Formal registration of companies has many immediate benefits for the companies and for business owners and employees. Legal entities can outlive their founders. Resources are pooled as several shareholders join forces to start a company. Formally registered companies have access to services and institutions from courts to banks as well as to new markets. And their employees can benefit from protections provided by the law. An additional benefit comes with limited liability companies. These limit the financial liability of company owners to their investments, so personal assets of the owners are not put at risk. Where governments make registration easy, more entrepreneurs start businesses in the formal sector, creating more good jobs and generating more revenue for the government.
Below is a detailed summary of the bureaucratic and legal hurdles faced by entrepreneurs wishing to incorporate and register a new firm in Uzbekistan. It examines the procedures, time and cost involved in launching a commercial or industrial firm with up to 50 employees and start-up capital of 10 times the economy's per-capita gross national income.
| No. | Procedure | Time to Complete | Associated Costs |
|---|---|---|---|
| 1 | Register the name of the company | 1 day | no charge |
| 2 | Open a temporary bank account with a local bank and transfer 30% of each founder’s contribution to the account; pay the registration fee | 2 days | no charge |
| 3 | Register with the local authority (khokimiyat) and obtain the certificate of state registration | 6 days | UZS 62,920 (1 time the minimum wages for registration fee) |
| 4 | Make a company seal | 1 day | UZS 30,000 to 50,000 |
| 5 | Notarize samples of signatures of the company’s general director and chief accountant | 1 day | UZS 1258 (2% of minimum monthly wage per transaction) |
| 6 | Open a permanent bank account with a local bank | 1 day | no charge |