Kyrgyzstan Legal Guide

New Law on Investments No. 198 — August 2025

Law No. 198 "On Investments in the Kyrgyz Republic" was adopted 12 August 2025, signed by President Japarov 14 August 2025, and published 19 August 2025 — replacing the 2003 investment law. The law introduces two critical changes for foreign investors: (1) a 10-year contractual stabilisation regime for large investors covering tax and non-tax payments; and (2) a new dispute settlement article. As first adopted, Article 23 required negotiation, mediation and the domestic courts before international arbitration. Law No. 46 of 8 April 2026 rewrote it: negotiation comes first, mediation is by agreement, and the dispute then goes to the Kyrgyz courts or, under a written agreement with a valid arbitration clause or under a treaty, to arbitration.

Keremet Bank — OFAC SDN designation, January 2025

In January 2025, the US Department of the Treasury's OFAC added Keremet Bank (OJSC) to the Specially Designated Nationals list under Russia-related sanctions. It shows that OFAC will designate financial institutions in EAEU member states for involvement in sanctions evasion, which creates secondary sanctions risk for foreign investors banking in Kyrgyzstan through institutions with Russia-linked transaction flows.

GDP growth of 11.1% in 2025

On preliminary data published by the National Statistical Committee, Kyrgyzstan's real GDP grew 11.1% in 2025 compared with 2024.

National Development Programme — targets to 2030

The National Development Programme of the Kyrgyz Republic until 2030, approved by Presidential Decree No. 178 of 5 June 2025, follows the programme to 2026 and sets the country's medium-term goals and priorities. Agriculture and tourism form one of its main lines of development.

Legal system

Civil law system — Continental/Soviet tradition. Presidential decrees carry significant weight. EAEU supranational law applies in trade, customs, and technical regulation. New Investment Law No. 198 (August 2025) governs foreign investment. Enforcement consistency varies by sector and region.

Foreign ownership

100% foreign ownership permitted in most sectors. Limits apply to land (foreign persons, including Kyrgyz companies in which foreign persons hold 20% or more, generally cannot own land: Land Code, Arts. 2(74)–(75), 8), to media (foreign persons may not hold more than 35% of the capital of a company founding a media outlet: Law on Mass Media, Art. 8(3)), and to licence companies for large and medium gold and silver deposits won at auction or tender, in which the State takes at least 30% (Law on Subsoil, Art. 19(4-1)). Mining sector requires subsoil use licence — granted by tender, auction, first application or, for entities at least two-thirds State-owned, Cabinet of Ministers decision. FEZ participation available for qualifying manufacturing and services activities.

Tax environment

CIT 10% standard rate. VAT 12%. WHT on dividends 10%. Activity of a free economic zone entity that meets the conditions is exempt from all taxes, but sales into the rest of Kyrgyzstan are taxed under the general rules (Tax Code, Art. 430). New Investment Law stabilisation regime gives large qualifying investors the most favourable tax terms for 10 years. Double tax treaties apply: see Tax in Kyrgyzstan.

Dispute resolution

Law No. 198, as amended in April 2026, requires negotiation first, then the courts or arbitration under a valid clause or treaty. ICSID Contracting State since 21 May 2022. Kyrgyzstan courts — improved but uncertain for foreign investors. Party to the New York Convention (accession, in force 18 March 1997). Bilateral investment treaties may give access to investor-state arbitration, on the terms of each treaty.

Currency & repatriation

Under Article 13 of Law No. 198, investors may convert the som and transfer profits, dividends and capital freely, but transfers can be delayed or blocked under fair and non-discriminatory rules on insolvency, securities, criminal proceedings, and fiscal and economic norms set by the Cabinet of Ministers and the National Bank. Banks handle high remittance flows, though the Keremet Bank designation calls for counterparty due diligence.

Key risks

Arbitration access depends on a valid clause or treaty under Law No. 198 — a priority for current investors. Political instability — history of government changes. Corruption — Transparency International CPI 2025 score 26/100, ranked 142nd of 182. Secondary sanctions — Keremet Bank SDN January 2025. Mining sector — a history of disputes between the State and foreign investors. Enforcement inconsistency outside Bishkek.