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