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Economy

Information for the foreign citizens on tourism and investment opportunities of the Kyrgyz Republic

The Kyrgyz Republic is developing trade and economic ties with 121 states of the world trade community, the 70 countries of them are the World Trade Organization's members.

Trade process with the CIS countries is based on bilateral Free Trade Agreements concluded among the Kyrgyz Republic and the CIS countries. The agreements provide trading opportunities without customs duties, taxes and charge, having effect equivalent to the quantitative restrictions.

There are a number of specific factors and the reasons due to investors prefer the Kyrgyz Republic to other countries in Central Asia, wishing to maximize profits and reduce the risk.

The main ones are: a liberal trade regime, a comprehensive investment protection, protection against the risk of double taxation, the unlimited export of capital and profits, free exchange of currencies, low business costs, a skilled workforce, and direct access to the authorities.

In recent years, the Government of Kyrgyzstan has taken significant measures to establish favorable investment climate and create conditions for attracting investments into the country. For these purposes, in 2014 the government established the Agency for Investment Promotion under the Ministry of Economy of the Kyrgyz Republic, which gave substantial support and assistance to investors in the country.

Great attention in investment opportunities paid to the country's tourism industry since tourism is one of the priorities of the economy of the Kyrgyz Republic.

For the development of the industry the Government amended legislative acts on visa-free regime with 61 countries, allowing to receive more than 2.5 million tourists a year. .

 

Priority areas of tourism in the Kyrgyz Republic

In the development of international tourism benefits of the Kyrgyz Republic in comparison with the other countries of Central Asia are expressed as follows:

• Environmentally friendly, unspoiled and unique nature landscape of the highlands, give the chance to develop mountain skiing, rafting, trekking;

• Considerable resources for Speleotourism. Today in Kyrgyzstan explored more than three hundred caves, each of them linked to any legend or tradition;

• Diversity of natural and climatic, historical and cultural resources of the country allows to create a huge amount of the tourist product, aimed at different cost, duration, comfort level, accommodation facilities, age, form of consumption, etc.;

• Relatively small size of the country allows using of several regions at the same time in providing of tourism product;

• Historical perception of the country in association with the Silk Road, and support of Tours along the Silk Road by the World Tourism Organization;

• Wealth of the Kyrgyz culture by nomadic traditions and hospitality of the Kyrgyz people;

• Development of cooperation between the public and private sectors in promoting the tourism opportunities of the Kyrgyz Republic.

 

At present time the priorities of tourism in the Kyrgyz Republic are:

• Resort and recreation tourism

• Mountain-adventure tourism and mountaineering (alpinism)

• Cultural and educational tourism

• Ecotourism

• Event tourism

• Medical tourism

Information for Foreign Citizens on entry/exit and stay in the Kyrgyz Republic

According to the Law of the Kyrgyz Republic "On external migration" foreign citizens and stateless persons enter the Kyrgyz Republic and exit from the Kyrgyz Republic through the checkpoints on the state border, open to international traffic by valid documents and visas, unless otherwise provided by legislation of the Kyrgyz Republic and entered into force international treaties in accordance with the law of which the Kyrgyz Republic is participant.

Functioning checkpoints on the state border of the Kyrgyz Republic:

Kyrgyz-Kazakh border area

- "Akzhol - road", international, 24 hours

- "Aktilek - road", international, 24 hours

- "Tokmok - road", two-way, 24 hours

- "Kenbulun - road", two-way, 24 hours.

- "Kaindy - train", international, 24 hours

- "Chaldybar - road", international, 24 hours

- "Chonkapka - road", international, 24 hours

- "Karkyra - road ", international, seasonal (May-October), during daytime.

Kyrgyz-Chinese border area

- "Torugart - road international, during daytime

- "Irkeshtam - road ', international, during daytime

Kyrgyz-Uzbek border area

- "Madaniat - road", international, 24 hours

- "Dostuk - road", international, 24 hours

- "Kensai - road", international, 24 hours

Kyrgyz-Taiik border area

- "Kulundu - road", international, 24 hours

- "Bor-Dobo - road", international, 24 hours

- "Kayragach - road", two-way, 24 hours

- "Kyzyl-Bel - road", international, 24 hours

- "Karamyk - road", two-way, during daytime

Citizens of foreign countries for whom visa-free regimes provided (Law of the Kyrgyz Republic dated by July 21, 2012 № 121 "On the introduction of a visa- free regime for citizens of some states within 60 days"), may enter, exit, transit, move and stay in the territory of the Kyrgyz Republic without a visa by one of the valid documents .During their stay in the Kyrgyz Republic citizens of foreign countries are exempted from the registration of identity documents, if their stay in the Kyrgyz Republic does not exceed 60 days (for the citizens of the Russian Federation and the Republic of Kazakhstan - 90 days).

For foreign nationals, who are subject to a simplified visa regime (Resolution of the Government of the Kyrgyz Republic on February 7, 2009 № 87 "On approval of the list of foreign states, citizens of which are subject to a simplified visa regime"), have the right to enter, exit, transit, move and stay on the territory of the Kyrgyz Republic on a visa obtained at the personal treatment upon arrival at the territory of the Kyrgyz Republic.

Entry to the border zone

In accordance with the Resolution of the Jogorku Kenesh on March 6, 2013 № 3889-V «On decree of the state bodies of the Kyrgyz Republic to develop tourism" the State Border Service (SBS) in accordance with the earlier achieved agreement with the Kyrgyz Association of Tour Operators provides permit to the border zone for tourists (having a valid visa of the Kyrgyz Republic) and employees of travel agencies(with supporting documents) - without a permit issued by the State Registration Service under the Government of the Kyrgyz Republic, according to the lists certified by the State Border Service of the Kyrgyz Republic (the notice) within one working day.

In other aspects, the State Border Service is guided by the Decree of the Government of the Kyrgyz Republic on May 15, 2004 № 362 "On the establishment of the border regime in the border area and the border strip of the Kyrgyz Republic."

 

Entry to the border strip

Permission to enter the border strip and the border zone in the presence of permits, the State Border Service is considering within one working day.

More detailed information about the rules of entry/exit and stay of foreign citizens in the Kyrgyz Republic, with the agreement on mutual trips of citizens is available on the website of the State Border Service of the Kyrgyz Republic www.border. gov.kg

The checkpoints also has information panels in three languages (Kyrgyz, Russian and English) with a telephone hotline operating round the clock and foreign citizens can send their complaints and comments on the actions of border guards on the above mentioned web site.

On customs registration of goods

across the state border of the Kyrgyz Republic

 

In accordance with the Instruction on the movement of goods and vehicles across the state border of the Kyrgyz Republic by individuals, approved by the Government of the Kyrgyz Republic dated 31.12.2004 № 976 (hereinafter - Instruction),customs clearance of goods while moving across the state border of the Kyrgyz Republic by individuals is carried out using a general tariff and non­tariff measures of regulation and taxation.

Goods intended for personal use by individuals, moved by these individuals across the state border of the Kyrgyz Republic in a simplified preferential right in accordance with the provisions of the Customs Code of the Kyrgyz Republic. Such goods undergo customs clearance without the use of non-tariff measures of regulation and taxation.

According to paragraph 2.1 of Instruction foreign individuals with permanent residence outside of the Kyrgyz Republic, when crossing the state border of the Kyrgyz Republic may temporarily import under preferential simplified procedure, with exemption from customs duties, the goods needed to these individuals for their personal use on the territory of the Kyrgyz Republic in accordance with the established list.

At the checkpoints on the state border of the Kyrgyz Republic are installed boards in English, Russian and Kyrgyz languages, which contain all the necessary information.

 

On safety of foreign citizens in the Kyrgyz Republic

Safety of tourists in the period of preparation and holding of "tourist season" in the Kyrgyz Republic is provided by the Ministry of Internal Affairs of the Kyrgyz Republic (MIA).

During the tourist season, the Ministry of Internal Affairs of the Kyrgyz Republic will set mobile traffic police posts from a fixed post "Kordai" to "Bishkek-Balykchy-Cholpon-Ata-Karakol".

Furthermore, during the tourist season, police officers of the Kyrgyz Republic will be assigned according to the approved deployment of posts only in patrol cars with the indication of telephone hotlines in the back of the car, which are equipped with video recorders and radar installations (Vizir) having functions of photo and video fixation.

 

 
 
Riches of the Kyrgyz Republic and mining industry
Kyrgyzstan possesses rich reserves of many valuable minerals. There is gold, silver, coal, stibium, mercury, and othernon-ferrous minerals. During the Soviet period, extraction and production of mercury, stibium, oil and gas, as well as some rare-earth elements including ceric and yttrium were pivotaltothe USSR mining industry. In 1986 gold mining began in the Makmal mine. In the south of the country, oil and gas were extracted in considerable volumes (up to 300,000 tons per year), covering half of the annual requirement. However, these reserves have now been exhausted. Over the last few years, oil recovery has sharply reduced and makes up no more than 65-75,000 tons per year. Moreover, gas recovery has fallen to 23 million cubic meters per year. No more than 10-15% of the needs of the economy in the southern region are satisfied by their own resources. But investors, in particular Russia’s Gazprom, are searching for new oil and gas fields in the south. By their estimations, the oil recovery can increase up to 150,00 tons during the next five years. Local and foreign experts predict about 11 million tons of oil are available in future recoverable reserves in the republic’s territory. China has shown its interest in this issue as well. 20 years ago in the KyrgyzRepublic about 4.5 million tons of black coal and brown coal was extracted per year, half of it exported to neighboring countries. Black coal strip mines are located in Kokjangak, Tashkumyr and Jergalan. Large reserves of brown coals have been developed since the Soviet period, and there are mines near Kyzyl-Kiya, and a larger site near Kara-Keche. Now coal extraction is on the level of 500,000-600,000 tons per year.
 
Economy

 

 

Economy of the Kyrgyz Republic

After several transitional years, caused by the collapse of the Soviet Union and search for an independent development framework, the Kyrgyz Republic successfully set course on economy recovery.

Kyrgyzstan’s membership in World Trade Organization became one of the most significant stages of the nation’s economy recovery. It is worth noting that Kyrgyzstan was the first CIS country to join the WTO.

Kyrgyzstan successfully develops market economy. International experts have noted the introduction of private land-ownership reforms and the introduction of international legislative standards as two of the most significant changes implemented by the Republic.

Agriculture, gold mining, hydro-energy and non-ferrous metallurgy as well as light and food industries are the nation’s flagship industries.

Agriculture, Kyrgyz Republic’s leading industry, is the source of the over one-third of the Kyrgyz gross domestic product. Major components of the Kyrgyz agricultural industry are livestock breeding (meat, dairy and wool production) as well as tobacco, cotton and industrial crops production, gardening, beekeeping and vegetable growing. Kyrgyzstan fully covers its foodstuff needs and exports food to Kazakhstan and Russia.

The industry of the Kyrgyz Republic, which produces over 20% of GDP, consists of processing industry, non-ferrous metallurgy and mineral resources industry.

The “Kumtor” gold-mining project (a joint venture with “Kameko” Canada) is one of the most significant commercial ventures in the Kyrgyz Republic. This enterprise generates nearly 35% of the country’s total exports and is responsible for generating approximately one-tenth of the domestic production. Kyrgyz Republic is the third among other CIS countries for gold-mining output.

Strong hydro-energy complex is possibly the nation’s greatest heritage from the Soviet Union. The country’s hydro-energy infrastructure is the second largest source of Kyrgyz exports. To underscore the importance of this industry, it should be noted that the cumulative hydro-energetic reserves of the Kyrgyz rivers exceed those of the famous Russian Volga river by several hundred percent. Kyrgyzstan exports electricity to Russia (over 1.5 billion kW annually) as well as to neighboring Kazakhstan, Uzbekistan, Tajikistan and China. Hydro-energy complex secures the excellent perspectives to replace the import of energy resources as the 75-100 thousand tons of oil extracted in Kyrgyzstan annually cover only one third of the country’s need in energy.

The country has developed a sufficient environment for successful development.Kyrgyzstan has established a multi-structural economy and posses rich natural and highly competent human resources. The country’s strategic development plan is proved by the consistently increasing inflow of direct foreign investments, dynamically developing banking sector and the population confidence in financial institutions.

Macroeconomic indicators for 2006-2010

Indicators

2005

2006

2007

2008

2009

2010

Fact

Prelim.

Forecast

Forecast

Forecast

Forecast

GDP

 

 

 

 

 

 

Nominal GDP (billion som)

100.9

113.2

128.3

144.5

163.4

185.5

Nominal GDP (mln USD)

2 461

2 835

3 249

3 659

4 137

4 695

Real GDP growth rate (%)

-0.2

2.7

8.0

8.0

8.5

9.0

GDP per capita (USD)

479

543

620

692

775

872

Prices and salary

 

 

 

 

 

 

Deflator of GDP

7.2

9.2

5.0

4.3

4.2

4.1

CPI, % to December of previous year

4.9

5.1

6.0

5.0

5.0

5.0

CPI, % to previous year

4.3

5.6

5.0

5.0

5.0

5.0

Nominal average salary, USD

62.6

76.1

91.7

110.4

132.9

160.8

National accounts (% from GDP)

 

 

 

 

 

 

GDP in market prices

100

100

100

100

100

100

Taxes for products

10.8

12.3

12.2

11.8

12.2

12.2

Consumption

96.1

110.5

106.0

101.6

96.6

92.2

private

78.5

92.6

89.1

85.6

81.6

78.2

state

17.5

17.9

16.9

15.9

15.0

14.0

Gross investments

22.4

26.3

26.7

28.7

33.3

36.5

State investments

4.6

4.1

4.2

3.9

3.1

1.8

Private investments

17.8

22.2

22.5

24.9

30.2

34.6

Export (goods and non-factorial services)

38.3

41.2

41.6

43.3

44.4

42.3

Import (goods and non-factorial services)

56.8

77.8

74.2

73.6

74.4

70.9

Net export

-18.5

-36.6

-32.7

-30.3

-30.0

-28.6

State finances (% from GDP)

 

 

 

 

 

 

Total resources of state budget

26.1

25.7

25.6

24.8

24.0

22.9

Total revenue

20.0

19.5

19.7

19.8

19.8

19.3

Including taxes

16.3

15.8

16.2

16.4

16.5

16.2

Total expenses

26.1

25.7

25.6

24.8

24.0

22.9

Including PIP (outside)

3.9

4.4

4.7

3.5

2.3

1.1

Interest payment

0.8

2.1

0.9

0.8

0.9

0.8

Deficit (including PIP)

4.2

3.5

3.0

2.8

2.6

2.4

Deficit with Social Fund

4.2

4.1

3.3

3.4

3.6

3.7

Money and credit

 

 

 

 

 

 

Growth rate М2 (for the end of the period)

17.6

51.1

24.0

18.3

16.7

8.2

Movement of money rate

6.3

5.1

4.5

5.3

5.2

5.2

Reserves in months of import

3.4

4.0

3.9

3.5

3.2

3.5

Outside sector

 

 

 

 

 

 

Account of current operations (mln USD)

-203.5

-663.5

-609.2

-658.0

-758.4

-801.3

Account of current operations (% from GDP)

-8.3

-23.4

-18.8

-18.0

-18.3

-17.1

Export of goods and services, mln USD

942

1 167

1 350

1 583

1 837

1 986

Export of goods and services growth rate

-11.3

8.3

9.6

13.2

12.6

5.3

Import of goods and services, mln USD

1 397

2 205

2 412

2 693

3 078

3 330

Import of goods and services growth rate

6.4

42.7

4.8

8.8

11.3

5.4

Debt and debt service

 

 

 

 

 

 

Foreign debt (% from GDP)

77.10

66.71

65.06

57.79

50.24

42.92

Debt service/export of goods and services

6.52

5.54

6.33

5.33

5.50

5.35

Debt service/GDP

2.50

2.29

2.63

2.31

2.44

2.26

Social indicators

 

 

 

 

 

 

Number of population (mln people)

5.14

5.19

5.24

5.29

5.34

5.38

Poverty (% from population)

43.1

40.6

37.4

34.8

32.8

29.8

Unemployment (% from population)

9.7

9.3

8.1

6.8

5.8

4.7