Arbitration as the Method of Settlement of Investment Disputes against the Kyrgyz Republic
AKIpress Analytics section, March 19, 2013

The Kyrgyz Republic has already participated in several arbitration proceedings. Therefore, it might be reasonable to analyze peculiarities of legal regulation of arbitration in the KR, the causes and consequences of arbitration disputes and make relevant conclusions…

What risks foreign investors should take into account while investing into the Kyrgyz mining sector,
The Times of Central Asia, March 1, 2012.

Overview of Anti-Corruption Laws in Kyrgyz Republic,
Comparative Summary of Anti-Corruption Laws in the CIS Economic Region, 2011,
The CIS Leading Council Network.

What a foreigner should know about tax regime in the Kyrgyz Republic?
The Times of Central Asia, publication expected.

Kyrgyzstan is not an offshore zone and does not provide tax exemptions, but the rates of many of them are not very high.

1. What qualifies as corruption?

Corruption refers to a white-collar crime covering such offences as receiving material and other benefits and advantages, as well as the provision of these benefits and advantages to individuals and legal entities, bribery, forgery, negligence of official duty, misappropriation of state property and abuse of official status and powers that threaten the interests of society and the state.

2. Which laws establish anti-corruption measures in the Kyrgyz Republic?

Anti-corruption measures are detailed in numerous areas of Kyrgyz law, the most notable being the laws on Anti-Corruption, Public Service, Municipal Service, Public Procurement, Combating Financing of Terrorism and Legalization of Illegally Generated Revenues (Money Laundering), Declaring and Publication of Data on Revenues, Obligations and Property of Persons Occupying Political and Other Special State Positions, and Close Relatives Thereof, and certain provisions of the Administrative and Criminal Codes of the Kyrgyz Republic.

3. Who is subject to anti-corruption regulation in the Kyrgyz Republic?

All i) governmental and ii) municipal officials, iii) officials of the National Bank, iv) heads of state enterprises, engaged in corruption, v) individuals (citizens of the Kyrgyz Republic and foreign individuals) and legal entities, including their officials and employees, unlawfully providing material benefits, gifts, advantages or services to governmental, municipal officials and heads of state enterprises as well as vi) members of procurement commission and vii) members of Judges Selection Council are subject to Anti-corruption laws of the Kyrgyz Republic. The governmental officials include political public officials, judicial officials and administrative public officials. Municipal officials comprise of political municipal officials and administrative municipal officials.

4. What kind of business amenities to governmental officials are prohibited by Anti-corruption laws?

As a general rule, governmental officials are prohibited to accept gifts. However, Anti-corruption laws allow accepting of gifts by governmental officials provided that:
- the value of the gift provided to the governmental official does not exceed 10 index rates (about USD 21);
- the gifts are presented during the official meeting to public officials pursuant to governmental meeting protocols.

5. Are there any restrictions with regard to business amenities to private sector provided by Anti-corruption laws?

Anti-corruption laws prohibit:
- the exchange of gifts between commercial companies, and state owned enterprises and organisations, unless the value of such gift is less than 10 index rates (about USD 21);
- the giving/accepting of a gift, money, securities, or other assets as well as the unlawful provision of services to a person with managerial functions working at a commercial company for the purposes of encouraging such person to take or not to take action in the interest of the giver of the bribe by using his/her managerial functions.

6. What kind of liability is prescribed for violation of Anti-corruption laws?

Violations of Anti-corruption laws lead to administrative and criminal liability. Administrative liability comprises of fines, termination of office and restriction on serving as governmental, municipal or corporate officer for a certain period of time. Criminal liability includes besides fines, termination of office and restriction on serving as governmental, municipal or corporate officer for a certain period of time, confiscation of property, imprisonment. The liability is imposed on both persons involved in corruption (for instance, bribe-giver and bribe-receiver). Legal entities are not subject to criminal liability.

7. What agencies are responsible for investigating and prosecuting corruption?

Corruption-related crimes are investigated and prosecuted by the following agencies: Anti-Corruption Service under the State Committee of National Security, Ministry of Internal Affairs, State Service on Fighting Economic Crimes under the Government of the Kyrgyz Republic (Financial Police) and the General Prosecutor’s Office.

8. Are there statutes of limitations during which an offence can be prosecuted?

The statute of limitations for prosecution of violations of Anti-corruption laws vary from 1 up to 10 years depending on the gravity of the criminal offence, determined according to the maximum punishment stipulated for each specific offence.

2. Are there any limitations on the credit amount?

Each bank sets limitations on the amount of credits depending on the type of lending. As a rule, the biggest credits are issued for the purpose of developing existing businesses.
Kyrgyz law establishes a maximum exposure to one borrower to be 15%-30% of the net capital of the bank depending on affiliation and non-affiliation with a bank.

3. What are the approximate limits on interest rates?

At present, each bank has its own lending programs: business credits, retail credits, mortgage credits, etc., and establishes minimum and maximum rates for respective credit products.
Approximate interest rates in local banks are as follows:
- Corporate credits – from 14% to 26% per annum;
- Small business credits – from 16 to 23% per annum;
- Mortgage credits - from 16% to 20% per annum;
- Retail credits – from 17% to 28% per annum.

Interest rates vary depending on bank’s policy, financial records of the borrower, currency in which credit is issued, borrower’s credit score and security.

4. Is it necessary to be a Kyrgyz citizen to receive credits from Kyrgyz banks?

No, it is not. Kyrgyz law does not prohibit foreign nationals or stateless persons from receiving credits from Kyrgyz banks.

5. How credit is repaid?

The repayment of credit and interest, as well as other charges concerned is made according to the credit agreement and credit repayment schedule. In case of a credit facility, the repayment of the credit or part thereof can be made during the term of the credit, in which case the borrower shall have the right to re-borrow the repaid amount of the credit. If the procedure and time for repayment of interest are not set by the agreement, the interest shall be paid in equal monthly installments until the date of credit repayment.

6. Is it possible to prepay?

The right to prepay and prepayment terms and conditions are provided in the credit agreement. The agreement can establish penalty or moratorium/ban on the early repayment of the credit. In any case, borrower cannot prepay without creditor’s consent unless otherwise stipulated in the agreement.

7. What security can be used for a credit?

For the purposes of ensuring the repayment of credit, the following types of security are used:
a. penalty (contractual sanctions for late payment);
b. pledge (mortgage);
c. surety (guaranty);
d. bank guaranty.
In practice, pledge of immovable property (mortgage) is the most common type of security. Among other things which may be used as collateral are any movable property or property rights including equipment, transport, goods in turnover, securities, accounts receivable, etc.

8. Who can act as a surety for a credit? What is the surety’s liability?

Any solvent persons can act as a surety for a credit. A surety assumes joint liability for the performance by borrower of its obligations under the credit agreement, unless the surety agreement provides for a subsidiary liability of surety.

Joint liability means that creditor may present claims under the credit against borrower and surety jointly or against any of them separately, for the full amount or part of the debt.

Subsidiary liability means that creditor may present claims against surety only after borrower refused or is unable to satisfy bank’s claims or fails to fully repay the debt.

9. What happens when the provisions of a credit agreement are violated?

Depending on the extent of violations and terms and conditions of the agreement, borrower may be required to perform additional obligations such as payment of penalty or fines. In case of material breaches, creditor may demand early repayment of the credit and interest thereon.

10. What are the most significant credit-related expenses?

When considering a bank credit, pay attention not only to interest rates and maturity, but also to credit-related expenses. If all expenses listed below are summed up, they can result in a quite substantial amount thus making the credit more expensive.
Significant expenses are as follows:
a. front-end fee (1-2% of the total amount of credit)
b. real estate appraisal fee
c. collateral protection insurance fee, pledge registration fee
d. fees for legal and notarial services
e. taxes

1. What are some of the regulatory requirements associated with the construction and operation of a hydropower plant (HPP) in the Kyrgyz Republic?

To design, construct and operate an HPP, each entity must obtain the required licenses, permits and consent. Depending on the project, these may include:

- obtaining rights to construct the HPP;
- obtaining rights to the land plot upon which the HPP will be constructed;
- obtaining all necessary construction licenses and permits for the project;
- obtaining licenses to generate and to sell electricity;
- commissioning an environmental impact report;
- executing an electricity sales agreement and an agreement for connection to the electricity grid.

2. What land use rights are required to construct an HPP?

Any company wishing to construct an HPP must hold title to the land where the HPP will be constructed or hold temporary land use rights. In addition, this land must be zoned for industrial use.

Foreign entities, which Kyrgyz law defines as any entity registered in the Kyrgyz Republic with at least 20 percent of shares being owned by a foreigner, or in any other manner putting them under control of a foreigner, are subject to certain limitations which include a prohibition on land ownership and a 50 year cap on obtaining temporary land use rights to lands.

3. What licenses are necessary for the construction of an HPP?

A contractor performing construction work must obtain a construction license from the State Agency for Architecture, Construction and Housing and Public Utility Sector under the Government of the Kyrgyz Republic. The contractor must also be able to construct the HPP within a certain capacity (MW). The construction license does not have an expiry date and is valid throughout the country.

The construction license is issued within 30 days of the date of filing a full set of documents required.

In addition, the person with lease rights or ownership over the land plot must also obtain a construction permit which is issued for the duration of construction. The construction permit is issued by territorial state architectural & construction supervisory unit, within 10 days of filling a full set of documents required.

4. How much does it cost to obtain these licenses and permits?

The construction license costs 300 Kyrgyz Soms (approximately $ 6.26 USD) each. The construction permit is issued free of charge.

5. How can a company bid for the rights to construct a new HPP?

According to Kyrgyz law, the rights to construct a new HPP (except for major electric energy production capacities and main lines of electric grids) must be awarded by tender by the Ministry of Energy and Industry of the Kyrgyz Republic which is charged with organizing and conducting tenders on an annual basis.

Construction of major electric energy production capacities is carried out in accordance with the National Energy Program or separate resolution of the KR Government.

6. What state body is charged with regulating the operation of an HPP and what documents are required to operate an HPP?

Under Kyrgyz law, the Ministry of Energy and Industry of the Kyrgyz Republic is charged with regulating the operations of all HPPs. A company generating electricity must obtain a license to generate electricity from the State Department for the Regulation of Fuel and Energy Facilities of the Ministry of Energy and Industry of the Kyrgyz Republic (SDRFEF) .

If a company plans on selling electricity, it must also obtain a license to sell electricity from the SDRFEF. Both licenses are issued within 30 days from the date of filing a full set of documents required. The licenses do not have an expiry date.

It should be noted that if electric energy is generated using renewable energy sources, then the generation and sale of such electric energy will not require licenses. However, if electric energy is generated by an HPP with the established capacity of 30 MW and more, then the generation and sale of such electric energy will require respective licenses.

7. Who develops HPP construction project feasibility studies?

Before starting the construction of any HPP, it is necessary to develop a special document, a feasibility study (the “FS”) defining specific location, capacity, and other technical qualities of the future HPP. To develop the FS, the customer (owner of the land plot on which the HPP construction is planned) must enter into the FS development agreement with the organization having relevant experience and qualification. Afterwards, the FS will be used as a basis for drafting the HPP planning documentation.

8. What is an environmental impact report and what is its purpose?

An environmental impact report is a report issued by the State Agency on Environmental Protection and Forestry under the Government of the Kyrgyz Republic, certifying the project as environmentally sound after completing the review and appraisal of the FS for the HPP construction project. Each company wishing to construct an HPP must obtain an environmental impact report for each proposed project. The report is a prerequisite for obtaining a construction permit. The environmental impact report must also be publicized and endorsed by public opinion polls. If the report issued by the environmental protection authorities is negative, then construction of the HPP will be denied.

9. Why do companies execute electricity sales agreements and with whom are these agreements executed?

Pursuant to Kyrgyz law, companies must execute electricity sales agreements with power distribution companies to ensure that electricity which has been generated can be sold. Such agreements are executed on a standardized form approved by the SDRFEF.

There are four power distribution companies in the Kyrgyz Republic which own provincial distribution networks and supply electricity to consumers: Severelectro OJSC, Vostokelectro OJSC, Oshelectro OJSC and Jalalabatelectro OJSC.

10. Does a company need to execute a transmission agreement and, if so, with whom is such an agreement executed?

Kyrgyz law requires energy companies to execute electricity transmission agreements to ensure the transmission of electricity generated by the HPP. The agreement must be signed with the National Electric Grid of Kyrgyzstan OJSC or with power distribution companies which own grids. These agreements are executed on a standardized form which has been approved by the SDRFEF. Any changes to the standardized terms of the agreement must be approved by the SDRFEF.

As of March 2013

1. Are construction licenses and building permits required to build infrastructure in the Kyrgyz Republic?

Yes. Construction activities in the Kyrgyz Republic are subject to numerous regulatory restrictions. Kyrgyz law mandates construction licenses, building permits and other similar documents for most construction operations in the Kyrgyz Republic. Kyrgyz law distinguishes between “construction licenses” which refers to the licensing schemes granted to contractors and “building permits” which permit the actual carrying out of construction.

The issuance of both construction licenses and building permits is dependent on what kind of establishment or facility is being constructed. A group or individual wishing to obtain the necessary documents related to undertaking specific construction work should therefore check with state agencies or consult with a lawyer to determine which documents are required.

2. What are some of the main differences between a construction license and a building permit and who is responsible for issuing them?

Construction licenses are issued by the State Agency for Architecture, Construction and Housing and Public Utility Sector under the Government of the Kyrgyz Republic (the “Licensing Authority”). Construction licenses are issued to contractors to ensure that they meet all regulatory and safety requirements.

Kyrgyz law mandates that foreign legal entities be given the same treatment as local legal entities with regards to the issuing of licenses. In practice however, foreign legal entities are not usually issued construction licenses unless they have established locally registered subsidiaries to act as the holder of the construction license and other required permits.

The construction license has no territorial limitations and is valid for use nationally. It is issued indefinitely and does not have an expiration date.

Building permits are issued by territorial architectural and construction supervisory body depending on the location of a building to be constructed. Building permits are only issued to the person or entity having legal ownership or usage rights to the land which will be used for the project.

The building permit is issued for the anticipated duration of construction and can be renewed if necessary.

3. What is required in order to apply for a construction license?

As mentioned above, to obtain a construction license, a foreign legal entity should establish a local subsidiary in the Kyrgyz Republic. The local company wishing to obtain a license will then be required to submit to the Licensing Authority a list of documents provided by law.

Some of the documents which will be required include: the completed application (standard form for issuance of the construction license), an individual tax number and proof of insurance contributions by the subsidiary, proof of payment of the processing fee for the construction license, a copy of the certificate of state registration of the subsidiary with the Ministry of Justice, a list of construction projects applied for by the subsidiary or local enterprise as well as substantial documents related to the subsidiaries business structure and competencies, including the competencies of staff and the safety of equipment.

The construction license implies several levels of responsibility. Depending on the type of construction works and the degree of complexity involved, the level of responsibility is established in accordance with the Rules for Appointing the Level of Responsibility at the time of licensing.

4. What is required in order to obtain a building permit?

The procedure for obtaining a building permit is as follows:

- receipt of architecture and planning terms in territorial architecture and construction subdivision;
- development and approval of design documentation by the territorial architecture and construction subdivision;
- expert examination of the design of a building in the territorial subdivisions of the Licensing Authority ;
- obtaining a building permit from territorial architectural and construction supervisory body.

5. How much does it cost to obtain construction licenses and building permits and how long do the respective processes take?

The official fee for the issuance of a construction license is 300 Kyrgyz Soms (approximately $6,26 ) for each license . The construction license is normally issued within 30 calendar days after submission of all necessary documents to the Licensing Authority.

The building permit is issued free of charge within 10 business days from the date of submitting all necessary documents.
The fee for architectural and planning terms and approval of design documentation by the territorial architecture and construction subdivision varies depending on type of a building, area and etc.

As of March 2013

1. Who issues work permits to foreigners or stateless persons?

The State Migration Service under the Government of the Kyrgyz Republic (the "Migration Service") is the authorized state body charged with issuing work permits to foreigners and stateless persons wishing to work in the Kyrgyz Republic. The Migration Service issues two kinds of work permits: permits authorizing the hiring and employment of foreign employees – a document of a standard form authorizing legal entities and individuals to hire foreign employees in the Kyrgyz Republic (“Employment Permit”) and work permits (personal cards) authorizing foreigners or stateless persons to work in the Kyrgyz Republic (“Employee Permit”). The list of documents required for obtaining Employment Permit and Employee Permit is set by the Migration Service (the effective list of documents is available on the official website of the Migration Service: Applications for Employment Permit and Employee Permit can be filed in electronic format or hard copy.

2. Who sets quotas for hiring foreign employees?

The Government sets annual quotas for hiring of foreign and stateless employees. The quotas are established by industry and vary by regions of the Kyrgyz Republic, including Bishkek.

The quota for foreign labor provided in the Employment Permit, shall be annulled if it is not used within three months after the issuance.

3. Who is required to obtain work permit?

Kyrgyz individuals or legal entities planning to hire foreign employees must be issued Employment Permits before they hire foreign and stateless individuals. Foreigners and stateless individuals (who have reached the age of 18) who have legally entered the territory of the Kyrgyz Republic, and plan to work or do business in the Kyrgyz Republic must apply for Employee Permit.

4. In which cases can permits be refused or revoked?

Requests for work permits can be refused and valid work permits revoked if: ­

- suitable local professionals become available for hire in the domestic market; ­
- the data submitted in an application turns out to be inaccurate; ­
- employees are terminated from employment or the employers’ business activities in the Kyrgyz Republic cease; ­
- illegal actions are committed.

Decisions to dismiss (refuse), revoke and suspend permit may be appealed in the court. If an employer violates the procedure for hiring and employing foreign employees the Migration Service will issue an admonition to the employer requiring that they rectify the detected violations. If the violations persist, the Migration Service may suspend or revoke the Employment Permit. When the employer ceases business, the Employment Permit and the Employee Permit become invalid regardless of the term for which they were issued and are subject to return.

5. Who is exempt from the requirement to obtain work permit?

Pursuant to the Kyrgyz law the requirement to obtain the work permit does not apply to the following persons: ­

- Persons who have official refugee status or political asylum in the Kyrgyz Republic; ­
- Permanent residents of the Kyrgyz Republic; ­
- Persons who travel to the Kyrgyz Republic to supervise the installation of technological equipment which has been supplied by foreign companies; ­
- Students undertaking internships within the programs of Kyrgyz educational institutions and working during the school breaks; ­
- Persons working in diplomatic and consular missions, or with international organizations accredited by the Kyrgyz Republic; ­
- Foreign correspondents and journalists accredited by the Kyrgyz Republic; ­
- Persons subject to other employment requirements in accordance with international treaties; ­
- Ethnic Kyrgyz who have been granted status of returnee.

Accordingly, in connection with accession of the Kyrgyz Republic to the Eurasian Economic Union (EEU), starting from August 12, 2015 citizens of the EEU member states (the Russian Federation, the Republic of Kazakhstan, the Republic of Belarus, the Republic of Armenia) are not required to obtain work permits to work on the territory of the Kyrgyz Republic in the framework of an international treaty.

6. How long do permits remain valid?

Employee Permits for foreign executives or professionals are valid for one year with the possibility of annual extension. Employee Permits for skilled foreign employees are generally valid for two years. Foreign individuals registered in the Kyrgyz Republic as individual entrepreneurs (Entrepreneurs) can obtain Employee Permit valid for up to three years. However, in practice, all foreigners, irrespective of their position and qualification, are issued work permits for one year. Such practice is explained by the fact that the quota for hiring foreign and stateless employees is approved by the Government on an annual basis.

7. Can a valid permit be transferred to another employer?

Employment Permits are employer-specific and may not be transferred. Foreign workers who have been issued Employee Permits by a particular employer are not allowed to transfer them to another employer. If foreign professionals work for more than one company, they must obtain Employee Permits for each employer.

Entrepreneurs holding Employee Permits may only do business at the places specified in their application. If the Entrepreneurs holding a valid Employee Permit wish to do business in a place which was not included in their initial application, the Entrepreneurs must apply for an additional permit.

8. How much is the fee for the issuance of permits?

The Migration Service charges a fee of 4,000 Kyrgyz Soms (approximately USD 58) for the issuance of an Employment Permit. An Employee Permit's fee per person is 2,000 Kyrgyz Soms (approximately USD 29). Fee for a work permit for the Entrepreneurs is 20,000 Kyrgyz Soms (approximately USD 291).

1. What types of government authorization confer rights to subsoil use?

The Kyrgyz legislation provides for the following instruments of acquiring subsoil use rights from the state:
- license;
- state registration;
- concession agreement; and
- production sharing agreement.

2. What is a mining license and are there different types?

The license is the most common basis to use subsoil and a document confirming the right to use subsoil issued by the Geology Agency.

The legislation provides for the following types of licenses depending on the type of work: 1) for geological prospecting activities up to 5 years with the possibility of further extension according to the technical project; 2) for geological exploration activities up to 10 years with the possibility of further extension according to the technical project; 3) for deposit development activities up to 20 years with the possibility of further extension until depletion of mineral reserves; 4) for objects not related to geological mineral exploration and deposit development issued for the term defined in the technical project with the possibility of further extension for the term defined in the adjusted technical project. Depending on the significance of the deposit/licensed area the license can be obtained on the basis of a competitive bidding, auction or direct negotiations.

3. What is the state registration in subsoil use and how does it confer rights to use subsoil?

On the basis of the state registration the following activities are performed:

- scientific subsoil research performed according to the approved program;
- individual placer mining activities.

The state registration of scientific subsoil research performed according to the approved program is conducted by the Geology Agency, while the state registration of individual placer mining activities is performed by local state administration.

4. What is a concession and how does it confer rights to use subsoil?

Concession is a form of subsoil use right arising from the concession agreement between the Kyrgyz Government and/or authorized state body and subsoil user, awarding the subsoil user an exclusive right to geological exploration and/or development of mineral deposits under the terms and conditions defined in the concession agreement. According to the current legislation the decision to provide the object for a concession is made by the Kyrgyz Government based on competition. The concession agreement is concluded for a period from 5 up to 50 years.

5. What is a production sharing agreement in subsoil use and how does it confer rights to use subsoil?

Production sharing agreement (PSA) is an agreement under which the Kyrgyz Government awards exclusive rights for deposit development to a subsoil user for a certain term and the subsoil user undertakes to perform specified activities at its own expense and risk. In addition to other conditions of subsoil use, PSA should determine the procedure of production sharing between the parties to the agreement. The mandatory party of PSA is the state, on behalf of which acts the Kyrgyz Government or authorized bodies. If the other party of PSA is foreign individuals or legal entities, then this agreement shall be ratified byJogorkuKenesh (Parliament) of the Kyrgyz Republic. Upon signing the agreement, the investor is also issued a license in accordance with the legislation of the Kyrgyz Republic. Except for some cases, the PSA is concluded based on a competitive tender or auction. PSA period shall not exceed 10 years.

6. Who regulates and controls subsoil use operations in the Kyrgyz Republic?

- The Government administers and manages the state subsoil fund of the Kyrgyz Republic, approves technical regulations in mining, restrictions and prohibitions on the use of natural resources in order to ensure national security, public safety and environmental protection;
- Ministry of Economy is the authorized body for the development of public policy on subsoil use, including the legal acts in mining sector, investment policy in the subsoil;
- Geology Agency is the authorized body for the implementation of state policy on subsoil use, including a system of organizing the right to use natural resources and land, attracts investment, maintains the State balance of mineral reserves and State cadaster of deposits and occurrences of minerals, issues, suspends and terminates the subsoil use right, examines mining and geological projects, controls the use and protection of subsoil for geological study and industrial development of the subsoil;
- State Inspectorate for Environmental and Technical Safety is the authorized body that supervises environmental and industrial security within the geological, mining and land leases and controls enforcement of environmental laws and industrial safety in the geological study and development of the subsoil;
- State Agency on Environment Protection and Forestry is the authorized body for implementation of policy and the regulation of relations in the sphere of environmental protection and use of natural resources, environmental safety and environmental management.

7. What are the environmental requirements in subsoil use sphere?

The subsoil legislation requires a compulsory environmental impact assessment and a positive expert opinion on the technical project for prospecting, exploration and development of deposit. Besides, while conducting activities the subsoil users must comply with the environmental legislation of the Kyrgyz Republic, including the following principal normative legal acts:

- Law on General Technical Regulation on Environmental Safety in the Kyrgyz Republic of 8 May 2009;
- Law on Environmental Impact Assessment of 16 June 1999;
- Forest Code of the Kyrgyz Republic of 8 July 1999;
- Water Code of the Kyrgyz Republic of 12 January 2005;
- Law on Production and Consumption Waste of 13 November 2001, and other.

It is prohibited or limited to conduct works on prospecting, exploration and development of mineral deposits in specially protected natural territories (reserves, natural parks, wildlife sanctuaries, natural monuments, botanical gardens, dendrological and zoological parks, biosphere territories and/or reserves, transboundary specially protected natural territories). There are also restrictions on conducting works in the border areas.

8. What taxes are payable by companies carrying on mining activities?

Commonly, the activity in the natural resources sector in the Kyrgyz Republic falls within the general tax regime, involving the payment and reporting for the following types of taxes for local companies and foreign companies operating in the Kyrgyz Republic through a permanent establishment:

- profittax (10%);
- incometax (10%);
- VAT (general rate is 12%, for some operations 0% or 20%);
- excise tax (ranges according to the type of excisable goods, the price or volume);
- sales tax (from 1% up to 3%).

On September 17, 2012 amendments to the Tax Code of the Kyrgyz Republic entered into force, according to which taxpayers involved in activities on mining and sale of gold ore, gold concentrate, gold alloy and refined gold shall not pay profit tax. The said persons shall pay tax on income at the rate ranging from 1% up to 20% (depending on the world price for one troy ounce), applied to:

- revenue (excluding VAT and sales tax) from the sale of gold alloy and refined gold; or
- value of gold in the gold-bearing ore and gold concentrate, calculated on the basis of world prices in accordance with the procedure established by the Kyrgyz Government.

Foreign organizations with no a permanent establishment in the Kyrgyz Republic receiving income at source in the Kyrgyz Republic, are subject to tax on income at the following rates:

- 5% of the income excluding the deductions from telecommunication services, transport services, insurance payments under the insurance agreements or reinsurance of risks, and
- 10% of the income excluding the deductions from dividends, interest, copyright royalties, royalty, insurance payments under the compulsory insurance agreements or reinsurance under compulsory insurance of risks, income from management services, advisory services and other services and works.

This type of tax shall be withheld by the tax agent, i.e. person paying the income.

Additionally, subsoil users pay taxes for subsoil use: bonus and royalty.

Bonus is a one-time payment for the subsoil use right for prospecting, exploration and development of mineral deposits. Taxpayer of bonus is the person who obtained the right to use subsoil. The bonus is also paid in case of change in ownership shares, when changing the participants, in the amount of 10 percent or more in proportion to the share of the property (except for a change in ownership shares of companies listed on stock exchanges). The tax base for the calculation of the bonus is the amount of geological reserves and expected resources registered by State cadaster of deposits and occurrences of minerals of the Kyrgyz Republic, and the drilling depth of water wells. Bonus rate is set by the Kyrgyz Government on all types of minerals on the classification table, depending on the degree of exploration, values, and scale deposits and/or occurrences of minerals, as well as the size of the area of deposits for the search of minerals and the drilling depth of water wells. For mineral deposits, which are tendered, the rate of the bonus is determined by the Kyrgyz Government for each deposit separately.

Royalty is the recurrent payments for the use of subsoil for development purposes and/or selection (extraction from the subsoil) of groundwater. The tax base of the royalty is:

- revenue, excluding VAT and sales tax, received from the sale of mineral resources or the products received as a result of mineral resources processing;
- in-kind volume of products sold;
- volume of the underground water withdrawn according to water gauges, except for specialized water supply organizations.

Royalty rates for different minerals (other than water) and construction materials range from 1% up to 12%.

9. What are the mechanisms for the protection of subsoil user’s rights?

Under the Law of the Kyrgyz Republic: “On Investments in the Kyrgyz Republic investment dispute shall be settled in accordance with any applicable procedure previously agreed between the investor and the public authorities of the Kyrgyz Republic, which does not exclude the use of other remedies in accordance with the legislation of the Kyrgyz Republic. In the absence of such agreement, an investment dispute between the public authorities of the Kyrgyz Republic and the investor shall be settled through consultations between the parties. If parties fail to reach a peaceful settlement of the dispute, any investment dispute shall be settled in the courts of the Kyrgyz Republic, unless in the case of disputes between foreign investors and state bodies of the parties requests that the dispute in accordance with one of the following procedures by contacting:
- The International Centre for Settlement of Investment Disputes (ICSID) under the Convention on the Settlement of Investment Disputes between States and nationals of other States or of the rules governing the use of additional funds for the conduct of hearings by the Secretariat of the center; or
- Arbitration or a provisional international arbitration tribunal (commercial court) established in accordance with the arbitration rules of the United Nations Commission on International Trade Law.

For initiating the arbitration, foreign companies may also enjoy the benefits granted by the bilateral treaties on mutual support, encouragement and protection of investment (capital expenditure) which have been executed by the Kyrgyz Republic with 27 countries. Recognition and enforcement of foreign arbitral awards in the Kyrgyz Republic is possible on the ground of and in the manner provided in the UN Convention on Recognition and Enforcement of Foreign Arbitral Awards of June 10, 1958, joined by the Kyrgyz Republic in 1995.

10. What is the termination process of subsoil use right?

The subsoil use right is terminated upon expiration of the license, unless the licensee files for extension or transformation of the license within the required period as well as in case of waiving of the mineral right by the subsoil users.

Also the subsoil use rights may be terminated by the decision of the Geology Agency in the following cases:

- pledge of the license for subsoil use and change of control without registration with the Geology Agency;
- more than 30 day late payment of a bonus and/or license fees and/or royalty;
- performance of activities without the engineering design approved by all necessary expert opinions;
- failure to eliminate the reasons for suspension of the mineral right within the period of time established by law.

Termination of the subsoil use right does not terminate the subsoil user’s obligation to perform reclamation of the land plot and disposal of the mining property, conservation and maintenance of the mining property securely, faultlessly and safely for the general public and environment until its transfer to the next subsoil user and transfer of geological information and primary documentation to the State Geological Information Fund.

Registration of Legal Entities in the Kyrgyz Republic: 8 Frequently Asked Questions

There are various types of legal structure for businesses in the Kyrgyz Republic («KR»). However, since the most common legal structures are a limited liability company («LLC») and a joint stock company («JSC»), we will refer to them in answering the questions below.

1. Who can be a participant(s) of the legal entity?

LLCs/JSCs can be founded by one or more entities, which might be both individuals and legal entities. JSCs can be also founded by the KR Government and local self-government authorities.

LLCs/JSCs cannot have another business entity as its sole founder/shareholder (hereinafter – “participant”), if this legal entity consists of only one person. LLCs must not have more than 30 and closed JSCs more than 50 participants, while open JSCs may have an unlimited number of participants.

If the number of participants of a closed JSC/LLC exceeds the established threshold, this legal entity must, within one year, change its legal structure to suit the legal requirement. However, if the respective change has not occurred, and one year later, the number of its members still exceeds the limit established for this business legal structure, such legal entity will be liquidated through judicial process.

2. What documents are required for registration of a legal entity?

For registration of a legal entity, the following documents must be submitted to the registration authority:

- Application for registration;
- Participant’s decision to establish a legal entity;
- Copy of the participant’s passport (if the participant is an individual);
- Copy of the certificate of state registration (if the participant is a legal entity);
- Copy of the CEO’s passport;
- Other data provided by KR law.

A foreign legal entity being the participant of a KR legal entity must additionally submit a legalized/apostilled extract from the state register or other certificate of good standing in accordance with the legislation of its country. The filing period for the extract from the state register or other certificate of good standing in accordance with the legislation of its country must not exceed 6 months from the date of issuing the said documents.

The articles of association and the memorandum of association are not required to be submitted to the registration authority except for the founding documents of financial/lending and other institutions licensed and/or regulated by the National Bank of KR.

3. What are the formal requirements for the registration documents?

The participant’s decision to establish a legal entity must be signed by each participant and contain the following data:

- Name of the to-be-registered legal entity in Kyrgyz and Russian;
- Legal address of the newly established legal entity;
- Data about each participant including the last name, first name and patronymic, place of residence (for natural persons), or full name, place of location (for legal entities);
- Amount of the charter capital and amount of each participant’s share in the charter capital of a legal entity;
- Last name, first name and patronymic of the chief executive officer.

The signature of the authorized representative of the legal entity on the decision establishing the legal entity must be attested by its seal or certified by the notary. The signature of the participant being a natural person must be certified by the notary.

The registration documents must be submitted to the registration authority either in Kyrgyz or in Russian. The documents prepared in a foreign language must be submitted to the registration authority together with the notarized translation into Russian or Kyrgyz.

4. Which authorities are responsible for registration of legal entities?

The KR Ministry of Justice and its territorial units are responsible for state registration of legal entities in KR.

State registration of legal entities is carried out by the registration authority according to the principle of a single window. The single-window principle means that the state registration of legal entities is performed in the registering, tax, statistics and KR Social Fund at the same time. In practice, after state registration with the KR Ministry of Justice or its respective territorial unit (at the place of location of the legal entity) the legal entity must submit necessary documents to the tax authority and social fund at the place of its location for recording purposes.

It should be noted that in cases provided by law the registration of a legal entity requires prior written consent of the state antimonopoly authority.

In case of state registration of financial and lending institutions, it is required to submit the written consent of the KR National Bank or its territorial unit. Also, in the cases established by law, the preliminary written consent of the KR state antimonopoly authority is required.

If you register a JSC, you must register it with the State Service for Regulation and Supervision of Financial Market under the KR Government within not later than 1 month from the date of state registration of the initial share issue.

5. How long does it take to register a legal entity?

State registration of legal entities by the justice bodies is performed within 3 business days from the date of submission to the respective justice body of all necessary documents required by the legislation.

Financial and lending institutions are registered by the justice bodies within 10 calendar days.

6. How to obtain a seal of the legal entity?

After receiving from the justice body the certificate of state registration indicating a taxpayer’s identification number (TIN) a legal entity can order a seal to be made by a private company making seals. At present, to have a seal made, a legal entity is not required to receive any permission from state authorities of KR.

7. What is the procedure for opening bank account?

After receiving the certificate of state registration and the seal, a legal entity may open account in any bank of KR.

After opening a settlement account, the bank must within 5 business days notify the tax authority at the place of location of a legal entity to this effect.

8. What is the minimum authorized capital required?

Pursuant to KR law, the authorized capital defines the amount of the property of a legal entity guaranteeing interests of its creditors. The amount of the authorized capital of the legal entity is defined by its participants in its constitutive documents. It should be noted that in JSCs the authorized capital must not be less than KGS 100,000 , whereas in LLCs the authorized capital may be minimal, which is up to KGS 1.

In JSCs, the authorized charter capital must be fully paid up at the moment of its establishment. As regards LLCs, their authorized capital must be paid up by its participants in full within 1 year from the moment of state registration of LLC with the justice body. If the authorized capital is not fully paid up within 1 year, LLC must either announce a decrease in the authorized capital and register its decrease as required or cease operation through liquidation.

Participants of LLC or shareholders of JSC who fail to fully pay up their contributions to a LLC or the value of shares in a JSC bear joint liability for obligations of the legal entity to the extent of the value of the unpaid contribution or value of shares.

Contribution to the authorized capital of the legal entity may include money, securities, movable or immovable property or proprietary rights , having monetary value. Monetary evaluation of the contribution of the participant is made by the agreement of the participants of the legal entity, and in cases provided by law is subject to independent expert appraisal.

As of March, 2013

1. What is an aircraft according to Kyrgyz law?

Kyrgyz law defines an aircraft as any apparatus supported in the atmosphere due to its interaction with air.

2. Does Kyrgyz law require the registration of aircrafts?

Yes, however, aircrafts which are registered in another country are not required to be registered in the Kyrgyz Republic.
Meteorological balloons, as well as gliders and aerostats used exclusively for meteorological purposes or to unmanned free balloon or balloons without payload and other similar aircraft are not required to be registered in the Kyrgyz Republic. They are however, still subject to a special accounting procedure by the Civil Aviation Authority. All civil aircrafts which are not registered in a foreign state and which are operated in the Kyrgyz Republic must be registered with the Civil Aviation Authority.

3. What is the effect of registering an aircraft?

The registration of an aircraft with the Civil Aviation Authority is merely evidence of compliance with Kyrgyz law and permits operation of an aircraft in the Kyrgyz Republic. It does not constitute the registration of the transfer of a title to an aircraft, nor does the Certificate of Registration evidence ownership of an aircraft.

4. What documentation is required to register an aircraft with the Civil Aviation Authority?

In order to register an aircraft in the Kyrgyz Republic, the owner or operator must submit the following documents to the Civil Aviation Authority, including:
- the completed standard application form;
- certificate of airworthiness or standard form report on an aircraft’s technical condition confirming the airworthiness of the aircraft;
- type certificate;
- sales-purchase agreement or other document evidencing ownership of the aircraft;
- lease agreement or other document evidencing right of use of the aircraft by the operator, who is not the owner of the aircraft;
- export certificate of airworthiness, recognized in the Kyrgyz Republic, in case of aircraft imported to the Kyrgyz Republic;
- act or other document that contains a list of operational, technical and other documentation, as well as a removable and other equipment of the aircraft in accordance with the technical documentation and its purpose.

5. What are the registration fees?

There is no fee payable for the registration of an aircraft. At present, services for registering an aircraft with the Civil Aviation Authority are free of charge.

6. Once a Certificate of Registration has been issued, can it be amended?

Kyrgyz law requires that the owner or operator of an aircraft registered in the Kyrgyz Republic, immediately notify the Civil Aviation Authority of any changes in data.
Replacement of Certificate of Registration will usually be done if:
- there has been a modification to an aircraft and/or a change in its ownership; or
- a Certificate of Registration has been damaged to the point that it is difficult to read or completely illegible.

7. Is there a requirement for the registration of a pledge on an aircraft?

Yes. According to Kyrgyz law, an aircraft must be registered by the pledgee (creditor), with the Central Pledge Registration Office under the Ministry of Justice. The registration has the effect of giving public notice and prioritizes against the claims of other creditors and third parties.
If an aircraft is subject to more than one pledge then the respective pledgees' claims then are satisfied on a first-come, first-serve basis, by reference to the date and time of each pledge registration. Thus, the pledgee who first registered a security interest in the aircraft will have priority over subsequent pledges registered by other pledgees’.

8. Which major international conventions on aviation has the Kyrgyz Republic ratified?

In 1992, the Kyrgyz Republic ratified the Convention on International Civil Aviation (Chicago, 1944). The Kyrgyz Republic also ratified the Convention on the International Recognition of Rights in Aircraft (Geneva, 1948) in 1999.
The Kyrgyz Republic has not ratified the Convention for the Unification of Certain Rules Relating to the Precautionary Arrest of Aircraft (Rome, 1933) or the Convention on International Interests in Mobile Equipment (Cape Town, 2001).
As of March 2013

9. What documents are required to deregister an aircraft?

In order to deregister an aircraft in the Kyrgyz Republic the aircraft operator/owner shall provide the following documents to the Civil Aviation Agency:

a) standard aircraft de-registration application;
b) document confirming the fact of decommissioning or withdrawal from service of the aircraft, in case if the aircraft was decommissioned or withdrawn from service;
c) report on mechanical condition of the aircraft, in case if it is necessary to issue the Export Airworthiness Certificate;
d) document confirming the obligations of the state of export of the aircraft to register the aircraft in its register, in case of submission of the de-registration application with the purpose to export or register the aircraft in another state;
e) the original Certificate of Registration.

Upon request of the operator/owner or another state the Civil Aviation Agency while de-registering the aircraft issues a Certificate of De-registration.

10. Which major documents of international aviation law has the Kyrgyz Republic ratified?

Starting from 1992 to date the Kyrgyz Republic has ratified the following documents of international aviation law:

- Convention on International Civil Aviation (Chicago, 1944);
- Convention on the International Recognition of Rights in Aircraft (Geneva, 1948);
- Convention for the Unification of Certain Rules Relating to International Carriage by Air (Warsaw, 1929);
- Convention Suppelementary to the Warsaw Convention for the Unification of Certain Rules Relating to International Carriage by Air (Guadalajara, 1961);
- Convention on Offences and Certain Other Acts Committed on Board Aircraft (Tokyo, 1963);
- Convention for the Suppression of Unlawful Seizure of Aircraft (Hague, 1970);
- Convention for the Suppression of Unlawful Acts Against the Safety of Civil Aviation (Montreal, 1971);
- Convention on the Marking of Plastic Explosives for the Purpose of Detection;
- International Air Services Transit Agreement (Chicago, 1944).

Information about the documents of international aviation law, ratified by the Kyrgyz Republic Republic, in more details can be found on the website of the Civil Aviation Agency (

1. What is meant by a trademark, service mark and collective mark?

Trademark or service mark means a sign which identifies products or services of a particular entity or individual from those of others. Collective mark means a sign used by entities representing unions and business associations, concerns, or other associations to identify themselves by quality or other common characteristics.

2. What can be registered as a trademark and what is not registrable?

Verbal (abbreviations, words, slogans, etc.), visual (logotypes, photographs, drawings, etc.), volumetric and other signs or their combinations can be registered as a trademark. A trademark can be registered in any color or color combination. Visually indistinguishable signs, as well as sound and smell marks are not subject to registration.

3. Where to apply for registration of a trademark?

The trademark office is the State Service of Intellectual Property and Innovations under the Government of the Kyrgyz Republic (Kyrgyz Patent Office).

4. Who may apply and in whose name can a trademark be registered? Who has the exclusive right to use a trademark and when does such right arise?

A trademark registration application can be filed by entities or individuals engaged in entrepreneurial activities. The application can be filed through a patent attorney or other agent. The trademark owner has the exclusive right to use, dispose of and prohibit the use of a trademark from the date of recording it in the State Registry (Registry).

5. What documents are required for filing a trademark application?

- A trademark registration application stating the applicant and its place of business or residence;
- A description of the mark applied for;
- A list of goods and services for which the trademark registration is claimed classified according to ICGS;
- A proof of payment of the registration fee;
- A charter of the collective mark, if the application is filed for registration of a collective mark;
- A power of attorney, if the registration application is filed through the patent attorney or other agent.
Kyrgyz applicants are required by the Kyrgyz Patent Office to submit a copy of the certificate of state registration (re-registration) as a legal entity or individual entrepreneur.

6. What are the requirements for power of attorney to represent before the Kyrgyz Patent Office?

The power of attorney completed in the Kyrgyz Republic must be executed in the manner provided by Kyrgyz law or by the law of the country where it is executed. In case of any doubts about its authenticity, at the request of the Kyrgyz Patent Office, the power of attorney must be legalized by the consular institution of the Kyrgyz Republic except in cases when no legalization is required under the treaties of the Kyrgyz Republic or the principle of reciprocity.

The power of attorney issued to a patent attorney to represent a foreign entity or national permanently residing outside the Kyrgyz Republic must meet the following requirements:
- be signed by the person who has issued it;
- be issued to an individual registered with the Kyrgyz Patent Office as a patent attorney;
- state the scope of authority of the patent attorney and date of its execution without which it will be deemed invalid.

The power of attorney issued to several patent attorneys registered with the Kyrgyz Patent Office entitles any of them to handle the trademark application.

7. What process is followed in reviewing applications? Time limits for proceeding with applications?

Application review process comprises a preliminary review and a trademark examination. The preliminary review is completed within 1 month from the date of filing an application. Based on the results of the preliminary review, the application is either accepted or denied.
Upon completion of the preliminary review, the trademark registration is held and completed within 12 months from the date of filing an application.
Also, at the applicant’s request and subject to payment of a registration fee, the trademark examination can be completed early within 6-7 months.

Based on the result of the trademark examination, the application is either accepted or denied.

8. What are the trademark registration requirements?

Pursuant to the decision to register a trademark, the Kyrgyz Patent Office, within 1 month from the date of receiving the proof of payment of the fee for registration, publication and issue of a certificate, completes the registration of the trademark in the Registry. The issue of the trademark certificate is completed by the Kyrgyz Patent Office 3 months after the date of publication of the trademark in the official bulletin. The trademark registration is valid for 10 years from the date of filing an application with the Kyrgyz Patent Office.
The number of classes in the application is not limited; the fee is charged for each class.

1. Who is responsible for regulating telecommunications operations in the Kyrgyz Republic?

The State Agency for Communications of the Kyrgyz Republic (SAC KR) is the public authority regulating communications sphere (telecommunications). The SAC KR has the authority to issue licenses for telecom services and permits to import and operate ra¬dio electronic equipment and high frequency devices, certify telecommunication equipment and devices, supervise compliance with legislation and license conditions, assure proper services and operations in the sector.

The SAC KR does not develop national telecommunications policy. Instead, the Ministry of Transport and Communications of the Kyrgyz Republic is the state body responsible for developing national telecommunications policy.

2. What telecommunications related activities and services in the Kyrgyz Republic are subject to licensing requirements?

Under Kyrgyz law a series of activities related to telecommunications services are subject to licensing, including:

- mobile communication services (i.e. GSM, CDMA, 3G(UMTS/WCDMA) etc.);
- wireline (fixed-line) communication services (i.e. local and long-distance, including international);
- telematic services (i.e. telephoto, call center, message processing, EMS, conference calls, information services, voice dialing);
- wireline and wireless data transmission (i.e. SMS, WAP, GPRS, EDGE, VoIP, VPN, EV-DO, EV-DV, HSDPA, HSUPA, Wi-Fi and WiMax);
- design, production, construction, installation of telecommunication
- devices, networks, lines, structures, systems.

While each activity related to telecommunications is generally licensed separately, a single license for several activities may be issued when it is technically feasible.

The license is issued based on the licensing agreement executed between the SACKR which serves to validate the license and forms an integral part of it. If the licensing agreement becomes invalid, so does the license.

3. Are some telecommunications activities exempt from licensing requirements?

Only activities relating to internal communications within an organization are not subject to licensing. These include activities which take place in the same building or in buildings located near each other, organizations with service points located within a minimal area defined by the SACKR and activities which do not cross public areas.

In addition, the use of radio frequency band 2404-2483.5 MHz for Wi-Fi internet without the use of outside antennas throughout the territory of the Kyrgyz Republic (except the city of Bishkek and its suburbs), is not subject to licensing.

4. Who issues licenses for telecommunication services and what is the procedure involved in to obtain such licenses?

The Licensing Commission of the SAC KR decides whether a license for the right to provide telecommunication services will be issued.

In order to obtain a license for providing telecommunication services, an applicant company must submit the following documents to the SAC KR:

- the completed standard application form;
- documents confirming payment of the application fee and a fee for issuing the license;
- a copy of the certificate of registration of the applicant company;
- a copy of the charter (and shareholders agreement, if applicable) of the applicant company;
- a copy of the taxpayer registration card of the applicant company;
- a copy of the social insurance payer registration notice of the applicant company;
- technical proposal ;
- copies of diplomas and certificates attesting to the qualifications of the applicant company’s employees who will be engaged in the rendering of telecommunication services;
- and the other information that came with the technical proposal, depending on the type and complexity of a telecommunications service

5. How much is the application fee?

The fee for consideration and issuance of the license is approximately 300 Kyrgyz Soms (approximately $6.2 USD) .

6. What territory will the license cover?

The license will define the network’s territories, which could include a single district, city, region or the entire territory of the Kyrgyz Republic.

7. How long are licenses issued for?

Though legislation does not cap term limits, in practice, licenses are generally issued for defined terms ranging from 2 to 10years.

8. Are there any other licensing or permit requirements for telecommunications operations in the Kyrgyz Republic?

Yes. In addition to the license for telecommunications, telecommunications providers must also obtain a number of other permits, certificates and licenses related to their specific operations.

A company wishing to import and/or export cryptographic equipment or software must also obtain the license for import of cryptographic equipment. This license coverts both the importation and use of temporary or permanent cryptographic products.

Permits are also required to use the radio frequency spectrum, codes (prefixes) and phone numbers, and to import telecommunication equipment.

Numerous certification requirements are also in place for any equipment producing radio frequency radiation or high frequency electromagnetic waves.

All licenses, permits and certificates are issued by the SAC KR. In addition, the SAС KR also registers telecommunication equipment and issues documentation proving their compliance with Kyrgyz standards.

9. Can the license for telecommunication services be suspended?

- Under the provision on licensing of telecommunications services for 3G standard (UMTS / WCDMA), it is required to pay a special fee $ 40 million soms (about 825,593 U.S. dollars) for participation in the competitive tendering, the cost recovery about 200 million soms (about 4,127,967 U.S. dollars) for the conversion of radio frequencies and making investments in an amount of 20 million soms (about 412,797 U.S. dollars) in the telecommunications infrastructure in certain terms, etc.

From all licensees in the telecommunications sphere an annual fee of 1% of the proceeds from the licensed activity is charged .

From all licensees providing telecommunications services using the radio spectrum, an annual fee for the oversight functions on the use of radio frequency spectrum is charged .

Nowadays, an introduction of an annual fee for an allotted to the licensee numbered resource.

10. Can a license for telecommunications services be suspended?

Yes. The license for telecommunication services may be suspended if certain conditions are not performed by providers of telecommunication services or if they violate the existing rules. These cases include:

- use of non-certified equipments;
- violation of mandatory standards for equipment and services, established by SAC KR;
- use of the radio spectrum without permission of SAC KR;
- non-compliance with the warnings of SACKR on elimination of the violations;
- violation of building norms and other regulations, leading to a disturbance of communications.

11. Is the legal climate in the Kyrgyz Republic favorable for foreign investments in the telecommunications industry?

Yes. In recent years, the telecommunications market of the Kyrgyz Republic, which had a low level of distribution services has increased significantly due to the unprecedented growth of a mobile communication. This growth can be attributed to the liberal regulatory regime of the legislation of the Kyrgyz Republic. As a result, the biggest mobile operators belong to foreign investors.



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