How Kyrgyz Citizenship May Affect Your Foreign Dividends

08.10.2025

Kyrgyz Passport: An Attractive Option for Global Investors

With the growing popularity of the Kyrgyz passport among international investors and entrepreneurs, understanding the tax implications of obtaining this status becomes particularly important. The Kyrgyz Republic attracts not only by simplified naturalisation procedures and a relatively moderate tax burden, but also by its fairly liberal approach to the taxation of its citizens’ international income.

Recent clarifications issued by the Ministry of Economy and Commerce of the Kyrgyz Republic have provided additional certainty on the taxation of dividend payments received by Kyrgyz citizens from foreign companies. This topic is especially relevant for those considering Kyrgyz citizenship while maintaining international investments and sources of income.

Basic Rate and Key Distinction: “Economic vs. Entrepreneurial” Activity

According to the current tax legislation of the Kyrgyz Republic, the basic rate of personal income tax is set at ten per cent, which makes the jurisdiction quite competitive at the international level. At the same time, the tax obligations of Kyrgyz citizens extend not only to income earned within the country, but also to certain categories of foreign income derived from economic activity.

It is important to note: taxation applies specifically to income from economic rather than entrepreneurial activity. This includes transactions with securities, shares in companies’ share capital, and the receipt of corresponding payments, including dividends. This distinction is crucial for determining tax obligations.

Dividends from Kyrgyz Companies: Full Exemption for Residents

With regard to dividends received from Kyrgyz companies, the law provides a full exemption from taxation for residents of Kyrgyzstan, regardless of their citizenship. Resident status is determined by the standard international test of physical presence in the country for at least 183 days within 12 months.

This approach creates favourable conditions for investment in the domestic economy and encourages business development within the country.

Dividends from Foreign Companies: A Progressive Approach to Double Taxation

For international investors, the situation with dividends from foreign corporations is of far greater importance. Here, Kyrgyz legislation demonstrates a progressive approach to the issue of double taxation, providing different mechanisms of tax regulation depending on the circumstances of income receipt.

The most favourable regime applies to income from companies registered in jurisdictions with which Kyrgyzstan has concluded double taxation treaties (DTTs). In such cases, the provisions of the relevant international agreements apply, usually providing for reduced tax rates in the source country and the right to credit the tax paid there against Kyrgyz tax liabilities.

The 2023 Reform: Unilateral Exemption in the Absence of a DTT

Of particular interest is the legislative approach to cases where no double taxation treaty exists. From 2023, the Tax Code of the Kyrgyz Republic introduced a rule granting Kyrgyz citizens unilateral exemption from taxation of dividends received from companies in states with which no treaty is in force. The sole condition for applying this benefit is the actual payment of personal income tax in the source country of the dividend payment.

This innovation applies not only to dividends but also to other categories of foreign income of Kyrgyz citizens, including salaries and rental income. Such a measure demonstrates the Kyrgyz authorities’ intention to create the most favourable conditions for their citizens engaged in international economic activity.

Anti-Offshore Rule: When 10% Must Be Paid in Kyrgyzstan

At the same time, the legislation provides for an important exception to the general exemption. If in the country of incorporation of the dividend-paying company personal income tax is entirely absent or set at a zero rate, Kyrgyz citizens are obliged to pay the ten per cent personal income tax into the budget of the Kyrgyz Republic. This rule is designed to prevent complete avoidance of taxation through the use of tax-free jurisdictions.

Thus, the existing system of taxation of international dividends in Kyrgyzstan takes into account various factors: the existence or absence of double taxation treaties between states, the actual taxation in the source country, and the tax residency status of the income recipient.

Practical Aspects: Filing Returns and Confirming Tax Paid

Practical application of these tax rules requires Kyrgyz citizens to comply with certain procedural obligations. In particular, they must submit tax returns to the Kyrgyz authorities declaring foreign income. To apply the exemptions or claim a credit for foreign tax paid, it is necessary to provide documentary evidence of the tax having been paid in the source state.

Conclusion: A Unique Precedent for Attracting Capital

Kyrgyzstan is establishing an unprecedented tax model by offering unilateral relief for foreign tax credit without requiring reciprocity. This distinguishes the country from other developing jurisdictions and makes Kyrgyz citizenship particularly attractive for international investors with diversified portfolios.

Revera specialises in obtaining Kyrgyz citizenship under a simplified procedure and provides comprehensive support at all stages – from document preparation to obtaining a passport. Our experts will help you assess the tax advantages of Kyrgyz citizenship in relation to your specific situation and optimise the structure of your international investments.

Authors: Saodat Shakirova, Anna Miritskaya

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