Uzbekistan has emerged as one of Central Asia’s most dynamic tourism markets. Visa liberalisation, e-visas and the growing international profile of the Silk Road cities have made Samarkand, Bukhara and Khiva much more accessible to foreign visitors.
Demand is now outpacing supply. Outside Tashkent in particular, there remains a clear shortage of quality four- and five-star accommodation. This presents an opportunity for developers and international hotel operators, although successful delivery requires careful navigation of land rights, incentives and permitting requirements.
Policy framework
Tourism development forms part of the Uzbekistan 2030 Strategy. The revised Strategy, approved by Presidential Decree No. UP-21 of 16 February 2026, envisages increasing the number of international visitors to 20 million, raising tourism’s contribution to GDP and expanding the country’s supply of upper-upscale hotels.
The Strategy is supplemented by targeted initiatives, including the Pearls of Ancient History programme, which focuses on the restoration of cultural heritage assets. The Tourism Committee of the Republic of Uzbekistan is responsible for implementing the State’s tourism policy and delivering sectoral targets.
The government is also pursuing tourism projects through public-private partnership arrangements. Presidential Resolution No. PP-161 identifies more than 30 prospective sites in Tashkent and across the regions, signalling a clear willingness to attract private capital, including foreign direct investment.
Incentives for hotel projects
Support for hotel development is structured around capital subsidies, tax relief and customs preferences. Under Presidential Resolution No. PP-238 of 27 July 2023, investors that build hotels rated three stars or above may receive reimbursement of part of their capital expenditure on a per-room basis. The amount of support increases with the hotel’s rating.
Hotels operating under established international brands may also qualify for partial reimbursement of franchise royalty payments during the first three years of the franchise term. For projects involving investment of more than USD 10 million, the State may fund the connection of utility and engineering infrastructure to the site.
Presidential Resolution No. PP-104 of 27 January 2022 provides additional tax and customs preferences for tourism businesses. Accommodation providers benefit from a reduced social tax rate of 1%. Hotel complexes with a gross floor area exceeding 5,000 square metres may receive a 90% reduction in assessed land tax and property tax.
Presidential Decree No. UP-132 of 30 August 2024 further entitles hotel businesses to recover 20% of VAT paid. It also exempts hotel equipment from customs duties, except for VAT and customs-clearance fees. Covered items include sports equipment, CCTV systems and sanitary and technical equipment.
Tourism and recreation zones
Tourism and recreation zones operate under a preferential regime broadly comparable to that available in special economic zones. An investor seeking participant status must apply to the relevant zone directorate and submit its corporate documents, registration materials and a business plan for the proposed project.
Participants benefit from preferential tax and customs treatment. A profit tax exemption is available for three years where investment is between USD 3 million and USD 5 million, for five years where investment is between USD 5 million and USD 15 million, and for ten years where investment is USD 15 million or more.
Property tax and land tax exemptions are also linked to the level of investment. Investments of between USD 300,000 and USD 3 million qualify for a three-year exemption; investments of between USD 3 million and USD 5 million qualify for five years; investments of between USD 5 million and USD 10 million qualify for seven years; and investments of USD 10 million or more qualify for a ten-year exemption. Zone participants are subject to a 1% turnover tax rate.
They are also exempt from customs charges, other than VAT and customs-clearance fees, on construction materials and equipment not manufactured in Uzbekistan. Other advantages include an accelerated VAT-refund procedure, with refunds available within seven days, and the possibility of deferring import VAT for up to 120 days.
Investors should also take into account the local-employment requirement. At least 90% of employees of legal entities operating in special economic zones, including tourism and recreation zones, must be Uzbek nationals.
Existing tourism and recreation zones include Charvak in Tashkent Region, Zomin in Jizzakh Region and Fergana in Fergana Region. Their special legal regimes can be particularly attractive for large-scale hospitality and tourism infrastructure projects.
Hotel operating models
International hotel brands are steadily increasing their presence in Uzbekistan. Hyatt, Wyndham, Accor and Hilton are already represented in the country, while Rotana has expressed interest in entering or expanding in the market.
The two principal models are management agreements and franchise arrangements. Under a management agreement, the hotel operator manages the property on behalf of the owner. Under a franchise arrangement, the owner operates the hotel independently but uses the brand, systems and operating standards of the international chain.
Whichever structure is chosen, the parties should align at the outset on brand standards, design approval procedures, the refurbishment and capital expenditure budget, and the performance metrics that will apply throughout the relationship.
Land and construction considerations
Land and urban-planning matters remain the most significant legal issues for foreign investors. Land ownership is generally available only to Uzbek citizens and Uzbekistan-incorporated legal entities with no foreign participation in their charter capital.
Foreign individuals and companies may lease non-agricultural land for up to 25 years. In most cases, lease rights are acquired through electronic auctions. For investment projects exceeding USD 10 million, however, land may be allocated by the Cabinet of Ministers through a best-proposal selection process.
That process starts with an application from the first investor, which describes the project but does not identify a particular plot. Once the project receives preliminary approval from the relevant government commission, the Cadastre Agency identifies a suitable available site. Competing proposals may then be submitted for that plot during a 60-day period.
Agricultural land presents additional challenges. Since 1 July 2026, land reclassification has been conducted through the Agroportal digital platform. Only the relevant district, regional or city khokimiyat may initiate the reclassification process. The existing lessee is entitled to compensation for losses, after which the plot is registered as available. Importantly, the existing lessee does not obtain an automatic right to lease the land after reclassification; it must participate in the subsequent auction on the same basis as other bidders.
Investors must also budget for compensation for the loss of agricultural production. The amount varies depending on soil quality and irrigation, and should therefore be addressed specifically in the project financial model. Construction must comply with the Urban Planning Code and applicable national building regulations, as compliance is essential for the project to be commissioned and put into operation.
Market outlook
Uzbekistan’s hospitality market continues to attract both international brands and local operators. The principal legal constraint remains land acquisition: the lease process is multi-stage, and regulatory requirements can have a material impact on the project timetable.
The sector’s further development will depend on visa policy and the appetite of international operators to expand. In June 2026, the Tourism Committee and Rotana agreed to establish a working group to prepare proposals for hotel management projects in Uzbekistan.
Since July 2026, organisers of large international conferences and exhibitions with at least 100 foreign participants have been entitled to a refund of 50% of VAT paid. This measure should stimulate demand for hotels with conference facilities and adequate room capacity.
The government is also supporting domestic tourism. Presidential Decree No. UP-87 of 15 May 2025 sets a target of 40 million domestic trips annually. One-off subsidies are available for the construction and renovation of modular hotels. The hotel levy payable by Uzbek citizens is lower than that imposed on foreign visitors, and Uzbek citizens are exempt from the levy when staying at sanatoria, boarding houses and certain designated tourism zones.
Family-run guesthouses, hostels, yurt camps, motor campsites and eco-lodges are also expanding. In the historic centres of Bukhara, Khiva and Samarkand, and in the mountainous areas of Tashkent Region, boutique and mini-hotels are increasingly becoming a permanent part of the tourism offering rather than a temporary substitute for conventional hotel development.
Conclusion
Uzbekistan offers an increasingly compelling case for hotel investment. Tourist arrivals are growing, quality room stock remains limited, and the government has introduced a broad range of support measures for tourism projects.
Before committing to an investment, developers should confirm the legal status of the site, the route for acquiring land rights, the availability of incentives, the intended relationship with the hotel operator, and the tax regime applicable in the relevant location. For some projects, establishing operations within a tourism and recreation zone may offer additional value.
The government is supporting both supply and demand: it is encouraging domestic travel, subsidising modular accommodation and reducing the cost burden for local tourists. For investors, this offers an opportunity to enter a market that is still taking shape but is already receiving sustained institutional support.
Author: Natalia Kuzmina, Counsel and CEO at Solward
The above is a general commentary and does not constitute legal advice.
