Note: Starting from 2019, the bank does not open accounts to companies incorporated in classic offshores.
Kyrgyzstan is a small mountainous country in Central Asia. It borders on China, Kazakhstan, Tajikistan and Uzbekistan. Thanks to its convenient geographical position, namely at the crossroads of trade routes between China and Russia, Kyrgyzstan will be of interest to those investors who intend to enter the market of the Celestial Empire and other Asian countries. The country’s economy relies mainly on agriculture. As for industry, mining of gold, antimony, mercury is quite developed, other sectors of economy are underdeveloped. Kyrgyzstan’s national currency is Kyrgyz som (KGS).
The Kyrgyzstan banking system emerged in 1991 after the collapse of the Soviet Union. During the 29 years that followed, the country’s banking system has overcome the growing pains and today Kyrgyzstan has a reliable and stable financial sector. Liquidity of the banking system for the first half of 2018 increased by 0.4 percentage points, to 65.5% (regulatory standard is 45%). Our company would like to offer you the service of opening a corporate bank account in Kyrgyzstan with a personal visit to the country.
Opening of an account with the local bank in Kyrgyzstan for a foreigner, as per rates for legal entities is 200 soms (the som exchange rate according to the Central Bank of Kyrgyzstan on July 29, 2020 is 76.78 soms for 1 U.S. dollar). Maintenance if free of charge.
Few Words on the Kyrgyzstan Banking System
The banking system of the Republic of Kyrgyzstan is two-tiered. The Central Bank is on the top tier with the main task of controlling and overseeing the country’s banking system, the second tier is for the commercial banks. As of July 1, 2018, 25 commercial banks were operating in the country, 320 branches included. The top five leading financial institutions in terms of the number of offices are as follows:
- RSK Bank with 51 offices;
- KYRGYZSTAN Commercial Bank with 35 offices;
- Ayil Bank with 33 offices;
- FINCA Bank with 24 offices;
- Optima Bank with 18 offices.
Banks in Kyrgyzstan
Few Kyrgyz banks can boast an extensive network of branches, but the existing offices are sufficient to comfortably serve their clients. These offices can be found in all major cities of Kyrgyzstan: Bishkek, Osh, Kara-Balta, Karakol, Tokmok, etc. Any non-resident can open a corporate account with a Kyrgyz bank at each of them.
Kyrgyz banks are demonstrating good performance. In the first half of 2018, the total assets of the Kyrgyz banking system increased by 6.8%. The volume of deposits of individuals and legal entities increased as well, and the volume of deposits of non-residents reached 1.4 billion soms (this growth since the beginning of the year amounted to 10.2%).
Kyrgyz banks are developing dynamically, continuously expanding the choice of services they offer, and increasingly using up-to-date technologies to serve their clients. We are talking about online banking, online support, remote access to the account, etc.
Kyrgyz banks are universal financial institutions. That is, both individuals and legal entities can get a full range of banking services. In addition, some banks have been granted the right to conduct financial transactions in accordance with Islamic principles via the “Islamic Window” since November 2017.
Banks offer the following services to corporate clients:
- Cash management and payment services;
- Currency transactions;
- Documentary transactions (letters of credit, guarantees);
- Keeping valuables in individual safe deposit boxes;
- Operations with securities;
- Visa or MasterCard corporate payment cards;
- Buying and selling gold species.
What Kyrgyzstan Guarantees to Investors
In accordance with the Kyrgyz Republic Investments Act, the state guarantees the following to the non-resident investors:
- equal rights for both local and foreign investors, non-interference in their work;
- exporting the profits from investing outside the country;
- protection from nationalization;
- the right to use the proceeds to conduct their activities in Kyrgyzstan;
- the right to invest in any activity that is not prohibited by law;
- freedom of cash transactions;
- other guarantees provided by Chapter 2 of the above-mentioned law.
In addition, money on deposits and settlement accounts open with the banks is insured by the Banking Deposit Protection Act. In accordance with this regulation, in the occurrence of the insured event, an individual (with a deposit account) or an entrepreneur (with a deposit or settlement accounts) will be indemnified with no more than 200,000 soms.
It is not entirely rational to consider deposits as one of the investment fields due to the lack of a mechanism for protecting the funds of legal entities and also because of the low interest rates. Thus, if we speak about a euro deposit, the rates vary from 0.5 to 3.5% per annum, U.S. dollar deposits yield 0.5 to 4% per annum, deposits in soms are from 3 to 11% per annum, and in rubles are 4.0 to 9.0% per annum. Therefore, it is better to use your non-resident bank account in Kyrgyzstan to pay for the goods, services, etc., in other words, for doing business.
Corporate Account with a Kyrgyz Bank
Not only residents, but also non-residents can open a corporate account with a Kyrgyz bank. But the bank will refuse to serve legal entities incorporated in Iran or the DPRK.
Current law prohibits the opening of accounts for non-residents whose operations are related to:
- Arms traffic;
- Gambling and lotteries (both online and offline), casinos, betting;
- Consulting services;
- Offering financial assistance, lending, contractual loans.
The benefits of having a current corporate account with the Kyrgyz banks for a non-resident company are as follows:
- Tolerant banking legislation;
- Russian-speaking staff;
- Low rates and fees;
- Accounts can be opened in different currencies.
Your bank account can be opened in the national currency (Kyrgyz soms), as well as rubles, dollars, euros or other currencies.
The main fees for using a settlement account will be:
|Account opening||200 soms|
|Account closing||200 soms|
|Account maintenance||Free of charge|
|Daily statements||Free of charge|
|Intrabank transfers in national currency from 9 a.m. to 4:30 p.m.||Free of charge|
|Som clearing transfers to other banks 9 a.m. to 11 a.m.||Depending on the amount: 10 to 60 soms|
|Som gross transfers to other banks 9 a.m. to 3:30 p.m.||100 soms|
|Internet banking||Free of charge|
|Re-issue of the Internet banking access code||100 soms|
Kyrgyz banks also carry out transfers in euros, dollars, rubles, Kazakh tenge, Japanese yen, Chinese yuan and other currencies. The fee for transfers in foreign currencies starts from 0.1 to 0.2% of the payment amount.
Payment transactions that banks are willing to provide to their clients:
- Payments upon orders within one banking day;
- All forms of international settlements on export and import transactions;
- Payments are credited to the account on the day they are received by the bank;
- Possibility of cashing out on the day of money receipt;
- Advises on all matters related to banking transactions.
Islamic Window at the Kyrgyzstan Banks
Some Kyrgyz banks have been granted the right to provide financial services in accordance with Islamic principles. Islamic Window established at the bank serves the clients via the Islamic Financial Center. So, both individuals and legal entities can get a full range of Islamic banking services:
- Salam is the sale of deferred delivery of goods to the bank at the current price of a particular asset;
- Musharakah is a joint participation of the bank and the client in the implementation of a certain business project;
- Mudaraba is when the bank becomes the client’s investor;
- Murabaha is a sale of bank assets with a mark-up in installments;
- Istisna is construction of a certain facility by the bank at the request of the client. The client is obliged to pay the cost of the facility by installments.
Lending at the Kyrgyzstan Banks
Kyrgyz banks offer their clients a full range of business finance services. Here the clients can get the following:
- credit line for replenishing their working capital or for investment purposes in soms, rubles, dollars, euros, yuans or tenge;
- microloans with a minimum package of documents required;
- express loans when the decision is made in 2 working days;
- agricultural home equity loan or a loan without collateral to replenish working capital or purchase the necessary agricultural equipment. The loans can be obtained in soms, rubles, dollars, euros, yuans or tenge;
- Leasing is available in rubles, dollars or euros for buying equipment or machinery.
Payment Cards at the Kyrgyzstan Banks
The banks offers their clients payment cards of the following types:
- Elkart is a card of the Kyrgyz Republic national payment system for the use inside the country. It is available for free, the cost of annual maintenance is 100 soms;
- Visa. Cards of this payment system are available from the banks in three types: Electron, Classic, Gold. Currency of the card can be soms or dollars. These cards are issued free of charge, the cost of annual maintenance varies by type and is usually from USD 5 to USD 60.
Gold Transactions at Kyrgyz Banks
Legal entities can buy gold species issued by the National Bank of the Kyrgyz Republic. Operations are carried out in soms on the day of the transaction. Both cash and non-cash payments are allowed. Operations are carried out on the same day if the client has applied before 11 a.m. If the application was made later then the operation will be carried out the next day.
Internet banking at the Kyrgyzstan Banks
Banks of Kyrgyzstan offer both non-residents and the Kyrgyzstan nationals a service of remote management of their settlement and other accounts. Having Internet or mobile banking at their disposal, the account holders do not have to come to the bank to make payments. They can pay for goods or services, check their account balance, top up the payment card, etc. from anywhere in the world where there is the Internet access. Also, the client can use the service of the Internet statement. It allows the account holder to always know the account balance and view all the transactions made over a certain period.
In order to get access to online banking, the client must made an application to the bank. After that, they will be given a password and a login to access their personal account in the official website of the bank.
How Do I Open a Non-Resident Bank Account in Kyrgyzstan
In order to start the procedure, you should do the following:
- Contact our specialists for professional help in opening the account. Our contact email is: firstname.lastname@example.org.
- Pay for the professional assistance in getting your account open. Available payment methods are a bank transaction, payment card, PayPal, WebMoney or Western Union. The cost of this service is:
- Company without nominees, from EUR 3,999.00;
- Company with nominees, from EUR 4,999.00.
- Prepare your documents required for opening a corporate account.
List of Documents Required to Open an Account
In order to open an account, non-resident legal entities must provide to the Kyrgyzstan bank notarized copies of legalized documents (excluding non-resident companies incorporated in the countries parties to the Convention on Legal Aid and Legal Relations in Civil, Family and Criminal Cases of 07.10.2002). If the documents do not require legalization, then they must be translated into Kyrgyz or Russian. The translation must be notarized in the country of the documents’ origin.
Here is the list of documents required to open an account:
- Questionnaire provided by the bank;
- Ultimate beneficiary’s identity card;
- Application for opening an account signed by the heads of the legal entity in accordance with the signature sample card;
- Account opening and maintenance agreement;
- Company signatures sample card with a company stamp in two copies, notarized;
- Extract from the trade register or any other document that contains information about the incorporation of a non-resident company;
- Notarized copy of the Articles of Association (or other similar document) in Kyrgyz and Russian languages;
- Copy of the account holder’s/company executive’s passport;
- License to operate (if any). The document must be certified in due course;
- Document confirming the authority of the account holder;
- Power of Attorney to dispose of the account (if necessary).
Note: The bank has the right to request additional documents if necessary.
The account opening procedure is as follows:
- The client fills out and provides us with all the necessary documents in the form of scans. We coordinate them with the bank and having received the confirmation we will arrange a meeting at the bank in Kyrgyzstan at a convenient time for you.
- It will take up to a week for the bank to carry out the verification, having received the full package of duly certified and notarized documents.
- After that, you will need to be interviewed by the Vice-Chairman of the Bank’s Board regarding the operations of your company, etc.
If you are interested in this service, please feel free to contact us today by email to email@example.com.