Opening corporate accounts in Uzbekistan and conducting transactions on them

Opening a bank account in Uzbekistan may seem a complicated task, especially for non-residents, but with the right approach and knowledge of all necessary procedures, this process becomes much easier and clearer. In this material we will deal with all aspects of this issue, starting from the requirements and necessary documents, finishing with the peculiarities of working with Uzbek banks.

This information will be useful for legal entities that are planning to start or are already operating in Uzbekistan.

Resident legal entities

For resident legal entities difficulties may occur only in case if the beneficiaries are on the list of persons suspected of terrorist activities or if they have an account opened in an offshore zone (Offshore List), as well as permanently residing in a country that is on the FATF list (countries with insufficient measures to combat financial crimes).

If a resident of a legal entity, the director and/or beneficiary is a foreign citizen, opening an account is slightly more complicated. If the beneficiary is a foreigner, the verification is carried out up to the ultimate beneficiary. And if the director is a foreigner, he/she needs additional documents.

List of information and documents required to open an account for a legal entity, difference for resident and non-resident:

Resident

1. Passport/ID card
2. Certificate of registration
3. Articles of Association
4. Resolution of Sole Participant (in case of Sole Participant)
5. Order on the director

Non-resident

1. Director’s passport
2. PINFL (personal identification number of an individual)
3. Registration at the place of residence
4. Certificate of state registration
5. Articles of Association
6. Order on appointment to the position of director
7. Minutes of a general meeting on the establishment of a legal entity in the event that there are many founders. Or the decision of the sole participant on the establishment of a legal entity.
8. Local telephone number
9. Notarized power of attorney for another individual, if the director is not present in person when opening the account.

KYC and AML procedures are mandatory before opening an account. 

The timeframe for opening varies depending on the bank and its rules. By law, the decision period is 15 banking days, but in practice an account can be opened within 1 working day if all the required documents are present.

Non-resident legal entities

A foreign legal entity cannot directly open an account in Uzbekistan, it is necessary to have an individual taxpayer number (TIN) registered in Uzbekistan.

There are 6 types of foreign legal entities that can obtain a TIN and 5 of them can open an account in Uzbekistan in the following cases:

1. Permanent establishment – an account in a local bank can be used for business activities
2. Representative offices – a local bank account may be used for administrative and organizational expenses of the representative office (office, equipment, machinery, services, personnel, advertising, marketing, etc.)
3. Foreign supplier of medicines – can obtain TIN, has no right to carry out business activities, no accounts are opened for them.
4. Foreign legal entity participant in open electronic trading of commodity exchanges – account in a local bank is limited to banking operations stipulated by a contract with a stock broker of Uzbekistan.
5. Foreign legal entity as an entity acquiring shares at organized trades on the securities market – account in a local bank is limited to performance of banking operations stipulated by the contract with the investment intermediary of Uzbekistan.

A foreign legal entity may also establish a national company to carry out full-fledged business activities, register its local subsidiary or joint company. In this case, the entity holding the bank account will be a company resident in Uzbekistan.

In other cases, non-resident legal entities cannot open a bank account.

Beneficiaries or companies from offshore zones may have difficulties, the bank will proceed from its risk profile when opening accounts, but there are no legal restrictions. 

A foreign structure without a legal entity (trusts) will also be treated as a legal entity.

Account transactions

Uzbekistan does not conduct account transactions with banks, goods, persons and institutions that are subject to sanctions restrictions (e.g., U.S. Sanctions SDN List, UK Sanctions, EU Sanctions). Restrictions are also imposed on FATF countries.

Uzbek legislation provides for the possibility of transit operations, but the practice of enforcement of the legislation on some of them should be taken into account. For example, Uzbekistan has a purchase contract and a sales contract that provide for the purchase of goods (by an Uzbek resident from a non-resident under a purchase contract) without importation into the customs territory or in transit (for subsequent sale to another non-resident under a sales contract).

Despite the fact that there are no legal restrictions on the conclusion and execution of such contracts, a few years ago some commercial banks began to refuse to conduct such transactions under the pretext of suspicion of circumventing sanctions. 

There are no currency restrictions in Uzbekistan, Internet Banking is available, but within the country residents with residents may conduct transactions only in the national currency.

Commercial banks should pay increased attention to all complex, unusually large transactions, as well as all unusual transaction patterns that have no apparent economic or legitimate purpose, questionable and suspicious transactions.

Doubtful transactions are considered, for example:

• Cash deposit of funds in an amount equal to or exceeding 500 times the BSV (basic settlement value) (~13k USD) per day to the bank account of a legal entity or individual entrepreneur as loans, financial aid, contribution to the authorized fund (capital) or working capital for replenishment purposes;
• transfer of an amount equal to or exceeding 1000 times the BSV (~26k USD) per day as a financial aid or loan; withdrawal of the same amount from an account as dividends or profits to an individual;
• transfer of funds, the amount of which is equal to or exceeds 500-fold of the basic settlement value, outside the Republic of Uzbekistan to the recipient’s account opened in a bank, the location of which is different from the recipient’s place of registration.

The following may be considered suspicious:

• transactions on transfer of funds outside Uzbekistan to accounts or in favor of persons permanently residing or registered in offshore zones, or cash receipts from the accounts of such persons, simultaneously or repeatedly within 30 days, for a total amount equal to or exceeding 500 times the amount of the basic calculation unit established on the day of the last transfer (receipt);
• transactions with non-resident clients, information on the founders of which is not available and it is impossible to obtain it by all available methods; transfer of funds by a non-resident to a resident as grants, financial aid, loans or gratuitous aid;
• situations when the money turnover of the client’s legal entity is equal to or exceeds 20,000-fold of the basic calculation value, which is visible for a period not exceeding 3 months from the date of establishment of this legal entity, and is carried out with purposes that do not correspond to the nature of its activity.

Such operations are subject to increased attention and additional control.

If you still have questions on opening bank accounts in Uzbekistan, our lawyers can consult you.

Authors: Nilufar Mirjalilova

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