The Government of Kyrgyzstan grants various economic advantages to specific enterprises or groups of enterprises, with a view to promote investment into favored sectors or regions.
There are five SEZ/ FEZ in Kyrgyzstan: Naryn, Karakol, Bishkek, Leilek and Maimak. Following incentives are provided to companies operating in SEZ / FEZ:
- Exemption from corporate tax, custom duties, import duty, any other fees and collections over the period of performance of activities in SEZ/ FEZ;
- Nominal annual fee of 0.1% - 2% on the sale of goods and services paid to the General Directorate of SEZ/ FEZ for granting certain privileges in the SEZ/ FEZ territory;
- Export of goods produced in SEZ/ FEZ, import of goods into SEZ/ FEZ, and goods imported for re-export are completely exempt from customs duties;
- Export of goods produced in SEZ/ FEZ shall be exempted from quota allocation and licensing, subject to certain restrictions;
- Simplified entry and exit regime for foreign employees;
- Simplified and expedited registration of economic entities;
- Direct access to infrastructure, including telecommunications, water supply, power supply, and transportation for performance of an activity in the SEZ/ FEZ territory; and
- Effective 1 January 2019, the supply of goods, works, and services by local non-FEZ/SEZ suppliers to an entity operating in FEZ/SEZ for use in its production is subject to a zero VAT rate.
- Profits earned by domestic companies (except companies engaged in tobacco, mining, alcohol, retailing, and information technology business), from own-produced or re-processed goods in Kyrgyzstan using only new equipment (not used or bought before 1 May 2015) are subject to corporate tax at the rate of 0%, for a period of 5 consecutive years, provided the taxpayer has:
- annual turnover exceeding KGS 170 million;
- monthly corporate tax exceeding KGS 150,000; or
- charter capital of the company exceeds KGS 10 million;
- Business activities conducted in the Park of Innovative Technologies are exempt from corporate tax, sales tax, and VAT, subject to certain conditions;
- Tax incentives are available to new industrial enterprises established on or after 1 January 2019 in specified areas engaged in qualified activities and having an investment agreement with the local authorities of a specified area. The incentives include exemption from sales tax, income tax, land tax, and property tax. The exemption is available for a period of 5 years, which may be extended up to 10 years. Qualifying industrial activities include all types of industrial production based on innovative technologies, light and food industry, power industry, agricultural processing, assembly production, and any export-oriented production. The incentives are not available to branches or representative offices of an enterprise outside of a specified area;
- New producers of electric and thermal energy, gas, and renewable fuel from the use of renewable energy sources are exempt from corporate tax for a period of 5 years from the date of commissioning of the renewable energy plants; and
- Tax benefits are available for entities registered and operating in certain areas of the Batken, Leilek, and Kadamjai districts which are included in the list of preferential border settlements and carrying out preferential types of industrial activity. This includes all types of industrial production based on innovative technologies, light and food industries, the electric power industry, processing of agricultural products, assembly production, and any export-oriented production. The incentives include exemption from sales tax, income tax, land tax, and property tax.