New challenges in growing time. Perspectives of leasing in Uzbekistan by Mr. Zafar Mustafaev, CEO of Uzbek Leasing International General Director of Association of Uzbekistan Lessors

Progress of leasing in Uzbekistan 1993 – National airline of Uzbekistan purchased via leasing 10 airplanes (Boeing, Airbus, RJ) 1995 – establishment of the first leasing company “Uzbek Leasing International A.O.” 1999 – adoption of the Law “On Leasing” 2001 – creation of the Working Group with participation of IFC’s Leasing Project for improvement of leasing legislation in Uzbekistan 2002 – The Presidential Decree on measures for further stimulus of development of leasing 2003 – amendments to the Economic Procedural Law of Uzbekistan on the issue of the leased asset repossession 2004 – resolution by the Cabinet of Ministers of the Republic of Uzbekistan on accelerated depreciation during the leasing 2005 – established the Association of Uzbekistan Lessors 2006 – The Presidential Decree on developing of services industry

Why Leasing Technological equipment imported for leasing is exempt from VAT and customs duties Object of leasing are exempt from the property tax Lease payments released of VAT Taxable income of the Lessee is reduced for the amount of interest on lease. Lessee deducts all the interest amount (lessor’s income) regardless of the leasing period Opportunity of use of accelerated depreciation Leasing services exempted from profit tax until April 01,

What we have today? Volume of internal leasing in million USD

Which sector is more important for the Lessees ? Types of equipment, given on lease basis (all lessors, excluding Uzselhozmashleasing ) manufacturing equipment 27% other 0.3% computer & office equipment 1% medical equipment 1% real estate 13% passenger vehicles 10% trucks 3% other 14% construction 9% printing 5% agricultural machinery 32% light industry 8% food production 4%

Who are the players on Uzbekistan leasing market Lease Companies Asia – Europe Trust Company Association of Business Women of Karakalpakstan Asaka-Trans Leasing Baraka Leasing Business Leasing Express Leasing Kurilish Leasing Poytaht Leasing Uzbek Leasing International AO Uzagrocaseleasing Uzselhozmashleasing Uzavialeasing Uzavtosanoatleasing Zamin Invest Banks Aloka Bank Asaka Bank Capital Bank Galla Bank Ipak Yuli Bank Ipoteka Bank NBU Pahta Bank Ravnak Bank Savdogar Bank Microcredit Bank Turon Bank Uzpromstroybank UzKDBank Khalk Bank Khamkor Bank

Uzbekistan Lessor’s Association Uzbekistan Lessor’s Association was established in 2005 Mission - to create conditions for development of leasing services in the Republic of Uzbekistan for effective realization of economic reforms implemented in Uzbekistan. There are 19 members in Association: Asaka-Trans LeasingAsia – Europe Trust Company Baraka Leasing Asaka Bank Business Leasing Capital Bank Express Leasing Ipak Yuli Bank Kurilish Leasing Ipoteka Bank Poytaht Leasing Pahta Bank Uzbek Leasing International AO Microcredit Bank Uzselhozmashleasing Hamkor Bank Uzavialeasing Zamin Invest Uzavtosanoatleasing

First Leasing Company Operations on the leasing market since 1996 Paid-up capital USD 6 million Solid shareholders: 15 %35 % Over 140 projects has financed and total amount of USD 25 million Internal funds, credit lines from NBU, IFC, EBRD, CDB and export credit agency

Portfolio Structure – Industry Sectors

Portfolio Structure – Project Size in % from number of projects

Portfolio Structure – Supplier Countries

What equipment is most wanted in Uzbekistan? Compact and mini-technological equipments for small and private entrepreneurship Car leasing Cotton spinning and textile industry Processing of agricultural products Construction equipment Special vehicles, trucks and buses Telecommunication

Why L easing in Uzbekistan? One of the best legislative bases on leasing in the world:  Simplified system for registration and taxation of leasing companies  Leasing activity is not licensed  Availability of tax allowances and preferences Big demand for leasing services Leasing is high profitable financial facility

Our address: Tashkent city, Republic of Uzbekistan 4th Floor, International Banking & Finance Center 1, Turab Tula Street Tel.: ( ) ( ) ( ) ( ) Fax.: ( )