than 5 working days. The Working Commission will inspect, among other things: • The compliance of the building and construction works with the requirements on labor protection, fire safety, environment protection, and its prevention of human- caused emergency situations, and so forth • The separate constructions and units of the warehouse If its findings are favorable, the commission then accepts the construction for subsequent presentation to the State Acceptance Board. The Working Commission issues the following: • The certificate of allowable concentration of radon in the completed constructions • The certificate of acceptance of the temporary buildings and constructions • The certificate of readiness of the construction for presentation to the State Acceptance Board 16 Request and obtain certificate of acceptance from the Tashkent City 14 days no charge Hokimat Agency : Hokimat The Hokim (the head of the city government) decides whether to approve the Working Commission’s act of acceptance within 2 days. However, in practice, this takes longer. There is no fee involved. The decision of Hokim is further needed for registering the building with the cadastre authorities. BuildCo should submit to the State Acceptance Board, among other documents, the following documents: • The certificate on elimination of defects brought to light by the Working Commission • The approved project and estimate documentation • The list of project and research organizations that participated in construction • Other relevant documents 17 Register the new construction with the cadastre 30 days UZS 86,120 Agency : Cadastre BuildCo must register the new construction with the real estate cadastre of the relevant district of the city of Tashkent. The registration takes around 2 weeks in Tashkent and costs 50% of MMW for legal entities. Takes place simultaneously with previous procedure. Page 14 Doing Business 2019 Uzbekistan Details – Dealing with Construction Permits in Uzbekistan – Measure of Quality Answer Score Building quality control index (0-15) 11.0 Quality of building regulations index (0-2) 2.0 How accessible are building laws and regulations in your economy? (0-1) Available online; 1.0 Free of charge. Which requirements for obtaining a building permit are clearly specified in the building List of required 1.0 regulations or on any accessible website, brochure or pamphlet? (0-1) documents; Fees to be paid; Required preapprovals. Quality control before construction index (0-1) 1.0 Which third-party entities are required by law to verify that the building plans are in Licensed 1.0 compliance with existing building regulations? (0-1) architect; Licensed engineer. Quality control during construction index (0-3) 2.0 What types of inspections (if any) are required by law to be carried out during construction? Inspections by in- 1.0 (0-2) house engineer; Inspections by external engineer or firm; Unscheduled inspections; Inspections at various phases. Do legally mandated inspections occur in practice during construction? (0-1) Mandatory 1.0 inspections are always done in practice. Quality control after construction index (0-3) 3.0 Is there a final inspection required by law to verify that the building was built in accordance Yes, final 2.0 with the approved plans and regulations? (0-2) inspection is done by government agency; Yes, in- house engineer submits report for final inspection; Yes, external engineer submits report for final inspection. Do legally mandated final inspections occur in practice? (0-1) Final inspection 1.0 always occurs in practice. Liability and insurance regimes index (0-2) 1.0 Which parties (if any) are held liable by law for structural flaws or problems in the building Architect or 1.0 once it is in use (Latent Defect Liability or Decennial Liability)? (0-1) engineer; Professional in charge of the supervision; Construction company. Which parties (if any) are required by law to obtain an insurance policy to cover possible No party is 0.0 structural flaws or problems in the building once it is in use (Latent Defect Liability Insurance required by law or Decennial Insurance)? (0-1) to obtain insurance . Professional certifications index (0-4) 2.0 Page 15 Doing Business 2019 Uzbekistan What are the qualification requirements for the professional responsible for verifying that the Minimum number 1.0 architectural plans or drawings are in compliance with existing building regulations? (0-2) of years of experience; University degree in architecture or engineering. What are the qualification requirements for the professional who supervises the construction Minimum number 1.0 on the ground? (0-2) of years of experience; University degree in engineering, construction or construction management. Page 16 Doing Business 2019 Uzbekistan Getting Electricity This topic measures the procedures, time and cost required for a business to obtain a permanent electricity connection for a newly constructed warehouse. Additionally, the reliability of supply and transparency of tariffs index measures reliability of supply, transparency of tariffs and the price of electricity. The most recent round of data collection for the project was completed in May 2018. See the methodology for more information. What the indicators measure Case study assumptions Procedures to obtain an electricity connection To make the data comparable across economies, several assumptions about the (number) warehouse, the electricity connection and the monthly consumption are used. • Submitting all relevant documents and obtaining The warehouse: all necessary clearances and permits - Is owned by a local entrepreneur and is used for storage of goods. • Completing all required notifications and - Is located in the economy’s largest business city. For 11 economies the data are receiving all necessary inspections also collected for the second largest business city. • Obtaining external installation works and possibly - Is located in an area where similar warehouses are typically located and is in an purchasing material for these works area with no physical constraints. For example, the property is not near a railway. - Is a new construction and is being connected to electricity for the first time. • Concluding any necessary supply contract and - Has two stories with a total surface area of approximately 1,300.6 square meters obtaining final supply (14,000 square feet). The plot of land on which it is built is 929 square meters Time required to complete each procedure (10,000 square feet). (calendar days) The electricity connection: • Is at least 1 calendar day - Is a permanent one with a three-phase, four-wire Y connection with a subscribed • Each procedure starts on a separate day capacity of 140-kilo-volt-ampere (kVA) with a power factor of 1, when 1 kVA = 1 • Does not include time spent gathering kilowatt (kW). information - Has a length of 150 meters. The connection is to either the low- or medium-voltage distribution network and is either overhead or underground, whichever is more • Reflects the time spent in practice, with little common in the area where the warehouse is located and requires works that involve follow-up and no prior contact with officials the crossing of a 10-meter road (such as by excavation or overhead lines) but are all Cost required to complete each procedure (% of carried out on public land. There is no crossing of other owners’ private property because the warehouse has access to a road. income per capita) - Does not require work to install the internal wiring of the warehouse. This has • Official costs only, no bribes already been completed up to and including the customer’s service panel or • Value added tax excluded switchboard and the meter base. The reliability of supply and transparency of The monthly consumption: tariffs index (0-8) - It is assumed that the warehouse operates 30 days a month from 9:00 a.m. to 5:00 • Duration and frequency of power outages (0–3) p.m. (8 hours a day), with equipment utilized at 80% of capacity on average and that • Tools to monitor power outages (0–1) there are no electricity cuts (assumed for simplicity reasons) and the monthly energy consumption is 26,880 kilowatt-hours (kWh); hourly consumption is 112 kWh. • Tools to restore power supply (0–1) - If multiple electricity suppliers exist, the warehouse is served by the cheapest • Regulatory monitoring of utilities’ performance supplier. (0–1) - Tariffs effective in January of the current year are used for calculation of the price of electricity for the warehouse. Although January has 31 days, for calculation • Financial deterrents limiting outages (0–1) purposes only 30 days are used. • Transparency and accessibility of tariffs (0–1) Price of electricity (cents per kilowatt-hour)* • Price based on monthly bill for commercial warehouse in case study *Note: Doing Business measures the price of electricity, but it is not included in the ease of doing business score nor the ranking on the ease of getting electricity. Page 17 Doing Business 2019 Uzbekistan Getting Electricity - Uzbekistan Standardized Connection Price of electricity (US cents per kWh) 5.7 Name of utility Uzbekenergo City Covered Tashkent Indicator Uzbekistan Europe & OECD high Best Regulatory Central Asia income Performance Procedures (number) 4 5.3 4.5 3 (25 Economies) Time (days) 88 110.3 77.2 18 (3 Economies) Cost (% of income per capita) 705.2 325.1 64.2 0.0 (3 Economies) Reliability of supply and transparency of tariff 8 5.5 7.5 8.0 (27 Economies) index (0-8) Figure – Getting Electricity in Uzbekistan and comparator economies – Ranking and Score DB 2019 Getting Electricity Score 0 100 94.00: Russian Federation (Rank: 12) 86.05: Uzbekistan (Rank: 35) 76.79: Kazakhstan (Rank: 76) 74.88: Moldova (Rank: 81) 71.66: Regional Average (Europe & Central Asia) 46.01: Kyrgyz Republic (Rank: 164) Note: The ranking of economies on the ease of getting electricity is determined by sorting their scores for getting electricity. These scores are the simple average of the scores for all the component indicators except the price of electricity. Page 18 Doing Business 2019 Uzbekistan Figure – Getting Electricity in Uzbekistan – Procedure, Time and Cost Time (days) Cost (% of income per capita) 800 80 700 Cost (% of income per capita) 70 600 60 Time (days) 500 50 400 40 300 30 200 20 10 100 0 0 1 2 3 4 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a different procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://doingbusiness.org/en/methodology ). For details on the procedures reflected here, see the summary below. Figure – Getting Electricity in Uzbekistan and comparator economies – Measure of Quality 8 8 8 8 7 7 6 5.5 Index score 5 4 3 2 1 0 0 Uzbekistan Kazakhstan Kyrgyz Republic Moldova Russian Federation Europe & Central Asia Page 19 Doing Business 2019 Uzbekistan Details – Getting Electricity in Uzbekistan – Procedure, Time and Cost No. Procedures Time to Complete Associated Costs 1 Submit application and await technical conditions and connection contract 14 calendar days UZS 0 with estimate Agency : Tashkent City Electric Network Enterprise OJSC The customer submits an application for the electrical connection to the Tashkent City Electric Network Enterprise and waits for them to issue technical conditions along with the connection contract that contains the time required for the connection works as well as the connection cost estimate. 2 Signing connection contract and make payment 3 calendar days UZS 56,250,000 Agency : Tashkent City Electric Network Enterprise OJSC Upon receiving the connection contract from the utility, customer has 3 business days to sign the contract and make the 100% prepayment for connection. 3 Implementation of connection works by utility and inspection 70 calendar days UZS 0 Agency : Tashkent City Electric Network Enterprise OJSC During this procedure the Utility implements following works: - prepares the connection design, after the receipt of the advance payment under the contract on connection to electric networks "on a turn-key basis"(15-20 business days), - receives preliminary approval by all stakeholder organizations (5 business days) - finalizes design based on received comments and gets final approval (3 business days) - upon having the design approved, utility conducts the external connection works, carries out meter installation (15-30 business days) - after completion of external works, inspection by the State Energy Inspectorate "Uzgosenergonadzor" takes place (3 business days), wherein "Uzgosenergonadzor" inspects an external power supply system and issues: 1) Certificate of technical inspection of electrical installations of consumers 2) Permit for the commissioning of electrical installations 4 Sign supply contract and obtain final connection 1 calendar day UZS 0 Agency : Tashkent City Electric Network Enterprise OJSC The customer concludes a supply contract and obtains final electricity connection. Takes place simultaneously with previous procedure. Page 20 Doing Business 2019 Uzbekistan Details – Getting Electricity in Uzbekistan – Measure of Quality Answer Reliability of supply and transparency of tariff index (0-8) 8 Total duration and frequency of outages per customer a year (0-3) 3 System average interruption duration index (SAIDI) 0.2 System average interruption frequency index (SAIFI) 0.1 What is the minimum outage time (in minutes) that the utility considers for the calculation of SAIDI/SAIFI 0.5 Mechanisms for monitoring outages (0-1) 1 Does the distribution utility use automated tools to monitor outages? Yes Mechanisms for restoring service (0-1) 1 Does the distribution utility use automated tools to restore service? Yes Regulatory monitoring (0-1) 1 Does a regulator—that is, an entity separate from the utility—monitor the utility’s performance on reliability of Yes supply? Financial deterrents aimed at limiting outages (0-1) 1 Does the utility either pay compensation to customers or face fines by the regulator (or both) if outages Yes exceed a certain cap? Communication of tariffs and tariff changes (0-1) 1 Are effective tariffs available online? Yes Link to the website, if available online http://uzbekenergo.u z./ru/activities/tariffs- electric-power/ Are customers notified of a change in tariff ahead of the billing cycle? Yes Note: If the duration and frequency of outages is 100 or less, the economy is eligible to score on the Reliability of supply and transparency of tariff index. If the duration and frequency of outages is not available, or is over 100, the economy is not eligible to score on the index. If the minimum outage time considered for SAIDI/SAIFI is over 5 minutes, the economy is not eligible to score on the index. Page 21 Doing Business 2019 Uzbekistan Registering Property This topic examines the steps, time and cost involved in registering property, assuming a standardized case of an entrepreneur who wants to purchase land and a building that is already registered and free of title dispute. In addition, the topic also measures the quality of the land administration system in each economy. The quality of land administration index has five dimensions: reliability of infrastructure, transparency of information, geographic coverage, land dispute resolution, and equal access to property rights. The most recent round of data collection for the project was completed in May 2018. See the methodology for more information. What the indicators measure Case study assumptions Procedures to legally transfer title on To make the data comparable across economies, several assumptions about the immovable property (number) parties to the transaction, the property and the procedures are used. • Preregistration procedures (for example, The parties (buyer and seller): checking for liens, notarizing sales agreement, paying property transfer taxes) - Are limited liability companies (or the legal equivalent). - Are located in the periurban area of the economy’s largest business city. For 11 • Registration procedures in the economy's largest economies the data are also collected for the second largest business city. business city. - Are 100% domestically and privately owned. • Postregistration procedures (for example, filling - Have 50 employees each, all of whom are nationals. title with municipality) - Perform general commercial activities. Time required to complete each procedure The property (fully owned by the seller): (calendar days) - Has a value of 50 times income per capita, which equals the sale price. • Does not include time spent gathering - Is fully owned by the seller. information - Has no mortgages attached and has been under the same ownership for the past • Each procedure starts on a separate day - 10 years. though procedures that can be fully completed - Is registered in the land registry or cadastre, or both, and is free of title disputes. online are an exception to this rule - Is located in a periurban commercial zone, and no rezoning is required. - Consists of land and a building. The land area is 557.4 square meters (6,000 • Procedure is considered completed once final square feet). A two-story warehouse of 929 square meters (10,000 square feet) is document is received located on the land. The warehouse is 10 years old, is in good condition, has no • No prior contact with officials heating system and complies with all safety standards, building codes and legal requirements. The property, consisting of land and building, will be transferred in its Cost required to complete each procedure (% of entirety. property value) - Will not be subject to renovations or additional construction following the purchase. - Has no trees, natural water sources, natural reserves or historical monuments of • Official costs only (such as administrative fees, duties and taxes). any kind. - Will not be used for special purposes, and no special permits, such as for • Value Added Tax, Capital Gains Tax and illicit residential use, industrial plants, waste storage or certain types of agricultural payments are excluded activities, are required. - Has no occupants, and no other party holds a legal interest in it. Quality of land administration index (0-30) • Reliability of infrastructure index (0-8) • Transparency of information index (0–6) • Geographic coverage index (0–8) • Land dispute resolution index (0–8) • Equal access to property rights index (-2–0) Page 22 Doing Business 2019 Uzbekistan Registering Property - Uzbekistan Indicator Uzbekistan Europe & OECD high Best Regulatory Central Asia income Performance Procedures (number) 9 5.3 4.7 1 (4 Economies) Time (days) 46 20.3 20.1 1 (New Zealand) Cost (% of property value) 1.1 2.6 4.2 0.0 (Saudi Arabia) Quality of the land administration index (0-30) 18.5 19.6 23.0 None in 2017/18 Figure – Registering Property in Uzbekistan and comparator economies – Ranking and Score DB 2019 Registering Property Score 0 100 90.27: Kyrgyz Republic (Rank: 8) 88.74: Russian Federation (Rank: 12) 84.62: Kazakhstan (Rank: 18) 82.62: Moldova (Rank: 22) 75.57: Regional Average (Europe & Central Asia) 66.60: Uzbekistan (Rank: 71) Note: The ranking of economies on the ease of registering property is determined by sorting their scores for registering property. These scores are the simple average of the scores for each of the component indicators. Figure – Registering Property in Uzbekistan – Procedure, Time and Cost Time (days) Cost (% of property value) 0.5 45 40 Cost (% of property value) 0.4 35 30 Time (days) 0.3 25 20 0.2 15 10 0.1 5 0 0 1 2 *3 *4 *5 *6 7 8 9 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a different procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://doingbusiness.org/en/methodology ). For details on the procedures reflected here, see the summary below. Page 23 Doing Business 2019 Uzbekistan Figure – Registering Property in Uzbekistan and comparator economies – Measure of Quality 30 26.0 25 24.0 22.0 Index score 19.6 20 18.5 17.0 15 10 5 0 Uzbekistan Kazakhstan Kyrgyz Republic Moldova Russian Federation Europe & Central Asia Details – Registering Property in Uzbekistan – Procedure, Time and Cost No. Procedures Time to Complete Associated Costs 1 Obtain the evaluation of the market value for the property 10 days UZS 1,500,000; (1 to Agency : Private evaluator 2 million UZS) Private evaluator will visit the land ad immovable property, take measurements, etc. Usually, the visit is performed without presence of a client (seller). 2 Request and obtain Cadastral Certificate 10 days no charge Agency : Cadastral Service Office The seller has to obtain the Cadastral Certificate. The certificate contains technical parameters of premises (when built, height, deterioration level, blueprint, etc.) as well as cadastral value (taxable value), which is used for property tax calculation purposes. 3 Inspection of a property to determine its status 1 day UZS 960,065.76; (1% Agency : Cadastral Service Office of the minimum Pursuant to the Decree No.1 as of Jan 7, 2014 the state official will have to monthly wage per conduct the onsite inspection of the land and building. The inspection is square meter of land performed to establish cadastral value of the property and to evaluate all possible plot area changes in technical parameters, record new construction and reconstruction etc. As of December 1, 2017, the minimum Pursuant to the Order No. 186 from July 10, 2014 the fee for an inspection of the property by experts from the State Committee on Land Resources, Geodesy, wage is UZS Cartography and State Cadastre is set as follow: 172,240) 1. Property with total size up to 100 sqr. m - 1 MMW (monthly minimum wage) 2. Property with total size from 100 sqr. m to 1000 sqr. m - 1% from MMW per square meter of the property size 3. Property with total size from 1000 sqr. m to 5000 sqr. m - 15 from MMW 4. Property with total size from 5000 sqr. m to 15000 sqr. m - 30 from MMW 5. Property with total size from 15000 sqr. m to 50000 sqr. m - 50 from MMW 6. Property with total size more than 50000 sqr. m - 70 MMW 4 Seller obtains the certificate stating that there are no outstanding payments 1 day no charge due to the water and sewage service provider Agency : Water service provider Parties have to submit to the notary the certificates stating that there are no outstanding payments due to the trash collection service use from trash collection service provider. Parties have to request these certificates specifically for the property transaction to demonstrate that there are no outstanding fees that have to be paid before transfer of property takes place. 5 Seller obtains the certificate stating that there are no outstanding electricity 1 day no charge bills Agency : Electricity service provider Parties have to submit to the notary the certificates stating that there are no outstanding payments due to the electricity service use from electricity service provider. Parties have to request these certificates specifically for the property transaction to demonstrate that there are no outstanding fees that have to be paid before transfer of property takes place. 6 Seller obtains the certificate stating that there are no outstanding trash 1 day no charge collection bills Agency : Trash collection service provider Parties have to submit to the notary the certificates stating that there are no outstanding payments due to the trash collection service use from trash collection service provider. Parties have to request these certificates specifically for the property transaction to demonstrate that there are no outstanding fees that have to be paid before transfer of property takes place. Page 24 Doing Business 2019 Uzbekistan 7 Notarize the sale agreement between the seller and buyer 1 day UZS 1,772,349.6; Agency : Public Notaries (1% of the minimum According to Article 480 of the Civil Code of Uzbekistan a contract for sale of an monthly wage per immovable property shall be concluded in a written form by formation of one square meter of document signed by the parties. Accordingly, the obligation to notarize the sale of building area + fees a real estate between legal persons is not required by law. charged by notaries However, upon agreement of the parties, the contract can be notarized. In for consultations and accordance with paragraph 51 of Instructions on notarial acts of notaries, in case drafting sale- of notarization of the sale contract of a real estate such transactions shall be purchase agreement certified in a notary's office located at the place where the location of the real state is. As of December 1, For certification of transactions on alienation of a real estate owned by legal 2017, the minimum entities, notary requires the following documents: wage is UZS • Proof of ownership of the property (cadastral certificate); 172,240) • Certificate of state registration of the legal entity; • Certificate on the net book value of the property, signed by the director and the chief accountant of the legal entity; • Certificate of net assets of the legal entity; • Power of attorney for a representative of the legal entity, issued in the prescribed manner (if there is no an employment contract between the representative and the legal entity, a power of attorney shall be issued by a notary); • Act of acceptance of the property; • Document verifying the payment between the parties (the receipt, payment order)*; *In case the sale contract is notarized, a written basis for the settlement between the parties, namely the conclusion of the preliminary agreement between the parties on the basis of which the payment for the transferred property was made, will be needed in order to provide the notary with a document confirming settlement between the parties. 8 Buyer applies for the registration at the Registration Office 22 days Agency : Registration Office - Department of Land Resources and State Cadastre - City of Tashkent According to Article 481 of Civil Code of Uzbekistan, the transfer of the property rights on immovable property from the seller to the buyer is subject to the state registration. In case of registration of a building or structure in a land register and in a register book, the case of change of the owner of person having proprietary rights to that object, and also in case of change of the legal position of the object, a new certificate of state registration of a building structure will be issued with the obligatory withdrawal and cancellation of the old certificate. Pursuant to the Resolution of the President of Uzbekistan No.PP-2412 dated 28 September 2015 the document confirming the title to the property rights shall be submitted with the registration department of city/district municipality (khokimiyat), further the property rights will be registered by the State Committee on Land Resources, Geodesy, Cartography and State Cadaster. 9 Buyer submits the cadastral package to the local tax authorities 3 days no charge Agency : Local Tax Authorities The buyer submits a copy of Cadastral package to the local tax authority in order to update the land and property taxation records to the new owner's name. In addition, according to the Tax Code of the Republic of Uzbekistan, authorities involved with the registration of the title must report information on new owners to the tax authorities within 10 days after registration of the title has taken place. Takes place simultaneously with previous procedure. Page 25 Doing Business 2019 Uzbekistan Details – Registering Property in Uzbekistan – Measure of Quality Answer Score Reliability of infrastructure index (0-8) 5.0 What is the institution in charge of immovable property registration? Tashkent city Department of Land Resources and State Cadastre In what format are the majority of title or deed records kept in the largest business city—in a Computer/Scann 1.0 paper format or in a computerized format (scanned or fully digital)? ed Is there an electronic database for checking for encumbrances (liens, mortgages, restrictions Yes 1.0 and the like)? Institution in charge of the plans showing legal boundaries in the largest business city: Cadastre Service office under the State Committee on land resources, cartography and State Cadastre In what format are the majority of maps of land plots kept in the largest business city—in a Computer/Scann 1.0 paper format or in a computerized format (scanned or fully digital)? ed Is there an electronic database for recording boundaries, checking plans and providing No 0.0 cadastral information (geographic information system)? Is the information recorded by the immovable property registration agency and the cadastral Single database 1.0 or mapping agency kept in a single database, in different but linked databases or in separate databases? Do the immovable property registration agency and cadastral or mapping agency use the Yes 1.0 same identification number for properties? Transparency of information index (0–6) 2.5 Who is able to obtain information on land ownership at the agency in charge of immovable Only 0.0 property registration in the largest business city? intermediaries and interested parties Is the list of documents that are required to complete any type of property transaction made Yes, online 0.5 publicly available–and if so, how? Link for online access: http://www.kadast r.uz/ru/individual/ services/pereche n-dokumentov- dlya-registratsii- prava/2933/ Is the applicable fee schedule for any property transaction at the agency in charge of Yes, online 0.5 immovable property registration in the largest business city made publicly available–and if so, how? Link for online access: http://www.kadast r.uz/ru/corporate/ services/stoimost -uslug/3364/ Does the agency in charge of immovable property registration commit to delivering a legally Yes, online 0.5 binding document that proves property ownership within a specific time frame–and if so, how does it communicate the service standard? Link for online access: http://www.kadast r.uz/ru/corporate/ services/sroki- okazaniya- uslug/3352/ Is there a specific and separate mechanism for filing complaints about a problem that No 0.0 occurred at the agency in charge of immovable property registration? Page 26 Doing Business 2019 Uzbekistan Contact information: Are there publicly available official statistics tracking the number of transactions at the No 0.0 immovable property registration agency? Number of property transfers in the largest business city in 2017: Who is able to consult maps of land plots in the largest business city? Only 0.0 intermediaries and interested parties Is the applicable fee schedule for accessing maps of land plots made publicly available— Yes, online 0.5 and if so, how? Link for online access: http://www.kadast r.uz/ru/corporate/ services/stoimost -uslug/3364/ Does the cadastral or mapping agency commit to delivering an updated map within a Yes, online 0.5 specific time frame—and if so, how does it communicate the service standard? Link for online access: http://odnookno.u z/ru/e- services/order/? SERVICE_ID=78 0 Is there a specific and separate mechanism for filing complaints about a problem that No 0.0 occurred at the cadastral or mapping agency? Contact information: Geographic coverage index (0–8) 4.0 Are all privately held land plots in the economy formally registered at the immovable property No 0.0 registry? Are all privately held land plots in the largest business city formally registered at the Yes 2.0 immovable property registry? Are all privately held land plots in the economy mapped? No 0.0 Are all privately held land plots in the largest business city mapped? Yes 2.0 Land dispute resolution index (0–8) 7.0 Does the law require that all property sale transactions be registered at the immovable Yes 1.5 property registry to make them opposable to third parties? Is the system of immovable property registration subject to a state or private guarantee? Yes 0.5 Is there a specific compensation mechanism to cover for losses incurred by parties who No 0.0 engaged in good faith in a property transaction based on erroneous information certified by the immovable property registry? Does the legal system require a control of legality of the documents necessary for a property Yes 0.5 transaction (e.g., checking the compliance of contracts with requirements of the law)? If yes, who is responsible for checking the legality of the documents? Registrar; Notary; Lawyer; Does the legal system require verification of the identity of the parties to a property Yes 0.5 transaction? If yes, who is responsible for verifying the identity of the parties? Registrar; Notary; Is there a national database to verify the accuracy of identity documents? Yes 1.0 For a standard land dispute between two local businesses over tenure rights of a property Arbitration Court worth 50 times gross national income (GNI) per capita and located in the largest business or The economic city, what court would be in charge of the case in the first instance? Court of Tashkent city How long does it take on average to obtain a decision from the first-instance court for such a Less than a year 3.0 case (without appeal)? Page 27 Doing Business 2019 Uzbekistan Are there any statistics on the number of land disputes in the first instance? No 0.0 Number of land disputes in the largest business city in 2017: Equal access to property rights index (-2–0) 0.0 Do unmarried men and unmarried women have equal ownership rights to property? Yes Do married men and married women have equal ownership rights to property? Yes 0.0 Page 28 Doing Business 2019 Uzbekistan Getting Credit This topic explores two sets of issues—the strength of credit reporting systems and the effectiveness of collateral and bankruptcy laws in facilitating lending. The most recent round of data collection for the project was completed in May 2018. See the methodology for more information. What the indicators measure Case study assumptions Strength of legal rights index (0–12) Doing Business assesses the sharing of credit information and the legal rights of borrowers and lenders with respect to secured transactions through 2 sets of • Rights of borrowers and lenders through indicators. The depth of credit information index measures rules and practices collateral laws (0-10) affecting the coverage, scope and accessibility of credit information available • Protection of secured creditors’ rights through through a credit registry or a credit bureau. The strength of legal rights index bankruptcy laws (0-2) measures the degree to which collateral and bankruptcy laws protect the rights of borrowers and lenders and thus facilitate lending. For each economy it is first Depth of credit information index (0–8) determined whether a unitary secured transactions system exists. Then two case • Scope and accessibility of credit information scenarios, case A and case B, are used to determine how a nonpossessory security distributed by credit bureaus and credit registries interest is created, publicized and enforced according to the law. Special emphasis (0-8) is given to how the collateral registry operates (if registration of security interests is possible). The case scenarios involve a secured borrower, company ABC, and a Credit bureau coverage (% of adults) secured lender, BizBank. • Number of individuals and firms listed in largest In some economies the legal framework for secured transactions will allow only case credit bureau as a percentage of adult population A or case B (not both) to apply. Both cases examine the same set of legal provisions Credit registry coverage (% of adults) relating to the use of movable collateral. • Number of individuals and firms listed in credit Several assumptions about the secured borrower (ABC) and lender (BizBank) registry as a percentage of adult population are used: - ABC is a domestic limited liability company (or its legal equivalent). - ABC has up to 50 employees. - ABC has its headquarters and only base of operations in the economy’s largest business city. For 11 economies the data are also collected for the second largest business city. - Both ABC and BizBank are 100% domestically owned. The case scenarios also involve assumptions. In case A, as collateral for the loan, ABC grants BizBank a nonpossessory security interest in one category of movable assets, for example, its machinery or its inventory. ABC wants to keep both possession and ownership of the collateral. In economies where the law does not allow nonpossessory security interests in movable property, ABC and BizBank use a fiduciary transfer-of-title arrangement (or a similar substitute for nonpossessory security interests). In case B, ABC grants BizBank a business charge, enterprise charge, floating charge or any charge that gives BizBank a security interest over ABC’s combined movable assets (or as much of ABC’s movable assets as possible). ABC keeps ownership and possession of the assets. Page 29 Doing Business 2019 Uzbekistan Getting Credit - Uzbekistan Indicator Uzbekistan Europe & OECD high Best Regulatory Central Asia income Performance Strength of legal rights index (0-12) 6 7.2 6.1 12 (5 Economies) Depth of credit information index (0-8) 7 6.6 6.7 8 (42 Economies) Credit registry coverage (% of adults) 0 25.3 21.8 100.0 (4 Economies) Credit bureau coverage (% of adults) 42.7 43.4 65.3 100.0 (25 Economies) Figure – Getting Credit in Uzbekistan and comparator economies – Ranking and Score DB 2019 Getting Credit Score 0 100 80.00: Russian Federation (Rank: 22) 75.00: Kyrgyz Republic (Rank: 32) 70.00: Moldova (Rank: 44) 68.70: Regional Average (Europe & Central Asia) 65.00: Kazakhstan (Rank: 60) 65.00: Uzbekistan (Rank: 60) Note: The ranking of economies on the ease of getting credit is determined by sorting their scores for getting credit. These scores are the sum of the scores for the strength of legal rights index and the depth of credit information index. Figure – Legal Rights in Uzbekistan and comparator economies 9 8 9 8 7.2 7 6 6 6 Index Score 5 4 3 2 1 0 Uzbekistan Kazakhstan Kyrgyz Republic Moldova Russian Federation Europe & Central Asia Page 30 Doing Business 2019 Uzbekistan Details – Legal Rights in Uzbekistan Strength of legal rights index (0-12) 6 Does an integrated or unified legal framework for secured transactions that extends to the creation, publicity and Yes enforcement of functional equivalents to security interests in movable assets exist in the economy? Does the law allow businesses to grant a non possessory security right in a single category of movable assets, without No requiring a specific description of collateral? Does the law allow businesses to grant a non possessory security right in substantially all of its assets, without requiring a Yes specific description of collateral? May a security right extend to future or after-acquired assets, and does it extend automatically to the products, proceeds and No replacements of the original assets? Is a general description of debts and obligations permitted in collateral agreements; can all types of debts and obligations be No secured between parties; and can the collateral agreement include a maximum amount for which the assets are encumbered? Is a collateral registry in operation for both incorporated and non-incorporated entities, that is unified geographically and by Yes asset type, with an electronic database indexed by debtor's name? Does a notice-based collateral registry exist in which all functional equivalents can be registered? Yes Does a modern collateral registry exist in which registrations, amendments, cancellations and searches can be performed Yes online by any interested third party? Are secured creditors paid first (i.e. before tax claims and employee claims) when a debtor defaults outside an insolvency No procedure? Are secured creditors paid first (i.e. before tax claims and employee claims) when a business is liquidated? No Are secured creditors subject to an automatic stay on enforcement when a debtor enters a court-supervised reorganization No procedure? Does the law protect secured creditors’ rights by providing clear grounds for relief from the stay and sets a time limit for it? Does the law allow parties to agree on out of court enforcement at the time a security interest is created? Does the law allow Yes the secured creditor to sell the collateral through public auction or private tender, as well as, for the secured creditor to keep the asset in satisfaction of the debt? Figure – Credit Information in Uzbekistan and comparator economies 8 7 7 7 7 6.6 6 6 6 Index Score 5 4 3 2 1 0 Uzbekistan Kazakhstan Kyrgyz Republic Moldova Russian Federation Europe & Central Asia Page 31 Doing Business 2019 Uzbekistan Details – Credit Information in Uzbekistan Depth of credit information index (0-8) Credit Credit Score bureau registry Are data on both firms and individuals distributed? Yes No 1 Are both positive and negative credit data distributed? Yes No 1 Are data from retailers or utility companies - in addition to data from banks and No No 0 financial institutions - distributed? Are at least 2 years of historical data distributed? (Credit bureaus and registries Yes No 1 that distribute more than 10 years of negative data or erase data on defaults as soon as they are repaid obtain a score of 0 for this component.) Are data on loan amounts below 1% of income per capita distributed? Yes No 1 By law, do borrowers have the right to access their data in the credit bureau or Yes No 1 credit registry? Can banks and financial institutions access borrowers’ credit information online Yes No 1 (for example, through an online platform, a system-to-system connection or both)? Are bureau or registry credit scores offered as a value-added service to help Yes No 1 banks and financial institutions assess the creditworthiness of borrowers? Total Score ("yes" to either public bureau or private registry) 7 Note: An economy receives a score of 1 if there is a "yes" to either bureau or registry. If the credit bureau or registry is not operational or covers less than 5% of the adult population, the total score on the depth of credit information index is 0. Coverage Credit bureau Credit registry Number of individuals 8,703,113 0 Number of firms 647,778 0 Total 9,350,891 0 Percentage of adult population 42.7 0 Page 32 Doing Business 2019 Uzbekistan Protecting Minority Investors This topic measures the strength of minority shareholder protections against misuse of corporate assets by directors for their personal gain as well as shareholder rights, governance safeguards and corporate transparency requirements that reduce the risk of abuse. The most recent round of data collection for the project was completed in May 2018. See the methodology for more information. What the indicators measure Case study assumptions • Extent of disclosure index (0–10): Review and To make the data comparable across economies, a case study uses several approval requirements for related-party assumptions about the business and the transaction. transactions; Disclosure requirements for related- party transactions The business (Buyer): • Extent of director liability index (0–10): Ability - Is a publicly traded corporation listed on the economy’s most important stock of minority shareholders to sue and hold exchange. If there are fewer than ten listed companies or if there is no stock interested directors liable for prejudicial related- exchange in the economy, it is assumed that Buyer is a large private company with party transactions; Available legal remedies multiple shareholders. (damages, disgorgement of profits, fines, - Has a board of directors and a chief executive officer (CEO) who may legally act on imprisonment, rescission of the transaction) behalf of Buyer where permitted, even if this is not specifically required by law. • Ease of shareholder suits index (0–10): - Has a supervisory board in economies with a two-tier board system on which Mr. Access to internal corporate documents; James appointed 60% of the shareholder-elected members. Evidence obtainable during trial and allocation of - Has not adopted bylaws or articles of association that go beyond the minimum legal expenses requirements. Does not follow codes, principles, recommendations or guidelines that are not mandatory. • Extent of conflict of interest regulation index - Is a manufacturing company with its own distribution network. (0–10): Simple average of the extent of disclosure, extent of director liability and ease of The transaction involves the following details: shareholder indices - Mr. James owns 60% of Buyer, sits on Buyer’s board of directors and elected two • Extent of shareholder rights index (0-10): directors to Buyer’s five-member board. Shareholders’ rights and role in major corporate - Mr. James also owns 90% of Seller, a company that operates a chain of retail decisions hardware stores. Seller recently closed a large number of its stores. • Extent of ownership and control index (0-10): - Mr. James proposes that Buyer purchase Seller’s unused fleet of trucks to expand Governance safeguards protecting shareholders Buyer’s distribution of its food products, a proposal to which Buyer agrees. The price from undue board control and entrenchment is equal to 10% of Buyer’s assets and is higher than the market value. - The proposed transaction is part of the company’s principal activity and is not • Extent of corporate transparency index (0-10): outside the authority of the company. Corporate transparency on ownership stakes, - Buyer enters into the transaction. All required approvals are obtained, and all compensation, audits and financial prospects required disclosures made—that is, the transaction was not entered into fraudulently. • Extent of shareholder governance index (0– - The transaction causes damages to Buyer. Shareholders sue Mr. James and the 10): Simple average of the extent of shareholders executives and directors that approved the transaction. rights, extent of ownership and control and extent of corporate transparency indices • Strength of minority investor protection index (0–10): Simple average of the extent of conflict of interest regulation and extent of shareholder governance indices Page 33 Doing Business 2019 Uzbekistan Protecting Minority Investors - Uzbekistan Indicator Uzbekistan Europe & OECD high Best Regulatory Central Asia income Performance Extent of disclosure index (0-10) 8.0 7.3 6.5 10 (13 Economies) Extent of director liability index (0-10) 3.0 4.9 5.3 10 (Cambodia) Ease of shareholder suits index (0-10) 7.0 6.8 7.3 10 (Djibouti) Extent of shareholder rights index (0-10) 6.0 7.1 6.4 10 (Kazakhstan) Extent of ownership and control index (0-10) 5.0 5.6 5.4 None in 2017/18 Extent of corporate transparency index (0-10) 7.0 7.5 7.6 10 (6 Economies) Figure – Protecting Minority Investors in Uzbekistan and comparator economies – Ranking and Score DB 2019 Protecting Minority Investors Score 0 100 85.00: Kazakhstan (Rank: 1) 68.33: Moldova (Rank: 33) 66.67: Kyrgyz Republic (Rank: 38) 65.29: Regional Average (Europe & Central Asia) 61.67: Russian Federation (Rank: 57) 60.00: Uzbekistan (Rank: 64) Note: The ranking of economies on the strength of minority investor protections is determined by sorting their scores for protecting minority investors. These scores are the simple average of the scores for the extent of conflict of interest regulation index and the extent of shareholder governance index. Figure – Protecting Minority Investors in Uzbekistan and comparator economies – Measure of Quality Uzbekistan 7 3 8 5 6 7 Kazakhstan 9 6 9 8 10 9 Kyrgyz Republic 7 5 7 8 5 8 Moldova 9 4 7 5 8 8 Russian Federation 8 2 6 5 9 7 OECD high income 7.4 5.5 6.5 5.2 6.3 7.4 Europe & Central Asia 7.6 4.6 7.2 5.6 7.3 6.8 0 10 20 30 40 50 60 Sub-Indicator Score Extent of corporate transparency index (0-10) Extent of director liability index (0-10) Extent of disclosure index (0-10) Extent of ownership and control index (0-10) Extent of shareholder rights index (0-10) Ease of shareholder suits index (0-10) Page 34 Doing Business 2019 Uzbekistan Details – Protecting Minority Investors in Uzbekistan – Measure of Quality Answer Score Extent of conflict of interest regulation index (0-10) 6 Extent of disclosure index (0-10) 8.0 Whose decision is sufficient to approve the Buyer-Seller transaction? (0-3) Shareholders 3.0 excluding interested parties Must an external body review the terms of the transaction before it takes place? (0-1) No 0.0 Must Mr. James disclose his conflict of interest to the board of directors? (0-2) Full disclosure of 2.0 all material facts Must Buyer disclose the transaction in periodic filings (e.g. annual reports)? (0-2) Disclosure on the 2.0 transaction and on the conflict of interest Must Buyer immediately disclose the transaction to the public? (0-2) Disclosure on the 1.0 transaction only Extent of director liability index (0-10) 3.0 Can shareholders representing 10% of Buyer's share capital sue for the damage the Yes 1.0 transaction caused to Buyer? (0-1) Can shareholders hold Mr. James liable for the damage the transaction caused to Buyer? (0- Not liable 0.0 2) Can shareholders hold the other directors liable for the damage the transaction caused to Not liable 0.0 Buyer (0-2) Must Mr. James pay damages for the harm caused to Buyer upon a successful claim by No 0.0 shareholders? (0-1) Must Mr. James repay profits made from the transaction upon a successful claim by No 0.0 shareholders? (0-1) Is Mr. James disqualified upon a successful claim by shareholders? (0-1) No 0.0 Can a court void the transaction upon a successful claim by shareholders? (0-2) Voidable if unfair 2.0 or prejudicial Ease of shareholder suits index (0-10) 7.0 Before suing, can shareholders representing 10% of Buyer's share capital inspect the Yes 1.0 transaction documents? (0-1) Can the plaintiff obtain any documents from the defendant and witnesses at trial? (0-3) Documents that 2.0 directly prove specific facts in the plaintiff’s claim Can the plaintiff request categories of documents from the defendant without identifying No 0.0 specific ones? (0-1) Can the plaintiff directly question the defendant and witnesses at trial? (0-2) Yes 2.0 Is the level of proof required for civil suits lower than that of criminal cases? (0-1) Yes 1.0 Can shareholder plaintiffs recover their legal expenses from the company? (0-2) Yes if successful 1.0 Extent of shareholder governance index (0-10) 6.0 Extent of shareholder rights index (0-10) 6.0 Does the sale of 51% of Buyer's assets require shareholder approval? Yes 1.0 Can shareholders representing 10% of Buyer's share capital call for a meeting of Yes 1.0 shareholders? Must Buyer obtain its shareholders’ approval every time it issues new shares? Yes 1.0 Page 35 Doing Business 2019 Uzbekistan Do shareholders automatically receive preemption rights every time Buyer issues new No 0.0 shares? Must shareholders approve the election and dismissal of the external auditor? No 0.0 Are changes to the rights of a class of shares only possible if the holders of the affected No 0.0 shares approve? Assuming that Buyer is a limited company, does the sale of 51% of its assets require Yes 1.0 member approval? Assuming that Buyer is a limited company, can members representing 10% call for a Yes 1.0 meeting of members? Assuming that Buyer is a limited company, must all or almost all members consent to add a Yes 1.0 new member? Assuming that Buyer is a limited company, must a member first offer to sell their interest to No 0.0 the existing members before they can sell to non-members? Extent of ownership and control index (0-10) 5.0 Is it forbidden to appoint the same individual as CEO and chairperson of the board of Yes 1.0 directors? Must the board of directors include independent and nonexecutive board members? No 0.0 Can shareholders remove members of the board of directors without cause before the end Yes 1.0 of their term? Must the board of directors include a separate audit committee exclusively comprising board No 0.0 members? Must a potential acquirer make a tender offer to all shareholders upon acquiring 50% of Yes 1.0 Buyer? Must Buyer pay declared dividends within a maximum period set by law? Yes 1.0 Is a subsidiary prohibited from acquiring shares issued by its parent company? Yes 1.0 Assuming that Buyer is a limited company, must Buyer have a mechanism to resolve No 0.0 disagreements among members? Assuming that Buyer is a limited company, must a potential acquirer make a tender offer to No 0.0 all shareholders upon acquiring 50% of Buyer? Assuming that Buyer is a limited company, must Buyer distribute profits within a maximum No 0.0 period set by law? Extent of corporate transparency index (0-10) 7.0 Must Buyer disclose direct and indirect beneficial ownership stakes representing 5%? No 0.0 Must Buyer disclose information about board members’ primary employment and Yes 1.0 directorships in other companies? Must Buyer disclose the compensation of individual managers? Yes 1.0 Must a detailed notice of general meeting be sent 21 days before the meeting? No 0.0 Can shareholders representing 5% of Buyer’s share capital put items on the general meeting Yes 1.0 agenda? Must Buyer's annual financial statements be audited by an external auditor? Yes 1.0 Must Buyer disclose its audit reports to the public? Yes 1.0 Assuming that Buyer is a limited company, must members meet at least once a year? Yes 1.0 Assuming that Buyer is a limited company, can members representing 5% put items on the Yes 1.0 meeting agenda? Assuming that Buyer is a limited company, must Buyer's annual financial statements be No 0.0 audited by an external auditor? Page 36 Doing Business 2019 Uzbekistan Paying Taxes This topic records the taxes and mandatory contributions that a medium-size company must pay or withhold in a given year, as well as the administrative burden of paying taxes and contributions and complying with postfiling procedures (VAT refund and tax audit). The most recent round of data collection for the project was completed in May 2018 covering for the Paying Taxes indicator calendar year 2017 (January 1, 2017 – December 31, 2017). See the methodology for more information. What the indicators measure Case study assumptions Tax payments for a manufacturing company in Using a case scenario, Doing Business records taxes and mandatory contributions a 2017 (number per year adjusted for electronic medium size company must pay in a year, and measures the administrative burden and joint filing and payment) of paying taxes, contributions and dealing with postfiling processes. Information is also compiled on frequency of filing and payments, time taken to comply with tax • Total number of taxes and contributions paid or laws, time taken to comply with the requirements of postfiling processes and time withheld, including consumption taxes (value waiting. added tax, sales tax or goods and service tax) • Method and frequency of filing and payment To make data comparable across economies, several assumptions are used: - TaxpayerCo is a medium-size business that started operations on January 1, 2016. Time required to comply with 3 major taxes It produces ceramic flowerpots and sells them at retail. All taxes and contributions (hours per year) recorded are paid in the second year of operation (calendar year 2017). Taxes and • Collecting information, computing tax payable mandatory contributions are measured at all levels of government. • Preparing separate tax accounting books, if The VAT refund process: required - In June 2017, TaxpayerCo. makes a large capital purchase: the value of the • Completing tax return, filing with agencies machine is 65 times income per capita of the economy. Sales are equally spread per month (1,050 times income per capita divided by 12) and cost of goods sold are • Arranging payment or withholding equally expensed per month (875 times income per capita divided by 12). The machinery seller is registered for VAT and excess input VAT incurred in June will be Total tax and contribution rate (% of commercial profits) fully recovered after four consecutive months if the VAT rate is the same for inputs, sales and the machine and the tax reporting period is every month. Input VAT will • Profit or corporate income tax exceed Output VAT in June 2017. • Social contributions, labor taxes paid by The corporate income tax audit process: employer - An error in calculation of income tax liability (for example, use of incorrect tax • Property and property transfer taxes depreciation rates, or incorrectly treating an expense as tax deductible) leads to an • Dividend, capital gains, financial transactions incorrect income tax return and a corporate income tax underpayment. TaxpayerCo. taxes discovered the error and voluntarily notified the tax authority. The value of the underpaid income tax liability is 5% of the corporate income tax liability • Waste collection, vehicle, road and other taxes due. TaxpayerCo. submits corrected information after the deadline for submitting the annual tax return, but within the tax assessment period. Postfiling Index • Time to comply with a VAT refund (hours) • Time to obtain a VAT refund (weeks) • Time to comply with a corporate income tax correction (hours) • Time to complete a corporate income tax correction (weeks) Page 37 Doing Business 2019 Uzbekistan Paying Taxes - Uzbekistan Indicator Uzbekistan Europe & OECD high Best Regulatory Central Asia income Performance Payments (number per year) 10 16.6 11.2 3 (Hong Kong SAR, China) Time (hours per year) 181 214.8 159.4 49 (Singapore) Total tax and contribution rate (% of profit) 32.1 32.3 39.8 26.1% (32 Economies) Postfiling index (0-100) 48.17 64.41 84.41 None in 2017/18 Figure – Paying Taxes in Uzbekistan and comparator economies – Ranking and Score DB 2019 Paying Taxes Score 0 100 84.55: Moldova (Rank: 35) 79.77: Russian Federation (Rank: 53) 79.28: Kazakhstan (Rank: 56) 76.92: Uzbekistan (Rank: 64) 75.80: Regional Average (Europe & Central Asia) 56.55: Kyrgyz Republic (Rank: 150) Note: The ranking of economies on the ease of paying taxes is determined by sorting their scores for paying taxes. These scores are the simple average of the scores for each of the component indicators, with a threshold and a nonlinear transformation applied to one of the component indicators, the total tax and contribution rate. The threshold is defined as the total tax and contribution rate at the 15th percentile of the overall distribution for all years included in the analysis up to and including Doing Business 2015, which is 26.1%. All economies with a total tax and contribution rate below this threshold receive the same score as the economy at the threshold. Figure – Paying Taxes in Uzbekistan and comparator economies – Measure of Quality 100 90.79 80 73.14 64.41 Index score 60 48.17 48.85 40 37.38 20 0 Uzbekistan Kazakhstan Kyrgyz Republic Moldova Russian Federation Europe & Central Asia Page 38 Doing Business 2019 Uzbekistan Details – Paying Taxes in Uzbekistan Tax or Payments Notes on Time Statutory Tax base Total tax Notes on mandatory (number) Payments (hours) tax rate and TTCR contribution contribution rate (% of profit) Unified social 1.0 66.0 15% gross salaries 17.38 payment Corporate 1.0 64.0 7.5% taxable profit 6.32 income tax Infrastructure 1.0 8% taxable 6.24 development income after tax corporate income tax Land tax 1.0 various rates land area 1.90 Tax on 1.0 withheld 10% interest 0.26 interest income Environmenta 1.0 various rates tons of waste 0.02 l tax Employee 1.0 1% gross salaries 0.00 withheld paid - Cumulative Pension Fund contribution Employee 1.0 filed jointly 8.0% gross salaries 0.00 withheld paid - with USP, but Personal paid Pension Fund separately contribution Value added 1.0 51.0 20% value added 0.00 not included tax (VAT) Water tax 1.0 withheld various rates water 0.00 small amount consumption Totals 10 181 32.1 Page 39 Doing Business 2019 Uzbekistan Details – Paying Taxes in Uzbekistan – Tax by Type Taxes by type Answer Profit tax (% of profit) 12.6 Labor tax and contributions (% of profit) 17.4 Other taxes (% of profit) 2.2 Page 40 Doing Business 2019 Uzbekistan Details – Paying Taxes in Uzbekistan – Measure of Quality Answer Score Postfiling index (0-100) 48.17 VAT refunds Does VAT exist? Yes Does a VAT refund process exist per the case study? No Restrictions on VAT refund process Restricted to international traders and others Percentage of cases exposed to a VAT audit (%) Not applicable Is there a mandatory carry forward period? Yes Time to comply with VAT refund (hours) No VAT refund 0 per case study scenario Time to obtain a VAT refund (weeks) No VAT refund 0 per case study scenario Corporate income tax audits Does corporate income tax exist? Yes Percentage of cases exposed to a corporate income tax audit (%) 0% - 24% Time to comply with a corporate income tax correction (hours) 5.5 92.66 Time to complete a corporate income tax correction (weeks) No tax audit per 100 case study scenario Notes: Names of taxes have been standardized. For instance income tax, profit tax, tax on company's income are all named corporate income tax in this table. The hours for VAT include all the VAT and sales taxes applicable. The hours for Social Security include all the hours for labor taxes and mandatory contributions in general. The postfiling index is the average of the scores on time to comply with VAT refund, time to obtain a VAT refund, time to comply with a corporate income tax correction and time to complete a corporate income tax correction. N/A = Not applicable. Page 41 Doing Business 2019 Uzbekistan Trading across Borders Doing Business records the time and cost associated with the logistical process of exporting and importing goods. Doing Business measures the time and cost (excluding tariffs) associated with three sets of procedures—documentary compliance, border compliance and domestic transport—within the overall process of exporting or importing a shipment of goods. The most recent round of data collection for the project was completed in May 2018. See the methodology for more information. What the indicators measure Case study assumptions Documentary compliance To make the data comparable across economies, a few assumptions are made about the traded goods and the transactions: • Obtaining, preparing and submitting documents during transport, clearance, inspections and port Time: Time is measured in hours, and 1 day is 24 hours (for example, 22 days are or border handling in origin economy recorded as 22×24=528 hours). If customs clearance takes 7.5 hours, the data are • Obtaining, preparing and submitting documents recorded as is. Alternatively, suppose documents are submitted to a customs agency required by destination economy and any transit at 8:00a.m., are processed overnight and can be picked up at 8:00a.m. the next day. economies The time for customs clearance would be recorded as 24 hours because the actual • Covers all documents required by law and in procedure took 24 hours. practice, including electronic submissions of Cost: Insurance cost and informal payments for which no receipt is issued are information excluded from the costs recorded. Costs are reported in U.S. dollars. Contributors Border compliance are asked to convert local currency into U.S. dollars based on the exchange rate prevailing on the day they answer the questionnaire. Contributors are private sector • Customs clearance and inspections experts in international trade logistics and are informed about exchange rates. • Inspections by other agencies (if applied to more than 20% of shipments) Assumptions of the case study: - For all 190 economies covered by Doing Business, it is assumed a shipment is in a • Handling and inspections that take place at the warehouse in the largest business city of the exporting economy and travels to a economy’s port or border warehouse in the largest business city of the importing economy. - It is assumed each economy imports 15 metric tons of containerized auto parts (HS Domestic transport 8708) from its natural import partner—the economy from which it imports the largest • Loading or unloading of the shipment at the value (price times quantity) of auto parts. It is assumed each economy exports the warehouse or port/border product of its comparative advantage (defined by the largest export value) to its • Transport between warehouse and port/border natural export partner—the economy that is the largest purchaser of this product. Shipment value is assumed to be $50,000. • Traffic delays and road police checks while - The mode of transport is the one most widely used for the chosen export or import shipment is en route product and the trading partner, as is the seaport or land border crossing. - All electronic information submissions requested by any government agency in connection with the shipment are considered to be documents obtained, prepared and submitted during the export or import process. - A port or border is a place (seaport or land border crossing) where merchandise can enter or leave an economy. - Relevant government agencies include customs, port authorities, road police, border guards, standardization agencies, ministries or departments of agriculture or industry, national security agencies and any other government authorities. Page 42 Doing Business 2019 Uzbekistan Trading across Borders - Uzbekistan Indicator Uzbekistan Europe & OECD high Best Regulatory Central Asia income Performance Time to export: Border compliance (hours) 112 22.1 12.5 1 (19 Economies) Cost to export: Border compliance (USD) 278 157.5 139.1 0 (19 Economies) Time to export: Documentary compliance (hours) 96 24.3 2.4 1 (26 Economies) Cost to export: Documentary compliance (USD) 292 97.9 35.2 0 (20 Economies) Time to import: Border compliance (hours) 111 21.1 8.5 0 (25 Economies) Cost to import: Border compliance (USD) 278 162.3 100.2 0 (28 Economies) Time to import: Documentary compliance (hours) 174 24.7 3.4 1 (30 Economies) Cost to import: Documentary compliance (USD) 292 93.9 24.9 0 (30 Economies) Figure – Trading across Borders in Uzbekistan and comparator economies – Ranking and Score DB 2019 Trading Across Borders Score 0 100 92.32: Moldova (Rank: 35) 86.17: Regional Average (Europe & Central Asia) 80.74: Kyrgyz Republic (Rank: 70) 71.06: Russian Federation (Rank: 99) 70.36: Kazakhstan (Rank: 102) 49.79: Uzbekistan (Rank: 165) Note: The ranking of economies on the ease of trading across borders is determined by sorting their scores for trading across borders. These scores are the simple average of the scores for the time and cost for documentary compliance and border compliance to export and import. Figure – Trading across Borders in Uzbekistan – Time and Cost Time (hours) Cost (USD) 292 292 200 278 278 174 250 150 Time (hours) Cost (USD) 200 112 111 96 150 100 100 50 50 0 0 Export Export Import Import - - - - Border Documentary Border Documentary Compliance Compliance Compliance Compliance Page 43 Doing Business 2019 Uzbekistan Details – Trading across Borders in Uzbekistan Characteristics Export Import Product HS 52 : Cotton HS 8708: Parts and accessories of motor vehicles Trade partner Russian Federation Russian Federation Border Beyneu border crossing Yallama border crossing Distance (km) 1515 60 Domestic transport time (hours) 52 2 Domestic transport cost (USD) 1065 58 Details – Trading across Borders in Uzbekistan – Components of Border Compliance Time to Complete (hours) Associated Costs (USD) Export: Clearance and inspections required 85.9 277.9 by customs authorities Export: Clearance and inspections required 0.0 0.0 by agencies other than customs Export: Port or border handling 25.8 0.0 Import: Clearance and inspections required 85.9 277.9 by customs authorities Import: Clearance and inspections required 0.0 0.0 by agencies other than customs Import: Port or border handling 24.7 0.0 Page 44 Doing Business 2019 Uzbekistan Details – Trading across Borders in Uzbekistan – Trade Documents Export Import Export declaration Customs Import Declaration Export contract Certificate of origin Certificate of conformity Commercial invoice Invoice Packing list Packing list Serial/code numbers CMR CMR waybill Certificate of origin Certificate of conformity Export license for cotton Expert decision determining the code of the product Certificate of fumigation Phytosanitary certificate Page 45 Doing Business 2019 Uzbekistan Enforcing Contracts The enforcing contracts indicator measures the time and cost for resolving a commercial dispute through a local first-instance court, and the quality of judicial processes index, evaluating whether each economy has adopted a series of good practices that promote quality and efficiency in the court system. The most recent round of data collection was completed in May 2018. See the methodology for more information. What the indicators measure Case study assumptions Time required to enforce a contract through the The dispute in the case study involves the breach of a sales contract between 2 courts (calendar days) domestic businesses. The case study assumes that the court hears an expert on the quality of the goods in dispute. This distinguishes the case from simple debt • Time to file and serve the case enforcement. • Time for trial and to obtain the judgment To make the data comparable across economies, Doing Business uses several • Time to enforce the judgment assumptions about the case: Cost required to enforce a contract through the - The dispute concerns a lawful transaction between two businesses (Seller and courts (% of claim) Buyer), both located in the economy’s largest business city. For 11 economies the data are also collected for the second largest business city. • Attorney fees - The buyer orders custom-made goods, then fails to pay alleging that the goods are • Court fees not of adequate quality. - The value of the dispute is 200% of the income per capita or the equivalent in local • Enforcement fees currency of USD 5,000, whichever is greater. - The seller sues the buyer before the court with jurisdiction over commercial cases Quality of judicial processes index (0-18) worth 200% of income per capita or $5,000. • Court structure and proceedings (-1-5) - The seller requests the pretrial attachment of the defendant’s movable assets to secure the claim. • Case management (0-6) - The dispute on the quality of the goods requires an expert opinion. • Court automation (0-4) - The judge decides in favor of the seller; there is no appeal. • Alternative dispute resolution (0-3) - The seller enforces the judgment through a public sale of the buyer’s movable assets. Page 46 Doing Business 2019 Uzbekistan Enforcing Contracts - Uzbekistan Standardized Case Claim value UZS 14,346,158 Court name Tashkent Interdistrict Commercial Court City Covered Tashkent Indicator Uzbekistan Europe & OECD high Best Regulatory Central Asia income Performance Time (days) 225 496.3 582.4 None in 2017/18 Cost (% of claim value) 20.5 26.3 21.2 None in 2017/18 Quality of judicial processes index (0-18) 6.0 10.3 11.5 None in 2017/18 Figure – Enforcing Contracts in Uzbekistan and comparator economies – Ranking and Score DB 2019 Enforcing Contracts Score 0 100 81.25: Kazakhstan (Rank: 4) 72.18: Russian Federation (Rank: 18) 67.26: Uzbekistan (Rank: 41) 65.65: Regional Average (Europe & Central Asia) 60.87: Moldova (Rank: 69) 50.42: Kyrgyz Republic (Rank: 131) Note: The ranking of economies on the ease of enforcing contracts is determined by sorting their scores for enforcing contracts. These scores are the simple average of the scores for each of the component indicators. Figure – Enforcing Contracts in Uzbekistan – Time and Cost Time (days) Cost (% of claim value) 700 47.0 50 Cost (% of claim value) 585 582.4 600 496.4 40 Time (days) 500 410 28.6 400 26.3 370 30 337 22.0 21.2 20.5 300 16.5 20 225 200 10 100 0 0 Europe Kazakhstan Kyrgyz Moldova OECD Russian Uzbekistan & Republic high Federation Central income Asia Page 47 Doing Business 2019 Uzbekistan Figure – Enforcing Contracts in Uzbekistan and comparator economies – Measure of Quality Uzbekistan 1.5 0 2 2.5 Kazakhstan 3 5 3 5 Kyrgyz Republic 1.5 1 0 2.5 Moldova 2.5 3 2 2 Russian Federation 2.5 4 0 3 OECD high income 2.5 3.1 2.3 3.6 Europe & Central Asia 2.1 3 1.4 3.6 0 2 4 6 8 10 12 14 16 18 Sub-Indicator Score Alternative dispute resolution (0-3) Case management (0-6) Court automation (0-4) Court structure and proceedings (-1-5) Details – Enforcing Contracts in Uzbekistan Indicator Time (days) 225 Filing and service 30 Trial and judgment 90 Enforcement of judgment 105 Cost (% of claim value) 20.5 Attorney fees 15 Court fees 3.5 Enforcement fees 2 Quality of judicial processes index (0-18) 6.0 Court structure and proceedings (-1-5) 2.5 Case management (0-6) 0.0 Court automation (0-4) 2.0 Alternative dispute resolution (0-3) 1.5 Page 48 Doing Business 2019 Uzbekistan Details – Enforcing Contracts in Uzbekistan – Measure of Quality Answer Score Quality of judicial processes index (0-18) 6.0 Court structure and proceedings (-1-5) 2.5 1. Is there a court or division of a court dedicated solely to hearing commercial cases? Yes 1.5 2. Small claims court 0.0 2.a. Is there a small claims court or a fast-track procedure for small claims? No 2.b. If yes, is self-representation allowed? n.a. 3. Is pretrial attachment available? Yes 1.0 4. Are new cases assigned randomly to judges? No 0.0 5. Does a woman's testimony carry the same evidentiary weight in court as a man's? Yes 0.0 Case management (0-6) 0.0 1. Time standards 0.0 1.a. Are there laws setting overall time standards for key court events in a civil Yes case? 1.b. If yes, are the time standards set for at least three court events? No 1.c. Are these time standards respected in more than 50% of cases? Yes 2. Adjournments 0.0 2.a. Does the law regulate the maximum number of adjournments that can be No granted? 2.b. Are adjournments limited to unforeseen and exceptional circumstances? No 2.c. If rules on adjournments exist, are they respected in more than 50% of cases? n.a. 3. Can two of the following four reports be generated about the competent court: (i) time to No 0.0 disposition report; (ii) clearance rate report; (iii) age of pending cases report; and (iv) single case progress report? 4. Is a pretrial conference among the case management techniques used before the No 0.0 competent court? 5. Are there any electronic case management tools in place within the competent court for No 0.0 use by judges? 6. Are there any electronic case management tools in place within the competent court for No 0.0 use by lawyers? Court automation (0-4) 2.0 1. Can the initial complaint be filed electronically through a dedicated platform within the yes 1.0 competent court? 2. Is it possible to carry out service of process electronically for claims filed before the No 0.0 competent court? 3. Can court fees be paid electronically within the competent court? Yes 1.0 4. Publication of judgments 0.0 4.a Are judgments rendered in commercial cases at all levels made available to the No general public through publication in official gazettes, in newspapers or on the internet or court website? 4.b. Are judgments rendered in commercial cases at the appellate and supreme No court level made available to the general public through publication in official gazettes, in newspapers or on the internet or court website? Alternative dispute resolution (0-3) 1.5 1. Arbitration 1.0 Page 49 Doing Business 2019 Uzbekistan 1.a. Is domestic commercial arbitration governed by a consolidated law or Yes consolidated chapter or section of the applicable code of civil procedure encompassing substantially all its aspects? 1.b. Are there any commercial disputes—aside from those that deal with public No order or public policy—that cannot be submitted to arbitration? 1.c. Are valid arbitration clauses or agreements usually enforced by the courts? No 2. Mediation/Conciliation 0.5 2.a. Is voluntary mediation or conciliation available? Yes 2.b. Are mediation, conciliation or both governed by a consolidated law or No consolidated chapter or section of the applicable code of civil procedure encompassing substantially all their aspects? 2.c. Are there financial incentives for parties to attempt mediation or conciliation No (i.e., if mediation or conciliation is successful, a refund of court filing fees, income tax credits or the like)? Page 50 Doing Business 2019 Uzbekistan Resolving Insolvency Doing Business studies the time, cost and outcome of insolvency proceedings involving domestic legal entities. These variables are used to calculate the recovery rate, which is recorded as cents on the dollar recovered by secured creditors through reorganization, liquidation or debt enforcement (foreclosure or receivership) proceedings. To determine the present value of the amount recovered by creditors, Doing Business uses the lending rates from the International Monetary Fund, supplemented with data from central banks and the Economist Intelligence Unit. The most recent round of data collection was completed in May 2018. See the methodology for more information. What the indicators measure Case study assumptions Time required to recover debt (years) To make the data on the time, cost and outcome comparable across economies, several assumptions about the business and the case are used: • Measured in calendar years • Appeals and requests for extension are included - A hotel located in the largest city (or cities) has 201 employees and 50 suppliers. The hotel experiences financial difficulties. Cost required to recover debt (% of debtor’s - The value of the hotel is 100% of the income per capita or the equivalent in local estate) currency of USD 200,000, whichever is greater. - The hotel has a loan from a domestic bank, secured by a mortgage over the hotel’s • Measured as percentage of estate value real estate. The hotel cannot pay back the loan, but makes enough money to • Court fees operate otherwise. • Fees of insolvency administrators In addition, Doing Business evaluates the quality of legal framework applicable to • Lawyers’ fees judicial liquidation and reorganization proceedings and the extent to which best • Assessors’ and auctioneers’ fees insolvency practices have been implemented in each economy covered. • Other related fees Outcome • Whether business continues operating as a going concern or business assets are sold piecemeal Recovery rate for creditors • Measures the cents on the dollar recovered by secured creditors • Outcome for the business (survival or not) determines the maximum value that can be recovered • Official costs of the insolvency proceedings are deducted • Depreciation of furniture is taken into account • Present value of debt recovered Strength of insolvency framework index (0- 16) • Sum of the scores of four component indices: • Commencement of proceedings index (0-3) • Management of debtor’s assets index (0-6) • Reorganization proceedings index (0-3) • Creditor participation index (0-4) Page 51 Doing Business 2019 Uzbekistan Resolving Insolvency - Uzbekistan Indicator Uzbekistan Europe & OECD high Best Regulatory Central Asia income Performance Recovery rate (cents on the dollar) 37.6 38.6 70.5 None in 2017/18 Time (years) 2.0 2.3 1.7 0.4 (Ireland) Cost (% of estate) 10.0 13.2 9.3 1.0 (Norway) Outcome (0 as piecemeal sale and 1 as going 0 .. .. .. concern) Strength of insolvency framework index (0-16) 8.0 11.1 11.9 None in 2017/18 Figure – Resolving Insolvency in Uzbekistan and comparator economies – Ranking and Score DB 2019 Resolving Insolvency Score 0 100 67.83: Kazakhstan (Rank: 37) 58.61: Russian Federation (Rank: 55) 55.58: Regional Average (Europe & Central Asia) 54.12: Moldova (Rank: 68) 47.62: Kyrgyz Republic (Rank: 82) 45.21: Uzbekistan (Rank: 91) Note: The ranking of economies on the ease of resolving insolvency is determined by sorting their scores for resolving insolvency. These scores are the simple average of the scores for the recovery rate and the strength of insolvency framework index. Figure – Resolving Insolvency in Uzbekistan – Time and Cost Time (years) Cost (% of estate) 3 15.0 15.0 2.8 15.0 16 13.2 14 Cost (% of estate) 2.5 2.3 12 Time (years) 2.0 2.0 2 10.0 1.7 9.3 9.0 10 1.5 1.5 1.5 8 6 1 4 0.5 2 0 0 Europe Kazakhstan Kyrgyz Moldova OECD Russian Uzbekistan & Republic high Federation Central income Asia Page 52 Doing Business 2019 Uzbekistan Figure – Resolving Insolvency in Uzbekistan and comparator economies – Measure of Quality Uzbekistan 3 2.5 2 0.5 Kazakhstan 6 3 4 2 Kyrgyz Republic 3 3 1 2 Moldova 4 2.5 3 2.5 Russian Federation 5 2.5 3 1 OECD high income 5.3 2.8 2.2 1.9 Europe & Central Asia 4.5 2.6 2.3 1.8 0 2 4 6 8 10 12 14 16 Sub-Indicator Score Management of debtor's assets index (0-6) Commencement of proceedings index (0-3) Creditor participation index (0-4) Reorganization proceedings index (0-3) Note: Even if the economy’s legal framework includes provisions related to insolvency proceedings (liquidation or reorganization), the economy receives 0 points for the strength of insolvency framework index, if time, cost and outcome indicators are recorded as “no practice.” Figure – Resolving Insolvency in Uzbekistan and comparator economies – Recovery Rate Recovery rate(cents on the dollar) 100 80 60 38.9 42.1 37.6 36.2 38.6 40 30.9 20 0 Uzbekistan Kazakhstan Kyrgyz Republic Moldova Russian Federation Europe & Central Asia Page 53 Doing Business 2019 Uzbekistan Details – Resolving Insolvency in Uzbekistan Indicator Answer Score Proceeding liquidation Liquidation is the most likely procedure because there are several creditors involved and the debts of the hotel significantly exceed the permissible limits under Uzbekistan law. Reorganization is not often achieved in Uzbekistan for private companies. Outcome piecemeal sale Hotel's assets are likely to be sold piecemeal because currently it would be very difficult to find a buyer willing to purchase the entire hotel and continue operating it. Time (in years) 2.0 The petition to initiate liquidation of the debtor will be lodged with the court upon expiration of three months from the moment when monetary obligations became due. Following the acceptance of the petition, the court will issue an order to consider the case (1-2 months). Then the Court will commence supervisory proceedings (from 6 to 12 months). The court will also appoint an administrator, who will take over the company's financials, publish notice of bankruptcy, receive claims from creditors and try to reach settlements between them, whenever possible, and prepare a register of creditors' claims. The administrator also must prepare an interim balance sheet of the debtor and present it to the creditors, who will have to approve it. The hotel will then go into liquidation. A public auction will be held to sell the assets, after which the creditors will be paid and the company will be liquidated. Liquidation generally lasts between 6 and 12 months. Cost (% of 10.0 The total cost of the proceedings will amount to around 10% of the value of the estate. Main estate) expenses will include attorneys' fees (up to 3%), remuneration and fees of the administrator (up to 4%), fees of other professionals involved in the insolvency proceedings, such as accountants and assessors (2%), and auctioneer’s fees – (up to 2%). Recovery rate 37.6 (cents on the dollar) Page 54 Doing Business 2019 Uzbekistan Details – Resolving Insolvency in Uzbekistan – Measure of Quality Answer Score Strength of insolvency framework index (0-16) 8.0 Commencement of proceedings index (0-3) 2.5 What procedures are available to a DEBTOR when commencing insolvency proceedings? (a) Debtor may 1.0 file for both liquidation and reorganization Does the insolvency framework allow a CREDITOR to file for insolvency of the debtor? (b) Yes, but a 0.5 creditor may file for liquidation only What basis for commencement of the insolvency proceedings is allowed under the (a) Debtor is 1.0 insolvency framework? generally unable to pay its debts as they mature Management of debtor's assets index (0-6) 3.0 Does the insolvency framework allow the continuation of contracts supplying essential goods No 0.0 and services to the debtor? Does the insolvency framework allow the rejection by the debtor of overly burdensome Yes 1.0 contracts? Does the insolvency framework allow avoidance of preferential transactions? No 0.0 Does the insolvency framework allow avoidance of undervalued transactions? No 0.0 Does the insolvency framework provide for the possibility of the debtor obtaining credit after Yes 1.0 commencement of insolvency proceedings? Does the insolvency framework assign priority to post-commencement credit? (b) Yes over 1.0 ordinary unsecured creditors but not over secured creditors Reorganization proceedings index (0-3) 0.5 Which creditors vote on the proposed reorganization plan? (a) All creditors 0.5 Does the insolvency framework require that dissenting creditors in reorganization receive at No 0.0 least as much as what they would obtain in a liquidation? Are the creditors divided into classes for the purposes of voting on the reorganization plan, No 0.0 does each class vote separately and are creditors in the same class treated equally? Creditor participation index (0-4) 2.0 Does the insolvency framework require approval by the creditors for selection or Yes 1.0 appointment of the insolvency representative? Does the insolvency framework require approval by the creditors for sale of substantial Yes 1.0 assets of the debtor? Does the insolvency framework provide that a creditor has the right to request information No 0.0 from the insolvency representative? Does the insolvency framework provide that a creditor has the right to object to decisions No 0.0 accepting or rejecting creditors' claims? Note: Even if the economy’s legal framework includes provisions related to insolvency proceedings (liquidation or reorganization), the economy receives 0 points for the strength of insolvency framework index, if time, cost and outcome indicators are recorded as “no practice.” Page 55 Doing Business 2019 Uzbekistan Labor Market Regulation Doing Business presents detailed data for the labor market regulation indicators on the Doing Business website (http://www.doingbusiness.org). The report does not present rankings of economies on these indicators or include the topic in the aggregate ease of doing business score or ranking on the ease of doing business. The most recent round of data collection was completed in May 2018. See the methodology for more information. What the indicators measure Case study assumptions Hiring To make the data comparable across economies, several assumptions about the (i) whether fixed-term contracts are prohibited for worker and the business are used. permanent tasks; (ii) maximum cumulative duration of fixed-term contracts; (iii) length of the The worker: probationary period; (iv) minimum wage. - Is a cashier in a supermarket or grocery store, age 19, with one year of work experience. Working hours - Is a full-time employee. (i) maximum number of working days allowed per - Is not a member of the labor union, unless membership is mandatory. week; (ii) premiums for work: at night, on a weekly rest day and overtime; (iii) whether there are The business: restrictions on work at night, work on a weekly rest - Is a limited liability company (or the equivalent in the economy). day and for overtime work; (iv) whether - Operates a supermarket or grocery store in the economy’s largest business city. nonpregnant and nonnursing women can work For 11 economies the data are also collected for the second largest business city. same night hours as men; (v) length of paid annual - Has 60 employees. leave. - Is subject to collective bargaining agreements if such agreements cover more than 50% of the food retail sector and they apply even to firms that are not party to them. Redundancy rules - Abides by every law and regulation but does not grant workers more benefits than (i) whether redundancy can be basis for terminating those mandated by law, regulation or (if applicable) collective bargaining workers; (ii) whether employer needs to notify agreements. and/or get approval from third party to terminate 1 redundant worker and a group of 9 redundant workers; (iii) whether law requires employer to reassign or retrain a worker before making worker redundant; (iv) whether priority rules apply for redundancies and reemployment. Redundancy cost (i) notice period for redundancy dismissal; (ii) severance payments due when terminating a redundant worker. Job quality (i) whether law mandates equal remuneration for work of equal value and nondiscrimination based on gender in hiring; (ii) whether law mandates paid or unpaid maternity leave; (iii) length of paid maternity leave; (iv) whether employees on maternity leave receive 100% of wages; (v) availability of five fully paid days of sick leave a year; (vi) eligibility requirements for unemployment protection. Page 56 Doing Business 2019 Uzbekistan Labor Market Regulation - Uzbekistan Details – Labor Market Regulation in Uzbekistan Answer Hiring Fixed-term contracts prohibited for permanent tasks? Yes Maximum length of a single fixed-term contract (months) 60.0 Maximum length of fixed-term contracts, including renewals (months) 60.0 Minimum wage applicable to the worker assumed in the case study (US$/month) 105.9 Ratio of minimum wage to value added per worker 0.4 Maximum length of probationary period (months) 3.0 Working hours Standard workday 8.0 Maximum number of working days per week 6.0 Premium for night work (% of hourly pay) 50.0 Premium for work on weekly rest day (% of hourly pay) 100.0 Premium for overtime work (% of hourly pay) 100.0 Restrictions on night work? No Whether nonpregnant and nonnursing women can work the same night hours as men Yes Restrictions on weekly holiday? No Restrictions on overtime work? No Paid annual leave for a worker with 1 year of tenure (working days) 15.0 Paid annual leave for a worker with 5 years of tenure (working days) 15.0 Paid annual leave for a worker with 10 years of tenure (working days) 15.0 Paid annual leave (average for workers with 1, 5 and 10 years of tenure, in working days) 15.0 Redundancy rules Dismissal due to redundancy allowed by law? Yes Third-party notification if one worker is dismissed? No Third-party approval if one worker is dismissed? No Third-party notification if nine workers are dismissed? Yes Third-party approval if nine workers are dismissed? No Retraining or reassignment obligation before redundancy? Yes Priority rules for redundancies? Yes Priority rules for reemployment? No Redundancy cost Notice period for redundancy dismissal for a worker with 1 year of tenure 8.7 Notice period for redundancy dismissal for a worker with 5 years of tenure 8.7 Notice period for redundancy dismissal for a worker with 10 years of tenure 8.7 Notice period for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure) 8.7 Severance pay for redundancy dismissal for a worker with 1 year of tenure 8.7 Page 57 Doing Business 2019 Uzbekistan Severance pay for redundancy dismissal for a worker with 5 years of tenure 8.7 Severance pay for redundancy dismissal for a worker with 10 years of tenure 8.7 Severance pay for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure) 8.7 Job quality Equal remuneration for work of equal value? No Gender nondiscrimination in hiring? No Paid or unpaid maternity leave mandated by law? Yes Minimum length of maternity leave (calendar days)? 126.0 Receive 100% of wages on maternity leave? Yes Five fully paid days of sick leave a year? Yes Unemployment protection after one year of employment? Yes Minimum contribution period for unemployment protection (months)? 0.0 Page 58 Doing Business 2019 Uzbekistan Business Reforms in Uzbekistan In the past year, Doing Business observed a peaking of reform activity worldwide. From June 2, 2017, to May 1, 2018, 128 economies implemented a record 314 regulatory reforms improving the business climate. Reforms inspired by Doing Business have been implemented by economies in all regions. The following are reforms implemented since Doing Business 2008. = Doing Business reform making it easier to do business. = Change making it more difficult to do business. DB2019 Protecting Minority Investors: Uzbekistan strengthened minority investor protections by clarifying the ownership and control structures of listed companies. Paying Taxes: Uzbekistan made paying taxes less costly by introducing new classification criteria for enterprises. The new classification allows small enterprises to pay a single social contribution at a fixed rate, but not less than 65% of the minimum wage for each employee. Trading across Borders: Uzbekistan made trading across borders faster by introducing an electronic application and payment system for several export certificates, reducing the time for export documentary compliance. DB2018 Starting a Business: Uzbekistan made starting a business easier by rolling out a new platform for business registration, starting with name verification as the first step. Dealing with Construction Permits: Uzbekistan made dealing with construction permits easier by streamlining the process of obtaining approvals of land plot allocations from various agencies. Getting Electricity: Uzbekistan streamlined the process of obtaining an electricity connection by introducing a turnkey service at the utility that fulfills all connection-related services, including the design and completion of the external connection. Protecting Minority Investors: Uzbekistan strengthened minority investor protections by increasing corporate transparency requirements. Paying Taxes: Uzbekistan made paying taxes easier and less costly by introducing an electronic system for filing and paying VAT, land tax, unified social payments, CIT, infrastructure development tax, environmental tax, personal pension fund contributions and cumulative pension contributions. On the other hand, land tax rates were increased. DB2017 Registering Property: Uzbekistan made transferring a property easier by increasing transparency of information. Protecting Minority Investors: Uzbekistan strengthened minority investor protections by clarifying ownership and control structures. Paying Taxes: Uzbekistan made paying taxes less costly by reducing the unified social payment rate paid by employers and the corporate income tax rate. However, the land tax rates in city of Tashkent increased. DB2016 Starting a Business: Uzbekistan made starting a business easier by introducing an online one-stop shop and streamlining registration procedures. Registering Property: Uzbekistan made transferring property easier by eliminating the requirement to provide several different nonencumbrance certificates, though it also increased the costs associated with property transfers. Getting Credit: Uzbekistan improved access to credit by adopting new laws on secured transactions that allow a general description of assets granted as collateral and establish a modern, unified, notice-based collateral registry. DB2015 Protecting Minority Investors: Uzbekistan strengthened minority investor protections by introducing a requirement for public joint stock companies to disclose information about related-party transactions in their annual report; setting higher standards for disclosure of such transactions to the board of directors; and establishing the right of shareholders to receive all documents related to such transactions. Trading across Borders: Uzbekistan made trading across borders easier by reducing the number of documents to export and import and by making it possible to submit documents electronically. Page 59 Doing Business 2019 Uzbekistan DB2014 Starting a Business: Uzbekistan made starting a business easier by abolishing the paid-in minimum capital requirement and by eliminating the requirement to have signature samples notarized before opening a bank account. Registering Property: Uzbekistan made transferring property easier by reducing the notary fees. Getting Credit: Uzbekistan improved access to credit information by expanding the scope of credit information and requiring that more than 2 years of historical data be collected and distributed. Paying Taxes: Uzbekistan made paying taxes easier for companies by eliminating some small taxes. Trading across Borders: Uzbekistan made trading across borders easier by eliminating the need to register import contracts with customs, tightening the time limits for banks to register export or import contracts and reducing the number of export documents required. Enforcing Contracts: Uzbekistan made enforcing contracts easier by introducing an electronic filing system for court users. DB2013 Starting a Business: Uzbekistan made starting a business easier by introducing an online facility for name reservation and eliminating the fee to open a bank account for small businesses. Getting Credit: Uzbekistan improved access to credit information by guaranteeing borrowers’ right to inspect their personal data. Trading across Borders: Uzbekistan reduced the time to export by introducing a single window for customs clearance and reduced the number of documents needed for each import transaction. Resolving Insolvency: Uzbekistan strengthened its insolvency process by introducing new time limits for insolvency proceedings and new time limits and procedures for the second auction and by making it possible for businesses to continue operating throughout the liquidation proceeding. DB2012 Starting a Business: Uzbekistan made starting a business easier by reducing the minimum capital requirement, eliminating 1 procedure and reducing the cost of registration. DB2011 Dealing with Construction Permits: Uzbekistan increased all fees for procedures relating to construction permits. DB2010 Dealing with Construction Permits: Uzbekistan made dealing with construction permits less costly by reducing the building permit fees. Paying Taxes: Uzbekistan made paying taxes easier for companies through a new tax code combining corporate income tax provisions. DB2009 Getting Credit: In Uzbekistan a private credit bureau (Inter Bank Kredit Bureau) started collecting information on the repayment patterns of individual borrowers as well as firms. DB2008 Starting a Business: Uzbekistan made starting a business easier by eliminating the requirement for substantive review at the registry, simplifying internal procedures and clarifying rules for refusal of registration. Registering Property: Uzbekistan made registering property easier and less costly by introducing a formula for calculating the fee to notarize a property sale agreement that takes into account the minimum wage. Paying Taxes: Uzbekistan made paying taxes easier and less costly for companies by abolishing the ecology tax, reducing the number of payments required for the corporate income tax and reducing the corporate income tax rate and the unified social payment rate. Resolving Insolvency: Uzbekistan made resolving insolvency easier by adopting legislation on the voluntary liquidation of private companies. Page 60 Doing Business 2019 Uzbekistan Page 61