Kyrgyzstan is a landlocked country located in Central Asia. It shares borders with Kazakhstan, Uzbekistan, Tajikistan, and China. Kyrgyzstan is a member of the Eurasian Economic Union (EAEU), which means that there are no barriers between its main trading partners, Russia and Kazakhstan.
The country is rich in natural resources, farmable land, gold, and copper and has great potential in mining, agriculture, tourism, and textiles. If you're looking for an easy way to register your business, you are in the right place. One of the most common business forms is a sole proprietorship. It is not complicated to establish, and the taxation system is rather simple.
Disclaimer: Be aware that this article is not a substitute for legal advice. Please always check official websites or seek legal advice before you take action.
Sole proprietorship in Kyrgyzstan
A sole proprietorship is a non-corporate form of doing business in Kyrgyzstan which can be established by any Kyrgyz or foreign national.
This business form is very attractive due to its simple structure and easy establishment procedure. It is a business run by only one person - the business owner. The proprietorship's liability is not limited, as the owner is responsible for all assets and debts of the business.
Another advantage of a sole proprietorship is that the business is flexible. It can quickly adapt to the changing environment, as the decision making and action taking are prompt.
Registration process
You can register a sole proprietorship in Kyrgyzstan in two ways:
1. Certificate of registration
This certificate of state registration is issued by the National Statistical Committee of the Kyrgyz Republic. You should visit the Committee office closest to your place of residence. The office in Bishkek is at Фрунзе (Frunze) street, number 374.
After the registration, you should register as a taxpayer at the State tax Service (Bishkek address: Чүй проспекти (Chuy Ave), 219) and as social insurance payer with the Department of Social Security (Bishkek address: Тыныстанова (Tynystanova Street), 215). You are obliged to keep the books and report to the tax authority annually.
2. Patent
Sole proprietors can operate a business without registering with the Kyrgyz National Statistics Committee. In this case, the business can be run on the basis of patents. A patent is a document that can be purchased from the State Tax Service of the Government of the Kyrgyz Republic. You are not required to keep the books in this case. You just need to extend the validity of the patent. The validity period is usually between one month and one year. You are not required to pay the income tax. However, if your income exceeds the VAT registration threshold, the authorities will stop issuing the patent and require the registration for a sole proprietor certificate.
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Taxes for sole proprietors in Kyrgyzstan
The taxation system in Kyrgyzstan is not much different than in other countries. Sole proprietors are obliged to pay a Value Added Tax (VAT) and income tax (except patent holders). The income tax rate is 10%.
You are required to register for VAT if your annual income exceeds the amount of KGS 30,000,000 (30 million Kyrgyz som). The standard VAT rate in Kyrgyzstan is 12%.
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