In 2025, Kyrgyzstan remains one of the most attractive jurisdictions for business in the post-Soviet space—especially for IT professionals, freelancers, and creative entrepreneurs. A flexible tax system, minimal bureaucracy, and the official status of the Russian language make the country convenient for relocation and launching a business. The two most popular legal forms are IE (Individual Entrepreneur) and LLC (OsOO in Kyrgyzstan). But which one should you choose?
What Are IE and LLC in Kyrgyzstan?
- IE (Individual Entrepreneur) is a private person registered to conduct business activities without forming a legal entity. The IE manages the business and is personally liable with all their assets.
- LLC (OsOO) is a legal entity where founders’ liability is limited to their share in the charter capital. It’s suitable for team ventures or businesses that require a formal legal structure.
Both forms are widely used in Kyrgyzstan, especially among IT and creative professionals working under the High Technology Park (HTP) or the Creative Industries Park (CIP). The choice depends on the scale, goals, number of participants, and tax preferences.
Registration: IE vs. LLC
Registering an IE
- Who can register: Citizens and foreigners (including non-residents) over 18. No residence permit required.
- Documents: Passport (for foreigners — with a notarized translation into Kyrgyz or Russian) and application form No. 163.
- Timeframe: 1–3 business days via public service centers (TsON) or the e.gov.kg portal.
- Cost: Government fee 250 KGS ($3). Notarization for foreigners: ~$10–20.
- Key points: Very simple process, ideal for freelancers and solo entrepreneurs. Most foreigners register their IE in Bishkek, where the process is well established.
Registering an LLC (OsOO)
- Who can register: One or more founders (individuals or legal entities, including foreigners).
- Documents: Charter, founding resolution, application form, founders’ passports, legal address (a virtual office is acceptable, ~$20/month).
- Timeframe: 5–7 business days via TsON or e.gov.kg.
- Key points: More paperwork than an IE, but allows for partners and investors.
Bonus: In Kyrgyzstan, both IE and LLC can be registered remotely.
Tax Regimes in 2025
Kyrgyzstan offers several tax regimes for both IEs and LLCs. You must choose a regime within 15 days after registration, or the General Tax System (GTS) will apply by default.
General Tax System (GTS)
- Taxes for IE and LLC:
- Reporting:
- Monthly: VAT and payroll taxes (by the 20th)
- Annual: Income/profit tax declaration (by March 1)
- Who it suits: Larger businesses with high turnover or clients requiring VAT invoices
Simplified Tax System (STS)
- Taxes for IE and LLC:
- Unified tax: 4% on revenue or 6% on revenue minus expenses (if turnover is under 30 million KGS)
- Exempt from VAT and profit tax
- Social contributions: 17.25% (12% for HTP/CIP)
- Reporting:
- Quarterly: Unified tax declaration (by the 20th of the next month)
- Annual: General tax declaration (by March 1)
- Notes: Reporting is not too complex. About 50% of IEs handle it themselves, while LLCs more often hire accountants.
- Who it suits: Small and medium businesses, freelancers, IT startups
High Technology Park (HTP)
- Taxes for IE and LLC:
- Contribution: 1% of revenue
- Employee income tax: 5% (instead of 10%)
- Social contributions: 12% of average salary
- Reporting: Quarterly reports confirming IT activity and income
- Who it suits: IT companies and freelancers exporting services (e.g. software development). 90% of revenue must be IT-related.
Creative Industries Park (CIP)
- Taxes for IE and LLC:
- Contribution: 1% of revenue in 2025 (2% from 2027)
- Employee income tax: 5%
- Social contributions: 12%
- Reporting: Quarterly reports confirming creative activity (design, marketing, game development, fashion, etc.)
- Who it suits: Creative businesses working locally or internationally. Export is not mandatory.
Pros and Cons of IE and LLC in Kyrgyzstan
IE (Individual Entrepreneur): Advantages
- Simple registration: Minimal paperwork, the process takes 1–3 days.
- Low cost: State fee is about $3, no charter capital required.
- Simplified reporting: Fewer documents compared to LLC, especially under STS, HTP, or CIP regimes.
- Flexibility: Easy for solo operations, ideal for freelancers.
- Withdrawals: IE income is personal income—no dividend tax.
IE: Disadvantages
- Unlimited liability: The entrepreneur is personally liable with all personal assets (e.g. apartment, car).
- Scaling limitations: Harder to attract investors or partners.
- Social contributions: Mandatory payments (2,500 KGS/$30/month), even with zero income, unless in HTP/CIP.
- Activity restrictions: Some business types (e.g. pawnshops) are not allowed for IEs.
LLC (OsOO): Advantages
- Limited liability: Founders are only liable up to their capital contribution; personal assets are protected.
- Scalability: Easier to attract investors, partners, or open branches.
- Flexibility: Can hire a director, split shares among founders.
- No mandatory social contributions for founders: Unless they work under an employment contract.
- Remote registration: Companies can be registered online without being physically present in Kyrgyzstan.
LLC: Disadvantages
- More complex registration: More paperwork, higher costs (~$50–100 including legal help).
- Bookkeeping required: Mandatory accounting even under STS (~$50–100/month).
- Dividend tax: 10% on profits paid to shareholders.
- Longer liquidation: Takes 2–3 months and is more complex than closing an IE (5–10 days).
Key Differences in 2025
| Criterion | IE | LLC (OsOO) |
|---|---|---|
| Registration | 1–3 days, ~$3 fee, minimal docs | 5–7 days, ~$12 fee, capital from 1 KGS |
| Liability | Full, personal assets at risk | Limited to charter capital |
| Tax regimes | GTS, STS, HTP, CIP | GTS, STS, HTP, CIP |
| Social contributions | ~$30/month for self (unless in HTP/CIP) | Only for employees |
| Bookkeeping | Simplified or not required under STS/HTP/CIP | Mandatory even under STS |
| Profit withdrawal | No taxes, treated as personal funds | 10% dividend tax |
| Liquidation | 5–10 days, minimal cost | 2–3 months, more complex |
| Bringing in partners | Hard, suited for solo business | Easy, shares can be split |
When to Choose an IE
- You’re a freelancer or solo entrepreneur (designer, developer, marketer).
- Planning to join HTP or CIP (1% tax, minimal reporting).
- Your turnover is small (under 30 million KGS), and you want to minimize costs.
- You don’t plan to bring in partners or investors.
Example: An IT freelancer working with foreign clients registers as an IE in the HTP, pays 1% of revenue, and submits quarterly reports.
When to Choose an LLC (OsOO)
- You’re working in a team or planning to scale.
- You want to attract investors or divide ownership among founders.
- You expect large-scale projects with turnover over 30 million KGS requiring VAT.
- You want to protect your personal assets from business liabilities.
Example: An IT studio with five employees registers an LLC in the CIP, pays 1% of revenue, hires an accountant for reporting, and distributes profits among founders.
Special Notes for IT and Creative Businesses
- HTP: Ideal for IT companies and freelancers exporting services (90% of income must come from IT). IE is easier for solo developers; LLC is better for teams.
- CIP: Best for creative industries (design, media, marketing, game dev). Export is not required, which suits local market players. LLC is preferable for studios with multiple founders.
Banking
Kyrgyzstan has 20+ banks open to non-residents (e.g. RSK Bank, connected to SPFS — Russia’s SWIFT alternative). LLCs often find it easier to open a corporate bank account than IEs.
Practical Tips
- Choose a regime before registering: Check whether your business qualifies for HTP or CIP and apply immediately to benefit from 1% tax.
- Hire a lawyer or accountant: Mandatory for LLCs, and useful for IEs in HTP/CIP. Costs ~$50–100/month.
- Use online services: The e.gov.kg portal allows business registration and tax reporting online.
- Check your banking options: For non-residents from the US or EU, Demir Bank or Kyrgyzkommertsbank support Payoneer and Wise.
- Understand the risks: IE is easier to close but carries personal liability. LLC protects your assets but requires higher start-up and maintenance costs.
Conclusion
Choosing between IE and LLC in Kyrgyzstan in 2025 depends on your goals, business size, and tolerance for bureaucracy. IE offers a quick start with low costs — ideal for freelancers and small businesses, especially under HTP or CIP. LLC suits team ventures, business expansion, and investor involvement while protecting personal assets. Both forms enjoy access to low-tax regimes (1% under HTP/CIP), but LLC requires more setup and accounting. For IT and creative businesses, HTP and CIP are the best options. Contact us for personalized advice and full support to avoid costly mistakes.