Why is company registration in Kyrgyzstan beneficial?
In Kyrgyzstan, founders can be individuals or legal entities, both local and foreign. A Limited Liability Company (LLC or OsOO) is only liable for its obligations, while the founder’s liability is limited to the amount of their contribution to the charter capital.
- There are no minimum capital requirements. The minimum charter capital is 1,000 KGS, which can be deposited within a year.
- No residency requirements for the director or founder in Kyrgyzstan.
- Since April 2023, a single tax rate from 2% to 6% applies depending on the type of business activity.
- Foreigners are not required to be physically present in Kyrgyzstan to register a company. All necessary procedures can be carried out remotely via a power of attorney.
- The Russian language has equal legal status with Kyrgyz, and official documentation and interactions with state authorities can be conducted in Russian.
Documents Required for Remote Company Registration
- Notarized power of attorney
- Notarized copy of the passport of the director and founder
To open a company in Bishkek, additional documents are required:
- Application for registration in the standard form
- Decision on company establishment
- Copy of the founder’s passport (for individuals), including a translated version
- Company registration documents (for legal entities)
- Certified extract from the state registry (for foreign legal entities)
- Copy of the LLC director’s passport with translation
Taxation System in Kyrgyzstan
General Taxation System (OSN)
The general taxation system includes sales tax and corporate income tax. Tax reporting and payments follow this schedule:
- During the first 12 months, taxes must be reported monthly.
- After the first year, reporting switches to quarterly or monthly, depending on the company’s annual revenue.
Sales Tax is calculated based on revenue from goods and services sales.
- The tax rate varies based on payment method and business activity:
- 0% for cashless transactions
- 2% for retail trade (cash payments)
- 3% for service-based businesses (cash payments)
Simplified Taxation System (STS)
For small businesses, particularly during their early stages, the simplified tax system (STS) based on a single tax rate is often the preferred option. In addition affordable accounting services are presented.
Special Tax Regime for IT Companies in the High Technology Park (HTP)
Companies operating in IT and registered within the High Technology Park (HTP) enjoy special tax benefits:
- A 1% revenue-based contribution to the HTP administration (instead of corporate tax).
- Employees of HTP resident companies pay only 5% income tax instead of the standard 10%.
This 1% charge is more of a membership fee rather than a tax, making it highly attractive for IT firms.
Tax Reporting and Payments
- During the first 12 months, reporting and tax payments must be made monthly.
- After the first year, companies can switch to monthly or quarterly reporting, depending on their revenue.
Corporate Income Tax
- Calculated as the difference between revenue and documented expenses, as per Kyrgyzstan’s tax regulations.
- The corporate tax rate is 10%, and payments are made quarterly.
Key Considerations for Company Registration in Kyrgyzstan
- The company name must be unique and should not match existing legal entities.
- This can be verified on the official Ministry of Justice website through the Unified Register of Legal Entities and Branches.
- There are no fixed capital requirements for LLCs (OsOO).
- A company can have from one to thirty participants.
Conclusion
Registering a company in Kyrgyzstan remotely offers numerous advantages, including low tax rates, minimal regulatory requirements, and full remote setup without the need for in-person visits. Given the favorable legal environment and equal recognition of the Russian language, the country is an attractive destination for foreign entrepreneurs looking to establish and expand their businesses.