Tashkent, Uzbekistan (UzDaily.com) – Licensing reform rarely happens in isolation. Often, improving the business licensing system is just one aspect of a broader national reform program aimed at enhancing the business and investment climate.

Complex, repetitive, lengthy, costly, and multi-step procedures and processes place a heavy burden on businesses, becoming a significant obstacle to doing business in many countries.

Therefore, governments striving to improve their country’s business climate place licensing system modernization at the heart of their reforms. This can significantly reduce the administrative burden on businesses.

In August 2020, with the aim of creating broader opportunities for entrepreneurship through the radical improvement of licensing and permitting procedures, the elimination of bureaucratic barriers, and the implementation of institutional reforms by optimizing and automating processes in the field of permit activities, the President of Uzbekistan signed a decree on improving licensing procedures for legal and physical persons. The Law "On Licensing, Permitting, and Notification Procedures" and government decisions on the procedures for licensing and permitting through electronic systems were also adopted. These initiatives enabled the processing of the maximum number of permits, licenses, and notification procedures available in electronic form.

To reduce bureaucratic burdens and the risk of corruption, UNDP and the EU, in collaboration with the Ministry of Justice, supported the government in digitalizing the licensing system by creating an online licensing platform - the "License" information system complex. This system provides interactive services in the field of licensing and permitting procedures. For user convenience, mobile applications for iOS and Android have made these services accessible on the go. Through this mobile application, users can process licensing documents, obtain information about their organization’s licensing documents, search for information from the licensing registry, and more.

The "License" information system created a unified platform for entrepreneurs to submit applications for licenses, permits, and notifications, allowing business representatives to obtain permits without leaving home. They only need to submit an electronic application, eliminating the need to spend time and resources scanning and printing numerous documents. This led to simplified processes, reduced costs, and decreased dependence on paper.

Due to the automation of the procedure, the average time for obtaining licenses and permits has been reduced by three to four times, and the number of documents required has been halved. Previously, a license application could take up to two months to process; now, it takes just 5-8 days.

The transition of public services for issuing licenses and permits to electronic form, with the ability to submit applications through the "License" electronic licensing system, is undoubtedly a positive, progressive step in the interaction between businesses and licensing organizations. Practical business experience shows that digitalizing public services in this area disciplines licensing organizations in terms of adhering to procedural deadlines. For example, the "License" electronic licensing system includes a feature that allows the suspension of service processing by the licensing authority to enable applicants to address comments, avoiding formal rejections and the need to repeat procedures.

Old System – Decentralized and Paper-Based

This marks a significant improvement over the previous decentralized licensing system, where all information about issued licenses and permits was scattered across various institutions in different locations and was only available in paper form. In the traditional system, the issuance of licenses and permits was handled exclusively by responsible organizations in the relevant regions and districts. Additionally, some licensing authorities had their own internal autonomous information systems.

As part of the Joint Project, the Ministry of Justice received support in reengineering business processes (BPR) for approximately 31 out of 266 licensing services. BPR involves the radical redesign of core procedures to achieve significant improvements in productivity, cycle time, and quality. These 31 interactive services were fully digitized and optimized, and are now available through the new "License" platform. Users can apply for licenses, pay fees, and track the status of their applications electronically, simplifying the process.

Such transparency in processes creates an incentive for improving the quality of work of licensing authorities, as it helps monitor their performance and build a rating of their effectiveness. As a result, this process has become convenient, fast, simple, and transparent for entrepreneurs.

Optimizing Processes for Seamless Operation

The digitization of licenses and permits is a response to overcoming infrastructural bottlenecks created by outdated systems. The improvements have allowed individuals and legal entities to effortlessly apply for the appropriate license or permit and track the progress of their applications in real-time. 

Usmon Ochildiv, the head of the private enterprise "Usmon Ishonch Service 2009" located in the Surkhandarya region, had a positive experience with the new system. His company provides services for printing text and images on paper, polyethylene, and other materials using digital technologies. The firm also offers similar services for printing text and images for visually impaired people, combining digital printing technology with Braille.

Ochildiv recalls: "Recently, I submitted a notification application for printing activities through the portal license.gov.uz. My application was reviewed within one business day. Previously, it took a week or 10 days to obtain a permit. Sometimes, I had to travel to Tashkent to submit the necessary documents. The new online system is indeed convenient. The payment process is also quite simple."

Since the portal’s launch in 2021, over 370,000 applications have been processed online, saving applicants billions of soms and more than 750,000 sheets of paper. The top 5 categories of applications include:

- Transport – 237,156 (64%)
- Education and Sports – 24,952 (6%)
- Alcohol and Tobacco Trade – 22,566 (6%)
- Ecology and Environment – 18,375 (4%)
- Medicine and Veterinary – 16,287 (4%)

Notification System Further Eases Business Operations

New government reforms have also introduced a notification procedure that replaces 44 licenses and 13 licensing procedures. For instance, by simply notifying the authorized body, businesses can now start operations in fields such as preschool education, concerts/entertainment, veterinary services, and retail alcohol sales. Media registration has also been transitioned to a notification-based system.

The licensing and permitting reform being carried out in Uzbekistan not only involves moving document processing procedures online but also revising the requirements themselves, establishing a clear list of documents that entrepreneurs must submit. These requirements must be reasonable and clearly understood by both regulators and businesses, which helps reduce the administrative burden on entrepreneurs.

The ultimate goal of this initiative is to integrate all state licenses and permits into a single system, thereby achieving greater accountability and higher-quality data in this crucial area of public services.