Bonds

Corporate bonds are a classic capital raising instrument in which a private company or commercial bank borrows money from investors for a specific period. For the issuer, this is an advantageous alternative to bank credit, allowing them to obtain financing without providing strict collateral.

For a private or corporate investor, purchasing such securities means obtaining a guaranteed right to regular passive income in the form of interest. Unlike stocks, bonds do not grant voting rights at shareholder meetings or a share in the business, but ensure mandatory repayment of the entire debt amount on a strictly established maturity date.

Large joint-stock companies, limited liability companies, and leading commercial banks of the country can act as issuers on the local securities market. To issue debt securities, an organization must meet strict financial stability criteria. Before entering the exchange, each company undergoes a state audit procedure and must register its prospectus with the National Agency for Perspective Projects (NAPP). This ensures that only legal entities with transparent reporting and real business operations enter the open market.

The yield level on corporate bonds in Uzbekistan's national currency traditionally exceeds rates on standard bank deposits and currently averages 20% to 25% per annum in sum. The specific coupon rate directly depends on the issuer's credit rating and the current monetary policy of the Central Bank.

Payment frequency is fixed before trading begins and cannot be changed unilaterally. Depending on the conditions of a particular issue, investors can receive accrued interest monthly, quarterly, or semi-annually, allowing flexible personal cash flow planning.

Under current Uzbekistan legislation, income from bond interest (coupons) paid by business entities is fully exempt from taxation for both individuals and legal entities. For private investors, this means a zero personal income tax (PIT) rate, while for commercial companies it means profit tax exemption.

This preference is temporary and was introduced by the state to actively support and stimulate the local capital market. According to regulatory acts (including tax benefit extensions under Presidential Decree No. PP-90), this special tax regime is officially established and remains in effect until December 31, 2028.

The debt securities market in Uzbekistan is structured to be maximally democratic, allowing retail investors to start with modest capital. The nominal value of one corporate bond for the mass segment at most issuers is only 100,000 soums. Thus, to make your first exchange transaction, you need to have a balance equivalent to the value of one security, plus the minimum commission of an investment broker.

A low entry threshold gives beginners an excellent opportunity to test exchange instruments without significant financial risks. Additionally, the affordable price of one bond allows you to effectively diversify investments even with a modest overall budget, distributing capital among securities of several commercial banks or enterprises from different economic sectors.

Corporate debt instruments on the stock market of Uzbekistan are most often classified as medium-term assets. Depending on the investment strategy and business objectives, companies and commercial banks issue bonds with a maturity of 1 to 3 years (long-term programs up to 5 years are less common). This time period is fixed by the issuer in the prospectus before trading begins and cannot be changed during circulation.

For an investor, this period represents the time during which their funds will be in use by the company, and they are guaranteed to receive regular interest payments. Upon expiration of this fixed period, the official maturity date arrives, and the issuer fully repays investors the initial par value of all bonds purchased.