INVESTMENTS, EXPORT AND SMEs. The Ministry of Economy of the Kyrgyz Republic

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1 INVESTMENTS, EXPORT AND SMEs The Ministry of Economy of the Kyrgyz Republic

2 Contents Brief information about Kyrgyzstan Macroeconomic indicators Legislation and favorable investment climate About production cost SME intensive sectors About relevant institutions Other investment, export and SME support measures

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6 Liberal legislation Equal conditions for foreign and local companies Access to all sectors of economy Freedom of monetary operations Freedom of choice of form and objects of investments Guarantees of protection from expropriation of investments and compensation of losses Wide protection of foreign investors rights Guaranteed repatriation of investments, property and information outside the Kyrgyz Republic No intervention into business activities Participation in privatization, purchase of shares and securities of Kyrgyz companies

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11 SMEs in Kyrgyzstan Indicator Year 2015 Year 2016 The volume of gross value added of SMEs (bln. USD) Share of SME s gross added value in GDP (%) 2,54* 2,74* 40,3 40,8 Number of operating SMEs, units Number of employed people in SMEs (thsnd) 452,3 463,6 * Current exchange rate

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16 Relevant bodies of the Ministry of Economy for SME development, investment and export promotion The State Agency for Investment and Export Promotion under the Ministry of Economy of the Kyrgyz Republic Investment Policy Department Ministry of Economy of the KR Department of entrepreneurship regulation Department Interregional Management

17 Departments Functions Investment Policy Department Development and implementation of a unified state policy in the field of direct investment, taking into account the priorities of economic development Proposals elaboration for state bodies and local self-government bodies on improving the investment climate in the Kyrgyz Republic Department of Entrepreneurship regulation Development of a unified state policy in regulating entrepreneurship activities in licensing, control and supervision Making suggestions on simplifying and optimizing the procedure for obtaining licenses and permits, for optimizing inspections of business entities

18 The State Agency for Investment and Export Promotion under the Ministry of Economy of the Kyrgyz Republic The State Agency for Investment and Export Promotion under the Ministry of Economy of the Kyrgyz Republic attracts, advices and supports foreign I investors. In addition, local business also supported by the Agency. consultations, meetings, seminars, forums, exhibitions etc. Assistance to domestic enterprises in finding foreign investors and conclusion of contracts with foreign investors advisory support in resolving investment disputes interaction between state bodies, investors, exporters and foreign importers assessment of export readiness and exporters' capabilities

19 Structure of the State Agency

20 Improvement of Investment Climate STABILIZATION REGIME The investor has a right to choose and apply the most favorable tax regime for 10 year period in case of changes in legislations SOVEREIGN CREDIT RATING Kyrgyz Republic was assigned sovereign credit ratings "B2 stable" and "B by the international credit rating agencies «Moody's Investors Service» and «Standard & Poor's» correspondently. INVESTMENT INCENTIVES List of Investment Incentives was issued as an open source for the investors, which ensures transparency by providing fiscal and non-fiscal incentives and preferences.

21 Fiscal measures to support investors Adopted fiscal policy concept for years Businesses with turnover up to $ are exempted from VAT Simplified taxes for the construction industry (was fixed at 12$ per m2) Leasing companies were exempted from VAT, income tax and sales tax Introduced tax contract (with fixed tax value) for catering, resort and recreational field and housing construction Under the consideration the implementation of reduced Income Tax for newly established enterprises within first 5 years and the possibility of exempting them from the land tax Import of banking equipment was exempted from VAT

22 Reduction of Administrative Barriers Reduced number of permits and licenses from the 500 to 101 Introduced the principle of "silence gives consent" in the licenses issue system. The number of public services were reduced from to 373 Simplified procedures of state registration/ Registration for starting business includes only 2 procedures Reduced number of controlling state bodies from 21 to 13

23 Kyrgyz-Russian Development Fund Kyrgyz-Russian Development Fund was founded in 2015 Total Capital 500 millions $ USA Additional 500 millions $ USA is being attracted from investors The Fund provide law interest credits to projects in agriculture, textile industry, transport and housing construction, infrastructure.

24 THANK YOU FOR YOUR ATTENTION The Ministry of Economy of the Kyrgyz Republic Tel.: +996 (312) Fax.: +996 (312) mail.mineconom.gov.kg