The Republic of Uzbekistan is a mid-sized, landlocked country in Central Asia. It has a significant population of over 37.7 million people and an economy that is expanding very quickly. Despite a downturn around 2020, related to the global price of oil, Uzbekistan’s GDP has grown by seven times in the past two decades.

In 2025, it’s worth $132.48 billion and is expected to grow an additional 5.9% this year. This provides its people with a per capita GDP of $3,510, making Uzbekistan a lower-middle-income country.

Income (URU)* Tax Rate
0 – 552,384 0%
552,384 – 789,120 10%
789,120 – 1,183,680 15%
1,183,680 – 2,367,360 24%
2,367,360 – 3,945,600 25%
3,945,600 – 5,918,400 27%
5,918,400 – 9,074,880 31%
Over 9,074,880 36%

The Uzbek labor force includes 13.974 million workers. This low amount of labor participation (37% of the population) is largely due to a lack of employment for the country’s large rural population and an extensive informal economy whose workers are not officially recorded. About 14% of the country’s workforce is employed in agriculture, producing cotton, grains, and vegetables for export.

Roughly 58% of workers are employed in services that include trade, transportation, tourism, financial services, information, construction, and communication. That leaves 28% of the workforce employed in industry, especially in mining and oil and gas extraction. Uzbekistan’s main exports include gold, cotton, copper, petroleum gas, and potassium fertilizers, which are primarily traded with Switzerland, Russia, the UK, China, and Turkey.

This country’s economy keeps on growing and offering opportunities to investors from around the world. In this review, we’ll explain how and why so many of them choose to partner with PEOS in Uzbekistan to ensure success when hiring local employees.

What Are PEOs in Uzbekistan?

A PEO, or Professional Employment Organization in Uzbekistan, is a type of service provider that works primarily with international clients who own entities and hire employees in this country. A PEO can be a very important partner when hiring local workers, as it allows clients to outsource their HR and compliance functions. This enables smooth relations with employees, high-quality HR services, and mitigation of the risks of non-compliance with Uzbekistan’s labor and tax laws.

It also helps clients get started working in the Uzbek market as quickly as possible. When you engage a PEO, it behaves like a co-employer with you, helping to take over many important functions related to employee management. As the primary employer, you still need to manage your workers’ schedules and day-to-day tasks, while the PEO does most of the administrative work.

It handles payroll and pays your employees’ salaries. It also administers mandatory benefits, handles income tax withholding, and monitors paid and unpaid leaves. On top of these HR functions, your PEO partner also helps you stay compliant by setting up legal contracts, reporting to government agencies, and constantly monitoring for changes to labor regulations.

Essentially all modern PEOs focus their service provisions on online, cloud-based platforms. These platforms automate many processes and also provide extensive tools and features to help clients manage additional aspects of HR, like employee engagement and recruitment. They also provide platform support, often 24/5 or even 24/7.

Experts in Uzbek law, taxes, HR, and recruitment may also act as advisors, helping advise clients and set the rules that govern platform functions. An Uzbekistan EOR is a similar type of service provider to a PEO in that both manage HR and compliance for their clients. These two terms are often used interchangeably, but there is an important difference between them.

While a PEO works as a co-employer with clients who own entities in Uzbekistan, EORs can hire employees on their clients’ behalf. They use their entities in the country to contract workers directly, becoming their legal employers in Uzbekistan and taking on full responsibility for compliance.

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Which Services Do PEOs Provide in Uzbekistan?

An increasing number of PEOs are now working in Uzbekistan, thanks to growing interest in this market and its workers. The main services that most high-quality PEOs will offer include:

Payroll Management

Payroll is a challenging function to perform, and even more so when you need to do it in a foreign country with different rules and regulations from what you’re used to. When you engage a PEO, however, it takes on this challenge for you. It sets up calculations for your workers based on their salaries, tax obligations, and benefits, preparing these for automated processing.

You still have a role to play as the worksite employer, however. You’ll need to collect your employees’ time and attendance data for each pay period, either through time tracking tools built into your PEO’s platform or external software. Once you submit that data, the PEO will quickly and accurately process your payroll and calculate each employee’s net pay.

It will normally pay them by direct deposit, though some providers offer options like checks or prepaid employee cards. Finally, the PEO will store all your payroll records for future reference and auditing.

Employee Benefits

Your Uzbek employees are entitled to certain mandatory benefits like sick leave, maternity leave, annual leave, and public holidays. They also must receive support from social security programs that they and their employers pay into. They can also opt into a voluntary pension program to save additional funds for retirement.

All of these mandatory benefits will be administered by your PEO partner, including the following contributions:

BenefitEmployee Contribution
(% of salary)		Employer Contribution
(% of salary)
Social security taxn/a12.0
Mandatory pension contribution1.0n/a
Voluntary pension contributionUp to 8.0n/a
If you want to offer more benefits to help you attract and retain top-quality Uzbek talent, most PEOs can help. They will normally connect you with providers of health insurance, life insurance, and private pension plans, and assess an additional fee to administer these supplemental benefits.

Tax Compliance

Employers in Uzbekistan are obliged to calculate and withhold pay-as-you-earn (PAYE) personal income taxes from their employees’ salaries. Your PEO will handle this responsibility as a part of the payroll process, including remitting the taxes collected to the TCRU monthly and reporting to this authority as needed. Uzbekistan assesses a flat tax of 12% on employment income, making taxes relatively easy to calculate in this country.

Recruitment and Employment Contracts

If you’re thinking about engaging a PEO because you’ve already identified Uzbek workers you want to hire, you may not need help with recruitment, at least not right away. However, if you need help sourcing talent, many PEOs can provide you with assistance. Some only offer self-help tools for you to recruit more efficiently on your own, such as applicant tracking systems (ATSs) and access to their talent pools.

Others, however, employ professional recruiters who can actively search out candidates to meet your hiring needs. These recruiters normally work fast and find better quality candidates than you could access on your own, thanks to their experience and knowledge of the local employment market. If you need help with interviews and selection, some PEOs also offer these services.

When you’ve selected candidates, your PEO can advise you on the salaries and benefits to offer them and support you during contract negotiations. It will then prepare legally compliant contracts and manage their signing and storage for future reference. 

Contracts in Uzbekistan must be in writing and should be based on the model contract issued by the Cabinet of Ministers. They can be permanent or for fixed terms for non-durable work. Fixed-term contracts can last up to five years, including renewals.

Probation periods are allowed for up to three months for regular workers and six months for managers and executives. Probation doesn’t apply to seasonal workers or industrial workers who received extensive training from the entities that will then employ them.

Onboarding

With new hires contracted, your next job is onboarding, and this is a function shared between your organization and your PEO. The PEO will focus on administrative duties, collecting each worker’s personal information, banking information, and important documents.

It will add them to your payroll, set up their salary payments, and register them with the appropriate government agencies. Your responsibilities normally include providing orientations, training, and access to the tools, systems, and data your employees will need to perform their work.

Terminations

If you need to dismiss or lay off workers in Uzbekistan, your PEO will support you as an advisor. You can dismiss workers for gross misconduct without notice. For other reasons, your PEO will help you calculate notice periods and severance payments as needed.

Employers must normally provide between seven days’ and two months’ notice, depending on the reasons for terminating contracts. Workers are entitled to severance pay equal to half a month’s salary to two months’ salary, depending on their years of service to the employer.

Why Hire Through a PEO in Uzbekistan?

The Uzbek economy is set to continue expanding, and the country’s government is becoming more and more open to foreign investment. Investors can find numerous opportunities, especially in energy, mining, manufacturing, and ICT. Workers are becoming better trained and increasingly well educated.

Managing these workers’ HR needs, however, can still be very challenging due to language, cultural, and legal differences. A PEO partner can help you stay current and compliant with local labor laws that include:

  • Regular hours: Uzbek employees may work no more than 40 regular hours per week. If they work a six-day workweek, they cannot work more than seven hours a day. If they work a five-day workweek, they cannot work more than eight hours a day.
  • Overtime: Overtime hours cannot be required and need the employee’s consent, except in emergency cases. Workers can’t perform more than 120 hours of overtime per year, nor can they work more than four overtime hours in any two-day period. Workers must receive at least double pay for their overtime hours. 
  • Annual Leave: Workers are entitled to 21 calendar days of annual leave, though workers under the age of 18 and those with disabilities receive 30 days. After every five years of service to an employer, an employee becomes entitled to an additional two days of annual leave, up to a maximum of eight additional days.
  • Maternity and paternity leave: Pregnant employees are entitled to 18 weeks of maternity leave – 70 days must be taken before and 56 days taken after delivery. They are entitled to at least 75% of their normal wages during this time, paid for through the Social Insurance Fund (SIF). Paternity leave is not mandated in Uzbekistan, though some employers may grant leave to new fathers at their discretion.

When you work with a PEO in Uzbekistan, you need to hire your employees directly, though it will help you manage them. To do so, you need to have a registered business entity in the country. If you haven’t got one yet, you’ll find that it’s surprisingly easy to register a company in this country.

The World Bank ranks Uzbekistan 8th in the world for ease of starting a new business. It normally takes only three procedures and three days to register a simple business like a limited liability company (LLC) here. Some PEOs even offer company registration services to help you make this process even easier.

Once your business is registered, your PEO can also help you register employees with the National Agency for Social Protection (NASP) and the Tax Committee of the Republic of Uzbekistan (TCRU), Uzbekistan’s social security and tax authorities. Reporting to these bodies will also be performed on your behalf by your PEO. This helps to keep you compliant.

Advantages of Using a PEO in Uzbekistan

An increasing number of foreign investors are choosing to work with PEOs when they employ workers in Uzbekistan because of the many advantages this relationship produces, including:

  • Cost Savings: PEOs normally provide high-quality administrative and HR services for much less than the cost of setting up an HR department internally.
  • Risk Reduction: When you work with a PEO, it manages contracts, reports to the authorities, and monitors legal changes to help you stay compliant at all times.
  • Quick Market Entry: Most PEOs can help you get started in the Uzbek market by onboarding your employees in just a few days. Their recruiters can also help you source talent very quickly in this market.
  • Focus on Core Activities: By outsourcing your HR and compliance needs to a PEO, you enable yourself to keep focused on the core activities that create value for your business.

Steps to Engage an Uzbekistan PEO

To start a collaboration with a PEO partner in Uzbekistan, you can follow these basic steps:

1

Select your Provider

Assess your needs and set a budget for hiring. Look for a reputable PEO that offers the services you require within your budget.

2

Have a Consultation

Arrange to meet with your selected provider to explain your needs and obtain a quote for their services.

3

Enter a Service Agreement

Engage your provider by signing a service agreement and start hiring and onboarding your employees quickly.

Partner With a PEO in Uzbekistan To Expand Your Business Successfully

Uzbekistan is quickly emerging as a strategic destination for foreign investors, thanks to its booming economy, simplified company registration process, and growing workforce. However, understanding and complying with local labor and tax laws can be a challenge. A PEO can help streamline operations so you can focus on growth while staying compliant.

Expanding your team in Uzbekistan? RemotePeople provides dependable PEO support to help you manage payroll, compliance, and HR responsibilities with ease. Our services give your business a smooth, compliant path to hiring locally and operating confidently in the Uzbek market. Reach out today to get started.