Uzbekistan to restrict foreign investors from land auctions

New rules for foreign investors

Under the proposed changes, foreign investors will no longer be permitted to acquire agricultural land through public auctions. Instead, they may obtain land via secondary lease agreements through regional administrations. This is subject to specific conditions: a minimum investment of $10 million and a commitment to reclaiming pastures, rain-fed lands, or land currently out of agricultural use.

While agricultural auctions will be reserved for local farmers and businesses, the government aims to maintain a welcoming environment for international capital in other sectors. The lease term for all types of land, including those for industrial and construction projects involving foreign investors, is proposed to be fixed at 49 years.

Boosting independence for local farmers

The reforms focus heavily on increasing economic freedom for domestic land users. Despite previous progress in land allocation, many leasers still face restricted independence regarding crop choice, which has left approximately 117,600 hectares of land unsold at auctions.

To address this, the government plans to expand the practice where farmers decide what to plant. This follows successful trials in the Fergana Valley, Jizzakh, Tashkent regions, and Karakalpakstan. In 2025 alone, entrepreneurs are expected to plant high-yield, export-oriented crops on 16,000 out of 20,000 hectares of newly allocated land, creating a foundation for $150 million in exports. An additional 100,000 hectares will be auctioned this year under these revised, more flexible terms.

Support for large-scale plantations and livestock

The state is also targeting the development of industrial plantations and livestock projects. Plots ranging from 50 to 500 hectares will be auctioned, with a goal of launching at least five major projects in each region this year. To ensure the success of these ventures, the government will provide substantial financial backing, including:

• Coverage of electricity and water supply costs.
• Soft loans for up to 7 years with a 3-year grace period and interest rate compensation.
• Subsidies covering up to 50% of packaging costs for the produced goods.

Modernization and digitalization

President Mirziyoyev criticized the current paper-based processes for land category changes and loss calculations, noting that delays cause investor dissatisfaction. The transition to a fully digital system is now a priority. This includes integrating the cadastre, agriculture, and justice systems to allow for the transparent extension of lease terms via public service centers.

Furthermore, the reform seeks to enhance the financial utility of land leases. Legislation will be updated to allow lease rights to be used as collateral not only for commercial loans but also for leasing, mortgages, and bank guarantees.

Strengthening oversight and legal responsibility

To protect the integrity of land resources, the president called for stricter accountability. Liability for the illegal seizure of land will now apply to all categories of land, not just irrigated areas. Additionally, the government plans to simplify the accounting of vacant plots and clarify the rules for sub-leasing.

In a move to support infrastructure development, projects involving railways, highways, airports, and water facilities will be exempt from payments related to land loss when land categories are changed. Compensation paid to citizens when land is seized for public needs will also be exempt from taxation.

Future management will be handled by 13 regional directorates for agricultural land and 14 investment companies for non-agricultural land, serving as a "bridge" between the state and the private sector to ensure a more open and predictable environment for business.