Merchandise Trade

• Kyrgyzstan joined the World Trade Organization (WTO) in 1998.
   
• Kyrgyzstan's trade profile received a significant boost when the country ascended to the Russian-led Eurasian Economic Union (EAEU) single market trading bloc in 2015. It is a member along with Russia, Belarus, Kazakhstan and Armenia. The EAEU single market provides for the free movement of goods, people, capital and services between member states, with a common external tariff regime.
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• Various anti-dumping measures were imposed on products from Ukraine, autos parts and steel products from Mainland China, and autos from various countries. The country is highly dependent on imports for consumer and industrial needs. This makes accessing them from non-EAEU markets significantly more expensive. Given that Mainland China is Kyrgyzstan's neighbour, this has significantly impacted trade flows between the two countries. In October 2019 Ukraine initiated dispute complaints against Kyrgyzstan and Armenia to challenge anti-dumping duties imposed by on steel pipes originating from Ukraine.
   
• The country's landlocked status has meant that in the past it has largely traded with its immediate neighbours, such as Russia and Mainland China. Trade with Russia has benefitted from Kyrgyzstan's accession to the EAEU.
   
• Mainland China has become Kyrgyzstan's most important source of goods. Mainland China is the source of nearly two-fifths of all goods brought into Kyrgyzstan. Machinery, clothing goods and other manufactured products make up the bulk of the basket of items bought by Kyrgyzstan from Mainland China.
   
• Kyrgyzstan has double taxation treaties with over 20 countries including Armenia, Austria, Belarus, Canada, Mainland China, Finland, Germany, India, Iran, Kazakhstan, Lithuania, Malaysia, Moldova, Mongolia, Pakistan, Poland, Russia, Switzerland, Tajikistan, Turkey, Ukraine, and Uzbekistan.

Sources: WTO – Trade Policy Review, Fitch Solutions

Trade Updates

The EAEU-Mainland China agreement was signed on May 29, 2018. The EAEU and Iran signed an interim agreement on a free trade zone in May 17, 2018, during the Astana Economic Forum. Two years of negotiations resulted in a three-year arrangement to reduce import customs duties on approved goods.

Active

1. Commonwealth of Independent States Free Trade Agreement (CISFTA): Most of Kyrgyzstan's main trade partners are now included in the EAEU, which has somewhat superseded the CISFTA.
    
2. Kyrgyzstan-Tajikistan (effective date from January 2006): Kyrgyzstan mainly imports fruits, nuts and tobacco from Tajikistan. Kyrgyzstan's exports to Tajikistan include coffee, tea and milk as well as preparations of cereals, spirts and vinegar.
    
3. EAEU (Kyrgyzstan, Russia, Kazakhstan, Armenia and Belarus): While opening up markets in major trade partners Russia and Kazakhstan, the deal increases trade barriers with neighbouring Mainland China.
    
4. EAEU-Vietnam FTA: Vietnam is not a major export or import partner of Kyrgyzstan. However, the promulgation of this FT  in October 2016 provides another tariff-free market for Kyrgyzstani exports and may allow Vietnam to overtake some of Mainland China's dominance in the textiles and manufactured goods markets.
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5. EAEU-Singapore FTA: The EAEU and Singapore agreed to begin negotiations for an FTA in December 2016 and concluded five negotiation rounds. The two parties signed the FTA on October 1, 2019. The agreement aims to strengthen collaboration between the two parties in areas such as trade and investment, intellectual property rights protection, customs cooperation and competition enforcement.

Foreign Direct Investment

• Value Added Tax: 12%
• Corporate Income Tax: 10%

Source: State Tax Service under the Government of the Republic, Kyrgyzstan

Localisation Requirements

The Kyrgyzstani government sets specific quotas for how many foreign workers can be employed. These quotas are set by the Ministry of Labour on an annual basis and differ from region to region within the country. In order to acquire a foreign worker permit, an employer must demonstrate that the skills needed for the specific position cannot be sourced within the domestic labour market.

Visa/Travel Restrictions

The country still has fairly low female workforce participation rates, estimated at around 48%. Significant cultural and religious barriers remain and women do not enjoy the same pay or career opportunities as men, further restricting the pool of talent to choose from.

Foreign Worker Permits

While citizens of other EAEU and Commonwealth of Independent States countries may be employed without obtaining a special work permit, this is not the case for foreign workers from countries outside these regional arrangements. In order to be legally allowed to employ foreign workers, a business must first obtain permission from the Ministry of Labour. In order to be issued a foreign worker permit (which usually takes around 35 days), the employer must demonstrate that the skills needed for the specific position cannot be sourced within the Kyrgyzstani labour market. Preference is usually given to granting foreign worker permits to highly skilled professionals

​​​​​Sources: Government websites, Fitch Solutions

Sovereign Credit Ratings

Sources: Moody's, Standard & Poor's, Fitch Ratings

Hong Kong’s Trade with Kyrgyzstan

Export Commodity	Commodity Detail	Value (US$ million)
Commodity 1	Telecommunications and sound recording and reproducing apparatus and equipment	29.6
Commodity 2	Photographic apparatus, equipment and supplies;  optical goods; and watches and clocks	3.1
Commodity 3	Office machines and automatic data processing machines	1.0
Commodity 4	Electrical machinery, apparatus and appliances; and electrical parts thereof	0.8
Commodity 5	Professional, scientific and controlling instruments and apparatus	0.2

Import Commodity	Commodity Detail	Value (US$ thousand)
Commodity 1	Telecommunications and sound recording and reproducing apparatus and equipment	770.1
Commodity 2	Sugar, sugar preparations and honey	15.7
Commodity 3	Miscellaneous manufactured articles	11.2
Commodity 4	Electrical machinery, apparatus and appliances; and electrical parts thereof	10.0
Commodity 5	Office machines and automatic data processing machines	4.6