Business Expenses

LABOR CONDITIONS

Labor Code of Uzbekistan adopted 21.12.1995 (last amended on 22.12.2010) is the main labor document, which regulates labor relations between employers and employees in Uzbekistan, which, inter alia, determines minimum labor conditions.

Minimum Labor Conditions

Normal duration of working time

At least 8 hours per day or 40 hours per week

Duration of probation period

At most three months

Frequency of remuneration

At least once every 2 weeks

Remuneration for overtime, weekend and holidays

At least double

Payment for night shifts (22:00 - 06:00)

At least 1.5-fold

Severance pay at termination of labor contract

At least one average monthly wage

Paid annual leave

At least 15 work days at a rate of at least average wage

Paid maternity leave

70 calendar days prior to childbirth and 56-70 calendar days after childbirth with payment of government social welfare

Categories of business week in accordance with work time schedule:

5-            day              (40 hours) business week 8-hour working day and 7-hour pre-holiday working days;

6-            day              (40 hours) business week 7-hour working days and 5-hour pre-day off workdays as well as 6 hour pre-holiday workdays(in case of Saturday - 4 hours);

36 hours business week 6 hour working day and 5 hour pre-holiday workdays.Holidays (non-business) days in 2012:

1 January               New Year Day;

8  March                  International Women's Day;21 March          Nauruz Holiday;

9  May                     Remembrance Day;

19 August              Ramazan Hait (Eid ul-Fitr);

1 September        Independence Day of the Republic of Uzbekistan

1 October              Teachers' Day;

26* October          Kurban Hait (Eid ul-Adha);

8 December          Constitution Day of the Republic of Uzbekistan

*) The dates of Ramazon Hayit (Eid al-Fitr) and Qurbon Hayit (Eid al-Adha) can be moved for one day.

STAFF RECRUITMENT

For recruitment of the workers needed the businesses may contact specialized human resource agencies, which maintain databaseson vacancies and quotes for workers of different areas. The wages asked in many cases exceeds market (effective) rates by 20 percent.Recruitment fee is on average 50% of the estimated monthly income of the worker. No upfront fee is charged. The fee is paid afteractual commencement of work by the worker. Recruitment agencies undertake the responsibilty to replace a staff within 3 monthstarting from commencement of the employment (base warranty term - 30 days since the employment).

Average wages in Tashkent city as of January 1, 2012*

Background

Monthly wage, USD

Background

 

Monthly wage, USD

IT specialist

550

Customer Service Manager

 

240

Hotel administrator

420

Ad and PR manager

 

360

Sales administrator

360

Merchandiser

 

360

Restaurant administrator

400

Office manager

 

240

Manager assistant

340

Security guard

 

250

Auditor

580

Translator

 

400

Accountant

400

Assistant accountant

 

250

Web designer

450

Software programmer

 

600

Driver

240

Salesman

 

250

Medical consultant on equipment

350

Psycologist

 

700

Chief accountant

480

Editor

 

800

Chief technologist

420

Branch manager

 

720

Customs declaration expert

420

Secretary - referent

 

250

Designer

500

Procurement manager

 

340

Engineer

450

Foreign trade specialist

 

460

Executive Director (CEO)

850

Process Engineer

 

540

Business Director

540

Goods manager

 

360

Copyrighter

340

Trade agent

 

240

Creative manager

600

Trade representative

 

720

Logistics specialist

700

Financier

 

600

Marketing specialist

360

Financial analyst

 

480

HR manager

360

Economist

 

500

Sales manager

240

Legal advisor

 

660

* Based on the opinion of experts, average wages in other cities are 20-30% lower than in Tashkent

 

 

Home Services

 

 

 

 

Specialty

 

Minimum daily wage

 

 

Thousand Uzbek soums

USD

 

Driver (main), minimum wage

 

20

10

 

Maid

 

30

15

 

Porter

 

30

15

 

 

Specialty

 

minimum daily wage

 

Thousand Uzbek soums

USD

Apartment renovation worker

40

 

20

General construction-related professions

25

 

10

Guard

20

 

10

Cook

18

 

8

Odd-job worker

15

 

7

Gardener (guard)

15

 

7

Metalworker/Plumber

50

 

25

Electrician

40

 

20

Source:www.vse.vsem.uz

 

 

 

Individual Income Tax[1]

 

 

 

Taxable Income

 

Tax Rate

 

Up to five times the MW

 

9 % of the amount of income

 

From five (+ UZS 1) to tenfold MW

Tax from fivefold MW amount + 16 % of the amount exceeding fivefold MW

From tenfold (+ UZS 1) MW and above

Tax from tenfold MW amount + 22 % of the amount exceeding tenfold MW

Note:

1.For individual income taxation purposes the amount of MW is treated as cumulative total from beginning of the year (total of minimum monthly wages for each month of the respective period since beginning of the year).

2.Mandatory monthly contributions to Individual Retirement Account in amount of 1 percent of the assessed individual income tax are deductible from the latter.

3.  Foreign individuals are subject to taxation in the Republic of Uzbekistan in accordance with the Tax Code of the Republic of Uzbekistan and international agreements signed by the Republic of Uzbekistan. Foreign individual residents are subject to the same individual tax treatment as nationals of the Republic of Uzbekistan.

For instance, individual income of a staff with monthly wage of UZS 1 000 000would equal:

Individual income tax=(1000000 - (1062920)) 0.22 + (562920 0.9)+(5 62920 0.16) = 81576 + 28314 + 50336 = 160226 UZS.

Recruitment of Foreign Workforce in Uzbekistan

A foreign citizen can work in Uzbekistan only with confirmed right to work issued to him//her based on the appropriate forms and permit obtained by the employer.

Permit is issued by the Agency for External Labor Migration (http://www.migration.uz/).

Permits are issued to the Uzbek legal entities, companies with foreign investments operating in Uzbekistan, as well as Uzbek and foreign individuals living in Uzbekistan and using foreign workers. The length of the work of foreign workers should not exceed the term of the permit.

The employer submits the following documents to the Agency in order to obtain the permit:

-           Application;

-           Draft contract or other documents, which confirm preliminary agreement with foreign citizens or foreign firms about their intention and conditions for recruitment of expatriate workers;

-           Expat worker application with a photo;

-           Bank record on payment for processing and issuing a permit and other documents required at the demand of the Agency;

-           HIV-negative certificate.

Permit issued for one year, labor contract is extended with endorsement of the parties based on the aforementioned documents submitted by the employer up to expiry of the labor contract.

Fee of up to 10 MMW is charged for the permit (confirmation) and its extension


[1]According to the Annex 8 to the Resolution 1675 of the President of Uzbekistan dated 30.12.2010

MFERITMEDEF InternationalInternational Business CenterGov.uzPress ServiceOliy MajlisUzASARIO