Belgium (Brussels Morning Newspaper), Uzbekistan is planning to become the world’s IT outsourcing hub, displacing traditional locations in India and China, a major conference heard.
This was a key message to emerge from the first-ever Uzbekistan Outsourcing Conference in New York.
In India, escalating labor costs and high levels of employee churn are “eroding” its competitive edge while China’s outsourcing landscape is “fraught” with regulatory complexities and intellectual property concerns, casting a shadow of uncertainty over foreign investments, the conference was told.
In contrast, delegates heard that Uzbekistan offers a “stable and welcoming” environment, underpinned by a supportive government and a burgeoning tech workforce.
Its strategic location, competitive labor costs, and proactive business incentives present an attractive proposition for foreign companies seeking to optimize costs and access top-tier talent, the event heard.
This will be welcomed by the EU which has accepted Uzbekistan as the 9th beneficiary country of the special incentive arrangement for sustainable development and good governance (GSP+) under the unilateral Generalised Scheme of Preferences (GSP).
Trade turnover between Uzbekistan and the EU stood at $3.9 billion in 2021 and this increased by 15 percent the next year.
Uzbekistan is now strengthening its economic relationship with the European Union and EU officials have recently positively noted bold steps taken by the Central Bank of Uzbekistan and expressed their commitment to strengthen bilateral relations.
This is bolstered by Uzbekistan’s plans to boost the export of IT services to $5 billion by 2030 (compared to $344 million in 2023).
The conference earlier this month, jointly hosted by The Ministry of Digital Technologies and the special economic zone IT Park of Uzbekistan, outlined to an array of US firms the special incentives Uzbekistan’s government has put into place that have already attracted more than 400 foreign firms to IT Park.
International companies already based at the IT park include Esokia, Optimo, AMCBridge, Dyninno, Vention, Gcore, and Reasunta Technology.
Commenting, Minister of Digital Technologies of Uzbekistan Sherzod Shermatov, noted, “We are pleased to continue strengthening our cooperation with the technology sector of the United States and present the unique opportunities offered by our country. Uzbekistan is fast positioning itself as a reliable partner ready to compete with recognized IT hubs such as
Alongside the comprehensive support we have introduced, our main asset is our educated and talented youth. Of a population of Uzbekistan’s population of 36 million, 60% are young people with an average age of 29. We already have more than 1800 companies at IT Park, and we look forward to welcoming new US companies.”
Incentives already being offered to foreign companies who choose to base their IT outsourcing needs at IT Park include exemption from corporation and social tax (up to 25%), 7.5% income tax (as opposed to 12%), and a VAT waiver on import or services.
In 2024, the Uzbekistan government also launched “Enterprise Uzbekistan”, a special legal regime designed to further encourage digital innovation and R&D. Key areas covered include customs and taxation, labor relations, finance and banking, data use and protection, intellectual property protection, and the resolution of commercial and civil disputes.
