Tashkent International Financial Centre: An Overview of Uzbekistan's New Constitutional Law

On 13 July 2026 the President of Uzbekistan signed the Constitutional Law on the TashkentInternational Financial Centre (the “TIFC Law”), a long-awaited development in the country's economic and legal history and one intended to bolster foreign and domestic investment, deepenthe domestic capitalmarket, and establish Uzbekistan as a competitive international financial jurisdiction.

In its ambition and architecture, it sits within the same family as the Astana International Financial Centre and the Dubai International Financial Centre, transplanting a financial-center model onto Uzbek soil through the highest available legislative form, followedby an extensive block of consequential amendments to the Constitution and to some forty codes and laws.

Natureand structure

The Tashkent International Financial Centre (the “TIFC”)is established as a discrete geographical territory operating under a special legal regime. Its initial boundaries are fixed by presidential decree upon establishment and, once the Centre begins operating, cannot be reduced, althoughthe President may expand or clarify them by further decree. The term itself denotes both the legal, regulatory and institutional system and the Centre's regulatory bodies, according to context.

The Centre is administered through four regulatory bodies with financial, administrative and operational independence, and each shielded from external instruction or interference. They are:

• The Council - the supreme strategic and rule-making body and chaired by the President of Uzbekistan, whichsets the Centre'sdirection, approves its budgets,

and adoptsthe master legislative framework;

• The Administration - the principal executive and administrative organ responsible for running, developing and promoting the Centre, and the organ

within which the Executive Director sits;

• The Financial Services Board (the “FSB”) - the financial-services regulator responsible for licensing, prudential and conduct regulation, supervision and

enforcement; and

• The Tashkent International Commercial Court - the judicial body, which exercises absolute and independent judicial power.

Constitutional application of England and Wales law

Within the Centre, the applicable law is arranged in a hierarchy-of-law like matters with strict order of precedence:

1)the Constitution of Uzbekistan;

2)the TIFC Law itself;

3)presidential decrees and resolutions issued under the Law, governing the establishment and operation of the Centre, boundary changes, strategic management and key appointments;

4)the decisions of the Centre's regulatory bodies adopted withintheir competence; and

5)as a residual gap-filler, common law and the principles and rules of equity of England and Wales (insofaras they are consistent with the Constitution, the Law, or the Centre's decisions).

Contrary to the expectations, the Laws of England and Wales, are not self-executing. Its direct application is subject to a dedicated decision of the Council, which must specifywhich legislative acts of England and Wales apply, as of what date, and in what manner;that activation decision is itself treated as a decision of the Centre. In addition, the internationally recognized standards of the leading global financial centers may be drawn upon as an auxiliary means of interpreting the Centre's decisions and of filling legal gaps.

The court system and procedural law

The Tashkent International Commercial Court is the judicial body of the Centre and wields absolute and independent judicial power. Judges decide independently; no instruction may be given to them, and no accountability may be imposedon them for their rulings.

The Court comprises two instances, a first-instance court and an appellate court, and the appellate court's determinations on both jurisdiction and merits are final and binding, admitting of no further complaint. The Court also serves the neighboring International Centre for Digital Technologies; the two zones being repeatedly linked for judicial and interpretive purposes.The jurisdiction of the Court extends to:

1)civil and labor disputesamong persons of the Centre;disputes concerning activity conducted or property locatedin the zone;

2)the insolvency and bankruptcy of participants and of individuals residing there;

3)disputes referred by agreement;

The Court also exercises supervisory jurisdiction over international arbitration seated in the Centre or administered by the Tashkent International Arbitration Centre, and hears challenges to decisions of the Centre's regulatory bodies on regulation, licensing, supervision and enforcement.

Its personal jurisdiction also reaches those who transact under the decisions of the Centre or of the DigitalTechnologies zone, and those who consent to jurisdiction. The Court may recognize and enforce any arbitral award irrespective of the seat, subject to applicable treaties.

Importantly, the Court does not hear criminal cases or administrative-offence cases. Animportant qualification applies,however, in that where a matter is in substance a commercial, economic or civil-law dispute, a breach of an organ's requirements, or market misconduct capable of resolution within the Centre's framework, it remains with the Centre rather than passing to the ordinary criminal or administrative process. Furthermore, conduct that would otherwiseattract criminal or administrative liability under Uzbek law shall, where it is in substance a commercial dispute or market-conduct issue, will be dealt with through the Centre's civil, economic or regulatory mechanisms.

On procedure, the Chief Justice nominated by the Council and appointed by the President of the Republic of Uzbekistan enjoysfull power to make and amend the court rules, procedural rules,practice directions, forms and protocols, and, unusually, these take effectwithout Council approval.

The Court commands the full range of interim and enforcement relief, including enforcement orders, asset attachment and freezing, prohibitory and mandatory

injunctions, search orders and disclosure orders. Its judgments are issued in the name of Uzbekistan and are recognized and enforced throughout the country; enforcement within the zone is carriedout by the Court.

Taxation and benefits

The tax and customs regime is set by the TIFC Law and by decisions of the Centre adopted in agreement with the Ministry of Economy and Finance. Uzbek Tax Code applies within the Centre only where expressly provided by the TIFC Law or by the Centre's own decisions..

The centerpiece is a fiscal holiday running until 1 January 2076. Until that date, the benefits available to individuals and investors include:

• exemption from corporate income tax (standard rate of 15%) and social tax (standard rate of 12%) on income from financial services rendered or exported

from the Centre in relation to qualifying participants that satisfy substance, income source and other requirements established jointly by the Centre's Administration and the Ministry of Economy and Finance;

• exemption of employees from personal income tax (standard rate of 12%) on employment income arising from activity in the Centre,with exception to

employees who are tax residents of Uzbekistan (although the TIFC Law leaves open the possibility for the Centre to establish a separate personal income tax benefit regime for such employees);

○exemption from personalincome tax and corporate income on:

–income and capital gains on the disposal of securities listed on the Centre's stock exchange, as well as shares and participation interests in TIFC participants;

–dividends and interest on securities listedon the Centre's stock exchange and dividends on shares in TIFC participants; and

–foreign-source incomeof individuals who hold investment tax resident status under the TIFC's dedicated program.

• real estate of the regulatory bodies and TIFC participants locatedin the Centre is exempt from property tax and land tax;

• services and activities of TIFC participants conducted in accordance with the TIFC Laware exempt from VAT (standard rate of 12%);

• property imported for use or consumption in the Centre is exempt from the customs duties and customs processing fees.

The tax exemptions available to TIFC participants do not apply to members of multinational enterprise groupswhose consolidated revenuein at least two of the four preceding financial years exceededEUR 750 million and which comprise two or more entities located in different jurisdictions.

Two sets of safeguards temper the regime.First, the benefitsmay not be reduced or narrowed without the Council's consent, yet they are subject to periodic review for effectiveness, the first review falling withinten years and subsequent reviews every five years, with review carrying no implication that the benefits must change.

TIFC Law establishes a special investment tax residency program under which qualifyingindividuals, and their family members may obtain Uzbek tax resident status for the purpose of accessing the tax benefitsdescribed above. Statusis denied where the principal purpose of participation is to avoid tax on income, assets or activities materially connected to Uzbekistan.

Corporate forms and corporate registration

The requirements and procedures for recognizing participants, and for the establishment, registration and choice of organizational and legal forms of entities within the Centre, are determined by decision of the Council. Foreign legal entities qualify for recognition and registration irrespective of their governing foreign law, provided that they satisfy the participant criteria.

The TIFC Law contemplates a full corporate ecosystem well beyond financial firms, namely including:

• holding companies, special purpose vehicles, treasury companies and headquarters entities;

• funds, trustsand fiduciary structures established and managedwithin the zone;

• corporate service providers offering company formation, corporate governance services and registered-office services;

• professional-services firms in law, consulting, valuation, accountancy, tax advice, management consulting, technology and fintech; and

• epresentative offices, together with supporting commercial activity suchas retail, hospitality, conference, education, cultural and wellness amenities that sustain

the ecosystem.

Given the inceptionof the TIFC Law, more detailed regulation of corporate forms and procedures for incorporation of TIFC-regulated entitiesare expected to follow in due course.

Capitalmarkets and currency control

In the field of capitalmarkets, the issuance,offering, listing, tradingand redemption of securities and other financial instruments are regulated by decision of the FSB.

A stock exchange is defined as a licensed, non-discretionary multilateral trading system; where instruments are listedor traded on such an exchange, the exchange's own rules apply in addition,while the FSB retains absolutesupervisory and regulatory authority. Permittedmarket activity is broad, encompassing the issuance and trading of shares, bonds, Islamic securities (sukuk), derivatives, commodities and metals, together with market-making, prime brokerage, and the operation of exchanges, alternative trading systems, clearinghouses and centralsecurities depositories.

The currency control regime in the TIFC is among the most important matters addressedby the TIFC Law. Unless a legal provision to the contrary exists, the general Uzbek currency-control requirements do not apply to participants' currency operations within the Centre's jurisdiction, particularly the rules governing currency contracts, the registration or notification of capital-movement operations, the opening of foreign bank accounts, and the reporting of currency operations.

By way of counterbalance, the joint decisions of the TIFC and the Central Bank must preserve balance-of-payments monitoring, financial stability, anti-money-laundering compliance and macroeconomic oversight through simplified reporting and information-exchange mechanisms, and those instruments must guarantee the free repatriation of capital and the free convertibility of currency for participants, non-citizen employees, investment tax residents and their families.Monetary obligations may accordingly be denominated and settled in agreed foreigncurrencies, and even in digital assets where the FSB's rules permit.

Licensing and Regulatory Permits

All regulated activity in the Centre, whether financial services, financial market infrastructure, digital-asset activity, additional services or other permitted activities, may be conducted only under an appropriate license, registration (or exemption, when applicable). As a generalrule, the FSB is the licensing authorityfor financial and regulated additional services, while the Administration handles the licensing and registration of the non-regulated activities.

A licencemay be granted to a qualifying legal entity, a partnership structure, a branch of a foreign legal entity, a subsidiary, a joint ventureor another permitted structure, and, in defined cases, to individuals. Applicants must demonstrate sound financial standing, systems and controls proportionate to the nature, scale and complexity of the activity, and management by fit-and-proper personsof adequate knowledge, skill and good business reputation. The FSB may also create exemptions, including for firms outside the Centre serving participants on a cross-border basis.

TIFC Rules

Because the TIFC’s detailed rules are not yet adopted, the TIFC Law constructs a transitional bridge. The TIFC regulatory bodies have twelve months, extendable by the Council by up to a furthersix months, to adopt the decisions necessaryto operate the TIFC, after which the Council declares operational readiness for the President's confirmation, which fixes the activation date. Two transitional licensing routes then operate:

• The holderof a valid Uzbek nationallicense may, upon activation, providethose same financial services in the Centre without filing an additional application,

provided it registers a subsidiary or branch withinsixty days, with the Centre's laws prevailing over any conflicting nationalrule and the FSB retainingpower to object, restrict,suspend or impose conditions where a licenseposes a risk; and

• The Council may recognize categories of foreign jurisdictions and regulators, and atransition license may be grantedto the holder of a valid foreignlicense where

the Administration has concluded a memorandum of understanding or other supervisory-cooperation agreement with the home regulator, with a temporary license of up to six months available while such a memorandum is negotiated, extendable once by up to five months, and lapsing automatically if no memorandum is concluded.

In each case the home regulator must apply standardscomparable to those of the TIFC Law and consistent with the standardsof the Financial Action Task Force (FATF).

Enforcement

TIFC Law establishes a robust enforcement framework. A participant that conducts commercial or financialactivity contrary to the TIFC Law or the Centre'sdecisions is liable to a fine of up to the greater of USD 10 million or ten per cent of the valueof the offending transactions or activity.

Beyond financial penalties, the Council maintains a register of violations. The sanctions regime is broad and includes formal warnings, disgorgement of unlawfully obtained profits, restrictions on business activity, prohibition of individuals from performing controlled functions, and the suspension or full revocation of a licenseor registration..

Enforcement processis subject to procedural safeguards: participants must be given prior notice of an allegedviolation and an opportunity to respond, and any sanctionis subject to review by the Court.