July 16, 2024

Opening a personal investment account in Uzbekistan

The Cabinet of Ministers adopted Resolution No. 331 dated from 13th June 2024 “On approval of the Regulations on the procedure for opening a personal investment account and accounting for the funds on it”. This Regulation defines the purposes of opening a personal investment account and the policy of its use.

Also, the Regulations provide for procedures for:

  • keeping records of funds in an individual investment account and providing information about their status;
  • application of benefits for wages and other income sent to a personal investment account;
  • closing a personal investment account.

The provision has a specific scope, namely, it applies to shares, corporate bonds, long-term government securities, municipal bonds, investment units, and mutual investment funds.

According to the Resolution, a personal investment account is used to purchase securities issued on the local stock market and traded on the organized securities market.

A personal investment account is opened and managed by an investment intermediary based on an annual agreement. A client can have only one personal investment account. Deposits to a personal investment account and all transactions on it are carried out in UZB national currency.

To open a personal investment account, the following procedure must be established:

  1. the client applies to the investment intermediary indicating the personal identification number of the individual and an identity document.
  2. the investment broker opens a personal investment account for the client within one day.

It is provided that the investment intermediary can remotely open a personal investment account in electronic form through digital identification, buy and sell the client’s securities, and also provide him with other services following the agreement.

After opening a personal investment account, the securities and funds held in it are regulated. Securities and funds in a personal investment account must be used only for the purposes established by the agreement.

Dividends on stocks and interest on bonds are not kept in an individual investment account. In this case, these funds are transferred by the investment intermediary to the client’s bank or deposit account.

The client has the right at any time to demand from the investment intermediary the return of securities and funds held in his investment account or to transfer them to another investment intermediary with whom a new agreement has been concluded.

Closing a personal investment account

The client has the right to close a personal investment account at any time, including remotely, by contacting an investment intermediary to close a personal investment account. The following requirements are provided:

  1. In cases where a personal investment account is closed before the expiration of 12 months from the date of conclusion of the agreement, the funds on it are subject to income tax for individuals.
  2. a personal investment account may be closed after the sale of all securities held on it or transferred to another personal investment account or deposit account at the direction of the client.

Your investment intermediary is required to close the personal investment account within ten business days from the date of receipt of the client’s application to close the personal investment account.

Tax legislation requirements

By paragraph 23 of Article 378 of the Tax Code of the Republic of Uzbekistan, wages and other income sent to the personal investment account of clients for the purchase of securities issued on the local stock market are not subject to personal income tax, under the following conditions:

  • in the amount of up to one hundred times the minimum amount of total wages for the tax period;
  • upon payment of payments (contributions) in a non-increasing order and with the condition of non-revocation of one-time payments within twelve months from the date of entry into force of the agreement.
  • Investment intermediaries and investment asset managers submit monthly information about personal investment accounts in electronic form to the competent authority (National Agency for Prospective Projects of the Republic of Uzbekistan) and tax authorities in an orderly manner.