Permission issued for the transfer of foreign currency outside the Republic of Uzbekistan by non-residents working through a permanent institution

  Amendments had been introduced into the “Procedure for maintaining non-residents’ accounts in national currency by commercial banks of the Republic of Uzbekistan” (Reg. No.510 of the Ministry of Justice dated 1998.10.22) and the “Procedure for maintaining accounts in foreign currency by commercial banks” (Reg. No.511 of the Ministry of Justice dated 1998.12.10). The Central the bank introduced those changes, published on the 25^th of March, 2019
 In compliance with the introduced amendments: 

Firstly, accounts in national and foreign currencies from now on shall also be opened to non-resident legal entities that purchase (sell) shares of companies through organized tenders, and, accordingly, funds received from such tenders shall be credited to them.

In the version that was in effect before the introduction of amendments, the accounts of non-resident legal entities were opened:

• in national currency:
  •  to foreign diplomatic and such other official representative offices operating in the Republic of Uzbekistan, to international organizations and their branches that enjoy immunity and diplomatic privileges, as well as to representative offices of foreign organizations in the Republic of Uzbekistan that do not carry out economic or other commercial activities;
  •  to those taking part in commodity exchanges’ open electronic tenders;
  •  to those operating in the Republic of Uzbekistan through a permanent institution.

• in foreign currency:
  • to foreign diplomatic and such other official representative offices operating in the Republic of Uzbekistan, to international organizations and their branches that enjoy immunity and diplomatic privileges, as well as representative offices of foreign organizations in the Republic of Uzbekistan that do not carry out economic or other commercial activities;
  • to those taking part in commodity exchanges’ open electronic tenders;
  • to those operating in the Republic of Uzbekistan through a permanent institution.

 Secondly, non-resident legal entities, which created a permanent institution, were allowed to transfer to their accounts dividends in national and foreign currency and other income from investment activities in Uzbekistan.
 The procedure, which was in effect before the introduction of amendments, provided for funds to be credited to the accounts of non-resident legal entities operating in the Republic of Uzbekistan through a permanent institution:

• in national currency:
  • funds from the sale of goods (execution of works, provision of services) and from conducting such other activities of a permanent institution on the territory of the Republic of Uzbekistan in compliance with provision of the legislation;
  • amounts transferred from accounts of a permanent institution opened in other banks of the Republic of Uzbekistan;
  • amounts from the sale of foreign currency to commercial banks;
  • funds from the accounts of a non-resident, who created a permanent institution, in the commodity exchanges’ cash-clearing chambers.

• in foreign currency:
  • foreign currency transferred from abroad from the account of a non-resident, who created a permanent institution;
  • foreign currency transferred from the accounts of a permanent institution opened in other banks of the Republic of Uzbekistan;
  • foreign currency acquired in the domestic foreign exchange market.

Thirdly, amounts recorded in the accounts of non-resident legal entities operating through a permanent institution, except that they may be:

• used for sale through commercial banks on the territory of the Republic of Uzbekistan;
• used to pay for expenses related to sending its employees to business trips outside the Republic of Uzbekistan (including in cash) in accordance with the established procedure;
• transferred to other accounts of an account-holder opened in other banks of the Republic of Uzbekistan, as well as to be used for other purposes stipulated for by the current legislation;

- now also from these accounts’ funds in foreign currency can be “transferred to accounts outside the Republic of Uzbekistan”.

  It should be noted here that such wording speaks not only of the possibility of repatriating profits, but also, in principle, of the free transfer of non-residents’ foreign currency kept in the permanent institutions’ accounts.