Embassy of the Kyrgyz Republic to the Swiss Confederation

Investing in Kyrgyzstan

COUNTRY PROFILE THE KYRGYZ REPUBLIC

Basic data (2011)Area: 199 000 km²Population: 5,5 mln peopleAverage age: 27,6 yearsLife expectancy: 68,8 yearsOfficial languages: Kyrgyz and RussianLiteracy level: 99.3%Currency (code): Som (KGS)GDP: USD 5.5 billionGDP per capita: 1 131 USDGDP growth: 5,7%Public debt to GDP: 48% Inflation 5.7% FDI inflow 459 mln USDStructure of Economy (% to GDP): Services (52%), Industry (24%), Agriculture (18%), Construction (6%)

New Economic Policy Strategy

Sustainable economic growth Improvement of business and investment

climate through optimization of legislation and economy deregulation

Optimization of state budget through efficient management of expenditures and revenues

Implementation of 40 large scale national projects to develop strategic sectors of economy. Creation of the state owned Development Bank

Privatization. The Government plans to sell off its assets in the following sectors: banking, energy, air and railroad, telecommunications, oil and gas.

Reasons to Invest in Kyrgyzstan Convenient geographic

location in the heart of Eurasia

Liberal, investment friendly legislation with a broad range of rights and guarantees

Liberal trade regime as a WTO member state (1998)

Low and simple taxation system

Competitive human capital and affordable skillful workforce

Strategic location on the Silk Road between Europe and Asia

Access to markets in Eurasia and China with over 1 billion of customers.

A transit country with potential to become transport, logistics and communication hub Kyrgyzstan

Turkish Airlines uses “Manas” airport as a transit point of the flight Istanbul-Ulanbator-Istanblul. The Lufthansa has some plans to fly to South Asia via “Manas”.

Strategic geographic location

Liberal legislation

Law “On investments in the Kyrgyz Republic” treats equally both national and foreign investors. Investment threshold was reduced to a level of $100,000

Bilateral treaties on mutual support, encouragement and protection of investment (capital expenditure) with 27 countries including Switzerland

New law “On licensing system in Kyrgyzstan”

Kyrgyzstan was ranked # 70 in the World Bank report “Doing business” for economic reforms

Liberal Trade and Taxation Regime

A member of the WTO (1998) and “Free Trade Zone Treaty” with Russia and other FSU countries (2011)

Trading with 123 countries with turnover equal to $5, 600 mln. in 2011. The main trade partners include

Russia (29%), Kazakhstan (16.8%), China (14%), Switzerland (8%)

New Tax code stimulates business expansion. New rates: Profit tax – 10%, Income tax – 10%, VAT -

12% (no VAT is levied on the imported industrial equipment by investors).

Liberal Trade and Taxation Regime

Treaties on avoidance of double taxation, including with Switzerland (2002), with 21 countries

4 Free economic zones offer business privileges for foreign investors: no duties on manufactured goods, tax incentives, simple customs clearance

and licensing

Affordable educated and skillful workforce

One of the Kyrgyzstan’s assets is a human capital that pushes forward development of the country

Literacy rate is 99.3%

Young people represent 30% of total labor force educated in Kyrgyzstan and overseas

Competitive wages in comparison with other former USSR countries. The average monthly salary in 2011 amounts to $160 ($480 in Kazakhstan and $640 in Russia)

ATTRACTIVE SECTORS FOR INVESTMENT

Mining. Mineral resources suh as gold, coper, rare metals.

Energy. Hydropower is 90% of the country's electricity production and its total capacity is 142 billion kWh per year, of which only 10% is used presently.

Garment industry. Over 110 thousand people are employed in more than 130 companies.

Agriculture. More than 699 thousand people are employed. No VAT on production and processing

Tourism. Mountain climbing, hunting, skiing, snowboarding, rafting and fishing. Year long recreation opportunities at Issyk-Kul Lake.

Naryn Province Investment Opportunities

Located in south east on the border with China on area of 44 thousand sq.km. 70% are mountains. Population – 265 thousand.

Mining projects include exploration of deposits of gold, iron, aluminum, coal, wolfram, barites, lead.

Hydroenergy projects include construction of small and medium power generation plants on numerous mountain rivers

Food processing projects include stock breeding and construction of meat processing factory for domestic and foreign markets

Tourism on Silk Road route. Construction of ski resorts, trekking bases.

Invest in Kyrgyzstan with confidence!