Invest estment ment opport rtuni niti ties es of the Kyrgyz - - PowerPoint PPT Presentation

In Inves estmen ent Promotion Agen ency Min inis istry ry of

• f Economy of
• f th

the e Kyrgyz Rep epublic

Invest estment ment opport rtuni niti ties es

• f the Kyrgyz

yz Re Republic c

FDI DI overview view

FDI in 2015 15 amounted

• unted USD 818

8 million ion Kyrg rgyz yzstan stan cre redit dit rating ing

500 1000 1500

2009 2010 2011 2012 2013 2014 2015

FDI by years

11% 12% 8% 10% 2% 1% 24% 32% FDI by sectors (2015)

Energy provision Construction Services and wholesale Finance and insurance Mining Other Manufacturing Professional, scientific, and technical activities

S&P S&P B (stable) Moody’s B2 (stable)

Why Kyrgyzst yzstan an is attr tract active ve for r investors stors?

Stable macroeconomic indicators The lowest tax rates within the region Cheap and skilled labor force Cheap electricity Visa free access to 61 countries Strategic location Favorable trade regimes Liberal legislation Free economic zones The easiest place to do business in the region

Stable ble macroe roeconom conomic ic enviro ronment nment

2.2 2.5 2.8 3.7 5.1 4.6 4.6 6.1 6.5 7 7.4 6.6 1 2 3 4 5 6 7 8 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Nominal GDP (USD billion)

433 476 543 722 966 871 880 1124 1178 1263 1258 1178 200 400 600 800 1000 1200 1400 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

GDP per capita

Liberal al legislati ation

Equal l condit itions ions for r fore reig ign and local l comp mpanies ies Guara rantees of prote tectio ion from m expro ropri riatio ion of investme ments and comp mpensatio ion of losses Wide protectio ion of foreig reign investors tors rights ts Access to all sectors tors of economy my Part rtic icip ipati tion in priv ivati tizatio ion, purc rchase of shares and securi ritie ies

• f Kyrg

rgyz comp mpanie ies Freedom m of choic ice of form rm and

• bje

jects of investme tments Guara ranteed repatri riatio ion of investme ments, propert rty and info form rmatio ion outs tsid ide the Kyrg rgyz Republi lic Freedom m of moneta tary opera ratio ions No inte terve rventio ion into to busin iness acti tivit itie ies

The lowe west t tax rate tes s wi within n the region

Tax Kyrgy gyz Republ blic Tajikistan an Uzbek ekistan tan Kazak akhs hstan an China VAT

12% 12% 20% 20% 12% 17%

Income Tax

10% 10% 8-13% 10% 10% 5-45%

Profit Tax

10% 10% 25-30% 9-35% 10-20% 15-25%

Only 8 types es of taxes es in the count untry ry

• VAT
• Tax on subsoil use
• Income tax
• Sales tax
• Profit tax
• Land tax
• Excise tax
• Wealth tax

Free e economi

• mic

c zones (FEZ) Z)

• 0% Profit tax, Import and export fees

for raw materials and end products

• All types of currencies without limits
• Simplified customs clearance

procedures

• 100% repatriation of investment and

profit

• Simplified entry/exit regime for

foreign employees

• Low rent rates

Ch Cheap and skilled d labor force rce Ch Cheap electr trici icity ty Visa free ee access ss to 61 countries tries

The easiest st place to do business ss in the region

• n

According to the World Bank report “Doing Business” and international economic freedom index, calculated by the Research Center of Heritage Foundation, the Kyrgyz Republic has highest ranks in following categories:

Taxation Easiness of doing business Labor market freedom Free trade Investment freedom Favorable government finance policy

Doing Busine ness ss 2015 2015

2 4 6 8 10 12 China Uzbekistan Kazakhstan Russia Tajikistan Kyrgyz Republic

How many procedures does a business starting take?

10 20 30 40 50 China Uzbekistan Kazakhstan Russia Tajikistan Kyrgyz Republic

How many procedures does it take to start own business?

2 4 6 8 10 12 China Uzbekistan Kazakhstan Russia Tajikistan Kyrgyz Republic

How being the rights protected at credit operations? (on

10 20 30 40 50 60 China Uzbekistan Kazakhstan Russia Tajikistan Kyrgyz Republic

How many days does it take to register property?

Kyrgyz gyz Republi lic c is located ted in the middle e of the Eurasia sia and neighbo bor r to the biggest st markets kets such as China, , Russia ia, , Kazakhsta khstan. n. Kyrgyz gyz Republi lic c has access ss to the market et of 180 millio ion people e

Strateg rategic c locati tion

• n

Favora

• rable

ble trad ade e regime mes s and EAEU

THE PREFE FERE RENTI TIAL TRADE REGIME

• Member of the World Trade Organization (WTO) since December 20, 1998
• Member of the Eurasian Economic Union (EAEU) since August 12, 2015
• Member of the Generalized System of Preferences (GSP +)

Access to new markets No barriers to the movement of goods, services, capital and labor The influx of investment and prospects for large projects Labor force equality

EAEU EAEU

• 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.

Improvement of Investment Climate

• Adopted fiscal policy concept for 2015-2020 years
• Businesses with turnover up to 100 000 $ 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

Fiscal measures to support investors

• 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 20 000 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

Reduction of Administrative Barriers

By entering the Customs Union, Kyrgyz Republic opens up additional opportunities:

• Unified customs territory
• Uniform trade policy
• Uniforms customs code
• Free trade of goods within the customs area
• Free movement of goods, services, labor and capital

Market Capacity

OPPORTUNITY – MARKET SIZE Population of the Kyrgyz Republic – 6 million Population of Eurasian Economic Union – 183,3 million Total – 189,2 million ACCESS to 189,2 million market without customs duty Eurasian Economic Union

Kyrgyz-Russian Development Fund was founded in 2015

• Total Capital 500 millions $ USA
• Possibility to attract additional 500 millions $ USA

from investors The Fund provide law interest credits to projects in agriculture, textile industry, transport and housing construction, infrastructure.

Kyrgyz-Russian Development Fund

Overvi erview w of sectors tors of economy my

 FDI in 2015 – 14.7 million USD  The volume of production due in 2015 – about 100 million USD  “Kumtor” Field development –1.2 billion USD  Gold reserves at the field “Djeruy” 97076 kg

Mining ng

 FDI in 2015 – 10.9%  Share of GDP – about 5%  Consumption per capita – 1375 kWh per year  The annual growth in electricity demand– 7%  The HPP potential – more than 80 billion kWh per year  Available potential is realized only by 10%

Energy

Agriculture

 FDI in 2015 – 131.8 million USD  Share of GDP – 14%  Gross production– 2.7 million USD  279,8 thousand Farms  Cultivated area – 1185.9 (thousand ha.)  All products are free from VAT (12%)

 FDI in 2015 – 37 125 million USD  GDP share – 4.5%  2015 – 99.2 thousand economic entities  International tourists in 2015 – 2 million 400 thousand people  5th place in the list of “Must-visit countries" (by «The Telegraph»)

Tourism and services

Th Thank ank you u fo for yo your r att ttention ention!