Uzbekistan PEO & Employer of Record
WeHG provides international PEO and global employer of record services for companies looking to join the Uzbekistan market or hire local or foreign workers there.
According to common thinking, a subsidiary should be established in Uzbekistan. However, using our strategy enables you to begin working in Uzbekistan in only a few days, saving you both time and money. WeHG would make the hiring decisions for you even though you have total operational control over your position. As a result, they would technically be our employees working for you while being totally compliant and paid through our local payroll.
Uzbekistan fast facts
Population: 34,391,844 (2022)
Land area: 448,978 km²
Local currency: Uzbek som (UZS)
GDP per capita: $1,983.065 (2021)
Language: Uzbek (official)
GDP in currency: $69.24 billion
The economy of Uzbekistan is one of lower and middle-income development and emerging. Uzbekistan (or its official name, the Republic of Uzbekistan) is a country in Central Asia bordering Kazakhstan to the north-west and north, Kyrgyzstan and Tajikistan to the east and south-east, Afghanistan to the south, and Turkmenistan to the south-west. Neighbouring countries: Kyrgyzstan to the east; in the northeast, north and north-west of Kazakhstan; in the southwest and southern Turkmenistan; in southern Afghanistan and southeastern Tajikistan. Uzbekistan has access to the Aral Sea but is one of two countries in the world (along with Liechtenstein) that must cross the territory of two states to reach the World Ocean: all neighbouring countries also have no access to the Aral Sea World Ocean.
Hiring, Negotiating and Doing Business in Uzbekistan
Necessity of written employment contract
An employment contract in Uzbekistan must be in writing and can be either permanent or only last for five years. The probationary term is three months long.
Different forms of engagement: employment, contracting, work with private entrepreneur
Employee hiring must be formalized by an order (decree), which the worker must become familiar with (Article 82 of the Labor Code). The conclusion of an employment contract (contract) with a hired individual is mandated by the Labor Code.
The order on employment is filled out in one copy by an employee of the personnel department for all newly hired employees (except for those appointed by a higher authority). When placing an order for work, the instructions of the structural unit, profession (position), probationary period (if it is established when hiring), also the conditions for hiring and the nature of the job ahead (part-time, for damage to a temporarily absent employee, work performance, etc.) .). The order (decree) on employment is signed by the head of the enterprise or by the person with whom he exercises his powers.
Uzbekistan Employment Contract
Types of employment agreements
Two types of employment contracts are allowed in Uzbekistan: fixed-term employment contracts and permanent employment contracts. The maximum duration of the first type is 5 years. Speaking of a permanent employment contract, it is quite difficult to terminate it at the employer’s initiative if the employee does not want to terminate such a contract. The trial period is not required and lasts 3 months.
Uzbekistan working hours
A working day lasts not more than 8 hours and 40 working hours per week is permitted.
Overtime and work over a rest day are paid at the rate of 200% of the regular pay.
Vacation leave in Uzbekistan
Workers are entitled to 15 working days of paid annual leave. Also, there’re 30 days of annual leave for disabled or employees under the age of 18.
Uzbekistan Maternity Leave
Maternity leave in Uzbekistan starts 70 days before the birth of a child and has a total duration of 126 days (plus 56 days after the birth). In some cases, maternity leave can be extended to 14 additional days if a mother has had difficulties during childbirth or has had multiple births. There is nothing in Uzbek law about paternity leave. The adoption period is 56 days for the adoption of one child and 70 days for multiple adoptions.
Uzbek Severance Laws
Termination of the employment relationship must be initiated by the employer and be due to reasonable grounds (such as performance, reorganization of the company, or gross misconduct). A written notice must be sent to the employee and must be acknowledged upon receipt. If the employee belongs to a union, the employer must be allowed to cancel the employment agreement, and the termination process cannot go longer than a month.
There’re several understandable reasons to terminate the employment contract which regulate the duration of the notice period:
- Redundancy – 2 months’ notice
- Lack of qualification or health reason that impedes the employee’s ability to carry out their duties– 2 weeks’ notice
- Change in the company’s ownership – 2 months’ notice
- Gross misconduct or performance- 3 days’ notice
Uzbekistan Tax changes from April 2022 including several tax benefits.
Until December 31, 2024:
- Both resident and non-resident individuals are exempted from income tax on dividends from shares
- Non-resident legal entities are subject to a 5% corporate income tax on dividends from shares;
- Resident and non-resident individuals and legal entities are exempt from income tax or interest income accrued on bonds issued by legal entities.
Until 1 January 2025, a reduced social tax rate of 1% is established for qualifying businesses if at least 60% of their total revenue is derived from the provision of certain services.
The personal income tax rate in Uzbekistan stands at 12 percent
Health Insurance Benefits in Uzbekistan
The maximum amount of time an employee may take paid sick leave is four months, and six months if they have tuberculosis. The employee must submit a medical certificate to the employer in order to receive a salary. In Uzbekistan, the majority of government-provided healthcare is restricted to surgical procedures. Additionally, the country’s healthcare system is separated into three categories:
- Specific regions
- Local-level consisting of rural areas or towns, with a comparatively smaller private sector.
Additional Benefits in Uzbekistan
The following must be emphasized while discussing the primary employee benefits in Uzbekistan: accident and medical insurance; life insurance; and coverage for infectious diseases. However, it is believed that both public and private health care are inefficient and overpriced. Since gifts and cash are frequently used in the medical industry in Uzbekistan, corruption is pervasive.
General market practice benefits/additional allowances
One of the biggest and most efficient benefits of the Uzbek business market include the country’s rapid economic and population expansion. The number of workers in the nation enables investors from manufacturing and service businesses to successfully develop start-ups. The government also provides small and medium-sized firms with tax breaks and a simpler method of filing taxes and duties.
There are 10 Uzbek public holidays, that consist of religious and national holidays observed by the Law and people across the country: New Year’s Day, International Women’s Day, Navruz, Memorial Day, Ramadan Khait, Children’s Day, Kurban Khait, Independence Day, Teacher’s Day, Constitution Day.
Why Choose WeHireGlobally
WeHG takes care of all the onboarding hurdles, payroll, compensation and benefits, tax filing, and termination of employment. Our Employer of Record solution allows you to manage your overseas teams efficiently while minimizing cost and risk.
A standard full-time workweek is 40 hours or 8 hours per day.
- New Year’s Day
- International Women’s Day
- Memorial Day
- Ramadan Khait
- Children’s Day
- Kurban Khait
- Independence Day
- Teacher’s Day
- Constitution Day
- Why Choose WeHireGlobally
Employer payroll tax:
- Social security – 12%
- Pension – 0,1%
- Total Employment Cost – 12,1%
Employee Income Tax:
- Flat rate – 12%