By Diplomacy Journal Lee Kap-soo

The following article was contributed by Makhliyo Muksinova, export development director at IT Park Uzbekistan to the Diplomacy Journal for publication through the Embassy of Uzbekistan in Seoul. –Ed.

The collaboration between Uzbekistan and South Korea is not just an emerging trend—it’s a powerful alliance that’s driving significant developments in the IT and outsourcing sectors. Both countries have demonstrated a strong commitment to working together through a series of impactful joint initiatives and partnerships. By leveraging Uzbekistan’s young and skilled workforce and South Korea’s technological expertise, this partnership is setting new standards for international cooperation in IT services and outsourcing.

Uzbekistan at a Glance

Uzbekistan is undergoing active economic reforms aimed at liberalizing the economy and improving the business climate. The macroeconomic environment, including controlled inflation, a stable currency, and a balanced state budget, instills confidence in investors for the long term. Moreover, Uzbekistan is renowned for its friendly policies, which contribute to long-term geopolitical stability and positive international relations.

The processes of opening and running a business in Uzbekistan have significantly simplified in recent years, as confirmed by international rankings – Uzbekistan has been listed among the most favorable countries for starting a business by U.S. News & World Report. 

At the same time, the development of the e-government services platform has further eased the process, allowing entrepreneurs to conduct operations without mandatory visits to relevant authorities. As of now, the unified portal provides more than 700 types of services.

Thanks to significant infrastructure development, 99% of the country now has Internet access, with some of the lowest prices worldwide. Uzbekistan ranks 22nd globally in mobile internet pricing at $0.30 per GB. In terms of Mobile Data Affordability, the country is 43rd out of 179, with a cost of $4.36 per 10 GB. On a global scale, the average monthly mobile plan with over 10 GB of data costs $24.20.

Building on Success: Joint Partnerships and MOUs

Uzbekistan and South Korea have laid a strong foundation for collaboration through several key partnerships and MOUs that have helped to solidify their cooperation in the tech and outsourcing industries:

1. Uzbek-Korean IT Business Alliance: One of the most significant partnerships, this alliance between IT Park Uzbekistan and the Korea Institute of International Industrial Cooperation (KIIIC) is designed to facilitate IT outsourcing and strengthen technological ties between the two countries. The alliance focuses on promoting Uzbekistan as a premier outsourcing destination, attracting South Korean companies to tap into its skilled workforce. Joint IT offices will be established in both countries to streamline collaboration and boost exports of Uzbekistan’s IT services to Korea.

 
2. MOU with D.Camp: This memorandum of understanding with South Korea’s top startup incubator, D.Camp, is designed to enhance Uzbekistan’s startup ecosystem. It connects Uzbek entrepreneurs with Korean mentors and investors, offering them access to world-class business support, accelerators, and investment opportunities. Through this MOU, South Korean investors gain firsthand exposure to Uzbekistan’s rapidly developing tech scene, helping Uzbek startups scale internationally.

3. INHA University in Tashkent: This prestigious collaboration has brought South Korea’s renowned INHA University to Uzbekistan, where it provides top-tier IT education. The partnership ensures that Uzbekistan’s young professionals are equipped with cutting-edge skills, meeting the demands of global markets and providing a solid talent base for outsourcing.

4. HANCOM Academy: A collaboration in the digital content space, HANCON Academy focuses on training young Uzbek professionals in animation and game design. By bringing South Korean expertise to Uzbekistan, this initiative helps diversify Uzbekistan’s IT sector and creates a new generation of professionals who can contribute to global creative industries.

5. AKITA University and Yeungnam University Partnership: This academic partnership between AKITA University and Yeungnam University focuses on dual-degree programs in IT and engineering, providing Uzbek students with high-quality education aligned with Korean standards. This initiative strengthens ties between the academic institutions of both countries, fostering joint research and development in IT.

It is also important to mention that the Korea International Cooperation Agency (KOICA) plays a crucial role in the partnership by supporting various projects aimed at developing Uzbekistan’s IT infrastructure and educational initiatives. KOICA collaborates with local partners to implement key programs that promote technology exchange, capacity building, and the development of digital ecosystems. KOICA’s involvement has been instrumental in supporting the broader framework of ICT cooperation between Uzbekistan and South Korea, further fostering innovation and skill development.

Why Uzbekistan?

For South Korean companies, Uzbekistan offers a range of advantages that make it the perfect destination for ITes and outsourcing. The country’s young and highly skilled workforce is ready to meet the global demand for tech services, and the cost-efficiency that Uzbekistan offers is a significant benefit for businesses seeking to optimize their operations.

Young, Skilled Talent: With 60% of the population under 30 and over 102,000 Korean speakers, Uzbekistan’s workforce is uniquely positioned to meet the needs of South Korean businesses. The country produces more than 125,000 IT specialists annually, ensuring a steady pipeline of talent.

Cost-Effective Operations: Uzbekistan’s competitive labor costs and affordable infrastructure make it an attractive destination for outsourcing. Businesses can reduce operational expenses while maintaining high standards of service, especially in ITes and outsourcing sectors.

Cultural and Linguistic Synergy: Uzbekistan’s strong cultural and linguistic ties to South Korea make it an ideal partner. The presence of a large Korean-speaking population ensures seamless communication and collaboration between companies in both countries.
 
Moreover, soon the "Enterprise Uzbekistan" International Digital Technologies Center is about to launch, which will be a zone with a special legal regime for the next 100 years, based on the best practices from Ireland, Germany, the USA, the UAE and other countries.

Leisure activities: Beyond business, Uzbekistan offers a wide array of leisure activities year-round, catering to diverse interests and ensuring enjoyable pastimes for the entire family. From engaging in active pursuits and sports tourism to delving into the nation’s rich historical legacy, or simply relishing a day out at cinemas, bars, or restaurants, there’s something for everyone.

IT Park Uzbekistan: A Gateway for Korean Companies

At the center of Uzbekistan’s IT and outsourcing strategy is IT Park Uzbekistan, a state-of-the-art ecosystem that supports foreign companies, particularly those from South Korea, in setting up and growing their operations. IT Park offers a comprehensive range of incentives and support programs that streamline the process for market entry and expansion:

1. One-Stop Shop: This service enables South Korean companies to register their businesses remotely within just three days, simplifying the process of entering the Uzbek market.

2. Tax Incentives: Companies operating within IT Park Uzbekistan can benefit from 0% tax rates on corporate, land, and property taxes. These incentives are designed to significantly reduce the financial burden for businesses, allowing them to reallocate resources toward growth and expansion. 

3. Zero Risk Program: This program provides businesses with 12 months of free office space and technical equipment, ensuring that companies can set up operations without incurring upfront real estate and infrastructure costs. Additionally, the program offers a reimbursement of up to 15% of local employee salaries and covers up to $5,000 for employee training and development, significantly reducing operational expenses and allowing companies to invest in the skills of their workforce with minimal financial risk.

4. IT VISA: This program was designed to ensure a comfortable stay for foreign IT specialists in Uzbekistan, granting foreigners the same social rights and opportunities as Uzbek citizens for up to 3 years. It is available to investors, IT specialists, or founders of a company member of the IT Park.

A Promising Future for Korean-Uzbek Cooperation

Uzbekistan and South Korea have created a partnership that is built on a shared vision for growth and success in the IT and outsourcing sectors. With key joint ventures, MOUs, and government-backed initiatives already in place, the collaboration between these two nations offers substantial opportunities for businesses looking to expand. By leveraging Uzbekistan’s cost-effective operations and young, talented workforce, South Korean companies can confidently scale their global operations. This partnership is set to drive continued growth and success in the global market, benefiting businesses in both countries.

Now is the time for South Korean companies to seize the opportunity and partner with Uzbekistan, where the future of IT and outsourcing awaits.