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2023 HALF-YEAR WRAP-UP: IT PARK RESULTS - Embassy of the Republic of Uzbekistan in the United Kingdom of Great Britain and Northern Ireland

2023 HALF-YEAR WRAP-UP: IT PARK RESULTS



2023 HALF-YEAR WRAP-UP:
 IT PARK RESULTS

Uzbekistan’s IT sector keeps growing rapidly and setting new records. The state is successfully unlocking its potential and creating more opportunities to draw in foreign businesses. IT Park Uzbekistan makes a significant contribution to the development of IT. Data for the first half of 2023 depicts ongoing positive dynamics in the IT sector.

VOLUME OF EXPORT

Exports for the 1st half of 2023 exceeded the annual exports of 2022.

The volume of exports of IT Park residents increased by 2.7 times compared to the 1st half of last year and reached $145.3 million. It is important to note that exports for the 1st half of the year exceeded the annual exports of 2022, which amounted to $140.9 million. For the 1st half of 2023, 45% of exports fall to the share of the USA, 14% - the UK, 8% - EU countries, and 33% - to other countries such as Singapore, UAE, Sweden, Canada, Korea, etc.

When analyzing the structure of exports of IT services by areas, there is a transformation of the income of residents from BPO services to services with a higher added value, particularly, software development and game devs, compared to the 1st half of 2022.

One can notice a decrease in the share of exports of BPO services from 63% in 2022 to 20% in 2023 but considering the significant growth in exports in such areas as game dev, which totaled $15.2 million (an increase of 16.7 times from $0.9 million). Export of software products made up $60 million (an increase of 3.8 times from $15.7 million), and rendered technical support services totaled $10.8 million (an increase of 6 times from $1.8 million)

Based on the results for the 1st half of this year, it is expected that the total volume of IT exports will reach $300 million by the end of 2023.

VOLUME OF SERVICES PROVIDED

Given that the volume of services for the first half of 2022 totaled 2.2 trillion UZS, there was an increase of 2.4 times in the overall volume of services provided by IT Park resident enterprises to 5.4 trillion UZS. It should be noted that the total amount of services delivered in 2022 amounted to 5.8 trillion UZS.

NUMBER OF RESIDENTS

According to the results of the first half of 2023, the total number of IT Park residents is 1,424 companies, of which 986 are registered in the city of Tashkent, and 438 in the regions of the Republic, 296 residents are educational companies, and the number of companies with foreign capital participation was 213. In the first half of the year, the number of export-oriented IT Park resident companies reached 442, which is 2.2 times more than in the previous year.

408 companies were granted resident status in IT Park in the first six months of the year, while 200 were deprived, and 144 were denied resident status. Failing to fulfil the obligations was the reason for some of IT Park residents to be deprived of the status. In particular, 84 companies did not provide an audit report for 2022, and the remaining 116 failed to submit a quarterly report for 2023.

NUMBER OF EDUCATIONAL COMPANIES: 296

NUMBER OF COMPANIES WITH FOREIGN CAPITAL: 213

NUMBER OF WORKPLACES: 22 140

Because of the incentives, IT Park residents are offering more job opportunities by creating over 4,100 jobs in the first half of this year. More than 22,140 professionals were employed in total.

OPPORTUNITIES FOR COMPANIES

CORPORATE TAXES – 0%

SOCIAL TAXES – 0%

INCOME TAX – 7,5%

VAT ON IMPORTED SERVICES – NO

In 2023, new Zero Risk, Local2Global, and Global Excellence programs were launched to draw in new IT companies to Uzbekistan and to support existing IT Park residents in tapping into new markets.

The programs entail providing opportunities to reduce initial risks, collaborate with global consultants and site selectors to draw in international IT outsourcing and BPO companies to the Uzbek market, as well as to raise awareness, and improve the state’s brand as a new outsourcing market. For existing resident companies, the program offers export advisory reimbursement, a fully funded trip to Uzbekistan for company clients, and an export mentorship program.

In addition, in order to expand their potential and advance in the international market, resident companies were given opportunities to participate in such major events as JAPAN IT WEEK in Japan, Plug and Play Silicon Valley Summit in the USA, INDIASOFT 2023 in India, BETT in the UK, CX Outsourcers Forum in Scotland, Dublin Tech Summit in Ireland, Uzbek-German Business Forum in Germany, STEP Conference in the UAE, Central Asia Games Show (CAGS) in Kyrgyzstan, Digital Almaty in Kazakhstan and many others.

IT Park established cooperation companies and organizations such as Amazon Web Services EMEA SARL (Germany), Google (USA), ACIR (Spain), Enterprise Singapore (Singapore), Singapore Business Federation (Singapore), Gemx Technologies (Singapore), ASPA (Korea), Daegu Technopark (Korea), Science Park of Mongolia (Mongolia), Bandung Technopark (Indonesia), Global 500 (Georgia, USA), and ITC Iran TVTO (Iran) in order to boost the IT sector in Uzbekistan.

IT Visa. It should be noted that from April 1, 2022, residents of the IT Park received additional benefits and preferences. Specialists and investors, as well as foreign founders of IT Park residents are given the opportunity to obtain a 3-year IT visa:

• the rate of income tax on dividends of foreign founders of IT-Park was reduced - from 10% to 5%;

• attracting foreign specialists without obtaining permits for the right to work on the territory of Uzbekistan;

• residents of the IT-Park got the right to pay dividends and salaries to their foreign founders and specialists in foreign currency on debit cards - as part of the proceeds from the export of works/services;

• IT Park residents can use the virtual office service, which makes it possible for employees to work remotely and frees the company from renting office space. In addition, the use of a virtual office is not a basis for classifying a company as a high tax risk.

Credits. An opportunity was provided to create the basis of quality IT education and to provide loans for the purchase of equipment to those interested in the field, as well as to graduates of educational institutions who are residents of the IT Park. Loan funds are provided for 2 years, and their percentage is covered by the budget of the Youth Affairs Agency. The borrower pays the principal.

Loans can be received by those who have a certificate of completion of courses on the "One Million Uzbek Coders" platform no more than two months ago, or those who have a certificate of successful completion of training courses in the IT field of organizations considered to be IT Park residents for the last 6 months.

Education. As a practical proof of complex measures, following the order of President Shavkat Mirziyoyev and the decision of the Cabinet of Ministers dated June 1, 2022 No. 297 (On measures to establish the digital university "IT-Park University") IT Park University, the first online higher education institution in our country, was established. The founders of the university in a new format are IT Park and the company "EPAM Systems".

Besides that, the opening of the technical center of the global innovation platform "Plug and Play" in Uzbekistan in 2022 was a great event for the startup ecosystems of Uzbekistan.

PLANS

In the near future, IT Park plans to expand the types of activities for residents, which will include companies from the fields: creative economy, e-sports, accelerators. The organization also intends to open representative offices in the countries of the Middle East and Southeast Asia. Moreover, IT Park intends to attract the regional headquarters of the largest corporations to Uzbekistan.