The foreign investment regime and sector restrictions in Uzbekistan under the Law on Subsoil: what changed in 2027

Until early 2027, Uzbekistan's approach to foreign capital in its extractive and natural resource sectors was broadly permissive by Central Asian standards: foreign investors could hold significant stakes in subsoil-use entities with relatively few structural constraints beyond licensing. The amendments to the Law on Subsoil that entered into force in the first quarter of 2027 materially changed that position. For foreign companies evaluating Uzbekistan market entry — whether in mining, hydrocarbons, or adjacent industrial sectors — the new framework introduces participation ceilings, enhanced state pre-emption rights, and revised approval pathways that require advance structural planning well before any transaction closes.

The 2027 amendments to the Law on Subsoil represent the most significant recalibration of Uzbekistan's foreign investment regime in its extractive sector since the landmark liberalisation measures of the late 2010s. The changes operate on three levels: ownership structure, licensing procedure, and the treatment of existing subsoil-use agreements.

At the ownership level, the amendments introduced participation ceilings applicable to foreign legal entities and their affiliates in entities holding subsoil licences for strategic deposits. Under the revised framework, foreign participation in such entities is capped, and any acquisition that would cause a foreign investor's aggregate interest to exceed the prescribed threshold now requires prior approval from a designated inter-agency commission. The approval requirement applies both to direct acquisitions and to transactions structured through intermediate holding companies — a drafting feature that closes the most common structuring route previously used to achieve effective control without triggering formal review.

The licensing procedural changes are equally significant. The amended Law on Subsoil extends the mandatory pre-licensing due diligence stage, requiring applicants to demonstrate not only technical capacity and financial standing but also compliance with Uzbekistan's foreign investment registration requirements at the point of application rather than post-award. For foreign companies that had previously operated on the assumption that licensing and registration could proceed on parallel tracks, this sequencing change has a direct effect on transaction timelines.

The third layer of change concerns existing agreements. Subsoil-use agreements concluded before the amendments came into force are not automatically grandfathered. Where a change of control in the licence-holding entity would occur — including changes resulting from upstream corporate restructurings in a foreign investor's home jurisdiction — the amended Law on Subsoil requires notification, and in specified circumstances, re-approval of the subsoil-use terms. Foreign investors with legacy positions in Uzbekistan's extractive sector should treat this provision as a live compliance trigger, not a theoretical risk.

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The impact of the 2027 amendments is not uniform across investor categories. The participation ceiling and pre-approval requirements apply primarily to investors seeking interests in entities that hold licences for deposits classified as strategic under Uzbekistan's subsoil resource classification. In practice, this category covers the majority of commercially significant hydrocarbon and hard-rock mining licences.

Foreign investors operating through a joint venture structure with an Uzbek state entity or state-controlled company face a distinct set of considerations. The amended Law on Subsoil preserves existing flexibility for joint ventures in which the Uzbek state-side partner holds a qualifying interest — a carve-out that reflects the government's continued interest in attracting foreign capital and technology under structured partnership models. However, the carve-out is framed narrowly, and investors who rely on it without careful structural analysis risk triggering the pre-approval requirement inadvertently.

For foreign companies active in the Russia–Uzbekistan trade and investment corridor, the amendments introduce an additional layer of analysis. Uzbekistan is a CIS member and participates in a range of bilateral and multilateral investment protection frameworks with Russia and other CIS states. However, neither CIS membership nor any bilateral investment treaty with Russia exempts a foreign investor from the domestic subsoil participation requirements. The amended Law on Subsoil operates as a lex specialis — its requirements apply irrespective of treaty protections that may otherwise be available for compensation purposes. Foreign companies that have relied on treaty protections as a structural substitute for domestic compliance analysis should revisit that approach in light of the 2027 changes.

Investors entering Uzbekistan for the first time — rather than managing legacy positions — will encounter the revised framework at the market entry stage. For those clients, the relevant questions concern the choice of entry vehicle, the sequencing of company formation and licence application, and the structural design of any joint venture or co-investment arrangement. The [Market Entry & Company Formation](/jurisdictions/uzbekistan/company-formation/) practice page sets out the principal formation options available to foreign investors under Uzbekistan law.

The practical response to the 2027 amendments depends on the investor's current position relative to Uzbekistan's subsoil sector.

For investors with existing subsoil-use agreements or interests in licence-holding entities, the immediate priority is a compliance review. The review should address three questions: whether the investor's current participation level is within the amended thresholds; whether any planned corporate transaction at the investor level — including group restructurings, refinancings, or acquisitions — would constitute a triggering event under the re-approval provisions; and whether the licence-holding entity's existing agreements contain change-of-control provisions that interact with the new statutory requirements.

For investors at the market entry stage, the amended Law on Subsoil reinforces the case for completing company formation and foreign investment registration before commencing the licence application process. Attempting to run these processes in parallel — which was a common approach under the pre-amendment framework — now carries a material risk of application rejection or delay at the licensing stage.

Investors operating in adjacent sectors — construction, infrastructure, industrial processing — should not assume the amendments are irrelevant to their position. Where a project involves any extraction, processing, or use of subsoil resources as a component of a broader industrial activity, Uzbekistan's licensing authorities have taken an expansive view of what constitutes subsoil use. Early-stage regulatory mapping is advisable before project structuring is finalised.

The [Regulatory & Licensing](/jurisdictions/uzbekistan/regulatory-licensing/) and [Corporate & Joint Ventures](/jurisdictions/uzbekistan/corporate-jv/) practice pages address the structural and licensing dimensions in further detail.

[CTA: If you are evaluating a subsoil-related investment in Uzbekistan or reviewing compliance of an existing position, speak to our team: info@vetrovpartners.com | WhatsApp/Telegram: +7 (983) 510-38-76]

• [Market entry for foreign investors in Uzbekistan: company formation options and procedures](/jurisdictions/uzbekistan/company-formation/) [assign after import]
• [Joint ventures with Uzbek state entities: structuring considerations for foreign partners](/insights/) [assign after import]
• [Foreign investment registration in Uzbekistan: the pre-licensing sequence explained](/insights/) [assign after import]

Q: What specifically changed in Uzbekistan's subsoil law for foreign investors in 2027?

A: The 2027 amendments to the Law on Subsoil introduced three principal changes affecting foreign investors. First, participation ceilings now apply to foreign legal entities and their affiliates in entities holding licences for strategic deposits, with acquisitions above the threshold requiring prior approval from an inter-agency commission. Second, the licensing procedure was revised to require foreign investment registration compliance before a licence application is accepted, rather than permitting parallel processing. Third, existing subsoil-use agreements are no longer automatically grandfathered when a change of control occurs in the licence-holding entity — notification and, in specified cases, re-approval is required. Investors with legacy Uzbekistan positions should treat the third change as a live compliance matter.

Q: Which foreign investors are directly affected by the new participation ceiling rules?

A: The participation ceiling rules apply primarily to foreign investors seeking or holding interests in entities with licences covering deposits classified as strategic under Uzbekistan's subsoil resource classification system. In practice, this covers the majority of commercially significant hydrocarbon and hard-rock mining licences. Investors in joint ventures with Uzbek state entities may qualify for a structured carve-out, but the carve-out is drafted narrowly and requires careful structural analysis to rely upon safely. Investors in adjacent sectors — industrial processing, infrastructure, construction — should assess whether their activities involve subsoil use under the amended Law's expanded scope before assuming the ceiling rules are inapplicable to their position.

Q: What practical steps should a foreign company take before proceeding with a subsoil-related investment in Uzbekistan?

A: Three steps should be taken in sequence before any transaction proceeds. First, a regulatory mapping exercise should confirm whether the target deposit or activity falls within the strategic category and therefore within the scope of the participation ceiling. Second, the investor's proposed entry vehicle should be structured with reference to both the company formation requirements under Uzbekistan's general foreign investment legislation and the specific sequencing requirements introduced by the 2027 amendments. Third, where a joint venture is contemplated, the state-side participation and approval pathway should be confirmed before any commercial terms are agreed. Attempting to finalise commercial terms before the regulatory structure is clear is the most common source of delay in Uzbekistan subsoil transactions following the 2027 amendments.

Vetrov & Partners is a boutique law firm established in 2009, recognised by Pravo-300 for eight consecutive years. The firm advises foreign companies, investors, and creditors on cross-border matters with a Russian and CIS nexus, including market entry, company formation, and regulatory compliance across Uzbekistan and the wider Central Asian corridor.

The firm's Market Entry & Company Formation practice assists foreign investors at the structuring, registration, and licensing stages of their Uzbekistan operations, drawing on a network of regional analysts and local counsel to advise on jurisdiction-specific requirements alongside the cross-border dimensions. For Uzbekistan matters requiring advice on local law, the firm collaborates with qualified Uzbek counsel.

Enquiries: info@vetrovpartners.com | WhatsApp / Telegram: +7 (983) 510-38-76 | t.me/vitvetcom

This publication is provided for informational purposes only and does not constitute legal advice under Russian or any other applicable law. The information herein should not be relied upon as a substitute for professional legal counsel tailored to your specific circumstances. Vetrov & Partners is a Russian-qualified law firm. For matters governed by foreign law or requiring local admission in another jurisdiction, we collaborate with trusted counsel in the relevant jurisdiction. For advice regarding your particular situation, please contact info@vetrovpartners.com.

— Nodira Yusupova Contributing Regional Analyst — Uzbekistan, Vetrov & Partners vetrovpartners.com/contributions/

Nodira Yusupova is a contributing regional analyst advising on foreign investment, market entry, and regulatory matters in Uzbekistan. She works with the firm's cross-border practice on CIS-corridor mandates involving Uzbekistan-specific structuring and licensing questions.