Setting Up a Tech Subsidiary in Uzbekistan for a US Company: IT Park Residency, Taxes and Hiring (2026)

For a US company, the standard way to build an engineering team in Uzbekistan is a local LLC owned by the US parent that obtains IT Park resident status and sells development services to the parent under an intercompany agreement. As of October 2026, a resident is exempt from all taxes, including social tax, until 1 January 2028, and its employees pay personal income tax at 7.5% instead of 12% (Decree PF-5099). From 1 January 2028 to 1 January 2040 the exemption covers all taxes except VAT, and only for residents whose exports of IT Park activities exceed 50% of total income for the calendar year (Tax Code, Art. 483). IT Park decides on an application within 15 working days and issues the certificate within 3 working days after the decision (Resolution No. 589). The status is easy to lose: in July 2026 alone, 152 companies were stripped of it for not filing the annual audit report on time.

The general rules of the regime are in our article on becoming an IT Park resident.

Key points

• Only an Uzbek legal entity can be a resident. The US company and its branch cannot hold the status, so the vehicle is an LLC.
• The intercompany agreement is an export contract. Proceeds are due within 180 days of the signed act; late repatriation is fined from 5%.
• The export share drives the long-term regime. Above 50% of income, the subsidiary qualifies for the 2028–2040 exemption and pays 5% instead of 10% on dividends to the parent.
• The annual audit is the main risk. Missing it costs the status, and the tax authority can then restore the taxes on benefits already used.
• Foreign engineers need no work permit at a resident, but entry, stay and registration rules still apply.
• Code does not flow to the parent by default. Rights under an author contract are presumed non-exclusive and limited to Uzbekistan.

Three ways to build a team

The Law on Private Employment Agencies (ZRU-501, Art. 10) lists job placement, recruitment, placement abroad and information and advisory services, not leasing staff to a third party. In our reading, a local "EOR" therefore works as an outsourcing contractor that employs the engineers itself. Check its IP assignment and IT Park status: the 7.5% rate follows the employer.

Three points for the parent. A company may not have as its sole participant another company consisting of one person, unless that participant is a single-shareholder joint-stock company (ZRU-1137, Art. 8). In our assessment, the risky case is a single-member US LLC as the sole owner; a corporation with one stockholder is closer to the joint-stock exception, but confirm how the registrar treats the parent's legal form before filing. Branches are not legal entities (Civil Code, Art. 47), while IT Park admits only legal entities registered in Uzbekistan (para. 7 of the Regulation). Both countries are parties to the Apostille Convention, so the parent's documents are apostilled; the steps are in our guide to an LLC with a foreign founder.

Why the intercompany agreement is the core document

Under Resolution No. 283, services rendered to a non-resident are export regardless of where they are performed, so a Tashkent team coding for a Delaware parent is exporting. Four regimes follow.

• Currency control. The contract needs the mandatory sections of Resolution No. 283 (para. 4), and a contract in English needs a certified translation into Uzbek. Each act is entered in E-kontrakt by the 20th of the following month, and payment is due within 180 days of signing the acceptance act (para. 24). If proceeds are still missing more than 45 days (90 for small businesses) after those 180 days, the fine is 5% of the unpaid amount, a further 10% after 360 days and a further 35% after 545 days, counted from the export date (Law ZRU-573, Arts. 11 and 11-1). No fines apply while total overdue export receivables stay within 10% of foreign-currency proceeds over the previous 36 months.
• Export share. Billing the parent keeps exports above 50% of income — the condition for the 2028–2040 exemption and the 5% dividend rate.
• Affiliated-party approval. A legal entity holding 20% or more is an affiliated person (ZRU-1137, Art. 55): it notifies the company in writing, the executive body reviews the deal within three working days, and the affiliated person does not vote (Arts. 56–58). A deal worth 10% or more of net assets, which a new subsidiary's intercompany agreement almost always is, also needs a market valuation by an appraiser and a review of its terms by an independent external auditor (Art. 58). The law does not say how this works when the only participant is the counterparty, so in our assessment the procedure belongs in the charter.
• Transfer pricing. The Tax Code controls related-party transactions (Art. 180) and lets the tax authority adjust foreign-trade income to market prices (Art. 176). The US has its own rules, so price the fee, usually cost plus a markup, on a benchmark both tax advisers accept.

IT Park residency: eligibility, timeline and the annual audit

The applicant must be a legal entity registered in Uzbekistan, carry on listed activities and have an economically justified business plan (para. 9 of the Regulation under Resolution No. 589). For a development centre the relevant items are software design and development, including assignment of the exclusive right, implementation and support, modification, and R&D (items 1–3 and 27 of Annex 2).

The resident must stick to its business plan, report through the portal, pay a monthly contribution on total income by the 20th, and by 1 July file a financial audit plus a special-question audit of its activities and exports (para. 18). From 1 April 2026, under Presidential Resolution PP-388 of 26.12.2025, the contribution depends on income and exports (IT Park); confirm the rate with the Directorate.

Status is lost for activity outside the list, late or inaccurate reports and audits, or unpaid contributions (para. 21), after which the tax authority annuls the benefits and restores the tax due (para. 28). In July 2026 IT Park annulled the status of 152 companies that missed the deadline for the 2025 audit. Since January 768 companies have lost it; besides the audit, the common reasons were late payments, no activity for over six months, late quarterly reports and activity outside the business plan (IT Park, 27.07.2026).

Taxes for the subsidiary and its engineers

General rates: Tax Code Arts. 337, 258, 405, 381, 353; the regime from 2028 and the 5% dividend rate (in force since 1 February 2025): Art. 483. The IRS lists Uzbekistan as covered by the 1973 US–USSR income tax treaty, while the Uzbek treaty register does not list the United States — see our article on dividend tax for foreign participants. On the US side, owning the subsidiary triggers information returns such as Form 5471 or Form 8858, depending on how the LLC is classified for US tax purposes; that is a question for your US tax adviser.

Hiring: local developers and relocating Americans

Employment contracts are written, on paper or electronic, and their conclusion, amendment and termination are registered in the Unified National Labor System (Labor Code, Arts. 106 and 109). Probation is capped at three months, six for heads of organizations, their deputies and chief accountants (Art. 130). Contractors on civil-law contracts do not get the 7.5% rate.

A resident hires foreign specialists without the work permit confirmation and, within its export proceeds, may pay them in foreign currency to international payment cards (para. 17 of the Regulation). The right to stay is separate. US citizens have entered Uzbekistan without a visa for up to 30 days since 1 January 2026 (Decree of 3 November 2025). For longer stays, the IT visa is multiple-entry, up to 3 years, issued on IT Park's recommendation and extended without leaving the country; citizens of countries with visa-waiver entry receive the recommendation itself (IT-Card), which counts as the visa (Resolution No. 734). A specialist or a director of a resident qualifies with income of at least USD 30,000 over 12 months; if the participant is the parent itself, its representative applies as an investor, with financing or a stake of at least USD 30,000 (IT visa guide). Registration at the place of stay is a separate duty (registration and employer fines); companies without IT Park status follow the general work permit procedure.

Data: what the team may send to the US

Since Law ZRU-1125 of 26 March 2026, only biometric data, genetic data and data of telecom users must be stored in Uzbekistan (Law on Personal Data, Art. 27-1). Other data may go abroad to a country on the adequacy list, under approved contractual clauses or corporate rules, or under listed international standards. The list in Resolution No. 415 of 29.07.2026 has 49 states and territories; the United States is on it only for companies operating under the EU-US Data Privacy Framework (DPF).

• HR data in a US HRIS or payroll tool. Check that the vendor is on the DPF List and that its certification covers HR data; otherwise another basis is needed (see our 49-country article).
• Fingerprint or face access to the office. Biometric data: keep it on servers in Uzbekistan.

IP: making sure the code belongs to the US parent

• Employee to subsidiary. Exclusive rights in a work created within job duties belong to the employer unless their contract says otherwise (Law on Copyright, Art. 34). The same article leaves remuneration to that contract and, ten years after the work is made public, lets the author use it regardless of the contract. Define duties, assignments and remuneration in the employment documents.
• Subsidiary to parent. Rights under an author contract are non-exclusive unless expressly stated (Art. 38). Without a stated territory the right is limited to Uzbekistan, rights not listed are not transferred, rights to uses unknown at signing cannot be transferred at all, and onward transfer needs express permission (Art. 39); the contract must be written (Art. 42). The intercompany agreement should therefore assign the exclusive right worldwide for the full term of protection, list every way of use with its fee, and expressly allow sublicensing and onward transfer.

Assigning the exclusive right to software is itself a listed IT Park activity (item 1), so it can sit in the business plan. Contractors need the same wording; see who owns the code.

Timeline

Cost drivers

Example: a US SaaS startup with 10 engineers in Tashkent

The example is hypothetical. A Delaware SaaS company with several stockholders forms a wholly owned Tashkent LLC with nine local engineers and a US manager who relocates as director.

• Structure. Art. 8 does not bite; the charter sets the affiliated-party procedure, including the appraisal and auditor review for a deal worth 10% or more of net assets.
• IT Park. The business plan covers items 1, 2 and 27. A register entry on 20 March means benefits from 1 April.
• Intercompany agreement. Monthly billing at cost plus a benchmarked markup, a monthly act entered in E-kontrakt by the 20th, 30-day payment terms. All revenue is export, so the 50% test holds.
• Payroll. On UZS 225,000,000 of monthly gross salaries, personal income tax is UZS 16,875,000 at 7.5% instead of UZS 27,000,000 at 12%, and the employer saves UZS 27,000,000 a month in social tax.
• The manager. With income of at least USD 30,000 over 12 months, the director applies to IT Park in the manager category and works without a work permit confirmation.
• Code and data. The intercompany agreement assigns exclusive worldwide rights; HR data go to the US after the DPF check; the office uses cards, not fingerprints.

Checklist before the first hire

How Pactum helps

• We compare the three models and check the parent's ownership against the LLC law.
• We register the LLC (from UZS 1,500,000) and support the IT Park application; IT Park support is priced after task review.
• We draft the intercompany agreement with the export, IP and affiliated-party terms.
• We prepare employment documents, IT visa files and a compliance calendar.

State fees and third-party costs (auditor, apostilles, translations) are extra; the final price is set in a written proposal. Start with IT Park residency, company formation or a consultation: 60 minutes, UZS 300,000, credited toward the service.

FAQ

Can the US company become an IT Park resident directly?

No. Only legal entities registered in Uzbekistan qualify, and a branch is not a legal entity. The usual vehicle is an LLC owned by the parent.

How long does IT Park residency take?

A decision within 15 working days of accepting the documents, the certificate within 3 working days after it, benefits from the 1st of the following month. The LLC and bank account come first.

Do American engineers need work permits?

Not at an IT Park resident. Entry and stay are a separate matter: US citizens can stay up to 30 days without a visa, IT Park's recommendation gives up to 3 years, and registration at the place of stay still applies.

Can the subsidiary invoice only the US parent?

Yes. That is export of services and keeps the export share above 50%, but the agreement must meet currency control rules, be priced at arm's length and be approved as an affiliated-party deal.

What changes in 2028?

From 1 January 2028 to 1 January 2040 residents with exports above 50% are exempt from all taxes except VAT. The 7.5% salary rate is set for salaries received before 2028, so model later payroll taxes separately.

Who owns the code written in Tashkent?

The subsidiary, for service works, unless the employment contract says otherwise. The parent gets it only through an express exclusive assignment covering territory, uses and sublicensing.

Sources

• Resolution No. 589 of 15.07.2019, IT Park Regulation
• Decree PF-5099 of 30.06.2017
• Tax Code
• IT Park: new rules from 1 April 2026
• IT Park: 152 companies lost status, 27.07.2026
• Law ZRU-573 on currency regulation
• Resolution No. 283 of 14.05.2020
• Law ZRU-1137 on LLCs
• Civil Code, Part One
• Law ZRU-501 on private employment agencies
• Labor Code
• Resolution No. 734 of 21.11.2025
• Government portal: visa regime for US citizens from 1 January 2026
• Law on Personal Data
• Resolution No. 415 of 29.07.2026
• Law on Copyright and Related Rights
• HCCH: Apostille Convention status
• IRS: Uzbekistan treaty documents, Form 5471, Form 8858