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Elaborating a mechanism for paying salaries in foreign currency

Saturday, 11 May 2019

Kosta Legal has successfully devised a mechanism that allows a representative office of a foreign equipment manufacturer to make payments to its Uzbek employees in a cash foreign currency. The mechanism is likely to be highly demanded among foreign companies operating in Uzbekistan, owing to country’s stringent foreign exchange policies.

Under Uzbek law, salaries and bonuses of local employees must be paid in local currency, the Uzbek Soum. Using a variety of legal instruments, including insurance mechanisms, lawyers of Kosta Legal have developed a unique, structurally innovative legal product that accommodates the needs of the client, considering the existing restrictions. Besides giving the opportunity to make employment-related payments in a cash foreign currency, which is likely to benefit both employees and employers who avoid exchange losses, it allows employers use of some tax and mandatory payments exemptions.