Profit distribution and dividends in Uzbekistan

Members of a limited liability company (LLC) and shareholders of a joint-stock company (JSC) receive dividends following a profit distribution decision. The LLC and JSC laws require payment within 60 days (art. 26, LLC Law) and 60 days (art. 51, JSC Law), respectively. The Tax Code distinguishes between recipients, LLC ownership interests and JSC shares.

At a glance:

• An LLC distributes net profit in proportion to ownership interests following a general meeting decision; payment is due within no more than 60 days (art. 26, LLC Law).
• The general rate for a resident individual is 5% (art. 381, Tax Code), and for a nonresident individual 10% (art. 382, Tax Code); separate relief applies to shares.
• Through 31 December 2028 (art. 483, Tax Code), individuals are exempt from tax on share dividends, while nonresident legal entities pay 5% on share dividends.
• Receiving payment requires a distribution decision, no legal prohibition on payment and a calculation of the amount after applicable withholding tax.

Updated: 16 September 2026

What counts as a dividend

A dividend is an owner's income from a profit distribution, but the tax definition also covers certain other payments. The following are selected cases classified as dividends (art. 41, Tax Code):

1. A shareholder's or member's income from distributing profit on their shares or ownership interests, including interest on preferred shares.
2. Cash or property received on liquidation to the extent that it exceeds the amount of the recipient's interest in the charter capital.
3. The value of additional shares or an increase in the nominal value of an ownership interest when charter capital is increased out of the legal entity's own equity or property.

These categories remain subject to the condition that payments be proportionate to interests in the capital. Returning a capital contribution and distributing profit therefore cannot be treated as the same transaction merely because the same member receives the money. Capitalising profits also requires a separate assessment of the tax consequences, even where no money is transferred to a personal account.

The discussion below concerns LLC and JSC profit distributions. Taxation of payments on a member's withdrawal and income from other legal forms falls outside its scope.

How to document an LLC profit distribution decision

The general meeting of members determines the portion of net profit to be distributed. Distribution is proportionate to ownership interests (art. 26, LLC Law), and the charter or meeting decision determines the payment deadline and procedure. Payment must take place within 60 days of the decision. This provision does not allow members to vary the proportions freely merely by agreement.

As a general rule, the decision requires a majority of all votes (art. 35, LLC Law), unless the law or charter requires a higher threshold. The director implements the decision; a director's order alone does not replace the members' decision. Where there is only one member, that member decides individually and in writing (art. 38, LLC Law).

The minutes must contain the information required by law (art. 36, LLC Law):

• the place and time of the meeting;
• the total votes held by members attending;
• the chair or presidium, secretary and agenda;
• the main points of the contributions to the discussion;
• the matters put to a vote, voting results and decisions adopted.

The chair and secretary sign the minutes within three days of the meeting. After the minutes are prepared, the secretary sends an extract to every member by post or email within five working days.

For implementation, the decision can separately identify the profit period, total distribution, ownership interests and amounts allocated to each member, and the payment date and procedure. These are practical details for a dividend decision, rather than an additional exhaustive statutory list of requirements for minutes. Tax is calculated according to each recipient's status. Interests held by the company itself do not participate in distributions (art. 24, LLC Law).

Company formation and the general powers of its governing bodies are covered in the article on LLCs. It is relevant where the charter, membership or meeting powers need checking before profits are distributed.

How JSC dividend decisions and payments differ from LLCs

In a JSC, the general meeting of shareholders decides on the basis of the supervisory board's recommendation (art. 50, JSC Law) and financial statements supported by an audit opinion confirming their reliability. The decision specifies the amount, form and procedure for payment for each class of shares, together with the payment start and end dates. The amount cannot exceed the board's recommendation.

The same article contains a special rule for enterprises in which the state holds at least 50%: following a public offering of shares on the stock market, at least 30% of net profit (art. 50, JSC Law) must be allocated to dividends for at least seven years. Statutory restrictions on payment continue to apply. If the register contains a mobile number or email address, the shareholder must be notified of the decision within 15 days, with dispatch and receipt recorded.

Entitlement belongs to persons included in the register for the relevant meeting (art. 52, JSC Law). Buying a share after that register was compiled therefore does not itself establish entitlement to the dividend declared by that meeting.

A JSC must pay declared dividends. The meeting may choose cash, other lawful means of payment or the company's securities (art. 48, JSC Law). Dividends on preferred shares cannot be paid in securities.

Cash dividends are paid automatically to a bank account (art. 51, JSC Law) through the Central Securities Depository or investment intermediaries under the prescribed procedure. The JSC cannot require a payment application. A separate written request is provided for converting a nonresident's accrued dividends into freely convertible currency and transferring them to the specified account. Conversion is supported by a company-certified register extract and an accounting certificate stating the dividend amount and accrual date.

The declared amount is shown before tax (art. 55, JSC Law). Information on the dividend amount is published on the websites of the company and the authorised securities market regulator.

Can companies pay interim dividends

Yes, but the frequency and decision deadlines depend on the company form. An LLC may distribute net profit quarterly, half-yearly or annually (art. 26, LLC Law). Revenue or money in a bank account does not itself establish that distributable net profit exists.

A JSC may declare dividends for the first quarter, half-year, nine months and financial year, unless the law or charter provides otherwise. An interim dividend decision must be adopted within three months (art. 49, JSC Law) after the relevant period ends. This is a deadline for making the decision, distinct from the deadline for implementing a decision already adopted.

A JSC may pay dividends from net profit remaining at its disposal and retained earnings from previous years (art. 51, JSC Law). Specially designated funds may also support preferred-share dividends. Preferred-share dividends are paid first, followed by ordinary-share dividends. Where profits are sufficient to pay a fixed preferred dividend, the company cannot refuse payment. If profits are insufficient or the company is loss-making, payment is possible only from, and within the limits of, a reserve fund created for that purpose.

An interim decision does not remove the need to check financial restrictions. Rules identifying payment sources do not authorise distribution of future profits that have not yet been earned or allow the company to disregard deterioration in its finances before payment.

When profit distributions and payments are prohibited

For LLCs, the law distinguishes a prohibition on adopting a decision from a prohibition on implementing one. A distribution decision cannot be adopted (art. 27, LLC Law):

• before all charter capital has been paid in;
• before the actual value of a member's interest, or part of it, has been paid in the cases prescribed by law;
• where the company shows signs of insolvency or would do so as a result of the decision;
• where net assets are below the combined charter capital and reserve fund, or would fall below them as a result;
• in other cases specified by legislation.

Before payment, the company must recheck insolvency, net assets against capital and reserves, and other statutory prohibitions. Once those obstacles cease, the profit already allocated must be paid. A meeting decision does not authorise a transfer while a legal prohibition remains in force.

If an LLC creates a reserve fund, annual allocations must be at least 5% of net profit (art. 28, LLC Law) until the fund reaches the amount specified in the charter. The fund covers losses and the company's acquisition of an ownership interest in cases prescribed by law. It cannot automatically be treated as an unrestricted source of dividends.

A JSC cannot adopt a dividend decision or pay dividends under the following restrictions (art. 54, JSC Law): its capital has not been fully paid in upon formation; signs of insolvency exist at payment or would result from it; or net assets are below the combined charter capital and reserve fund. Accrued dividends must be paid once the obstacles cease. This list should not be replaced with the LLC restrictions: the statutory wording differs.

The introduction of observation proceedings separately prohibits dividend payments on securities (art. 79, Insolvency Law). Governing bodies also cannot decide to distribute profits among members (art. 81, Insolvency Law).

Example. Assume an LLC has net profit of UZS 200,000,000, its reserve fund has not reached the charter amount, and the minimum 5% allocation applies. The reserve receives 200,000,000 × 5% = UZS 10,000,000. UZS 190,000,000 remains before deciding the portion to distribute. This calculation does not replace checks on net assets, solvency and other restrictions.

Dividend tax rates for residents and nonresidents

The rate depends on the recipient's tax status and the type of ownership. The table gives domestic rates for ordinary profit distributions; treaty reductions and special sector regimes require separate checks.

The temporary relief runs from 1 April 2022 through 31 December 2028 (art. 483, Tax Code). Its wording concerns dividends on shares owned by shareholders. An LLC ownership interest is not a share covered by this provision: the exemption cannot be extended to an LLC member merely because both payments are called dividends.

These rates do not mean that tax always equals the gross dividend multiplied by the rate. For residents, the aggregate taxable distribution can be reduced by certain dividends received by the paying company. For a corporate nonresident, a separate credit for previously paid tax is available if the conditions are met.

How to calculate dividends and the net payment

First determine the dividend before withholding. The tax agent then calculates tax separately for each recipient and payment. For residents, the aggregate distribution is reduced by dividends received (art. 345, Tax Code) in the current and previous periods, provided they have not already been taken into account in determining the relevant tax base. Each recipient's base is their share of that amount.

Example. An LLC distributes UZS 200,000,000 to two resident individuals holding 60% and 40%. It has no received dividends available to reduce the base, and the general rate is 5%. The first member is allocated UZS 120,000,000: tax is UZS 6,000,000 and the net payment UZS 114,000,000. The second is allocated UZS 80,000,000: tax is UZS 4,000,000 and the net payment UZS 76,000,000. Total withholding is UZS 10,000,000; members receive UZS 190,000,000.

If the same LLC had received UZS 40,000,000 of eligible dividends not previously used for the reduction, the aggregate base would be 200,000,000 − 40,000,000 = UZS 160,000,000. The first member's base is UZS 96,000,000, tax UZS 4,800,000 and net payment UZS 115,200,000. The second member's base is UZS 64,000,000, tax UZS 3,200,000 and net payment UZS 76,800,000. The gross dividend remains unchanged; the withholding changes.

For a resident legal entity, dividends taxed at source are deducted in determining its tax base (art. 343, Tax Code). This is another rule to distinguish from the tax calculation when that recipient subsequently distributes its own profit.

For a nonresident legal entity, the withholding is reduced by previously paid tax (art. 354, Tax Code) on dividends the payer received from other Uzbek legal entities, only if all conditions are met:

• the nonresident holds at least 25% of the payer's capital;
• that holding has been maintained continuously for at least 365 calendar days before payment;
• the tax on received dividends has not previously been used to determine withholding on the nonresident's dividends;
• the tax agent has obtained documents confirming payment of that tax.

Example. An LLC's sole member is a foreign company that has held its interest for two years. The gross dividend is UZS 100,000,000; at the general 10% rate, tax before the reduction is UZS 10,000,000. Assume that documented, previously unused tax on dividends the LLC received from other Uzbek companies is UZS 2,000,000. If every condition is met, withholding is UZS 8,000,000 and the nonresident receives UZS 92,000,000. The reduction applies to the tax itself, rather than reducing the base by the dividends received.

How to apply a double tax treaty

A treaty may limit Uzbekistan's tax, but there is no single rate for all countries. For each payment, check the treaty in force with the recipient's state of tax residence, its dividend article and the conditions for the relevant rate. Having a foreign founder does not itself establish eligibility for relief.

The recipient must be the beneficial owner of the income (art. 6, Tax Code), entitled to use or dispose of it independently. An intermediary with limited powers, no other functions and no assumed risks does not become the beneficial owner merely because the payment first reaches its account.

For the tax agent to apply an exemption or reduced rate, residence confirmation must be provided no later than the payment date (art. 357, Tax Code). The agent may request evidence of beneficial ownership. Payments through an intermediary additionally require a contract or other documents stating the amount attributable to each beneficial owner, their name, their tax registration number or equivalent in the state of residence if available, and their state registration number or equivalent.

Residence confirmation is accepted in three prescribed forms (art. 358, Tax Code):

1. An original certified by the competent foreign authority, with consular legalisation or an apostille under the applicable procedure.
2. A notarised copy of such an original.
3. A paper copy of an electronic document published on the competent foreign authority's website.

Legalisation is not required if the document is published on that official website, or a treaty or mutual agreement between competent authorities establishes another authentication procedure. An apostille is therefore not an unconditional requirement for every certificate. Residence is confirmed for the period stated in the document; if no period is stated, it covers the calendar year of issue or publication.

If relief was not applied at payment and tax was remitted to the budget, the beneficial owner can seek a refund of excess withholding (art. 357, Tax Code). Treaty rules also apply to payments to nonresident individuals (art. 400, Tax Code), whose refund entitlement is separately provided for tax withheld from their income (art. 401, Tax Code). A refund requires a procedure; submitting documents late does not trigger an automatic bank refund.

Other income categories and treaty application are covered in the article on double taxation. The article on tax refunds explains the general application procedure, offsetting tax debt and repayment. These are relevant where the issue goes beyond calculating a particular dividend.

What the company does as a tax agent

The company distinguishes the deadline for paying the owner from the tax remittance and reporting deadlines. Resident dividends follow a special procedure, while deadlines for corporate nonresidents cannot automatically be applied to individuals.

For example, accrual in September and payment in October to a resident means reporting under the special rule by 20 October, with tax remitted no later than the payment date. For a corporate nonresident paid in October, reporting follows the October payment and is due by 20 November. These months are illustrative: they demonstrate the distinction between accrual and payment.

For a corporate nonresident paid in foreign currency, tax is calculated and paid in soums at the Central Bank rate on payment (art. 354, Tax Code). Transferring property, offsetting obligations or directing income to a third party does not remove the tax obligation. For a noncash payment, the tax agent remits the calculated tax and correspondingly reduces the noncash income, subject to the qualifications in that provision.

What changed in 2025–2026

• From 1 January 2026, ZRU-1108 of 25 December 2025 introduced a reduction of corporate nonresident dividend withholding by tax previously paid on dividends received by the Uzbek paying company, subject to the conditions listed above.
• The new LLC Law, ZRU-1137 of 21 April 2026, took effect on 22 July 2026. Current profit distribution decisions should use its provisions, including the requirements for minutes and payment restrictions.

What an owner should check before receiving dividends

Compare the decision, financial calculation and tax treatment: the profit period, eligible recipients, how the ownership allocation was calculated, the payment deadline and the basis for withholding. A foreign recipient also needs residence and beneficial ownership documents where treaty relief is claimed. For a shareholder, the register and bank details matter.

If a JSC is at fault for failing to pay on time, it accrues a penalty at the refinancing rate (art. 53, JSC Law) set by the Central Bank. The penalty cannot exceed 50% of the unpaid amount. A shareholder may seek payment of declared dividends and the penalty through the courts. This JSC-specific rule cannot automatically be applied to LLCs.

Example. For unpaid dividends of UZS 20,000,000, the maximum penalty is 20,000,000 × 50% = UZS 10,000,000. This is a ceiling, rather than the penalty for any period: the actual amount depends on the period of delay attributable to the company and the applicable rate.

A statutory prohibition on payment and a delay attributable to the company require different assessments. If financial obstacles exist, first check the legal basis for withholding payment, then the obligation to implement the decision once they cease. The absence of a profit distribution decision also differs from failure to pay a dividend already declared.

Frequently asked questions

Can an LLC pay dividends every month?

The current LLC provision allows distribution decisions quarterly, half-yearly or annually. It does not establish monthly profit distributions. Distinguish the period covered by the decision from the procedure for implementing a decision already adopted: the charter or meeting determines the payment procedure and deadline, but the overall period cannot exceed 60 days (art. 26, LLC Law).

Are an LLC founder's dividends tax-exempt until 2028?

The individual exemption concerns dividends on shares owned by shareholders, rather than LLC ownership interests. The same provision sets a special share-dividend rate for nonresident legal entities. An LLC must therefore check its member's status and the general rate, and any applicable treaty for a foreign recipient. The period and subject of the temporary relief are specified separately for shares (art. 483, Tax Code).

Can dividends be paid when the current year shows a loss?

For a JSC, the law allows retained earnings from previous years to be used, so the current-year result alone does not settle the question. Capital, net asset and insolvency restrictions continue to apply. Where profits are insufficient or there is a loss, preferred-share dividends can be paid only from, and within the limits of, a reserve fund created for that purpose. The rules on payment sources (art. 51, JSC Law) must be read together with the prohibitions.

Does a foreign shareholder need to apply for payment?

A JSC cannot require an application for the ordinary automatic payment through the Central Depository or an investment intermediary to an existing bank account. However, a written request from the nonresident is provided for converting accrued dividends into freely convertible currency and transferring them to the specified account. These are different actions governed by the dividend payment procedure (art. 51, JSC Law).

Is a residence certificate enough for a reduced rate?

No. The certificate confirms residence for the relevant period, while the applicable treaty and beneficial ownership must be checked separately. If the treaty makes the rate conditional on ownership characteristics, those must also be established. To apply relief at source, the agent must receive residence confirmation no later than payment (art. 357, Tax Code). Payment through an intermediary requires additional documents identifying beneficial owners and their income.