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Uzbekistan is preparing to establish 14 new special economic zones by March 1, 2023, which would bring the country’s total to 36, according to a draft presidential resolution on measures for the establishment of large special economic zones. Enterprises operating within these zones would be exempt from property, land, water resources and profit taxes for periods of up to ten years.
The draft resolution envisages the creation of 100 large special economic zones for enterprises across each region, with the state committed to providing full conditions and infrastructure for business activity. The government has defined a broad set of objectives for the zones, including attracting foreign and domestic direct investment into high-value-added manufacturing, deepening import substitution, expanding agricultural processing and export capacity, and establishing logistics infrastructure. The resolution also calls for the creation of research and production centres meeting international standards for certification and product marking, as well as training programmes for qualified specialists tied to the needs of zone participants.
Minister of Investments and Foreign Trade Jamshid Khodjayev said 22 special economic zones specialising in industry, agriculture, pharmaceuticals and tourism have already been established. “We will continue to improve such conditions in order to become one of the most advanced in the region in this direction, and thereby create a more favourable environment for attracting new investors,” he said.
Economist raises alarm over fiscal consequences
The expansion has drawn pointed criticism from economist Otabek Bakirov, who argues the policy has drifted from its original purpose. “If 100 more enterprises in each region do not pay taxes, ownerless small businesses and the ordinary people will bear the burden,” Bakirov said, suggesting that special economic zones have become a mechanism for extracting benefits rather than a genuine driver of structural economic development.
His concern centres on the distributional effect of large-scale, long-duration tax exemptions: as more enterprises are sheltered from the standard tax base, the remaining fiscal weight falls disproportionately on smaller, informal or unregistered businesses and on individual taxpayers who lack the scale or legal standing to access zone benefits.
The tension between investment incentives and equitable tax policy is not unique to Uzbekistan, but the pace of zone creation here is notable. Moving from 22 to a projected 36 zones within months, while simultaneously outlining ambitions for 100 zones per region, signals an aggressive expansion that critics say has outpaced any rigorous assessment of fiscal costs or the actual performance of existing zones in generating the promised high-value investment and employment.
The draft resolution has not yet been formally adopted, and no timeline was given for the broader target of 100 zones per region beyond the March 2023 deadline for the initial 14 new sites.