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UZCHARMSANOAT ASSOCIATION

UZBEKISTAN : NEW OPPORTUNITIES OF TRADE, ECONOMIC AND INVESTMENT COOPERATION WITHIN THE ONGOING REFORMS IN LEATHER AND FOOTWEAR INDUSTRY. UZCHARMSANOAT ASSOCIATION. The Resolution of the President of the Republic of Uzbekistan. « On measures of further stimulation of development and growth

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UZCHARMSANOAT ASSOCIATION

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  1. UZBEKISTAN: NEW OPPORTUNITIES OF TRADE, ECONOMIC AND INVESTMENT COOPERATION WITHIN THE ONGOING REFORMS IN LEATHER AND FOOTWEAR INDUSTRY. UZCHARMSANOAT ASSOCIATION

  2. The Resolution of the President of the Republic of Uzbekistan «On measures of further stimulation of development and growth of export capability of leather, footwear and fur industries»

  3. REORGANIZATION OF THE ASSOCIATION UZBEKCHARMPOYABZALI Association UZCHARMSANOAT Association • Artificial leather producers • Hides skins and fur storages Hides skins and fur storages Artificial leather producers • Hides, skins and fur processing enterprises • Shoemaking factories Shoemaking factories Hides, skins and fur processing enterprises • Manufacturers of leather goods and leather-based apparel • Tanning chemicals • producers Manufacturers of leather goods and leather-based apparel Tanning chemicals producers Automated slaughterhouses Raw wool storages Raw astrakhan storages Raw wool processing enterprises Producers of astrakhan-based goods Producers of wool-based goods

  4. MAIN GOALS AND OBJECTIVES OF THE ASSOCIATION «IN-CHAIN» COOPERATION SUPPORT OF LOCAL PRODUCERS EXPORT ORIENTATION MODERNIZATION IMPORT DEPENDANCE DECREASE INTEGRATION Science (R&D) + Production + Education PROTECTION OF LEGAL RIGHTS AND INTERESTS

  5. REDUCTING THE EXPORT OF «WET-BLUE» • Other finished leather • producer • «Wet-blue» producer • Finished leather producer • SALES • MODERNIZATION • FINISH • FINISH • WET-BLUE EXPORT • 5% • сбор • The Fund for the Development • of Leather and Footwear Industry • (within the structure of the Uzcharmsanoat Association) • FOOTWEAR ANDLEATHER GOODS • FOOTWEAR AND • LEATHER GOODS

  6. EXPORT OF LEATHER QUOTING THE EXPORT OF FINISHED LEATHER Request on export Annual quota CABINET OF MINISTERS Permission Permission PRESIDENT UZCHARMSANOAT Association

  7. THE FUND FOR THE DEVELOPMENT OF LEATHER AND FOOTWEAR INDUSTRY PURPOSES SOURCES «UZCHARMSANOAT» ASSOCIATION Financial support of leather and footwear enterprises 5% tax from export of «wet-blue» Loan guarantees for new leather and footwear enterprises being established Membership fee Implementing the Quality system (ISO:9001) and other quality standards Grants and credits of the IFIs and other foreign financial entities Education and qualification abroad • The Fund for the Development • of Leather and Footwear Industry Bank deposits International fairs and exhibitions Other regular expenditures Other legal sources

  8. CUSTOMS AND TAX PREFERENCES FOR LEATHER AND FOOTWEAR INDUSTRY WHEN? ? TO WHOM? WHAT? till 01.01.2023 Tax preferences • All members of the Association are free from the following taxes: • Tax on revenue • Tax on estate • Unified tax – for small enterprises • Mandatory fees to the budgetary funds • Modern automated slaughterhouses Customs preferences • Hides, skins, fur and wool storages • All members of the Association are free from customs taxes: • on import of technological equipment • on import of component and spare parts • on import of raw materials and metal and textile hardware (non-produced in Uzbekistan) • 60 days prolongation for customs payments for all members of the Association: • on import of technological equipment • on import of component and spare parts • on import of raw materials and metal and textile hardware (non-produced in Uzbekistan) • on import of other goods for production purposes • Producers of: • leather, • footwear, • leather goods, • garments, • leather-, wool- and fur-based apparel, • sport accessories, • protective clothing, • footwear and equipment

  9. IMPROVEMENT OF FOREIGN TRADE ENVIRONMENT «UZCHARMSANOAT» ASSOCIATION LIMITED SUPPLIES footwear and leather products LARGE SUPPLIES footwear and leather products LIMITED SUPPLIES footwear and leather products производители Узбекистана производители Узбекистана производители Узбекистана производители Узбекистана FOREIGN PRODUCERS LIMITED SUPPLIES metal hardware, components, chemicals FOREIGN PRODUCERS LARGE SUPPLIES metal hardware, components, chemicals • «UZCHARMIMPEX» LIMITED SUPPLIES metal hardware, components, chemicals

  10. SUPPORT AND PREFERENCES TO FOREIGN ASSOCIATES MINISTRY OF FOREIGN AFFAIRS MINISTRY OF INTERNAL AFFAIRS MINISTRY OF LABOUR FOREIGNER Employment Fairs & exhibitions Teaching Consultancy

  11. EDUCATION AND QUALIFICATION Higher professional education Training and requalification Secondary vocational education UZCHARMSANOAT Association Tashkent Institute of Textile and Light Industry Tashkent Institute of Textile and Light Industry Vocational colleges EDUCATION INTERNSHIP LECTURES AND TRAININGS REGIONAL SPECIALIZED COLLEGES New educational programs «Technology and design of leather and fur goods» «Technology and equipment: leather, fur, astrakhan» «Technology and equipment: footwear and leather goods» TRAINING CENTER PRODUCTION SCIENCE RESEARCH & DEVELOPMENT

  12. INVESTMENT PROGRAMS PROGRAMME2 PROGRAMME 1 Ultimate upgrade of national leather manufacturing capacities towards to the production of finished leather Revolutionary extension of production of footwear and leather goods leather footwear 57 Investment projects 15 Investment projects leather 4 11 8 49 leather accessories New enterprises to be established Enterprises to be modernized shoemaking enterprises leather accessories factories 5252 new employments 65,4 mln.USD total investments 15 months launching period 3250 new employments 85,1mln.USD total investments 13 months launching period

  13. EXPORT FORECAST within next8years - times growth during last 6 years - times growth

  14. PROSPECTIVES OF COOPERATION BETWEEN INDIA AND UZBEKISTAN 2. OURSOURCING 1. INVESTMENT COOPERATION Tanneries Footwear semi-products Footwear Shoemaking factories PRODUCTION ON UZBEK FACTORIES NEW ENTERPRISES Leather accessories factories Fur and astrakhan semi-products Fur and astrakhan productions Fur and astrakhan goods

  15. 1. INVESTMENT ENVIRONMENT IN UZBEKISTAN Unprecedented tax and customs preferences for leather, footwear and fur manufacturers Other preferences valid in FEAs (Free Economic Areas) Huge investment programs welcoming foreign capital Preferences in favor of foreign investments 100% protection of legal rights and interests of foreign investors Convertible currency Why should you invest in Uzbek leather, footwear and fur industry RIGHT NOW?

  16. 1. INVESTMENT ENVIRONMENT IN UZBEKISTAN CUSTOMS PREFERENCES REDUCTION OF TAXABLE PROFIT TAX EXEMPTION VAT EXEMPTION • NO VAT • on machinery and equipment, • imported within the investment duties • upon the contract between the government • and Uzbek state authorized body • for state property management THE TAXABLE PROFIT IS REDUCED BY: up to3 mln. USD NO export taxes Contributions To extrabudgetary funds the funds used to expand the production capacity, construction of new buildings and facilities, and covering the credit on that purposes the funds used to purchase new technological machinery and equipment leasing payments the funds used on modernization • NO VAT • on the proceeds of the sales • of machinery and equipment, • imported within the investment duties • upon the contract between the government • and Uzbek state authorized body • for state property management for3 years from3 mln. USD up to10mln. USD Tax on estate NO import taxes for goods purchased for own production purposes (within 2 years from the registration date) • NO VAT • on machinery and equipment, • in accordance with the list approved • by the government • including it spare parts in case • it is provided by the terms of the contract for5 years Land tax more than10mln. USD NO import taxes on imported machinery and equipment and spare parts (in accordance with the list approved by the government) • NO VAT • on financial lease • (on the lessor’s commission) • Amortization is not included • Not more than 30 % of total taxable profit • Only for 5 years Unified tax • NO VAT • on imported raw material and semi-products • to be used in production of children’s footwear • (for enterprises with foreign investments) for10 years

  17. 2. ADVANTAGEOUSCONDITIONS FOR OUTSOURCING WHY IT IS BENEFICIAL TO OUTSOURCE WITH UZBEK ENTERPRISES? Foreign trade preferences Huge potential for raw material Qualified and inexpensive employees Large spreading market Low-cost energy resources Advanced logistics

  18. REVIVAL AND DEVELOPMENT OF ASTRAKHAN INDUSTRY Export to worldwide fur auctions Expansion of pastures The Resolution of the President of the Republic of Uzbekistan «On measures of accelerated development of astrakhan industry» Development of astrakhan skins processing Regulation of astrakhan skinsturnover Rebirth of astrakhan sheeps breeding Feed crops farming 00

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