Do I Need a Local Entity to Hire in Uzbekistan?

In Uzbekistan, a "local entity" refers to a recognized business presence, such as a subsidiary or branch office, that can act as an employer. This setup allows you to fulfill local payroll and employment obligations, ensuring compliance with Uzbekistan's labor laws.

Without a local entity, you generally can't manage payroll, register as an employer, or issue compliant employment contracts. However, using an Employer of Record (EOR) can simplify this process, allowing you to hire employees while avoiding the complexities of establishing a local entity.

What is Required to Employ Someone in Uzbekistan?

• Local employing entity required to directly employ? Usually yes (unless using an EOR)
• Payroll registration required? Yes (must register with the State Tax Committee)
• Withholding/tax remittance required? Yes (employers must withhold income tax and remit to the government)
• Social contributions required? Yes (mandatory contributions to the Social Fund)
• Local employment agreement required? Yes (written contracts are mandatory under Uzbek law)
• Mandatory benefits to budget? Yes (includes social security, paid leave, and other statutory benefits)
• Works council/collective agreements considerations? Often (certain sectors may require collective agreements)

Best Options If You're Hiring in Uzbekistan

Can I Hire Contractors Instead of Setting Up an Entity?

Yes, but be cautious about misclassification risks.

While hiring contractors in Uzbekistan doesn't require a local entity, the distinction between contractors and employees can be blurry. Authorities may scrutinize the nature of the work relationship, especially if the contractor operates under conditions similar to an employee.

• Ensure contractors have autonomy in their work.
• Avoid excessive control over their hours or methods.
• Be cautious if the contractor is integral to your business operations.

How Long Does Entity Setup Take And What Does It Cost?

Typical entity setup timeline: Typically 4–8 weeks, depending on the type of entity and required registrations.

Ongoing cost categories (entity route):

• Accounting, bookkeeping, and statutory filings: Estimated 1,500,000–3,500,000 UZS per month ($150–$350)
• Payroll provider: Estimated 300,000–800,000 UZS per employee per month ($30–$80)
• Employer registrations and recurring compliance: Estimated 1,000,000 UZS per year ($100)
• Corporate tax filings and annual reporting: Estimated 2,000,000–5,000,000 UZS per year ($200–$500)

EOR cost components (no-entity route):

• A per-employee EOR service fee (from $399 p/month with Playroll)
• Pass-through statutory costs (e.g., employer social security contributions)
• Any optional benefits you choose to provide beyond statutory minimums

How an Employer of Record Can Help You Hire in Uzbekistan

Hiring in Uzbekistan can be complex, but it doesn’t have to require setting up a local entity or taking on long-term overhead. With an Employer of Record like Playroll, you get a simple, predictable way to hire compliantly while keeping costs transparent and under control. We help you:

• Hire employees in Uzbekistan quickly without establishing a local entity, eliminating incorporation costs, ongoing administration, and exit complexity.
• Stay fully compliant with local payroll, tax, and employment regulations with Playroll’s payroll services.
• Control your total employment costs, with a clear monthly EOR service fee (from $399 per employee).
• Focus on growing your business, while we manage contracts, payroll, compliance, and labor law obligations end to end.
• Scale up or exit the market easily, without the financial or legal burden of closing a local entity.