Investment in Uzbekistan: Prospects and Risks
Uzbekistan is a growing economy that is only just seeing a strategic reopening and introducing free-market reforms, in the past decade or so. The market is prime for investments, with a government that is readily promoting foreign investments, encouraging privatization, and has introduced a streamlined tax system that incentivizes private players. Countries like Turkey, China, Russia, and Germany have readily invested huge sums in Uzbekistan in the past years. Transport, tourism, manufacturing, and metallurgy remain important areas of investment.
Prospects and Opportunities
The Uzbek investment climate is especially warm and welcoming. Since 2017, the government has enacted several legislations to increase foreign investment. Bodies such as the Investment Promotion Agency and Ministry of Investments and Foreign Trade have been set up. If you are looking to invest, energy, manufacturing, chemical, infrastructure, education and pharmaceutical industries can be favorable options. The most promising choice would be energy and natural resources. Uzbekistan is a country rich in natural reserves, with more than 2700 deposits, 100 different mineral raw materials and precious minerals such as uranium, gold, copper, natural gas and tungsten. A smart investment in this growing area is sure to bring heaps of profit, especially in a country that boasts of excess deposits. Recently, Uzbekistan has also expressed interest and directed focus on bringing sustainable infrastructure to the country. Long-term development plans include this in their ambit which makes infrastructure a great area for possible investment. Currently, the country lacks proper infrastructure in water, transport, roads and railways and the pipeline sector. These areas can be lucrative fields of investment.
Real estate is also becoming a new way of investing in Uzbekistan. Gross yields can reach more than 8-11%. Capital city Tashkent is a popular choice for many investors. Apartments, buildings and city center real estate provide lots of impetus for investment, owing to low construction rates and several banking measures that help foreign investors. The time is ripe to invest in Uzbekistan as it offers several benefits and an environment favoring financial growth. However, some risks must be considered before any major steps are taken.
Despite all the glowing positives of investing in Uzbekistan, certain internal and structural issues in the country can pose immediate risks to investors in the country. One of these is the substantial lack of transparency in governmental procedures. Besides, the banking infrastructure in the country is especially weak, and foreigners often face difficulty in negotiating this. There is also a serious lack of qualified personnel who can undertake important tasks in the country. This means there is a low quality of work and often a dearth of employable people. Several people have also complained of unnecessary state interventionism in the activities of private companies and a difficult business climate.
Uzbekistan is a growing economy that offers attractive investment options to foreign investors. Areas such as real estate, infrastructure and natural resources will see stellar growth in the future. However, several internal issues keep the country from progressing and pose difficulties to new and old investors alike.