RESOLUTION OF THE PRESIDENT OF THE REPUBLIC OF UZBEKISTAN

of May 20, 2024 No. PP-181

About measures for raising on new stage of development of tanning and shoe, shelkovodchesky industries and industry of rug weaving

For the purpose of further increase in investment appeal and competitiveness, building-up of the export potential of tanning and shoe, shelkovodchesky industries and industry of rug weaving of the republic, and also creating favorable conditions for broader promotion of domestic production on the foreign markets:

1. Approve offers of the Ministry of investments, the industry and trade, Chamber of Commerce and Industry, JSC Hulk banki, Uzcharmsanoat Association, and also khokimiyats of the Jizzakh and Tashkent regions on:

to education in Sharaf-Rashidovsky district, and also by expansion of the territory of the tanning and shoe small industrial zone in Akhangaransky district of the tanning and shoe industrial clusters (further - industrial zones) specialized on deep conversion of skin and production of finished goods;

to assignment on directorate on management of the industrial zones created in case of establishment of Uzcharmsanoat Association and Chamber of Commerce and Industry (further - Directorates), constructions and managements of factory buildings and water treatment constructions in industrial zones based on requirements of entrepreneurs.

2. Determine that for the purpose of creation of favorable financial conditions for deep conversion of tanning and shoe products the following mechanisms of support take root:

a) means of the credit line in the amount of 40 million US dollars opened in commercial banks for financing of the investment projects realized in tanning and shoe and fur industries based on the resolution of the President of the Republic of Uzbekistan of February 26, 2022 No. PP-143 "About additional measures for support of production of finished goods in tanning and shoe and fur industries" are redistributed according to the decision of Government commission on investment attraction, industrial development and regulation of trade (Zh. Hodzhayev) (further - Government commission) in the following directions:

To directorates by means of commercial banks for the term of 10 years, including three-year grace period, at the rate of 5 annual interest rates (from them 2 percent - margin of bank) - for construction of factory buildings and water treatment constructions on the basis of requirements of entrepreneurs;

To fund of development of the industry (further - Fund) - for introduction of 15 percent of cost of the equipment as share of Fund of development and reconstruction in the authorized capital of the companies created for the purpose of projects implementation of production of footwear, leather haberdashery products, fitment, accessories, shoe blocks, soles for footwear, top of footwear and imitation leather worth up to 5 million US dollars. At the same time:

the share created by fund shall not exceed 25 percent, and also from initiators of projects introduction as share of buildings, constructions, necessary for production, and other assets is required;

take into account that for the purpose of ensuring balance of the income and expenses of Fund of reconstruction and development the above-stated funds are allocated by means of optimization of the credit line opened by fund of reconstruction and development based on the Presidential decree of the Republic of Uzbekistan of July 13, 2021 No. UP-6260 "About Additional Measures for Full Support of Youth and Further Increase in Its Public Activity";

b) the parcels of land provided to inclusion in structure of the territory of tanning and shoe industrial clusters can be leased to Directorates on estimated value for the term of 49 years based on resolutions of the Cabinet of Ministers for implementation of large investment projects with payment term by installments for up to 10 years, also the objects which are under construction Directorates on these parcels of land can be implemented to entrepreneurs without restrictions before complete payment of payments for the earth by them;

c) the factory buildings and constructions which are under construction in the territory of tanning and shoe industrial clusters are transferred to entrepreneurs directly for a period of up to 7 years with payment term by installments or on the basis of lease;

d) JSC The Company on Development of Entrepreneurship is compensated the part exceeding 6 percent points, but no more than the size of 5 percent of interest expenses of the part of foreign currency loans which is not exceeding 3 million US dollars allocated for acquisition of the equipment for production of shoe and leather haberdashery products;

e) to the manufacturing companies of shoe and leather haberdashery products which attracted foreign brands part to 30 thousand US dollars of the expenses spent for the "sorsingovy" companies becomes covered.

JSC Hulk banki and Uzcharmsanoat Associations to implement system of covering of part to 30 thousand US dollars of the expenses spent for the "sorsingovy" companies, each company which attracted foreign brands in a month.

To deputy prime ministers Zh. Hodzhayev and D. Kuchkarov to determine funding mechanism and return of the means provided by the subitem "an" of this Item in a month.

3. Determine that Directorates perform the activities according to the procedure approved by their managerial bodies the legislations of the requirement for implementation of public procurements established by acts, to conducting examination of the specification and agreements do not extend to their activities, realization of property by means of auction and other requirements imposed to the companies with the state share also it is allowed to build objects economic method.

4. Exempt for a period of up to January 1, 2026 the Directorates and the companies formed in industrial zones from payment of the property tax, the land tax and tax for use of water resources.

To the Cabinet of Ministers to introduce in Legislative house of Oliy Majlis of the Republic of Uzbekistan the bill on the changes and amendments in the Tax code of the Republic of Uzbekistan following from this Item in a month.

5. Based on the subitem "an" of Item 2 of this resolution when entering share into the authorized capital of the companies by fund to establish procedure according to which:

for projects implementation achievement of agreements by initiators of projects with foreign brands and investors, and also their attraction is not considered obligatory;

the indicator of profitability of production on projects shall constitute at least 10 percent;

Compliance of price parameters of the equipment acquired within the project to the current market conditions is considered by the center of complex examination of projects and import contracts;

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