In December 2024, the Cabinet of Ministers approved new regulations for electronic commerce. These rules will take effect on July 1, 2025, and will cover a wide range of market participants, including marketplaces, order aggregators, digital streaming services, and self-employed individuals, including couriers and taxi drivers.
Key changes include:
- All operators of marketplaces, order aggregators, and streaming platforms must register as legal entities in Uzbekistan;
- All transactions, including income from self-employed individuals, must be conducted through special bank accounts;
- All electronic commerce entities are required to register in the registry and undergo a notification procedure.
The National Agency for Prospective Projects, responsible for regulating e-commerce, announced the development of this document back in October, stating that the industry needed reforms.
In an interview with Spot, the head of the Development and Regulation of E-commerce Department at NAPP, Kamronbek Mukhammediev, explained why the new rules are necessary, how they will change the market, and what will happen to companies that do not comply.
Why was the decision to approve the new rules made now?
In 2023, a presidential decree transferred the regulation and development of the electronic commerce sector to our agency. Prior to this, there was no single regulator for e-commerce.
From day one, we began working on this document, which continued throughout the year. We started by reviewing all relevant regulatory acts.
What did we find? Despite the electronic commerce law being adopted in 2004 and updated several times, the current version from 2022 has already become outdated. E-commerce today is closely linked to rapidly developing digital technologies, which can be described as growing exponentially.
In particular, it became clear that the terminology needed to be updated, as new types of electronic commerce, like order aggregators, have emerged since the law was passed.
Was the document publicly discussed and coordinated with businesses?
We established a direct dialogue with all representatives of the sector. Businesses were invited to send their suggestions in any convenient way: through official channels, email, or even phone calls. Our contact numbers, including my personal ones, are posted on the website, and I personally respond to calls and inquiries every day.
Both large and small companies were involved in the discussions. Additionally, we closely collaborated with international organizations such as the World Bank, EBRD, UNDP, and others. They provided us significant assistance by offering valuable recommendations based on international practices.
How will the new rules regarding special accounts for self-employed individuals work in practice? Will they be mandatory for all taxi drivers, couriers, and service providers in delivery?
A separate account can be opened at any bank—there will be no restrictions on the choice. Together with the Central Bank, we will develop regulations for separate accounts that will apply to all banks in the country. This will ensure competition among banks and freedom of choice for the self-employed.
As for working with these accounts, it will be made as convenient as possible. For example, couriers and taxi drivers already have bank accounts, so the transition will be quite simple.
The only difference is that the new account will be specifically designated for tracking transactions related to electronic commerce. This approach will ensure transparency of financial flows and simplify tax reporting.
It is expected that the flow of funds through electronic commerce will only go through these accounts, making all related payments visible.
Over time, we plan to work on simplifying tax reporting. Thanks to these separate accounts, entrepreneurs will not have to further clarify or provide complex reports—the entire flow of data will be automatically visible through this system.
What problems in the taxi sector necessitated such measures?
The electronic commerce law allows for cash payments, which is related to the peculiarities of Uzbekistan's economy, where cash still holds a large share. This was done to avoid restricting entrepreneurs and diminishing their revenue.
However, legislation requires that cash received by entrepreneurs be recorded and mandatorily deposited. This created difficulties for taxi drivers and couriers who receive cash daily.
They had to either look for kiosks to deposit funds or go to banks and stand in lines. Given that there are currently about 1 million self-employed taxi drivers and couriers registered, this would lead to a collapse.
To address this issue, we adapted existing practices. Now taxi drivers and couriers can pre-deposit money into a special account. For example, before starting their work shift, they deposit an estimated amount based on their calculations. When they receive cash from customers, an equivalent amount is deducted from their special account. This mechanism allows compliance with legislation and accounting for received funds, avoiding violations.
It is important to note that the government is not interested in punitive measures. Our goal is to support businesses and simplify compliance with requirements.
The new decree legalized the mechanism for pre-depositing funds, allowing the self-employed to use cash without fear of violating the law while adhering to financial accounting rules.
Many shops in Uzbekistan currently sell goods through social networks like Instagram and Telegram. Do they fall under the new rules?
Social networks are often used for advertising, while the transactions themselves take place offline. Such shops do not fall under the regulation of electronic commerce.
However, if an entrepreneur has created their own platform where electronic transactions can be concluded, payments can be made through banking systems, and electronic contracts can be formalized, then this falls under our requirements.
In this case, the shop is required to follow the notification procedure.
If an entrepreneur wants to go online, they must comply with security, personal data protection, and electronic transaction requirements. This is important for market order and consumer rights protection. Without rules, chaos ensues, which is why we urge them to adhere to legislation.
Why are international companies required to register in Uzbekistan, and how will the new requirements be enforced? Will these rules deter major players like AliExpress or Netflix, given the small size of the local market?
Many believe that global players look down on our market and the requirements of the legislation. I assure you, that is far from the truth.
Uzbekistan, with a population of 38 million, is a large and promising market. For major players who have already captured their share in other countries, new sources of growth are important. They are carefully studying our conditions and see potential.
If you look at the data from the tax committee, you will notice that international companies are already paying VAT for providing electronic services. The media regularly publishes information about how much these companies pay annually. Among them, giants like Facebook and Amazon are already registered as VAT payers.
Large international companies are too big to afford to violate the law. This can lead to huge fines, which we often see in the news. For them, reputation is paramount. Their stocks are traded on international markets, and any reputational losses can severely impact their capitalization. Therefore, they strive to strictly adhere to local legislation. These companies actively hire legal consultants to adapt to our requirements.
Since the beginning of the year, many large companies have opened offices here, confirming their serious approach to our market and legislation.
I won’t name specific companies, but due to previously liberal regulation, and in some cases the complete absence of it, some entrepreneurs took advantage of this. Large and popular players have been operating here for quite some time but did not have a legal entity in Uzbekistan.
Why is this important? Because local companies pay taxes and operate under the rules, which means they compete with non-residents under unequal conditions. We aim to create equal rules for everyone.
If a business, including international companies, wants to operate in our market and gain access to 38 million consumers that make up the largest market in Central Asia, they must also contribute to the economy's development. Uzbekistan's potential is enormous, interest in our market is growing, and this is evident from conferences and meetings abroad.
Population incomes are rising, purchasing power is increasing, and companies are profiting from this. But if they do not return anything to our economy, it becomes a “one-way street.” We consider this unfair.
The government creates conditions for them, so businesses should support us. There should be mutual relations, which is why this requirement was introduced.
This decree is not a tightening of regulations but rather an attempt to create equal conditions for all. When businesses legalize, a multitude of new opportunities opens up for them. Companies that are not residents cannot take advantage of benefits like official advertising, marketing, and participation in the country’s economic turnover. Once businesses legalize, they gain new opportunities for growth, increased activity, profit, and all of this has a positive effect. So, what tightening are we talking about?