Senate returns Tashkent International Financial Center bill to lower house over judicial concerns

The proposed legislation was designed to define the official legal status of the center, outline its operational frameworks, establish its governance structures, and lay down its institutional framework. Additionally, the bill included mechanisms for investor protection and regulatory stability guarantees. To attract global players, the framework offered participants streamlined foreign currency settlement processes, simplified recruitment pipelines for international specialists, and relaxed visa protocols.

However, during parliamentary deliberations, senators raised critical objections to several sections of the document. The upper house specifically highlighted the need to overhaul the criteria for appointing judges to the Tashkent International Commercial Court and requested a clearer definition of the court's judicial boundaries. Furthermore, lawmakers determined that clauses governing international arbitration cases, administrative disputes, and constitutional commentary required deeper legal refinement.

According to the Senate, addressing these structural loopholes is vital to building an internationally competitive financial ecosystem and ensuring robust legal protection for foreign capital. Following the vote, the Senate passed a resolution to form a joint conciliation committee comprising senators, legislative chamber deputies, and state agency officials to resolve the disputed points.

The legislative push follows a presidential decree issued in late March, which allocated land within the Tashkent City complex – bounded by Islam Karimov Avenue, Yangi Toshkent Passage, and Ukchi Street – to host the physical center. On 2 June, the Legislative Chamber had passed the bill in its second and third readings alongside a companion piece governing the Enterprise Uzbekistan digital technologies hub.

The four strategic pillars

The overarching operational strategy of the Tashkent International Financial Center focuses on four main vectors: investment attraction, capital market advancement, financial services expansion, and the cultivation of an innovation ecosystem.

In terms of investment, the initiative aims to build a transparent and competitive institutional environment that lowers entry barriers for contemporary financial enterprises. The capital markets division is tasked with connecting domestic trading platforms directly to global exchanges while accelerating security trading volumes.

For financial services, the roadmap prioritizes modernizing traditional banking, insurance, Islamic finance, fintech, e-commerce, and digital asset markets. Finally, the center plans to integrate international regulatory practices into a unified auditing, legal, and consulting ecosystem with the support of global financial institutions.

Investor incentives and 50–year tax exemptions

Under the rejected draft, registered participants would receive expansive operational freedoms. Companies could hire foreign nationals without acquiring standard work permits, and contracts could be legally settled, and salaries paid, using foreign fiat currencies or digital assets. Employees and their immediate families would also be eligible for specialized entry visas valid for up to five years, alongside unrestricted capital and profit repatriation rights.

The legislation also proposed an extensive fiscal incentive package scheduled to run until 1 January 2076, under which internal regulatory documents would govern tax relations. The planned benefits include:

·        Corporate income tax and social tax exemptions for management bodies and participants on services rendered within the center, excluding crypto exchanges.

·        Full exemptions from property and land taxes for facilities utilized by the center's administrative organs.

·        Duty-free import status for goods brought into the territory for internal use or consumption.

·        Income tax exemptions for foreign citizens and stateless persons working within the hub, while Uzbek citizens would benefit from a reduced flat rate of 7 percent.

·        Tax exemptions on capital gains from the sale of shares in participant companies, and zero-tax status on dividends, interest, or transactions involving securities listed on the Tashkent Stock Exchange.

·        Value-added tax exemptions for core operations within the zone, covering insurance, banking, investment, payment systems, and fintech.

The newly formed conciliation committee will now work on aligning these economic incentives and judicial structures with national legislative standards before the bill can be reintroduced for parliamentary approval.