Benefits Threshold Lowered, International Court Access Restricted
Kyrgyzstan Lowers Investment Threshold to $10 Million, Excludes International Arbitration Option
As of October 25, 2024, the investment threshold for receiving benefits in Kyrgyzstan has been lowered from $50 million to $10 million. However, foreign investors have lost the opportunity to apply to international arbitration courts, according to Bakyt Omurzakov, an adviser on business regulation and a representative of the Asian Leadership Center.
Omurzakov, who participated in the process of amending and supplementing the Investment Code in 2014-2015, explained that the original goal was to attract large companies to the mining industry by introducing threshold amounts and preferences to support the sector.
The latest amendments to the 2023 code have now lowered the threshold for receiving investment benefits to $10 million. Despite this positive change, Omurzakov raised concerns about the exclusion of the rule allowing investors to seek recourse through international arbitration in case of disputes.
He pointed out that without the option of international arbitration, investors facing political or economic changes that negatively impact their investments will have to rely solely on local courts, potentially facing bias in their cases.
Omurzakov emphasized that this development could send an alarming signal to foreign investors, as the lack of international arbitration may reduce the country’s attractiveness for large investments in infrastructure and private projects.
It was reported that the Kyrgyz government provides preferences for large investors who invest more than $10 million in the economy, including exemptions from VAT, sales, and income taxes. Additionally, the state is willing to provide land for the construction of production facilities.
