President Sadyr Japarov of the Kyrgyz Republic signed into law amendments to the “On Free Economic Zones” Law on November 20, 2024. The Zhogorku Kenesh, Kyrgyzstan’s parliament, had previously adopted these changes to support entrepreneurs, ensure fair competition, and resolve legal contradictions arising from the Tax Code.
The amended law clarifies the permitted activities for entities operating within the Special Economic Zones (SEZs). It generally prohibits the production and sale of excisable goods, with the following exceptions:
- Tobacco products (TN VED 2402) manufactured by companies registered in the FEZ before 2000 are subject to excise tax and VAT when imported into the rest of Kyrgyzstan.
- Nicotine-containing products, such as disposable e-cigarettes and similar devices (HS 2404 and 8543 40 000 0), face restrictions on export to the territory of the Kyrgyz Republic.
- Certain waters, including mineral and carbonated waters containing added sugar, sweeteners, or flavorings (HS code 2202), are subject to excise tax and VAT when sold outside the SEZ.
The amendments aim to strike a balance between supporting businesses within the Bishkek FEZ and maintaining a level playing field for companies operating elsewhere in Kyrgyzstan. The law ensures that excisable goods produced in the FEZ do not gain an unfair advantage over those manufactured in other parts of the country.