Presidential Decree: Uzbekistan expands the practice of creating investment and managing companies

A presidential decree “On additional measures to improve mechanisms for financing entrepreneurship and innovation projects” was adopted.

According to the statement of telegram channel of the Ministry of Justice, the decree envisages expanding the practice of setting up investment and management companies in order to quickly and efficiently attract investors, especially foreign ones.

According to the decree:

Investment company is a commercial organization that is engaged in the formation and accumulation of attracted funds of qualified investors to enter into innovative and other promising projects by the management company; 

Management company is a commercial organization that manages the investment company’s investment contribution in accordance with a contract concluded between them;

Venture fund is an investment company. It is managed by a management company and designed to invest only in high-risk venture projects;

Legal entities and individuals, including foreign citizens, who have invested no less than 500 million (sums) in the national currency and/or in foreign currency at the exchange rates of the Central Bank, are considered qualified investors.

Management and investment companies may be created in any organizational-legal form, unless otherwise is prescribed by law.

The decree specifies the following:

Investment and management companies are not licensed;

The management company is obliged to establish an internal audit service in the form and in the manner prescribed by its constituent documents and legislation envisaged by law;

Relationships between investment companies, management companies and qualified investors are independently established. The manner and methods of dispute settlement in joint activities are governed by a contractual basis;

Investment companies have the right to issue interest-free loans, including collateral or non-security loans;

The investment company is obliged to organize an annual external audit;

Investment and managing companies are monitored by the Securities Market Regulatory Authority.

Investment and management companies, that have been established and operating by January 1, 2022, can continue their activities in the prescribed manner.