Small and medium-sized enterprises (SMEs) play a vital role in Kyrgyzstan’s economy, employing 585,000 people and contributing significantly to various sectors, according to the National Statistical Committee (NSC).
As of 2024, Kyrgyzstan has 18,139 registered small businesses paying taxes. SMEs are particularly active in agriculture and manufacturing, with private entrepreneurs producing 65% of the country’s agricultural output and 26% of its industrial goods. Additionally, much of the hotel and restaurant industry is owned and operated by medium-sized private businesses.
Most of these enterprises are concentrated in the Bishkek and Chui regions, where 80% of the country’s small and medium-sized businesses operate.
The Kyrgyz government has taken steps to encourage entrepreneurs to operate transparently and contribute to the formal economy. In the summer of 2024, the voluntary patent system was abolished and replaced with a requirement for businesses to use cash registers.
To incentivize compliance, businesses with an annual turnover of up to KGS 15 million ($170,000) are exempt from taxes if they purchase cash registers, submit reports to the State Tax Service, and pay insurance and pension contributions. For businesses with a turnover between KGS 15 million and KGS 30 million ($340,000), a reduced tax rate of 0.5% on turnover is applied.
Small and medium-sized businesses are not only a backbone of Kyrgyzstan’s economy but also a key source of job creation. Government initiatives to formalize SME activity and simplify taxation are expected to further bolster the sector’s growth and contribution to the national economy.
