Startup funding in Uzbekistan: support programs and venture capital

A startup in Uzbekistan may receive a grant, reimbursement, a loan or an equity investment. The amount depends on the program: a hackathon winner may receive a grant of up to $10,000, while a convertible loan may reach $20,000. Access to most new measures is tied to registration on the Unified Electronic Platform of the Startup Ecosystem.

In brief:

• the Digital Startups program covers companies operating for up to 5 years with annual aggregate income not exceeding UZS 10 billion
• an ideathon or hackathon winner may receive a convertible loan up to $20,000, or a grant up to $10,000
• separate programs cover up to 50% of acceleration, MVP, mentor and training costs
• venture funding generally gives the investor equity, or a right to receive it later, so the founder must assess the amount, governance terms and exit route

Updated: 05 September 2026

Startup eligibility and available funding

What counts as a startup and who may join the program

There is no single definition covering every business. Under the IT Park rules, a startup project is a project that creates a new IT product or service in conditions of uncertain profit and high financial risk. An ordinary newly incorporated business does not become a startup merely because of its age if it has no innovative or scalable digital model.

The Digital Startups program is open to Uzbekistan-resident legal entities. The startup ecosystem also includes venture funds, private investors, and businesses that provide incubation or acceleration programs. An individual may submit a project to particular competitions or an incubator, but the main program requires the project to be incorporated as a local legal entity.

From 2026, a project must meet all of the following requirements:

The former requirement to have completed an incubation or acceleration program has been removed. Participation in such a program is still a condition of certain instruments, including the convertible loan available to an early-stage competition winner.

What forms of support are available to a startup

State support is not a single payment. The law includes tax and customs incentives, state innovation orders, public procurement of knowledge-intensive products, the attraction of business funding, and workforce development. A specific project receives support under the applicable program terms, a competition decision and a contract, not merely because the general list appears in the law.

Funding may come from budgets and dedicated funds, venture funds, international grants, bank loans, the startup’s own money, and private or foreign investors. The new ecosystem has four stages: idea formation, development, launch and scaling. Different instruments serve each stage.

• Idea: ideathons, hackathons, incubation, small grants and convertible loans.
• Development: R&D vouchers, minimum viable product (MVP) costs, mentors, training and patenting.
• Launch: unsecured loans, equity financing, and investment by a state or private venture fund.
• Scaling: co-financing alongside a foreign fund, public procurement, foreign-market expansion and specific foreign-currency facilities.

How much funding is available

The amount and legal nature of the funding vary. A grant normally gives the funder no equity, but the recipient must spend it under the competition terms. A loan must be repaid, while a convertible loan may become an equity interest. An investment changes the capital structure immediately or later.

Youth projects may receive a monthly grant for participation fees in a domestic incubation or acceleration program. Its total is capped at 100 BRVs, where one BRV is the base calculation unit, or UZS 44.000.000. The Young Entrepreneurs Championship permits an investment up to UZS 1 billion in each of no more than 100 winning projects and payment of financial and marketing services up to UZS 44.000.000. From 1 September 2026, a university may invest up to $20,000 in a student’s or researcher’s project.

Example. A startup spends $30,000 on an acceleration program that meets the program conditions. Reimbursement is 50%, or $15,000. This is below the $20,000 cap, so the full calculated amount may be claimed. If eligible expenditure is $60,000, half is $30,000, but reimbursement remains capped at $20,000.

Venture funds and investment documents

How a venture fund operates

The Innovation Activity Law defines a venture organisation as a specialised financial institution that finances risky innovation projects. It may be established with or without a separate legal entity, take equity in a newly created company, and provide funding without collateral, surety or a guarantee. Its founders may be individuals or legal entities, including foreign persons.

A separate regulation uses a narrower structure: a venture fund is an investment company managed by a management company. Qualified investors contribute funds; the minimum investment contribution is UZS 500 million. An investment company does not require a licence for this activity, but it must arrange an external audit every year.

The management company opens a special account, selects projects and pools contributions. A venture fund may use equity or an unsecured loan, participate in managing a portfolio company, and operate across sectors or within one sector. Its charter must set investment restrictions, decision-making rules, the manager’s liability, exit procedures and dividend payments.

The fund may begin investing only after its initial capital has been paid in full and it has entered into a trust-management agreement with the management company. The Ministry of Finance monitors funds using public and inter-agency information without involving the companies. The regulation creates no general tax exemption for every venture fund; taxation follows the ordinary legislation.

How venture financing is documented

The amount alone does not define the parties’ rights. An investor may choose the amount and form of investment, enter into contracts, dispose of the investment and attract borrowed funds; these investor rights operate within the law. In practice, a transaction may use a capital contribution, a purchase of equity, an investment loan, a convertible loan or an agreement for future equity.

When financing is provided through IT Park, the Directorate becomes a founder. The funding agreement sets the form and amount of the contribution, allocation of equity, settlement terms and the Directorate’s exit. A positive Expert Commission opinion is the basis for financing, but does not replace the agreement.

Founders and investors should allocate terms among the charter, participants’ resolutions and a corporate agreement. A written corporate agreement may regulate coordinated voting, management, the purchase or sale of equity upon specified events, and liability for breach. The company must be notified within 15 days, but the agreement’s contents need not be disclosed.

Since 22 July 2026, the new LLC Law expressly gives a participant the right to conclude a corporate agreement, receive information and profit, transfer an interest and leave the company. A new investor may enter through a capital increase funded by a third-party contribution, unless the constitutional documents prohibit it; the admission and contribution require a unanimous resolution. A later sale is subject to the pre-emptive right of the other participants and the company. The default exercise period is one month unless the charter or an agreement provides another period.

Example. An investor advances $200,000 as a convertible loan. The agreement should not merely say “convertible into equity.” It should specify the conversion event, the valuation method, any valuation cap or discount, the resulting interest, the participants’ resolution to increase capital, the registration timetable, and the consequences if conversion never occurs. Special programs recognise the instrument, but the parties determine its commercial terms by contract.

Applications, status and support programs

How to apply and how selection works

Registration of the project on the Unified Electronic Platform of the Startup Ecosystem is the starting point for the new measures. PP-59 ties reimbursements, youth instruments and successful-startup status to the Platform. A particular competition may additionally set a sector, application form, budget, supporting documents and timetable.

The Fund for Financing Science and Supporting Innovation finances projects through a competition and under an agreement among the responsible ministry, the Fund’s Executive Directorate and the project implementer. The competition notice and its documentation therefore determine eligible expenditure and proof of performance.

The following process applies to IT Park’s separate incubation and acceleration program:

1. The initiator files an application. An individual attaches a passport copy, while every applicant provides a startup project description.
2. The Council checks the documents and may invite the applicant to present the project. Review takes up to 20 working days, and a refusal must be reasoned in writing.
3. If admitted, the parties conclude an agreement and the project proceeds through acceleration and a demo day.
4. The Expert Commission assesses the project within 7 working days, referral to the Fund takes 3 working days, and the financing agreement is concluded within 5 working days.

Selection examines novelty and feasibility, market demand, commercialisation potential, competitive advantages, investment appeal and economic efficiency. The financial model, evidence of the team and proof of rights to the development should address those criteria directly.

What successful-startup and IT Park status provide

From 1 April 2026, a Digital Startups participant receives IT Park resident status without the general criteria or a minimum export requirement. The startup pays a fixed contribution of 1% of aggregate income.

A project in the Platform’s successful-startup register receives a special advance under a contract with a public-sector customer: 50% for procurement up to UZS 500 million and 30% above that price. If the project has no tax arrears or overdue receivables and has a low tax-risk rating, it may transfer up to $500,000 a year to foreign accounts to establish a foreign company, form its capital or provide working capital to a branch.

This article does not repeat every tax, customs, employment and foreign-currency rule for a resident. The IT Park article explains the duration of incentives, reporting, contributions, audit and loss of status. Read it after admission to the program or before calculating the financial effect of residency.

What special programs are available

Sector-specific instruments operate alongside the general ecosystem. For artificial-intelligence projects, the Coordination Commission sets priorities and criteria for financing through the Fund of Funds and IT Park Ventures. New projects enter through an open competition, while the authorities examine the technical documents in parallel within 15 days.

Youth measures include the Young Entrepreneurs Championship, incubation grants, R&D vouchers and infrastructure funding. From 1 September 2026, the Universities as Startup Generators program added student accelerators and a right for universities to invest their own funds. These instruments are not interchangeable: an applicant must check age, sector, legal-entity status, Platform registration and whether winning a particular competition is required.

IP protection, monitoring and foreign investors

How to protect the development and use the funds

Before applying, the company should establish who owns the code, design, database, invention, trade mark, and work product of employees or contractors. Platform participants may receive reimbursement for patenting and registration of intellectual-property results and trade marks, but reimbursement does not create the right itself. The applicant must show its legal basis for registration.

A recipient of budget funding must use the money for its intended purpose, commercialise developments created in a budget-funded project, and respect intellectual-property rights. The competition agreement may add a budget, milestones, deliverables, a reporting form, inspection rights and grounds for repayment.

In practice, the startup should account separately for project expenditure and retain the contract, invoice, acceptance certificate, payment evidence and resulting deliverable. If a program covers a percentage of cost, the application includes only verified eligible expenditure rather than the entire project cost.

What is checked after support is awarded

Controls depend on the instrument. A grant is checked against the budget and deliverable; a loan against purpose, repayment and interest; an investment against corporate rights and reporting; and IT Park status against permitted activities, income and mandatory contributions. The Directorate may remove an initiator from incubation or acceleration for breaching the agreement or program requirements.

Investment and management companies are subject to external or internal audit and monitoring. A startup must provide the investor with the information required by the agreement and corporate documents on time, while access to trade secrets and personal data should be regulated separately.

The general rule states that a person who violates innovation legislation is liable under the applicable law. It does not set one fine for every startup. The practical consequence is more likely to be refusal of reimbursement, removal from the program, repayment, contractual damages or a corporate dispute, where the applicable program and signed agreement provide for it.

May foreign investors participate

Yes. Foreign individuals and legal entities may found a venture organisation and qualify as investors. The main program requires the startup to be a legal entity resident in Uzbekistan, but the founder’s foreign citizenship does not in itself prevent participation.

After taxes are paid, a foreign investor may transfer initial and additional investment, income, sale proceeds and contractual payments. The guarantee of free transfer of funds is subject to lawful restrictions, including insolvency, creditor protection and enforcement of a court or arbitral decision.

Incorporation, a foreign founder’s interest and corporate documents require a separate analysis. The business registration article explains how to establish an LLC and what a foreign participant must provide. Once incorporated, the project should test its model against the selected startup program’s criteria.

Changes and founder checks

What changed in 2025–2026

• From 31 October 2025, PP-320 of 30 October 2025 established competitive financing of new AI projects through the Fund of Funds and IT Park Ventures and a 15-day parallel review of technical documents.
• From 13 February 2026, PP-59 of 11 February 2026 introduced the four-stage ecosystem. Eligibility, reimbursements and direct IT Park status changed from 1 April, and the Universities as Startup Generators program began on 1 September.
• From 22 July 2026, ZRU-1137 of 21 April 2026 replaced the former LLC Law and updated corporate agreements, admission of a new participant, minority protection and transfers of equity interests.
• From 28 August 2026, PF-175 of 27 August 2026 provided for the 2027–2030 Future Entrepreneur program: up to 30 startups across 8 fields, with up to UZS 5 billion per project as a 3-year interest-free unsecured loan convertible into equity or a SAFE. The state interest may not exceed 49%.

What a founder should check before a deal

Choose the suitable instrument before looking for the largest amount. A grant fits verified costs without an equity transfer; a loan fits a project with a credible repayment cash flow; a convertible loan fits a business whose valuation should be deferred; and an equity investment fits a deal in which the investor receives corporate rights immediately.

Before applying or signing a term sheet, check:

1. whether the company meets the age, income, sector, digital-model and Platform-registration tests;
2. whether the funding is a grant, reimbursement, repayable loan, convertible loan or capital contribution;
3. which costs are eligible, when they are paid and which documents prove them;
4. who owns the intellectual property and whether the investor may receive a licence or an interest in the rights;
5. how equity is calculated, who votes on reserved matters, how the next round works and how interests are diluted;
6. which events trigger the investor’s exit, a founder buyback or conversion of the loan;
7. which reports, inspections, repayment duties, remedies and dispute-resolution procedures apply.

This sequence allows the founder to compare state support and private investment by their legal consequences as well as their headline amounts.

Frequently asked questions

Must a startup repay a state grant?

A grant is not an ordinary loan and is not normally repaid on a schedule. The recipient must still comply with the competition terms, agreement, budget and permitted purpose. If evidence is missing, the deliverable is not achieved or the funds are spent outside the project, the program may refuse reimbursement, stop financing or require repayment under the agreement. Before incurring a cost, check whether the program pays an advance or reimburses verified expenditure.

Can a startup receive support before incorporating an LLC?

An individual may join particular ideathons, hackathons and IT Park incubation programs. The main Digital Startups program is designed for Uzbekistan-resident legal entities. Some youth measures allow a citizen to participate and incorporate later. The required form therefore depends on the instrument: an idea may be tested before incorporation, but an equity investment and most systematic measures require a company.

How does a convertible loan differ from a venture investment?

A convertible loan initially creates debt, which may become equity upon a specified event. A direct investment gives the investor an interest after a capital contribution or purchase is formally completed. A convertible loan defers valuation, but the parties should agree the conversion method, valuation cap, discount, timetable and consequences if no later round occurs. Direct equity financing immediately determines voting, profit rights and exit terms.

Does every grant give IT Park resident status?

No. Direct status without the general criteria is available to projects participating in the Digital Startups program. Winning another competition, receiving a research grant or attracting a private investment does not by itself create that status. The project must prove participation in the specified program and entry in the relevant registers. Once admitted, the company must comply with resident duties, including the contribution based on aggregate income.