Azizov & Partners

The commercial corporate law is presented by the Civil Code of Uzbekistan (as general) and the Uzbek Laws “On Joint Stock Companies and Protection of Rights of Shareholder”, “On companies with limited and additional liability” and “On business partnerships”. Above legislation provides that commercial legal entity could be founded in form of: (i) joint stock company; (ii) limited liability company; (iii) additional liability company; and (iv) general business partnership and limited business partnerships.

A joint stock company is a legal entity which provides its shareholders with limited liability to the extent of value of their shareholding (subject of few excerptions). The charter capital of a JSC comprises the nominal value of the company’s shares acquired by the shareholders. All shares must have the same nominal value.

A limited liability company is a legal entity established by one or more physical (individuals) or legal entities with a charter capital divided into participatory interests whose size is determined by the foundation documents. In contrast to shares of the joint stock companies, the participating interests are not securities. The holders of participatory interests in an additional liability company have broader (joint and several) liabilities in comparison to an limited liability company, the liability of which is limited to the value of the participants’ contributions.

There are two types of partnerships: a General Business Partnership and a Limited Business Partnership. A General Business Partnership is a partnership whose partners engage in business activity on behalf of the partnership and are jointly and severally liable for its obligations with all their assets. A Limited Business Partnership is a partnership in which there are one or several limited partners, who do not participate in the partnership’s business and who bear the risk of losses connected with the partnership’s activities only to the extent of their contributions.

Any legal entity established in Uzbekistan is subject to the state registration.

Non-corporate forms of commercial vehicles include (i) a representative office of a foreign commercial legal entity or (ii) permanent establishment of a foreign commercial legal entity.

A representative office of a foreign legal entity is a vehicle, which could not engage in a commercial activity. The representative office and its foreign personal personnel are subject to accreditation with the Ministry of Investments and Foreign Trade. Tax reporting of the representative office is performed by way of filing annual declaration.

According to the Uzbekistan legislation “permanent establishment” of the non-resident company for the tax purposes shall be understood as a place of commercial activity of the non-resident company in Uzbekistan or a representation thereof in Uzbekistan, either through a legal entity or an individual, irrespective of the fact if such representation leads to payment of Uzbekistan taxes or not. The permanent establishment is subject to registration with the Uzbekistan tax authorities. The permanent establishment shall occur automatically irrespective of the intention of the representative or the represented (parent) legal entity. From the beginning of 2007 the right to open bank accounts in Uzbekistan was granted to the permanent establishments.

Our law firm offers the following services in the sphere of Corporate Law and Commercial Vehicles

• advising clients on a wide range of matters related to corporate law and commercial vehicles;
• handling regulatory corporate matters, including calling of general meetings of participants(shareholders), participating thereon on behalf of the client, voting and taking decisions on the instruction of represented persons;
• representation of clients in front of management bodies of the local company in course of execution and implementation of any rights of the client as the holder of participatory interests or shares;
• assistance with the state registration of the local legal entities, including participating in negotiations with other co-founders, drafting of the foundation documents and internal corporate regulations, verifying of constitutive documents of existing companies in respect to their correspondence to the company law;
• providing of LDD of local companies and issuing of a legal opinions as regard to duly registration and existence thereof;
• consulting on various legal issues related to international merger and acquisition of the legal entities.

The upper level of the court system consists of the Constitutional Court and the Supreme Court. The lower level of the Uzbekistan court system includes regional courts on civil and criminal matters; economic and administrative courts and military courts.

With regard to disputes which arise in connection with local business activities, the disputing parties have a choice of the following dispute resolution mechanisms: negotiations, dispute settlement by an economic court, or local tribunal in accordance with the rules of the Economic Procedure Code of Uzbekistan or the rules of the relevant local tribunal.

As regard to international disputes, the choice of foreign forum (arbitrage) is recognized by Uzbekistan law unless an issue in dispute is within the exclusive jurisdiction of Uzbekistan domestic courts. Such exclusive domestic court jurisdiction may not be changed by the agreement of the parties. Uzbekistan is a party to the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. Accordingly, foreign arbitral awards obtained in a state that is a party to the New York Convention should be recognized and enforced by Uzbekistan courts (subject to the qualifications in the Convention and compliance with Uzbekistan procedural law).

Uzbekistan is a party to several investment treaties with foreign countries that contain dispute resolution clauses. Uzbekistan has signed and ratified the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (“ICSID Treaty”) of 1965.

Enforcement of court decisions and decision of other bodies are regulated by the Law of the Republic of Uzbekistan “On enforcement of court orders and orders of other bodies”, which provides for a specific procedure for enforcement of such orders. The Law states that peculiarities of enforcement against funds of the state budget and funds of the state-owned companies shall be performed in accordance with the Provision adopted by the Cabinet of Ministers of the Republic of Uzbekistan.

Our law firm offers the following services in the sphere of Disputes and Litigation:

• advising clients on the full spectrum of dispute resolution and litigation mechanisms ranging from negotiation, mediation, conciliation and conflict resolution to appellate proceedings;
• handling pre-judicial matters, including, pre-judicial claims, delivery of suites to the courts, preparing objections of the defendant and supporting of evidences;
• consulting on various legal issues related to international arbitrage and enforcement of the arbitrage’s awards.

Employment of nationals and foreign citizens in Uzbekistan is regulated by the Labor Code of Uzbekistan and other by-laws legislation, adopted due to implementation of the Labor Code. Labor relations, not covered by legislation, are regulated by collective agreements and individual employment contracts. Employment contracts must meet the standards prescribed by the Uzbekistan law. Foreign and local companies may hire employees directly, without using employment or recruitment agencies.

Full time employment implies full working hours, whereas part-time employment allows to work at two different placed simultaneously.

According to the Uzbek Labor Code:

• Terms and conditions of employment agreements and contracts providing for a less favourable status for employees compared to legislative or other regulatory acts shall be invalid;
• Labour legislation shall apply to foreign citizens and stateless persons who work in the Republic of Uzbekistan under employment agreements concluded with employers;
• Every employee shall have the following main rights: (i) to receive remuneration for labour which shall not be lower than the minimum amount established by legislation; (ii) to rest, secured by establishing a limited duration of working hours, shortened working days for a number of occupations and jobs, weekly days off, public holidays, and annual paid leave; (iii) labour conditions which meet the requirements of safety and hygiene; (iv) professional training, retraining and improvement of qualifications; (v) compensation for damage caused to health or property in connection with work; (vi) to join trade unions and other organisations which represent the interests of employees and labour collectives; (vii) social security due to old age, in the event of the loss of the ability to work, loss of the breadwinner and in other cases specified by law; (viii) protection, including judicial protection, of labour rights and qualified legal assistance; (ix) defence of his interests in collective labour disputes. Uzbek Labor Code provides for two months severance payment in the event of termination agreements at the initiate of the Employer.
• An employment contract may set the probationary period, which shall not exceed three months. Salaries may not be lower than the minimum monthly wage. The regular working week shall not exceed 40 hours. The minimum paid annual leave is 15working days. Companies must obtain a corporate license for attraction of foreign employees and work permit (confirmation) for each foreign employee. The pension scheme includes periodically transfers the obligatory contributions to the state Pension Fund and to the Individual Pension Accounts for each employee.

Our law firm offers the following services in the sphere of Employment:

• advising clients on the full spectrum of employment issues;
• drafting of all labor related documents, including employment contracts, collective agreements, duties instructions and other internal rules;
• obtaining a corporate license for attraction of foreign employees and work permit (confirmation) for each foreign employee;
• consulting on various legal issues related to labor disputes, negations and class actions against a employer.

The fundamental laws governing matters related to real estate are the Constitution of Uzbekistan, the Law on Property in the Republic of Uzbekistan, and the Land Code of the Republic of Uzbekistan.

The Uzbekistan Civil Code provides that the right of ownership and other rights for real property, their appearance, transfer, limitations and termination thereof are subject to state registration. The Registration Authority is offices of Regional Departments of the State Committee of the Republic of Uzbekistan on Land Resources, Geodesy, Cartography and State Cadastre.

An owner of real property at his own discretion may possess, use, and dispose of that property, as well as the rights to the objects of ownership in his possession.

Under Uzbek laws, land is considered national property. Only in very limited cases may individuals and legal entities have ownership rights over land. In other cases, individuals and legal entities use land based on permanent and temporary use rights as well as lease.

In the Republic of Uzbekistan use of land plots is on pay basis. Legal entities and individuals having in possession, use and in the ownership land plots shall make payment for the land. Payment for the land is deducted in the form of annual land tax, in the amount depending on quality, location and access to water of the land plot.

Many activities are subject to licensing in Uzbekistan. In sphere of civil construction the following activities shall be licensed:

• Design, construction, operation, and repair of gas main pipelines, oil and oil products’ pipe lines;
• Design, construction, operation and repair of bridges and tunnels;
• Development of architecture-construction documentation;
• Construction and operation of risky and potentially dangerous projects;
• Expert examinations of construction projects;
• Repair work at high altitude using industrial alpinism.

Our services in the sphere of Real Estate and Civil Construction

• registration of the cadastre objects with the relevant state ledgers and obtaining of information regarding such records in all aspects, including registration of transactions, confirmation on titles and any encumbrances in respect to real estate objects (land and premises);
• representation corporate clients in front of counterparties in course of drafting of the contracts to be executed in respect to real estate objects;
• advising on Uzbekistan laws in the areas of required authorizations, consents, permitting framework, regulation, investment, investment protection and other key aspects to Civil Construction;
• drafting and legal assessment of main construction agreement (FEED and EPC contracts);
• assistance with drafting of the core documents to be prepared in frame of to Civil Construction;
• assisting in the preparation, collection, review and confirmation of the conditions precedent (CP) and conditions subsequent (CS) in respect to FEED and EPC contracts;
• providing legal opinions to the client as are customarily required for Civil Construction;
• providing any other support and advice to the client on the legal aspects of the transaction to ensure the successful completion of the construction.