Uzbekistan is taking an unprecedented step to attract entrepreneurs and incentivize formal small businesses. According to Presidential Decree No. PP-247 of the Republic of Uzbekistan dated August 12, 2025, effective January 1, 2026, the country will introduce a special legal framework establishing one of the lowest tax rates in the region for sole proprietors (individual entrepreneurs) and self-employed individuals. This measure is designed to radically improve the business climate, create a level playing field, and provide substantial benefits to the entrepreneurial sector.
Key Provisions of the New Preferential Regime
The document meticulously defines the conditions and advantages of the new system, making it transparent and advantageous for small businesses:
Unified 1% Turnover Tax Rate: In accordance with Clause 2 of the decree, sole proprietors and self-employed individuals whose annual turnover (gross income) from all types of activities does not exceed 1 billion Uzbek soums will be subject to a fixed turnover tax rate of 1%. This radically simplifies tax administration and makes business operations highly predictable.
Revised Rules for the Self-Employed: Clause 1 abolishes the previously effective exemption from the turnover tax for self-employed individuals whose income did not exceed 100 million soums. Under the new policy, all entrepreneurs and self-employed individuals in this segment operate under a single, clear rule, which encourages the formalization of business activities.
Support for Transition to the General System: Per Clause 3, legal entities (including newly established ones) that are transitioning for the first time from the turnover tax to the Value Added Tax (VAT) and Corporate Income Tax system will receive a full exemption from corporate income tax for one calendar year following the transition. This is a powerful measure providing a "financial grace period" for companies at the scaling stage.
Objective and Principles: The framework is created to further foster favorable conditions, ensure equality, and support entrepreneurial activity.
Why This is a Unique Business Opportunity
The introduction of this new regime through an official decree addresses several key challenges simultaneously:
Simplicity and Certainty: Clear legislative parameters and a fixed rate minimize bureaucratic burden and allow for precise financial planning.
Powerful Incentive for Formalization: Favorable conditions make it economically disadvantageous to operate informally.
Systematic Support for Growth: The state not only facilitates starting a business but also encourages its development through the corporate income tax exemption when transitioning to the next level.
The new rules, established at the highest legislative level, create a "window of opportunity" for rapid and cost-effective market entry. To capitalize on this opportunity from the first day of 2026, preparation is essential.
We offer a comprehensive suite of services to launch and support your business:
Eligibility Analysis and Strategy Selection: We will help determine if your business project qualifies for the new preferential 1% regime or if it is more advantageous to immediately register a company with a plan to transition to the general system utilizing the "tax holiday."
End-to-End Legal Support for Registration: We will handle all stages: from analyzing your activity's economic classification codes (OKED) to preparing documentation and registering with state authorities in strict compliance with PP-247.
Accounting and Tax Compliance: We will organize accounting under the new special regime and prepare and submit all necessary reporting, allowing you to focus on business development.
Business Structuring Advisory: We will assist in building your operational and financial model to maximize the utilization of the provided benefits at all growth stages.
Strategic preparation initiated today will position you among the first to leverage the advantages of Uzbekistan's new business environment. Submit a consultation request, and our Uzbekistan market experts will develop a step-by-step business launch plan for you utilizing the new incentives.