Kubaeva Ismigul Farhod qizi

                                                                        July 5, 2021

                                                                        Image source:qalampir.uz


Entrepreneurship development is one of the most critical factors for economic growth, raising an employment rate and poverty reduction. In order to radically reduce state interference into the economy, to liberalize and promote small business and private entrepreneurship, the government of Uzbekistan has been adopting many laws and regulations for the last five years. As a result, the business environment has changed for the better in the country. This is also observable in the “Doing Business 2020” report, where Uzbekistan moved from the 76th to 69th place, improving its position by 7 points. In particular, it is notable that Uzbekistan has been included in the top-10 list of countries for the first time on the “ease of state registration” indicator.

At the same time, the sharp increase of enacted new legal documents and intensive amendments of previous laws resulted in complicating the regulation of the business sector for regulators and entrepreneurs. During this period, the Presidential Decree on “Approval of the National Strategy of the Republic of Uzbekistan on Human Rights” sets out to develop a draft Entrepreneurship Code. Therefore, lawmakers have proposed to adopt an Entrepreneurship Code.

This blog post analyzes the advantages and disadvantages of codification of business legislation in Uzbekistan based on international experience.

  1. Pros and cons of adoption the Entrepreneurship Code in Uzbekistan
    1. The pros of adoption Entrepreneurship Code

First of all, Entrepreneurship Codeserves to improve the economic conditions of people via the development of entrepreneurship and by fully guaranteeing entrepreneurship. In addition, the Entrepreneurship Code can serve as an essential step to ensure Uzbekistan’s entrance to the top 50 countries in the world in terms of the Doing business index.

Second, the Entrepreneurship Code can create a wide range of conveniences for entrepreneurs to use the legislation for Uzbekistan. It leads to revising about 5,000 legislative acts and eventually reducing their number. This may prevent from unstabalization of an entrepreneurship activity due to frequently adopted or amended legislation. Thus, the adoption of the Entrepreneurship Code may promote the increase of people entering a business.

Third, the Entrepreneurship Code is not just a codification of existing legal acts, but this new Code may significantly improve antimonopoly regulation of entrepreneurial activities

Entrepreneurship Code leads to the following possibilities as the primary goal:

  • increasing the social responsibility of entrepreneurs, improving the business environment, taking into account international standards in the field of economic rights and freedoms;
  • strengthening the responsibility of officials for illegal interference in the activities of business entities or unjustified actions aimed at making a loss to them;
  • expansion of mechanisms of public control over the protection of the rights and legitimate interests of entrepreneurs.

Fourth, it will give a chance to separate codification of business issues. For example, if we look at the arguments for adopting the Entrepreneurship Code in Russia, we may notice that business is a different economic sector. The integration of both social and economic spheres into a single Civil Code is theoretically unacceptable. Therefore, Russian lawmakers adopted a unique Entrepreneurship Code by separating business issues from the Civil Code.

Fifth, the boundaries of state regulation and main directions in business are defined in  Entrepreneurship Code.

Sixth, Entrepreneurship Code may play a signigicat role in further improvement of investment activities. For instance, to increase increasing the attractiveness of an investment, the government is adopting many legal normative acts for investors. Nevertheless, they are not well systematized and hard to follow.

Seventh, codification of business legislation will not only systematize the existing regulatory framework. It will also lay the legal foundation of public-private partnership, social stability, limited partnership, and self-employment.

  1. The cons in the adoption of Entrepreneurship Code in foreign experiences

The entrepreneurship Codehas been adopted in many countries. We may find them in the Ukraine, Germany, France, Russia, and Kazakhstan. However, all of these countries experienced a scholarly discussions on adopting the Entrepreneurship code. Let me highlight some of these arguments on the example of Kazakhstan.

First, there is an argument that there is no need for a separate Entrepreneurship Code as the Civil Code covers most of the leading entrepreneurship issues. Therefore, the Entrepreneurship Code cannot offer anything new to improve business performance. The Civil Code defines the rules of property, such as limited property rights, the right of obligations, freedom of contract, and types of contracts, ensuring the performance of obligations for businesses. Therefore, this situation may indicate that there is almost no need for an Entrepreneurship Code at present.

Second, the existing laws on business and entrepreneurship have set out all the procedures. The legislation in this area meets modern international standards and does not require significant changes. Simultaneously with the adoption of the Entrepreneurship Code, the new Code may lead to another problem that threatens legal stability: the existence of parallel, repetitive, and often contradictory laws, which may exacerbate the practice of law enforcement.

Third, the economic policy of the state often changes. The codification may make it difficult to amend the law in response to the changes in socio-economic policy.Therefore, consolidating all of them in one statute significantly narrows the flexibility of public authorities in making political decisions on economic issues. This is because there are frequent changes and additions to the legislation in this area. It is much easier to change the law than to change the Code.

Thus, according to the current analysis, we can say that the Entrepreneurship Code will make a significant contribution to the development of this sector with the event of a radical reduction of “bureaucracy.” It can expand the industry by facilitating the use of business legislation. Furthermore, the codification makes difficult the future amendment of the law, which may result in legal stability in the business sector. On the other hand, the codification may limit entrepreneurship activities by putting a business into a strictly regulated legal framework. Therefore, it is necessary to consider the benefits and disadvantages codification that may result from the adoption of the Entrepreneurship Code.


As shown above, the adoption of one entrepreneurship code has both positive and some negative sides. Therefore, it is necessary to make a deep research to have really useful Entrepreneurship Code. I believe, that the new Code will increase legal protection and stability in business sector, ensure freedom of entrepreneurs from the unlawful intervention of state bodies, and will provide appropriate and comprehensive solutions to legal disputes in entrepreneurship, which ultimately boost an entrepreneurship activity in Uzbekistan.

Cite as: Kubaeva Ismigul Farhod qizi, “Entrepreneurship Code: pros and cons of codification of business legislation”, Uzbekistan Law Blog, 05.07.2021