Tashkent International Financial Center: Uzbekistan is taking its place on the global financial map

What is an International Financial Center?

Imagine a special district within a city. It is home to the world’s largest banks, investment companies, insurance organizations and financial technology (fintech) firms. They are drawn there because the district offers rules that are familiar, clear and reliable: a legal environment aligned with international standards, an independent judiciary, tax incentives and an absence of bureaucratic barriers.

This model proved its worth in global practice in the late twentieth and early twenty-first centuries. Alongside historic financial capitals such as London and New York, a “new generation” of financial centers has emerged in recent decades. The most prominent examples include the Dubai International Financial Center (DIFC), Singapore and the Astana International Financial Center (AIFC) in neighboring Kazakhstan.

Dubai’s experience is particularly instructive. Established in 2004, the DIFC has become the largest financial hub in the Middle East, Africa and South Asia, hosting thousands of registered companies and tens of thousands of highly qualified professionals. The secret of its success is straightforward: an Arab state introduced English common law in part of its territory and established an independent court and regulator – and international capital responded with confidence. Astana followed the same path in 2018 and, within a short period, became an important vehicle for attracting investment to Central Asia.

Tashkent is now joining this group. Crucially, we are not merely copying the experience of others; we are studying the most advanced practices and implementing them in a manner adapted to our national interests.

Why is this a “Constitutional” law?

This question is likely to interest many readers. A special legal regime, differing from the regime established by ordinary legislation, will apply within the Financial Center. Introducing such a regime requires a legal foundation at the highest level. Accordingly, Article 15 of the Constitution was amended alongside the adoption of the Law to establish that a special legal regime may be introduced in designated territories on the basis of a constitutional law. Harmonizing amendments were also made to seven codes and more than thirty laws.

This is a reform of unprecedented scale in the history of our legal system. It was not rushed; rather, it underwent careful parliamentary scrutiny. The Senate returned the initial version of the Law for further revision, the conciliation commission strengthened the provisions protecting investors’ rights, and only then was the document approved. The process itself also demonstrates our state’s commitment to high-quality law-making.

How will the center be governed and regulated?

Under the Law, the Financial Center will have four principal bodies.

The Financial Center Council will be the strategic governing body. The President of Uzbekistan will serve as its Chair ex officio, ensuring that the project receives attention at the highest level of government. Importantly, at least one third of the Council’s members must be experts in international finance and commercial law who do not hold public office. This provides a statutory guarantee that international expertise will be incorporated into the Center’s governance.

The Financial Center Administration will be the executive body responsible for organizing the Center’s day-to-day operations.

The Financial Services Authority will be an independent regulator. It will license banks, investment companies, insurance organizations and other financial institutions and supervise their activities. The Law also equips the Authority with modern instruments, including a “regulatory sandbox” that will allow new financial technologies to be tested in a controlled environment. This will be particularly valuable for fintech start-ups.

The Tashkent International Commercial Court will be the Center’s independent judicial body. It will comprise two levels – the Court of First Instance and the Court of Appeal – and will have exclusive authority to resolve disputes falling within its jurisdiction. Its judges may include internationally recognized foreign legal experts in commercial law, finance and arbitration. Proceedings will be conducted in English, while judgments will be issued in the name of the Republic of Uzbekistan and enforced throughout the country.

The most noteworthy innovation is that, alongside national legislation, the common law of England and Wales and the principles of equity will apply within the Centre to the extent that they do not conflict with national law. Why English law? Because this centuries-old and highly refined legal system is widely regarded as the common “language” of global finance and international trade: a significant proportion of the world’s major commercial contracts are governed by English law. Offering investors a familiar legal system is tantamount to saying: “Here, the rules are ones you know and understand.”

What will it offer investors and the economy?

The Law creates extensive opportunities for the Center’s participants. They will be able to employ foreign specialists without obtaining work permits. Persons affiliated with the Center and their family members will be eligible for visas valid for up to five years. Monetary obligations may be performed in foreign currency and, within permitted limits, in digital assets. The right to repatriate capital and income without restriction will be guaranteed. Qualified participants will enjoy tax incentives until 2076 – a rare long-term guarantee in international practice, extending over a fifty-year horizon.

At the same time, the Law preserves the necessary balance. Requirements relating to anti-money laundering and countering the financing of terrorism will remain fully applicable, while large multinational enterprises will be subject to a minimum taxation mechanism consistent with international standards. In other words, Tashkent is not being established as an “unregulated zone”, but as a transparent and responsible international financial platform. This is also reflected in the statutory principles governing the Center’s activities: efficiency, transparency, integrity and professionalism.

The Law takes a particularly firm position on the inviolability of property: the confiscation, nationalization, expropriation or freezing of the assets of persons affiliated with the Center will not be permitted. Any exceptional measure may be taken only on a lawful basis, proportionately and subject to judicial oversight.

The economic expectations are equally substantial. By 2030, the Center is expected to attract $20–25 billion in investment into the economy and create approximately fifteen thousand jobs. Yet one outcome matters even more than these figures: trust. Trust is the most valuable asset in international financial markets, and it can be earned only through robust legal safeguards.

A new era – a new generation of lawyers: Tasks for the education system

The fate of every reform is determined by the people who put it into practice. The launch of the Tashkent International Financial Center will generate enormous demand in our country for an entirely new category of professionals: lawyers with a deep knowledge of English common law who can work fluently in English in the fields of international financial law, arbitration and corporate law. The experience of Dubai and Astana shows that the success of a financial center depends to a significant extent on the capacity of the local legal profession; otherwise, all highly skilled work will pass to foreign advisers.

It is encouraging that legal education in Uzbekistan has been preparing for this challenge in advance. Tashkent State University of Law has taken consistent steps in this direction. A dedicated English Law Department was established at the University a year ago – the first initiative in the national legal education system aimed at the systematic teaching of common-law traditions. A joint bachelor’s program with the University of London was launched last year, and a joint bachelor’s program with the University of Greenwich commenced this year. These programs enable students to study English law through primary sources and in accordance with international standards.

In other words, the first generation of Uzbek lawyers who will work at the Tashkent International Commercial Court, the Financial Services Authority and the international law firms operating within the Center are studying in university classrooms today. For them, the Financial Center is not merely a place of employment; it is an opportunity to build a world-class professional career while remaining in their homeland.

Conclusion

The Constitutional Law “On the Tashkent International Financial Center” is both the logical culmination of nearly a decade of consistently pursued economic reforms and the beginning of a new stage. Under the Law, the Center’s bodies must adopt the decisions required to commence operations within twelve months. We will therefore soon witness the formal opening of Tashkent’s doors to global financial capital.

If Dubai could create a world-class financial center in the desert and Astana in the steppe, Uzbekistan – with its rich historical heritage, advantageous geographical location, growing economy and, most importantly, firm political commitment to reform – can undoubtedly achieve the same. The Tashkent International Financial Center is an investment in the future and an opportunity being created for our children’s generation.

Islambek Rustambekov
Doctor of Law, Professor, International Arbitrator
Vice-Rector, Tashkent State University of Law