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Leather and footwear

Domestic market

Arguments:

Over 32 million people of the Republic of Uzbekistan

  • Low saturation and competitiveness of the domestic market

The total amount of leather produced in the republic is 612 million sq. dm. Including:

  • Leather semi-finished product I redistribution – 63%;
  • Products of the II and III redistribution (deeper processing and finished leather) – 37%
  • In 2017, a total of 17 million pairs of shoes and 3 million pieces of leather goods from 280.0 million sq. dm of finished leather were produced.
  • The average profitability of existing enterprises – 15%
Export
  • The market area of the free trade zone with the CIS countries is 300 million people, which is almost comparable to the US market
  • 0% VAT rate and exemption from customs duties on exported products
Financial support
  • In accordance with the Resolution of the President of 06.01.2017 No. RP-2718, a credit line was allocated for financing projects of leather industry through authorized banks in the amount of 250 million USD.
  • The Fund for Development and Supporting Leather and Footwear Industry has been established at Uzcharmsanoat Association, the funds of which are used to financially support organizations specializing in the full production cycle – from semi-finished leather to finished products by allocating funds on a returnable basis
Benefits and preferences for enterprises located in free economic zones
  • Exempt from payment:

— land tax, income tax, tax on property of legal entities, tax on improvement and development of social infrastructure, single tax payment for microfirms and small enterprises, as well as mandatory contributions to the Republican road fund and extrabudgetary Fund for reconstruction, overhaul and equipment of secondary schools, professional colleges, academic lyceums and medical institutions under the Ministry of Finance of the Republic of Uzbekistan;

— customs payments (except for customs clearance fees) for equipment, raw materials and components imported for their own production needs;

— customs payments (except for customs clearance fees) for construction materials not produced in the republic and imported within the framework of projects, according to lists approved by the Cabinet of Ministers of the Republic of Uzbekistan

  • Benefits in the free economic zone are granted for a period of 3 to 10 years depending on the amount of attracted investments, including in the equivalent (USD):

from 300 thousand dollars to 3 million dollars – for a period of 3 years;

from 3 million dollars to 5 million dollars – for a period of 5 years;

from 5 million dollars to 10 million dollars – for a period of 7 years;

from 10 million dollars and above – for a period of 10 years, with application of the profit tax rate and the single tax payment in the amount of 50% below the current rates for the next 5 years.

  • The state provides guaranteed connection to engineering and communication networks with their timely connection to production sites and their uninterrupted operation

 

Human resources
  • Tashkent Institute of Textile and Light Industry and 2 professional colleges in Bukhara and Samarkand regions
  • At Tashkent Institute of Textile and Light Industry a Training Center was created for retraining and advanced training of engineering and technical workers in the leather and footwear industry.
Licensing

In accordance with the legislation, the state licensing is not required.

State standards

Transition of all manufacturing enterprises to the requirements of the international standard ISO:9001 is required

State regulatory body and industry coordination
  • In accordance with the Resolution of the President of 03.05.2018, No.RP-3693, the “Uzcharmsanoat” Association was created.
  • At the same time, member organizations of the Association have the right to:

— exemption from income tax and property tax, single tax payment – for microfirms and small enterprises, as well as mandatory contributions to state trust funds;

— exemption from customs payments (except for customs clearance fees) for imported equipment, components, raw materials and fittings not produced in the republic, used by the organizations – members of the Association in production, according to the lists approved in the prescribed manner;

— deferment of customs payments (except for customs clearance fees) for a period of up to 60 days from the date of acceptance of the customs declaration when importing equipment, components, raw materials and accessories required for own production of goods not included in the above-mentioned lists.

State body for promotion and protection of the rights of foreign investors

State Investment Committee of the Republic of Uzbekistan