Photo: nuz.uz
Foreign IT companies that become residents of a newly established special zone for artificial intelligence (AI) and data center projects in Karakalpakstan—a sovereign republic within Uzbekistan—will receive a wide range of incentives, including full exemption from taxes and customs duties. The announcement was made by Hikmatilla Ubaydullaev, Deputy Head of the Department for Financial Technologies, AI, and Digitalization under the Presidential Administration of Uzbekistan.
According to Ubaydullaev, to qualify for the incentive package, companies must invest at least $100 million in enterprises based in Karakalpakstan. In return, investors will be exempt from value-added tax, profit, property, and land taxes, as well as from customs fees, until 2040. Dividends distributed to company owners will also be taxed at a zero rate.
Among other benefits, electricity for project facilities will be priced at $0.05 per kilowatt-hour—one of the lowest rates in the region. In addition, if investors contribute at least 25 percent of their own funds, the government will cover the cost of building external infrastructure, including electricity supply, roads, water, gas, and fiber-optic communication lines.
Foreign entrepreneurs will also be allowed to make direct international payments to suppliers and contractors without involving local banks, thereby avoiding currency restrictions and speeding up transactions.
As Ubaydullaev emphasized, the incentives apply not only to AI-focused enterprises but also to companies engaged in high-performance computing and the crypto industry. This initiative is part of Uzbekistan’s broader strategy to build a national AI ecosystem and create a regional data center cluster.
Land plots for such businesses will be allocated directly by decision of the Karakalpakstan government, and projects will be implemented under a fast-track model, in which design, equipment procurement, and construction proceed in parallel.
President Shavkat Mirziyoyev has instructed that this particular region of the country be developed into a hub for large-scale digital investments, where AI, cloud, and other advanced technologies can grow free from bureaucratic barriers, Ubaydullaev added.
