In response to the directives from the leadership of the Kyrgyz Republic regarding the importance of protecting businesses from illegal interference and as part of the implementation of the President's decrees, the International Business Council has developed an analytical report. This document is dedicated to the key institutional factors that influence the business environment in the country.
The analysis is based on data from official statistics of government agencies, information from international organizations, and collected practices of interaction between business and the state.
According to the National Statistical Committee, the gross domestic product (GDP) in 2025 amounted to 1,976.4 billion soms, which is an increase of 11.1% compared to the previous year.
Despite positive changes in investments, their level remains modest compared to other countries in the region. The share of foreign direct investment is about 4-5% of GDP, indicating opportunities for improving the investment climate.
The analysis of law enforcement practices reveals that the criminal prosecution of entrepreneurs creates uncertainty for investors. According to the estimates of the International Business Council, such a situation exacerbates legal uncertainty and may negatively affect investment decisions.
It is also worth noting that the tightening of tax administration significantly impacts business activity. In recent years, the amounts of additional taxes, penalties, and fines have increased significantly. For example, accrued penalties rose from 2.49 billion soms in 2020 to 33.84 billion soms in the first eight months of 2025 (an increase of more than 13 times), while fines increased from 0.46 billion to 9.10 billion soms over the same period (a 20-fold increase). The unpredictability of law enforcement under these conditions can create tension between business and the state.
The report emphasizes that reliable protection of property rights and predictability of government regulation are critically important for making investment decisions and long-term business planning.
Achieving a balance between the state's role in the economy and the development of a competitive environment is also important. In recent years, decisions have been made that strengthen state participation in certain sectors, which, according to international organizations, requires ensuring competitive neutrality and equal conditions for all market participants.
The state of the institutional environment is also reflected in international rankings. For example, according to the Corruption Perceptions Index from Transparency International, Kyrgyzstan received 25 points out of 100 and ranked 146th out of 180 countries, indicating persistent institutional problems for investment development.
According to the International Business Council, with the continuation of high economic growth rates, the quality of the institutional environment remains a key factor for the long-term development of the economy. Strengthening the rule of law, improving the predictability of government regulation, developing a competitive environment, and reducing unjustified interference in entrepreneurial activities are necessary conditions for a stable influx of investments.
The International Business Council will continue to promote constructive dialogue between the state and business, as well as make proposals for further improving the investment climate and attractiveness of the Kyrgyz Republic.
