The government of Uzbekistan wants to open an International Financial Center (IFC) in Tashkent and is now reviewing three types of such centers. The issue was publicly discussed at a conference organized by the Strategic Development Agency (SDA).
“The establishing of an IFC is one of the strategic goals for the development of Uzbekistan. This must be a global platform to attract new investments to the country and facilitate the management of capital equity. According to the World Bank’s statistics, the presence of an IFC may contribute about 1% to the country’s GDP,” said Aziz Gafurov, deputy head of the SDA.
As the official noted, the task of establishing an IFC has been set by President Shavkat Mirziyoyev. The SDA is now negotiating with international experts and weighing three potential options for the future IFC.
The first option is the improvement of the current system in the already existing legal frameworks. However, the project implies a soft tax policy to attract new foreign investments into different parts of the country. The second option is to establish a center as an enclave with a separate infrastructure, a special legal framework (based on modern English Law) and low taxes for the center’s residents. And the last option is a hybrid model, which is aimed at the fast development of the national financial market at the expense of broader infrastructure and IFC resources. Within this scenario, any foreign investor can rely on the International Court of Arbitration and Finance Court in a case of argument. However, this option doesn’t foresee any tax benefits for residents, but of course, it will stimulate the development of the entire financial market in the country.
In order to guarantee the best possible result, Uzbekistan has attracted to the project different international consultants, who also took part in the creation of similar financial centers in Frankfurt, Hong Kong, Dubai, Riyadh and Istanbul, Gaurov said.
He also noted that the first option is the easiest way to implement in the long term. The enclave option would require much more resources and time, while the hybrid model is the most suitable in terms of speed of realization and costs.
President Mirziyoyev came up with the idea of an ICF during his election campaign last year. He insisted that Tashkent would turn into a center for advanced innovations and investment.