Legal and Regulatory Assessment for Venture Capital and Private Equity in Uzbekistan
Client
International Finance Corporation (IFC)The background:
Uzbekistan’s venture capital (VC) and private equity (PE) ecosystem is nascent and hindered by fragmented and outdated regulatory frameworks, making it difficult for investors to navigate and operate effectively. The absence of a cohesive legal structure and recognition of international contract instruments further complicates investment activities.
Aim of the project:
Civitta, in collaboration with CENTIL Law Firm, conducted an in-depth analysis of the existing legal and regulatory environment for PE and VC in Uzbekistan. The project aimed to identify the core issues, benchmark against international best practices, and provide comprehensive recommendations for legal reforms to enhance the investment ecosystem.
This project addresses critical barriers in the investment landscape of Uzbekistan. By providing a detailed assessment and actionable recommendations, it paves the way for the establishment of a robust and market-friendly regulatory framework. This is crucial for attracting foreign and local investors, fostering innovation, and supporting the growth of startups and SMEs in Uzbekistan.
Services provided:
- Legal and Regulatory Environment Analysis: Comprehensive review of the current PEVC legal framework in Uzbekistan.
- Ecosystem Evaluation: Assessment of the PEVC ecosystem from the perspective of startup and SME support measures.
- Benchmarking: Comparison with international best practices and identification of gaps.
- Recommendations for Legal Reform: Detailed proposals for legal amendments to improve the regulatory environment.
- Support Measures Recommendations: Suggestions for auxiliary support measures to drive ecosystem development.
Project results:
Identification of key issues:
- Lack of a unified regulatory framework for PE and VC.
- Unrecognized contract instruments cause legal uncertainties.
- Insufficient support mechanisms for startups and SMEs.
Recommendations provided:
- Adoption of an Alternative Investments Law to provide a comprehensive framework for PEVC activities.
- Amendments to the Civil Code to recognize and enforce international contract instruments.
- Establishment of a dedicated agency to oversee the development of the PEVC ecosystem.
Impact:
- Enhanced legal clarity and stability for investors.
- Improved attractiveness of Uzbekistan’s investment landscape.
- Potential for increased foreign direct investment and local economic growth.
By addressing these challenges and implementing the recommended reforms, Uzbekistan can create a more conducive environment for PE and VC investments, driving innovation, and supporting the growth of its entrepreneurial ecosystem.
