Uzbekistan Offers 1% Tax Rate for $50m City Projects

Uzbekistan has introduced tax breaks and a regulatory sandbox for large urban development projects worth at least $50m in New Tashkent and other designated areas, under a presidential decree published on 11 November. The state news agency UzA set out the incentives, and UzDaily and Spot identified it as decree UP-243, signed by President Shavkat Mirziyoyev on 10 November.

The decree turns promises made to investors in October into law. Its central offer is a corporate income tax rate of 1% on income from leasing and selling the buildings, with the length of the relief tied to the size of the investment.

What the decree offers

• Corporate income tax of 1% on income from leasing and selling facilities: for 5 years for investment of at least $50m, 10 years for at least $100m and 15 years for at least $500m, according to UzDaily and Spot.
• Exemption from property tax and land tax for 20 years for projects of at least $50m.
• Exemption from value added tax on services that the general contractor and the lead design organisation buy from foreign companies and individuals without a presence in Uzbekistan.
• Exemption from tax on dividends until 1 January 2040, if they are reinvested in Uzbekistan.
• A regulatory sandbox in territories listed in an annex to the decree, where the directorates of special zones can set their own requirements for planning documents, buildings on plots offered for sale and technical conditions. The powers of the New Tashkent Construction Directorate are extended to the directorates of other zones.

Context: the October pitch

The measures follow a presentation of the New Tashkent project on 12 October, about a month before the decree. According to the President's press service, more than $2bn has been invested in New Tashkent so far, 20,000 hectares have been allocated to the city and a first phase of $50bn of projects is planned across 6,000 hectares. "New Tashkent is not just a place for building new housing," Mr Mirziyoyev said at the time.

The government portal reported at the time that infrastructure connection payments would be cut threefold for trade, service and business centres, fivefold for hotels and tourism facilities and tenfold for cultural and entertainment venues. It said 100 hectares in New Tashkent would be set aside for each Tashkent district and each of the 13 other regions, with the first 50 plots reserved for foreign investors, and that the Shirin area in Samarkand would get the same benefits as New Tashkent.

Analysis

The tiered tax holiday is designed to pull in fewer, larger investors rather than many small developers. A project of $500m or more gets three times the relief period of one at $50m, and the dividend exemption rewards those who keep profits in the country. For Tashkent, the logic is to use tax and land policy to finance a new city that the budget could not fund alone, a pattern that fits the rapid investment growth recorded in Uzbekistan's nine-month GDP data.

The risks sit in delivery. Deep tax relief on property income narrows the future tax base of the new districts, and the sandbox gives local directorates wide powers over planning rules. Foreign developers will judge the offer on how quickly plots, permits and connections are delivered, and on whether the rules stay stable over a 15-year horizon. International lenders are also expanding in the country, as shown by the World Bank portfolio nearing $16bn, which may help with the public infrastructure the projects need.

What to watch

• The implementing rules and the list of territories in the sandbox annex.
• The first investment agreements signed under the decree, and whether foreign investors take up the reserved plots.
• Whether projects in the Shirin area of Samarkand and the regional sites attract investors on the same terms as New Tashkent.

Sources: UzA, 11 November 2026; Press Service of the President of Uzbekistan, 12 October 2026; Government of Uzbekistan portal; UzDaily, 11 November 2026; Spot, 11 November 2026

Image: Press Service of the President of Uzbekistan, via president.uz