Legal Entities

Legal Entities

A variety of organizational legal forms of legal entities exist in the Kyrgyz Republic, the most common being: Limited liability companies or Joint stock companies.

A. Limited liability companies.

One of the most widespread types of legal entities in the Kyrgyz Republic, having a number of advantages:

·        Participants of an LLC are not liable for its obligations, and their risk of losses that may be incurred as a result of the company performance is limited to the amount of their respective contributions; and

·        The structure and powers of management bodies of an LLC are not subject to detailed legislative regulation, therefore, management and decision making in an LLC is more flexible.

The minimum amount of an authorized fund of an LLC may not be lower than one statutory rate (which, as of September 2007, is 100 soms, or about $2.5) established in the Kyrgyz Republic as of the time of participants’ contributions to the authorized capital.

B. Joint stock companies (open or closed).

Form of a legal entity as shareholders are not liable for the obligations of the company. A joint stock company must issue shares in the national currency of the Kyrgyz Republic, regardless of the form of original contribution.

Authorized capital of a joint stock company may not be lower than $2,500. As of the date of founding, authorized capital must be completely paid in and distributed among founders.

Joint stock companies established in the Kyrgyz Republic may be either open or closed.

3.4. Registration of Legal Entities

In the Kyrgyz Republic legal entities obtain the respective status upon their state registration with the Ministry of Justice of the Kyrgyz Republic.

State registration of the establishment or liquidation of a legal entity is performed free of charge within 10 business days from the date on which an application with all supporting documentation is submitted to the registering authority.

Should a legal entity be founded by a foreign entity, the following documentation has to be submitted to the relevant justice bodies:

  1.  Application for registration;
  2.  Charter and founding agreement of the newly established legal entity approved by its founders’ meeting;
  3. Minutes of the founders’ meeting on establishment of the legal entity, approval of its charter and founding agreement, and appointment of managerial bodies;
  4. Documents proving the location of the legal entity (such as a lease agreement, an agreement on gratuitous use of premises, or an official letter);
  5. Legalized copies of founding documents of a foreign legal entity that acts as a founder of the new legal entity, with a notarized translation into the national or official language;
  6. A legalized extract from a registry or another document proving that the foreign legal entity is an operating legal entity subject to legislation of its country, with a notarized translation into the national or official language.

Should a legal entity be founded by a foreign individual, instead of the last two documents on the above list, a copy of passport or other ID (with the visa term specified in cases where the foreign citizen resides within the Kyrgyz Republic) shall be submitted with a notarized translation into the national or official language.

3.5 Business activities without establishment of a legal entity

Foreign nationals permanently or temporarily residing within the territory of the Kyrgyz Republic may act as sole proprietors.

Individuals may engage in entrepreneurial activities based on a patent, if the respective activities are included in the list of patent-based activities approved by the Government of the Kyrgyz Republic.

A patent is a document issued by the tax authority and proving payment of the respective tax by individuals by place of their registration or business activity. The current monthly price of a patent varies from 100 to 4,500 soms and includes all types of taxes, with the exception of land tax, advertisement tax, garbage collection fee, and real estate tax. An individual engaged in entrepreneurial activities on the basis of a patent must not report to tax authorities and only needs to purchase a patent and further extend it.