INVESTMENTS, EXPORT AND SMEs
The Ministry of Economy of the Kyrgyz Republic
Contents
•Brief information about Kyrgyzstan
•Macroeconomic indicators
• Legislation and favorable investment climate
•About production cost
•SME intensive sectors
•About relevant institutions
•Other investment, export and SME support measures
Liberal legislation
Equal conditions for foreign and
local companies
Guarantees of protection from
expropriation of investments and
compensation of losses
Wide protection of foreign investors
rights
Access to all sectors of economy
Participation in privatization,
purchase of shares and securities
of Kyrgyz companies
Freedom of choice of form and
objects of investments
Guaranteed repatriation of
investments, property and
information outside the Kyrgyz
Republic
Freedom of monetary operations
No intervention into business
activities
SMEs in Kyrgyzstan
Indicator Year 2015 Year 2016
The volume of gross value added of SMEs (bln. USD)
2,54* 2,74*
Share of SME’s gross added value in GDP (%)
40,3 40,8
Number of operating SMEs, units 10 573 11 013
Number of employed people in SMEs (thsnd)
452,3 463,6
* Current exchange rate
Relevant bodies of the Ministry of Economy for SME development, investment and export promotion
The State Agency for Investment and Export Promotion under the
Ministry of Economy of the Kyrgyz Republic
Investment Policy Department
Department of entrepreneurship regulation
Department Interregional Management
Ministry of Economy of the KR
Departments’ Functions
•Development and implementation of a unified state policy in the field of direct investment, taking into account the priorities of economic development
•Proposals elaboration for state bodies and local self-government bodies on improving the investment climate in the Kyrgyz Republic
Investment Policy Department
•Development of a unified state policy in regulating entrepreneurship activities in licensing, control and supervision
•Making suggestions on simplifying and optimizing the procedure for obtaining licenses and permits, for optimizing inspections of business entities
Department of Entrepreneurship
regulation
The State Agency for Investment and Export Promotion under the Ministry of Economy of the Kyrgyz Republic
The State Agency for Investment and Export Promotion under the Ministry of Economy of the Kyrgyz Republic attracts, advices and supports foreign I investors. In addition, local business also supported by the Agency.
consultations, meetings, seminars, forums, exhibitions etc.
Assistance to domestic enterprises in finding foreign investors and conclusion of contracts with foreign investors
advisory support in resolving investment disputes
interaction between state bodies, investors, exporters and foreign importers
assessment of export readiness and exporters' capabilities
Structure of the State Agency
STABILIZATION REGIME
The investor has a right to choose and apply the most favorable tax regime for 10 year period in case of changes in legislations
SOVEREIGN CREDIT RATING
Kyrgyz Republic was assigned sovereign credit ratings "B2 stable" and "B“ by the international credit rating agencies «Moody's Investors Service» and «Standard & Poor's» correspondently.
INVESTMENT INCENTIVES
List of Investment Incentives was issued as an open source for the investors, which ensures transparency by providing fiscal and non-fiscal incentives and preferences.
Improvement of Investment Climate
• Adopted fiscal policy concept for 2015-2020 years
• Businesses with turnover up to 100 000 $ are exempted from VAT
• Simplified taxes for the construction industry (was fixed at 12$ per m2)
• Leasing companies were exempted from VAT, income tax and sales tax
• Introduced tax contract (with fixed tax value) for catering, resort and recreational field and housing construction
• Under the consideration the implementation of reduced Income Tax for newly established enterprises within first 5 years and the possibility of exempting them from the land tax
• Import of banking equipment was exempted from VAT
Fiscal measures to support investors
• Reduced number of permits and licenses from the 500 to 101
• Introduced the principle of "silence gives consent" in the licenses issue system.
• The number of public services were reduced from 20 000 to 373
• Simplified procedures of state registration/ Registration for starting business includes only 2 procedures
• Reduced number of controlling state bodies from 21 to 13
Reduction of Administrative Barriers
Kyrgyz-Russian Development Fund was founded in 2015
• Total Capital 500 millions $ USA
• Additional 500 millions $ USA is being attracted from investors
The Fund provide law interest credits to projects in agriculture, textile industry, transport and housing construction, infrastructure.
Kyrgyz-Russian Development Fund
THANK YOU FOR YOUR ATTENTION The Ministry of Economy of the Kyrgyz Republic Tel.: +996 (312) 62-05-35 Fax.: +996 (312) 62-41-60 E-mail: mail.mineconom.gov.kg