In order to further stimulate foreign investments into Uzbekistan and more effectively use its great economic potential, the “Navoi” Free Industrial Economic Zone (FIEZ) was established on 2 December 2008 in the Navoi province of the country.
The FIEZ is designed to promote a wide range of high-tech and internationally competitive production using modern high-efficiency equipment, technological lines and units, as well as the latest innovations. Its activity is coordinated and regulated by the Administrative Board and managed by the Directorate. The operation period of FIEZ is 30 years with the possibility that it can be extended.
Business entities registered in FIEZ enjoy exceptional customs, currency and tax regulations, simplified procedure for entry, stay and obtaining work permits for non-residents. For example, they are exempt from: land tax, property tax, profit tax of legal entities, social infrastructure development tax, unified tax payment for micro firms and small enterprises, compulsory contributions to the Republican Road Fund and off-budget Republican School Fund.
The privileges are available depending on the volume of foreign direct investments:
• from €3 to €10 million – for 7 years;
• from €10 to €30 million – for 10 years, with reduction of profit and unified tax payment rates by 50 per cent in the next 5 years;
• more than €30 million – for 15 years, with reduction of profit and unified tax payment rates by 50 per cent in the next 10 years.
The Zone is located on 564 hectares next to the highway E-40 and the Navoi International Airport, connected to international railway routes towards countries of Europe (via Russia and Turkey), South East Asia (via China), Middle East and the Gulf (via Iran).
The use of air corridors with landing in Uzbekistan offers substantial economy in time and cost of transportation. Thus, the distance from South East Asia to Europe via Navoi is 1000km shorter than via Dubai. At the same time, the time saving during the flight is 1.5 hours, and fuel economy is 15 tons for each aircraft. A transcontinental intermodal hub on the base of the Navoi Airport which started functioning from January 2009 is managed by the world leader in cargo transportations, Korean Air. Today, regular flights are carried out to a number of Asian and European cities.
Automobile cargo transportation between China and Europe through Uzbekistan is shorter by about 1000km in comparison with the route via Russia. There are also main railway routes passing through the Navoi region with access to the South to the ports of Iran and Turkey, and on the West and North to the ports of the Black Sea and the Baltic Sea. The shortest transit connection to Afghanistan, Pakistan and India appeared after the Guzar-Baysun-Kumkurgan railroad has been put into operation.
The FIEZ territory is provided with reliable electric, gas and water supplies, a favourable ecosystem, as well as access to a qualified local labour force. It also has all the necessary conditions to create industrial complexes with full production cycles from raw materials to ready products.
Priority areas include:
• electronics and electrotechnics;
• precision machinery production, equipment and component parts;
• pharmaceutical production and medical equipment;
• foodstuff processing and packing and
• plastic and polymer goods.
Navoi province is located in the centre of Uzbekistan, one of the largest industrial centres of the country. The province possesses rich minerals and raw materials resources, including the Muruntau gold-bearing field, silica sand fields (of more than 1.5 billion tons), deposits of granite (1.9 billion cubic metres), marble (420 million cubic metres), phosphorites (1.5 billion tons) and many others.
Navoi Mining and Metallurgy Combinat – the biggest enterprise of the province – is included in the top ten largest world producers of uranium and gold (9999 standard). Gold bars produced by the Combinat are awarded with the status of ‘optimal gold delivery’ by London Precious Metals Market and Tokyo Commodities Exchange. Along with mining, the province’s economy is based on the production of building materials, chemical, textile and food industries.
Forty foreign investment enterprises operate in the Navoi province. Most of them are established with participation of investors from USA, China, Republic of Korea, Russia, the UK and other European countries. The Uzbek-British joint venture Amantaytau Goldfields is also successfully working in the province.