In 2025, Kyrgyzstan finalized a new model for interaction between the state and small businesses.
Just five years ago, the national tax system was considered cumbersome — today, entrepreneurs enjoy one of the simplest tax regimes in Eurasia. This is the Simplified Tax Regime (STR) — a framework allowing small and medium businesses to pay minimal rates, skip complex reporting, and remain fully compliant.
For those planning to open an LLC (OsOO) in Kyrgyzstan, the simplified system has become not just a tool of optimization, but a gateway into the Central Asian market.
Why Kyrgyzstan Chose Simplification
After the 2020–2021 pandemic, the government faced a major challenge — more than half of small businesses operated outside the legal economy.
According to the Ministry of Economy and Commerce of the Kyrgyz Republic, about 60% of individual entrepreneurs did not file tax declarations at all.
The solution was a large-scale tax reform that introduced three basic regimes:
- The General system
- The Patent system
- The Simplified Tax Regime (STR)
The main idea was clarity and predictability.
Today, registration takes only a few clicks — fill out an online form and sign it with an electronic digital signature.
For foreign entrepreneurs, the process is even easier: you can open an IE (sole proprietorship) or an LLC remotely without visiting a tax office.
Who Can Use the Simplified Tax Regime
The STR is designed for:
- IEs and LLCs with annual turnover up to 50 million KGS
- Companies not engaged in licensed activities
- Freelancers, consultants, developers, and residents of HTP or CIP
- Foreign entrepreneurs registering a business in Kyrgyzstan remotely
Excluded sectors: banking, insurance, VAT-paying importers, and producers of excisable goods.
Key Advantages of STR
- Minimal bureaucracy: one quarterly report instead of monthly filings
- Low tax rates: from 0.5% to 4%, depending on activity
- No audits: e-declarations accepted without in-person visits
- Flexibility: easy transition to the general system as turnover grows
- Integration with IT Parks: HTP and CIP residents may combine zero income tax with simplified reporting
Rates and Limits in 2025
| Activity Type | Tax Rate | Notes |
|---|---|---|
| Retail & Wholesale Trade | 0.5% | for turnover ≤ 50M KGS |
| Manufacturing & Services | 2–4% | depends on payment type |
| Construction | 4% (non-cash) / 6% (cash) | requires a construction license |
| Jewelry Production | 0.25% | preferential rate |
| Turnover < 15M KGS with online cash register | 0% | fully exempt |
| Anonymous Sales | 4% | no buyer data provided |
According to the PwC Kyrgyzstan Tax Summary 2025, Kyrgyz small businesses face an effective tax burden 2–3 times lower than in most CIS countries.
How to Switch to the Simplified Regime
- Register an IE or LLC
- Indicate your legal address and activity code
- Submit the STI-163 notification to the local tax authority
- Open a bank account in Kyrgyzstan and connect to the “Salyk Service” e-tax platform
- File the first declaration within 30 days of registration
The entire process takes no more than 5 business days and can be completed fully online, including e-signature and document upload.
How to Calculate the Tax
Example: You run a consulting firm with an annual turnover of 10 million KGS.
At a 3% rate, your total tax equals 300,000 KGS per year — covering all mandatory payments.
No additional VAT, profit tax, or income tax is applied.
If your business exports IT services, you can become a resident of HTP and pay 0% tax, filing only one annual report.
Comparison with Other Regimes
Kyrgyzstan offers three main tax systems:
| Regime | Description |
|---|---|
| General System | Standard taxation (income tax + VAT) |
| Patent System | Fixed payment for micro-entrepreneurs |
| Simplified Regime (STR) | Middle ground for growing SMEs |
Entrepreneurs can compare all systems on the State Tax Service website before registration.
Foreign Entrepreneurs and the STR
Since 2024, non-residents can fully legalize their businesses without traveling to Bishkek.
All documents are filed online, a PIN is issued, and temporary registration is granted electronically.
This option is widely used by freelancers from Russia and Belarus working for international clients.
For foreigners, STR is a gateway into the EAEU market, as Kyrgyz companies can receive payments globally without currency restrictions.
Moreover, registered foreign LLCs may participate in tenders and sign official contracts with partners in Kazakhstan and Russia.
Combining STR with HTP and CIP
A key strength of Kyrgyz tax policy is the ability to combine regimes.
If a company operates within HTP or CIP, STR applies only to non-privileged activities.
Example:
An IT firm pays 0% tax on export revenue under HTP, and 2% on local consulting under STR.
This hybrid structure makes Kyrgyzstan unique in the region — allowing legal and flexible business structuring without offshore risks.
Common Mistakes Under STR
- Exceeding the 50M KGS turnover limit without notifying the tax office
- Failing to use a cash register for cash payments
- Underreporting revenue
- Choosing the wrong OKED code
- Using fake contracts or invoices
Penalties reach 100,000 KGS or exclusion from STR.
However, with accurate e-reporting, the risks are minimal — the Tax Service now uses digital analytics to automatically track compliance.
Why STR Benefits IT and Creative Industries
Thanks to HTP and CIP, digital entrepreneurs enjoy ultra-low tax environments:
- In HTP — 0% income tax
- In CIP — exemptions for creative professionals (design, media, animation, production)
Many startups begin with STR, then join a park and operate fully tax-free, completely legally.
Example:
A design studio from Almaty registered an LLC in Bishkek and joined the CIP.
During its first year, it saved over $8,000 while continuing to work with international clients via SWIFT and crypto payments.
Results and Outlook
The Simplified Tax Regime has become the standard framework for small businesses in Kyrgyzstan.
The country now maintains the lowest effective tax burden in the EAEU, while integration with HTP and CIP creates an ecosystem of near-zero taxation.
In 2026, the government plans to integrate STR with the Digital Entrepreneur Identifier (e-PIN) system.
In short, Kyrgyzstan’s simplified tax model is not a compromise — it’s a 21st-century solution: transparent, flexible, digital, and built for people who value efficiency and innovation.