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

Invest estment ment opport rtuni niti ties es of the Kyrgyz yz Re Republic c In Inves estmen ent Promotion Agen ency Min inis istry ry of of Economy of of th the e Kyrgyz Rep epublic

FDI DI overview view FDI in 2015 15 amounted ounted USD 818 8 million ion FDI by years Kyrg rgyz yzstan stan cre redit dit 1500 rating ing 1000 500 Moody’s 0 2009 2010 2011 2012 2013 2014 2015 B2 (stable) FDI by sectors (2015) 11% S&P S&P 12% 32% 8% B (stable) 10% 24% 2% 1% Energy provision Construction Services and wholesale Finance and insurance Mining Other Manufacturing Professional, scientific, and technical activities

Why Kyrgyzst yzstan an is attr tract active ve for r investors stors? The lowest tax rates Stable Liberal Free economic zones Cheap and skilled within the region macroeconomic legislation labor force indicators Cheap electricity Visa free The easiest Strategic Favorable trade access to place to do location regimes 61 business in the countries region

Stable ble macroe roeconom conomic ic enviro ronment nment Nominal GDP (USD billion) GDP per capita 8 1400 7.4 1263 1258 1178 7 1124 1178 6.6 6.5 7 1200 6.1 966 6 1000 871 880 5.1 4.6 4.6 5 722 800 3.7 4 433 476 543 600 2.8 2.5 3 2.2 400 2 200 1 0 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Liberal al legislati ation Equal l condit itions ions for r fore reig ign and Guara rantees of prote tectio ion from m local l comp mpanies ies expro ropri riatio ion of investme ments and comp mpensatio ion of losses Access to all sectors tors of economy my Wide protectio ion of foreig reign investors tors rights ts Freedom m of moneta tary opera ratio ions Guara ranteed repatri riatio ion of investme ments, propert rty and info form rmatio ion outs tsid ide the Kyrg rgyz Freedom m of choic ice of form rm and Republi lic obje jects of investme tments Part rtic icip ipati tion in priv ivati tizatio ion, No inte terve rventio ion into to busin iness purc rchase of shares and securi ritie ies acti tivit itie ies of Kyrg rgyz comp mpanie ies

The lowe west t tax rate tes s wi within n the region 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 • • Kyrgy gyz Tax Tajikistan an Uzbek ekistan tan Kazak akhs hstan an China Republ blic 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%

Free e economi omic c zones (FEZ) Z) 100% repatriation of investment and 0% Profit tax, Import and export fees • • profit for raw materials and end products Simplified entry/exit regime for All types of currencies without limits • • foreign employees Simplified customs clearance • Low rent rates procedures •

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

The easiest st place to do business ss in the region on 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 Free trade Easiness of doing business Investment freedom Labor market freedom Favorable government finance policy Doing Busine ness ss 2015 2015 How being the rights protected at credit operations? (on How many procedures does a business starting take? Kyrgyz Republic Kyrgyz Republic Tajikistan Tajikistan Russia Russia Kazakhstan Kazakhstan Uzbekistan Uzbekistan China China 0 2 4 6 8 10 12 0 2 4 6 8 10 12 How many procedures does it take to start own business? How many days does it take to register property? Kyrgyz Republic Kyrgyz Republic Tajikistan Tajikistan Russia Russia Kazakhstan Kazakhstan Uzbekistan Uzbekistan China China 0 10 20 30 40 50 0 10 20 30 40 50 60

Strateg rategic c locati tion on 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

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

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.

Fiscal measures to support investors • 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

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 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

Market Capacity 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

Eurasian Economic Union 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

Kyrgyz-Russian Development Fund 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.

Overvi erview w of sectors tors of economy my

Mining ng  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

Energy  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%

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%)

Tourism and services  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  5 th place in the list of “Must -visit countries" (by «The Telegraph»)

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