Legal support for subsoil use in Kyrgyzstan
The mining industry remains one of the key sectors of the Kyrgyz economy. It generates a significant share of export revenues and budget receipts and largely shapes the development of the regions. The country holds considerable mineral resource potential, including deposits of gold, silver, coal, antimony, rare and non-ferrous metals, as well as groundwater reserves and construction materials. Critical mineral resources are of particular importance, as they are of strategic interest for the development of modern technologies and industry.
The subsoil of the Kyrgyz Republic is the exclusive property of the state, and the right to use it therefore arises only in the manner prescribed by law: on the basis of a license, a concession agreement, a production sharing agreement or state registration. The industry is characterized by staged licensing, mandatory state participation in certain projects and a special tax regime. Each of these features calls for careful legal analysis at every stage of a project.
The lawyers of Baker Tilly Bishkek Legal support subsoil use projects, including critical minerals projects, throughout their entire life cycle: from selecting the method of obtaining rights to a subsoil plot and completing the licensing process to project structuring, transactions involving subsoil use rights and engagement with state authorities. We advise domestic companies and foreign investors, helping them structure projects in compliance with statutory requirements and reduce regulatory risks.
Our services
The full range of legal support for subsoil use in Kyrgyzstan:
Obtaining subsoil use rights
- analysis of the applicable procedure for granting rights to a subsoil plot (tender, auction, the “first application filed” rule, a decision of the Cabinet of Ministers of the Kyrgyz Republic)
- preparation of documentation and support in tenders and auctions
- support in obtaining licenses for prospecting and exploration works, as well as for the development of mineral deposits
- support in progressing to the next licensing stage
Project structuring and foreign investors
- advising foreign investors on the conditions for operating in the industry
- incorporation of a subsidiary in the Kyrgyz Republic for the purposes of obtaining a license
- disclosure of information on beneficial owners
- structuring projects with state participation through simple partnership agreements, joint ventures or subsidiaries
- analysis of the minimum state participation requirements
Transactions involving subsoil use rights
- legal due diligence of subsoil users and the licenses held by them
- support in the transfer of subsoil use rights, the transformation of licenses and changes in participation interests
- preparation and negotiation of contractual documentation
- support in obtaining the required approvals from state authorities
Taxation of subsoil use
- advising on the bonus, royalties, income tax, the license retention fee and contributions to the development and maintenance of local infrastructure
- assessment of the tax implications of obtaining a license, transferring rights, changing participation interests and increasing reserves or the licensed area
- joint work with Baker Tilly tax advisers within a single project
Engagement with state authorities and dispute resolution
- representing subsoil users before the competent state authorities
- challenging decisions, actions and omissions of state authorities
- support in disputes relating to subsoil use rights
Why clients choose Baker Tilly Bishkek Legal for subsoil use projects
Several reasons why clients entrust us with their mining projects:
- Understanding of the industry – we take the staged nature of licensing, state participation requirements and the specifics of subsoil use taxation into account from the project planning stage.
- Support throughout the project life cycle – we provide legal support from obtaining the first geological study license to the development of a deposit and transactions involving subsoil use rights, including legal support on matters arising in the course of a subsoil user’s operations.
- Experience working with foreign investors – we help structure a presence in Kyrgyzstan in line with the requirements for incorporating a subsidiary and disclosing beneficial owners.
- Integrated approach – where needed, clients gain access to the tax, financial and audit expertise of Baker Tilly specialists, which is particularly valuable given the special tax regime applicable to subsoil use.
- Engagement with state authorities – we support the obtaining of licenses, permits and approvals, including in connection with transactions involving subsoil use rights.
- Monitoring of legislation – we track changes in subsoil legislation and inform clients of new requirements affecting their projects in good time.
Contact us to discuss your inquiry and receive qualified legal support in Kyrgyzstan and Central Asia