A New, Strategically Significant Resolution Has Been Adopted Concerning the Republic of Karakalpakstan

Presidential Resolution No. 143 of the Republic of Uzbekistan, "On Measures for the Establishment of a Special Mining Zone in the Republic of Karakalpakstan and the Organization of Its Activities," has been adopted.

Pursuant to the document, a special mining zone, "Besqala Mining Valley," is being established in the region, intended to serve as a platform for the development of the digital assets industry and the attraction of investments into the high-technology sector. The entire territory of the Republic of Karakalpakstan is designated as a unified operational space for the said zone.

Within the framework of the special zone, the following legal regime is established:

• Mining activities utilizing the unified electric power system, all types of renewable energy sources, as well as electricity generated by hydrogen power plants, are permitted.

• The realization of crypto-assets obtained as a result of mining activities is permitted, in accordance with the established procedure, through national crypto-exchanges and foreign trading platforms, including direct contractual transactions, as well as their exchange for other liquid crypto-assets.

• Proceeds from the realization of crypto-assets, including assets exchanged for other liquid crypto-assets, are subject to mandatory crediting to bank accounts held with commercial banks of the Republic of Uzbekistan.

• Resident status of the special zone is granted exclusively to legal entities duly registered and operating within the territory of the Republic of Karakalpakstan in accordance with the procedure prescribed by law.

• Residents are granted the right to establish greenhouse facilities on agricultural land, utilizing thermal energy generated during mining activities, in compliance with the established requirements.

For the purpose of the effective implementation of the project, a Directorate of the Special Mining Zone "Besqala Mining Valley" shall be established under the Council of Ministers in the legal form of a limited liability company. The Directorate is vested with the authority to confer resident status upon participants of the special zone and to coordinate its activities.

Until January 1, 2035, income derived by residents from transactions related to the conduct of mining activities shall be exempt from the payment of taxes and mandatory contributions.