Successfully investing in Uzbekistan

The current economic situation in Uzbekistan can be described as opened for investment since the stability and steadily improvements may show in 2025. The country’s GDP is projected to grow by around 6 percent, reflecting the effectiveness of ongoing reforms and investments in key sectors. Industrial production continues to increase, with total output reaching 55.8 trillion Uzbek sums (which is equivalent to 4.39 billion USD) in January 2025, the 4.3 percent increase compared to the same period last year. Manufacturing growth has been particularly strong at 5.2 percent , while the mining sector has seen a more moderate increase of 2.3 percent, as more and more projects were established by current time. 

The services sector is showing especially high momentum, with an expected growth rate of 14.5 percent . This indicates an increase in domestic demand and a strengthening of small- and medium-sized enterprises. Moreover, Uzbekistan offers a competitive and rapidly developing human capital resources compared to other Central Asian countries. The cost of labor remains significantly lower, while maintaining a steadily improving level of education and professional skills. This combination presents a strategic advantage for investors. 

The agriculture sector is also demonstrating consistent progress, growing at a rate of 4.1 percent . Business activity is also increasing, with the business activity index rising 8.4 percent since December 2024 and 18.6 percent year over year. This increase has been accompanied by a rise in the number of newly registered businesses, demonstrating an improving entrepreneurial environment.

The financial sector continues to strengthen. The 14.8 percent increase in outstanding loans indicates rising confidence in the banking system. Retail trade has grown moderately by 1.1 percent . Meanwhile, trading volume on the commodity exchange has significantly increased for essential goods, including diesel fuel, gasoline, mineral fertilizers, and cathode copper.

Since recent reforms were introduced, Uzbekistan has adopted international best practices for IPO and SPO procedures, aiming to modernize its capital markets. These measures enhance transparency, investor protection, and regulatory compliance. Foreign investors are able to participate in Uzbekistan’s equity markets, with progressive steps being taken to align with global financial standards and attract cross-border capital. Despite the global economic slowdown observed in several Asian countries, Uzbekistan stands out for its economic resilience and positive growth trend driven by increasing export-import relations and projects. This progress is largely the result of structural reforms aimed at economic liberalization, private sector development, especially support for small and medium-sized businesses and infrastructure modernization.

The 2025 investment climate in Uzbekistan is considered favorable and increasingly attractive, especially for foreign investors. The government continues to implement reforms aimed at liberalizing the economy, improving the legal framework, and creating a more transparent and predictable business environment.

In the first quarter of 2025, Uzbekistan attracted over 8.7 billion USD in foreign investments, with direct foreign investments growing by more than 127 percent compared to the same period in 2024. This surge reflects growing international confidence in the country’s economic direction and stability. The key factors contributing to a positive investment climate have been described by several reasons. 

Uzbekistan’s macroeconomic stability, supported by a projected GDP growth rate of 6.0 percent for the 2024, continues to position the country as a compelling destination for foreign investment. This sustained economic expansion is driven by a favorable business climate, comprehensive structural reforms, and the government’s strong commitment to private sector development.

The ongoing privatization of major state-owned enterprises reflects a broader effort to liberalize the market and foster competition. In parallel, legal reforms have been introduced to enhance investor protections and streamline business registration procedures. Additionally, Special Economic Zones (SEZs) offer attractive tax and customs incentives, further reinforcing Uzbekistan’s investment appeal.

Sectors with the largest investment potential:

The sector received the largest share of investments (27.5 percent). Uzbekistan is focusing on value-added production, especially in textiles, construction materials, and food processing.

With 16.6 percent of total investments, the energy sector, especially solar and wind, is rapidly expanding. Uzbekistan aims to diversify its energy mix and reduce reliance on fossil fuels. The major legal or governmental support of investments mainly implemented in the energy sector projects.

Although its share slightly declined to 11.3 percent, mining remains a key sector, especially for gold, copper, and uranium. The government is encouraging foreign participation in exploration and processing of natural resources.

At 10.3 percent, agriculture is gaining from modern irrigation, greenhouse farming, and food exports. As the market consists of experienced farmers, there's strong potential for agriculture innovation and international practices for increasing the quality of crops.

With a 7 percent growth in the services sector, tourism, hospitality, and IT services are becoming increasingly attractive, supported by visa liberalization and digital infrastructure development and legal support for small and middle businesses.

German companies wishing to do business in Uzbekistan can face a number of challenges. However, the specific issues may vary depending on the industry and business. The several challenges that German companies may face mainly consists of:

It is important to note that Uzbekistan is actively working to overcome these issues and trying to create a favorable environment for foreign investors. German companies interested in doing business in Uzbekistan should carefully examine the local conditions and legal requirements.

In 2025, Uzbekistan is making remarkable progress in the development of renewable energy, particularly in solar and wind power. As part of a large-scale energy reform, the country has launched five solar and one wind power plant, and construction has begun on six new facilities with a total capacity of 2.5 gigawatts. This expansion has been made possible through the active attraction of foreign direct investment, around 20 billion USD, which has been invested in the energy sector over the past five years, with contributions from companies in Germany, the UAE, Saudi Arabia, Turkey, and China. For the first time in the country’s history, energy storage systems with a capacity of 300 megawatts have been installed in Andijan and Fergana, significantly improving energy supply stability. In total, Uzbekistan plans to generate 84 billion kilowatt-hours of electricity in 2025, which is 25 billion more than in 2016.

The development of green energy aims not only reduce dependence on fossil fuels but also contributes to environmental sustainability, job creation, and increased investment attractiveness. More than 4 million households are expected to gain access to clean energy, while the economy will save 2.5 billion cubic meters of gas and prevent the emission of 4.6 million tons of CO₂.

The foreign investors planning to launch the business in energy sector may receive governmental support in the context of legal framework. Several Presidential Decrees were issued in order to demonstrate governmental support to overcome regulatory barriers for foreign companies involved in renewable energy sector in Uzbekistan. The renewable energy sector is becoming one of the key drivers of sustainable development in Uzbekistan, opening up broad opportunities for international cooperation, technological innovation, and long-term economic growth.