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1.1.1. Main Forms of Doing Business

Kyrgyzstan provides several business forms for investors, of which the main forms include:

  • Company (Limited Liability Company or Joint Stock Company); and
  • Foreign Business (Subsidiary, Branch, Representative Office).

Company

Companies can be formed either as Limited Liability Companies (‘LLC’) or as Joint Stock Companies (‘JSC’).

The key aspects of Limited Liability Company include:

  • Shareholders’ liability is limited to their contribution in the company;
  • No minimum capital requirement;
  • Minimum 1 shareholder and maximum 30 shareholders, of any nationality, are permitted;
  • Another company cannot be the sole shareholder in LLC;
  • Minimum 1 director (individual or company), of any nationality, is required; and
  • Mandatory to convert the LLC into a JSC within a period of 1 year, if shareholders are more than 30; otherwise, it may be liquidated.

The key aspects of Joint Stock Company include:

  • Shareholders’ liability is limited to their contribution in the company;
  • The minimum capital requirement is KGS 100,000;
  • JSC may issue other securities such as debentures, bonds to raise working capital;
  • Another company cannot be the sole shareholder in JSC;
  • JSC can be formed as open JSC or closed JSC:
    • an open JSC can offer shares to the public. It is required to publish an annual report on its financial and business performance in the media, subject to certain conditions; and
    • a closed JSC requires minimum 3 shareholders and 1 director. Maximum 50 shareholders are permitted. If shareholders increase beyond 50, then it is required to be converted into open JSC within a period of 1 year.

Foreign Business (Subsidiary, Branch, Representative Office)

Foreign companies can conduct their operations in Kyrgyzstan through the constitution of a subsidiary, branch office, or a representative office. A subsidiary can be formed as an LLC or a JSC, subject to certain restrictions.

Foreign Business (Subsidiary, Branch, Representative Office)

A branch of a foreign entity is not regarded as a separate legal entity in Kyrgyzstan, and its operations are defined and controlled by the foreign parent entity. However, it is permitted to conduct business activities in the country. A branch of a foreign entity is required to be registered with the Ministry of Justice whereas, a branch of an international bank is required to be additionally registered with the Central Bank of Kyrgyzstan.

A representative office is not regarded as a separate legal entity in Kyrgyzstan. A representative office is not allowed to engage in commercial or business activity in the country. It is only permitted to conduct market research and to promote products and services of the parent company within Kyrgyzstan. A representative office of a foreign entity is also required to be registered with the Ministry of Justice.

Further information on the general investment, tax, and regulatory regime about the country is available at the following external references:

  • “Doing Business” report from World Bank – click here
  • Reports and publications from OECD – click here
  • Reports and publications from IMF – click here
  • Reports and news from Tax Justice Network – click here
  • Investor Guide – Information for investors – click here