Individual Entrepreneur or LLC: Which to Choose for a Business in Uzbekistan

Taxes for an IE and an LLC in 2026

• an individual entrepreneur (IE) on turnover tax pays 1% (Art. 467 of the Tax Code), an LLC 4% at the general rate (except retail and certain sectors), with income up to UZS 1 billion (Art. 461);
• an IE pays social tax for themselves — at least 1 BCV (base calculation value) per month (Art. 408);
• an LLC participant receives profit as dividends, taxed at 5% (Art. 381).

The fundamental difference

An individual entrepreneur is a natural person with a special status. A company is an independent legal entity, separate from its founders. All other differences follow from this.

An entrepreneur is liable for obligations with their own property. A company participant primarily risks what they have invested in the company, although in certain cases liability may extend further.

Partners and shares

The status of an entrepreneur cannot be divided: it has no shares, no co-owners and no way to record agreements between partners within the business itself.

A company allows you to allocate shares, set out how decisions are made and how a participant exits, and bring in an investor. If the business is started by two or three people, this is usually the decisive argument.

Accounting and reporting

An entrepreneur usually has fewer accounting obligations and simpler reporting. A company keeps full accounting records and prepares financial statements.

The difference is noticeable in support costs, but full accounting also provides more information about the business — which matters for borrowing, selling a stake and bringing in partners.

• volume of source documents
• composition and frequency of reporting
• accounting requirements
• cost of support

Tax burden

Both forms can use different tax regimes, and the overall burden depends not on the form as such but on the regime, the type of activity and the structure of income and expenses.

The comparison is made by calculating on specific figures. The conditions for applying regimes are revised from time to time, so the calculation is done under the current version of the legislation.

How customers perceive you

Large corporate customers and government bodies often prefer to work with legal entities — this is due to their internal procedures and counterparty requirements.

For retail, consumer services and work with small businesses, entrepreneur status usually creates no obstacles and is cheaper to maintain.

Access to money and exiting the business

For an entrepreneur, income after settling with the budget is their personal money. In a company, the money belongs to the company, and paying it out to a participant follows established procedures with their own tax consequences.

Winding down also works differently: closing a company is a longer and more formal procedure than deregistering an entrepreneur.

How to choose in your case

We approach the choice of form through the business model: the founders, the type of customers, expected turnover, the need for employees and plans for several years ahead. Then we calculate the tax burden under the applicable regimes.

For companies and entrepreneurs this is a routine part of tax consulting. The result is a reasoned decision, not a choice made on the advice of friends.