Investment Climate and Business Environment
According to the Law on Investment of the Kyrgyz Republic (as amended by the Law of KR dated 14 June 2004 N 76, 31 July 2006 N 144, 23 June 2008 N 127):
– Kyrgyz Republic provides equal investment rights for local and foreign investors, regardless of nationality, ethnicity, language, gender, race, religion, place of their economic activities, as well as the country of origin of investors or investments, except in cases stipulated by the legislation of the Kyrgyz Republic.
– Kyrgyz Republic represented by the state authorities and officials of local governments refrain from intervention in economic activity, the rights and legitimate interests of investors.
– The investor has the right to freely export or repatriate in fully convertible currency, compensation, as well as income derived from investments in the territory of the Kyrgyz Republic, including, but not limited by the following:
a) income from investments received in the form of dividends, interest and other forms of income;
b) funds received by investors after partial or complete termination of investment activity in the Kyrgyz Republic or disposition of investment property and property rights, without prejudice to the commitments of the investor in respect of the Kyrgyz Republic, or other creditors.
– Investors are entitled to freely exercise at their own discretion the right to possess, use and dispose of their investments, revenues and profits obtained by the said investments, for any purpose not prohibited by the legislation of the Kyrgyz Republic.
– In the case of amendments or additions to the investment, tax or customs legislation of the Kyrgyz Republic, with the exception of the Constitution and laws of the Kyrgyz Republic related to national security, public health and environmental protection, investors have the right to choose the most favourable conditions for them within the period of ten years from the date of implementation of their investment activities (or the period specified by the investment agreement).
Visa-free entry to the Kyrgyz Republic is valid for citizens of the following states of the CIS: Russian Federation, Azerbaijan, Georgia, Mongolia (for 3 months), Armenia, Belarus, Kazakhstan, Moldova, Tajikistan, Ukraine.
Since July 24, 2012 visa-free entry into Kyrgyzstan up to 60 days was introduced to nationals of the following countries:
|Bosnia and Herzegovina,
|The United Kingdom of Great Britain and Northern Ireland
||United Arab Emirates,
||United States of America,
Foreign citizens of other countries may enter Kyrgyzstan and transit through its territory only under condition of their possession of an entry visa to Kyrgyzstan.
The visa can be obtained at any Embassy of the Kyrgyz Republic abroad. If there is no embassy or representative of the Kyrgyz Republic, a visa can be obtained at the Russian or Kazakh Embassy or the Consular Department of the Ministry of Foreign Affairs in Bishkek airport upon arrival. The above embassies can open a visa only under a condition of an invitation/visa support available from a company of the country of destination.
Visa support requires the following information:
– Passport details
– The exact dates of stay in the Kyrgyz Republic
– Flight number (in the case of a visa at the Bishkek airport upon arrival)
Every foreign national upon arrival in Kyrgyzstan must be registered with the local police within 3 days (visa and registration office (OVIR), Local Police Department (ROVD), if he/she plans to stay in Kyrgyzstan for more than three days, excluding weekends.
Visas of the Kyrgyz Republic are divided into the following types and categories:
1 Diplomatic (type D);
2 Official (type O);
3 Investment (type INV);
4 Business (types B1, B2);
5 Labour (types W1, W2);
6 Student (type S);
7 Tourist (type TS);
8 Private (types P1, P2, P3);
9 Religious (Type R);
10 Transit (type TR).
Foreign citizens and stateless persons arriving to the Kyrgyz Republic with the purpose of work, get registration in the State Committee for Migration and Employment (hereinafter in this Section – Committee); they must obtain a standard work permit. A company, hiring a foreign citizen obtains permission to employ a foreign employee, which sets a quota for recruitment and employing of a certain number of foreign workers.
To obtain a work permit and permit to employ foreign workforce, both foreign citizen and the employer shall submit applications for the issuance of the relevant documents to the Committee. A list of documents that ought to be enclosed with the application is set by the Committee.
A work permit for a foreign head of enterprise and a foreign specialist is valid for one year, with the right to be renewed annually. The overall validity of the work permit for foreign skilled workers is no more than two years, and for foreign entrepreneurs – no more than three years.
The decision to issue or refuse a work permit is being made by the Committee within 15 days of submission of all the necessary documentation in proper format.
Registration of legal entities
In the Kyrgyz Republic, there are various legal forms of entities, of which the most common are the following:
Limited Liability Company; and
• Joint Stock Company (open-type and closed-type).
A Limited Liability Company (OsOO) is one of the most common legal property forms in the Kyrgyz Republic. This form provides a number of advantages:
The LLC members are is not liable for the obligations of the Company and bear the risk of losses related to economic activity of the Company within the limits of contributions made by them.
• the structure and competence of the LLC management are less regulated by law, which allows the LLC to be more flexible in terms of management and decision-making by its parties. ´
The minimum share capital must not be less than 100 KGS. It should be noted that, in accordance with the legislation of the Kyrgyz Republic, if the founding legal entity consists of one shareholder, he can not be the sole founder/participant of the LLC. The number of members of the LLC should not exceed 30. Otherwise, the LLC must be reorganized into a joint stock company within 1 year.
A Joint Stock Company is one of the most common legal forms of entities as the shareholders are not liable for its obligations and bear the risk of losses associated with the company’s activities with the value of their shares. A joint stock company must issue shares which are expressed in the national currency of the Kyrgyz Republic, regardless of the form of contribution. In addition to shares, joint stock companies may issue other securities (eg bonds) following the set procedure in order to raise working capital.
In accordance with the legislation of the Kyrgyz Republic, if the founding legal entity consists of one shareholder, he can not be the sole founder/participant of the Joint Stock Company.
Authorized capital may not be less than 100 thousand KGS. At the time of establishment of the company, its authorized capital must be fully paid and distributed among the founders.
In the Kyrgyz Republic, there are two types of joint stock companies – open type and closed type.
State registration of legal persons is within the jurisdiction of the Ministry of Justice of the Kyrgyz Republic. Registration (re-registration) of a legal entity, branch (representative office) shall be made within 3 business days after submission of the list of required documents to the registration authority.
State registration (re-registration) of financial and credit-issuing institutions, non-profit organizations, as well as branches (representative offices) of foreign and international organizations, with the exception of political parties and their subsidiaries (offices), shall be carried out within 10 calendar days from the date of submission the list of required documents to the registration authority. Termination of registration of legal entities, branches (representative offices) shall be made within 7 business days.
Activities in FEZs
There are three free economic zones in Kyrgyzstan:
• FEZ “Bishkek” is in the capital – the economic and political centre of the country;
• FEZ “Karakol” is located at the foot of the Tian Shan mountain range on the coast of Issyk-Kul Lake – the second largest alpine lake in the world that provides tremendous opportunities for development of tourism;
• FEZ “Maimak” is located at the border between Kazakhstan and Kyrgyzstan at the crossroads of international communication;
• FEZ “Naryn” occupies its area at the Chinese border, and has significant potential for development of tourism and mining. Its area is 47 thousand km2, which is approximately one-fourth of the entire territory of Kyrgyzstan.
Special legal regimes have been established in the free economic zones (FEZ) that provide benefits in the field of external economic and business activity.
Companies operating in free economic zones enjoy the following benefits and advantages:
• partial exemption from all taxes, duties, fees and charges for the entire period of operations in FEZs;
• deductions in the amount of 0.1-2% of the proceeds from the sale of goods and services to the General Directorate of free economic zone for provision of tax and other benefits in its territory;
• export of goods produced in FEZs, import of goods to the SEZ, as well as goods intended for re-export, are fully exempt from customs duties;
• goods intended for export produced in the territory of FEZ are exempt from quotas (except for export to the customs territory of the Kyrgyz Republic, the amount of which shall not exceed 30% of total production in FEZs throughout the year) and from licensing;
• easy entry and exit of foreign employees;
• Simplified and accelerated registration of a business entity;
• simplified customs procedures;
• direct access to infrastructure, including telecommunications, water, electricity and transportation, in the course of operating in the FEZs.