Legal Due Diligence in Uzbekistan

Why legal due diligence matters in Uzbekistan

Uzbekistan offers attractive acquisition and partnership opportunities, from privatisation of state assets to investment in privately held companies across manufacturing, construction, retail and services. Information about local businesses, however, is not always complete, consistent or easily accessible. Corporate records may not reflect actual ownership arrangements, assets may be held under rights that are narrower than expected and historic transactions with state property may carry unresolved risks.

Legal due diligence allows an investor or buyer to identify these issues before committing capital, to price them correctly and to address them in the transaction documents. As a law firm in Uzbekistan advising local and international companies, LEXGLOBAL conducts due diligence that is proportionate to the transaction and focused on the issues that actually affect value and risk.

Our approach

Scoping the review

Not every transaction requires a full-scope review. We begin by agreeing with the client the purpose of the due diligence, the materiality thresholds, the areas of focus and the format of the report. A red flag review for an early-stage decision is very different from confirmatory due diligence before signing a share purchase agreement.

Sources of information

We combine analysis of documents provided by the target through a data room with independent verification using publicly available state registers and other accessible sources, as well as management interviews where appropriate. Where official information is incomplete, we clearly identify the limitations and their implications.

Reporting

Our reports are written for decision-makers. Each finding is accompanied by an assessment of its significance and a practical recommendation: a condition precedent, a specific warranty or indemnity, a price adjustment, a remedial action or, in some cases, reconsideration of the transaction. Reports can be prepared in English, Russian or Uzbek.

Areas covered

Corporate structure and ownership

We verify incorporation, charter documents, share capital and its payment, the history of changes in ownership, corporate approvals, restrictions on transfer of interests, and the authority of management. For companies with state participation or privatised assets, we review the privatisation documents and any continuing investment or social obligations.

Assets and real estate

We review title to land plots, buildings and key equipment, the basis of land use, state registration, encumbrances and pledges, and the lawfulness of construction and reconstruction.

Contracts and operations

We analyse material contracts, including change of control provisions, exclusivity, termination rights, currency and payment terms and related-party transactions. We also review licences, permits and certificates required for the business and their transferability.

Employment

We review employment documentation against the requirements of the Labour Code effective from 30 April 2023, including employment contracts, internal regulations, engagement of foreign employees and potential employee claims.

Tax, litigation and compliance

We review court cases, enforcement proceedings, inspections and claims by state authorities, and identify potential contingent liabilities. Where tax issues require specialist review, we coordinate with the client's tax advisers. We also consider compliance with personal data, anti-corruption and sector-specific requirements.

Counterparty checks

Before entering into a significant supply, construction or distribution contract, it is often sensible to conduct a limited review of the counterparty: its registration status, ownership, authority of signatories, litigation history and any obvious red flags. We offer these checks on a quick-turnaround basis for companies that regularly engage new partners in Uzbekistan.

After the review

Due diligence is only valuable if its results are reflected in the transaction. We translate findings into transaction documents, negotiate protections with the seller and, after closing, help implement remedial steps and integrate the target into the investor's compliance framework.

Why LEXGLOBAL

• Lawyers with long-term experience with international companies and cross-border projects in Uzbekistan and Central Asia, including work with Huawei Technologies, China Petroleum Pipeline Engineering and Sinohydro
• Practical, commercially relevant reports rather than lengthy descriptions
• Work in Uzbek, Russian and English
• Continued support as a long-term legal partner after the transaction

If you are considering an acquisition or partnership and need a lawyer in Tashkent to conduct due diligence, we can propose a scope and timeline tailored to your transaction.