The long-awaited presidential decree regulating Uzbekistan's startup ecosystem has finally been announced, providing a much-needed boost for the sector. While not all existing challenges have been addressed, the decree opens up numerous opportunities for entrepreneurs and investors alike.
Key highlights of the decree include the introduction of the "Digital Startups" program, designed to provide comprehensive support for startup projects. This initiative aims to streamline the process for new ventures and facilitate their growth in an increasingly competitive landscape.
The decree stipulates that startups attracting investments from foreign venture funds will receive up to $100,000 in additional support. This financial backing is expected to incentivize partnerships and attract international investment, fostering a more dynamic entrepreneurial environment.
Furthermore, the IT Park will allocate unsecured loans to startups at an interest rate not exceeding 17.5%. This measure is intended to ease the financial burden on new businesses and encourage innovation.
To attract global talent, startup founders will be eligible for an IT visa, simplifying the immigration process for tech professionals looking to establish their presence in Uzbekistan.
Additionally, the IT Park Uzbekistan will establish a new venture fund with a capital of $10mn, aimed at further supporting emerging startups. Meanwhile, the re-establishment of the UzVC venture as a "Fund of Funds" with a capital of UZS 150bn ($11.71mn) will enhance the investment landscape for startups in the country.
State banks and economic societies will now have the authority to create their own venture funds, while state organizations will be permitted to enter into contracts with startups up to UZS 500mn ($39,047) in one fiscal year. This regulatory shift is anticipated to facilitate greater collaboration between the public and private sectors.
The decree also introduces a Regulatory Sandbox from 2025 to 2027 as part of the Digital Startups Program. This special legal regime will allow for the testing of innovative financial instruments, such as SAFE Notes and Convertible Notes, in a controlled environment.
Finally, a law on alternative investments is set to be developed by February 2025, further establishing a framework for investment in the startup sector.
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