Structuring the transaction and establishing a joint venture for financing construction of shopping malls

Kosta Legal has advised an Uzbek client wishing to make substantial investments in the construction of two shopping malls in Tashkent, which may potentially become largest shopping complexes within the country.

Our role as external legal counsel embraced: (i) carrying out legal due diligence on rights to land plots and real estate; (ii) assisting in the establishment of a joint venture company, a future operator of the malls in which our client is a member; and (iii) developing a scheme under which the malls will be promptly transferred to the joint venture company immediately upon completion. The transaction turned to be incredibly complex, as Uzbek law remains excessively rigid and rather ambiguous where real estate ownership rights of investors financing construction are concerned. A sophisticated structure had to be elaborated for the transaction to bypass these ambiguities.

Our client was a local financial institution wishing to diversify its investment portfolio by financing one of the largest construction projects within the capital, Tashkent.