Kyrgyzstan

Kyrgyzstan

Legal framework

 

The legal framework analysis aims to provide general knowledge of the national cooperative legislation and of its main characteristics and contents, with particular regard to those aspects of regulation regarding the identity of cooperatives and its distinction from other types of business organisations, notably the for-profit shareholder corporation.

It aims to evaluate whether the national legislation in place supports or hampers the development of cooperatives, and is, therefore “cooperative friendly” or not, and the degree to which it may be considered so, also in comparison to the legislation in force in other countries of the ICA region, or at the supranational level.

In addition, the research aims to provide recommendations for eventual renewal of the legal frameworks in place in order to understand what changes in the current legislation would be necessary to improve its degree of “cooperative friendliness”, which is to say, to make the legislation more favourable to cooperatives, also in consideration of their specific identity. This webpage presents a snapshot of the legal framework analysis results for Kyrgyzstan.

 

In the Kyrgyz Republic, only the Law on Cooperatives is in force, which regulates the activities of all types of cooperatives, except for financial cooperatives. The law defines the legal and economic foundations of the formation and activities of cooperatives of the Kyrgyz Republic and their unions.

Main laws relevant to cooperatives in Kyrgyzstan

In the Kyrgyz Republic (hereinafter - the KR) there are special laws regulating the activities of various types of cooperatives. Legal acts (LA), which are special laws regulating the activities of cooperatives, include the following, and they are located below in accordance with the LA hierarchy:

1

Civil Code of the Kyrgyz Republic of May 8, 1996 No. 15 (last modified on August 6, 2018 No. 88).

The concept of a cooperative and the basis for the formation
of cooperatives are provided for in articles 152, 153.

2

Law of the Kyrgyz Republic “On cooperatives” dated June 11, 2004 No. 70 (last modified on 07/26/2018 No. 70).

The law defines the legal and economic foundations of the formation
and activities of cooperatives of the Kyrgyz Republic and their unions.

3

Tax Code of the Kyrgyz Republic of October 17, 2008 No. 230 (last modified on August 6, 2018 No. 88).

The Tax Code defines the basic principles for the taxation of cooperatives. Tax issues are provided for only in the tax code,it is prohibited to include taxes in other laws.

4

The Land Code of the Kyrgyz Republic of June 2, 1999 No. 45(last modified: January 12, 2018 N 12).

Regulates issues of land use, land allocation, the right of cooperatives to lease state land, provides for the concept of garden and garden cooperatives.

5

The Law of the Kyrgyz Republic “On the Tariffs of Insurance Contributions for the State Social Insurance” of January 24, 2004 N 8 (latest update on July 15, 2017 No. 125).

This law establishes and determines the rates of insurance premiums for state social insurance.

6

The “Concept of the development of the agricultural
cooperative system in the Kyrgyz Republic for 2017-2021”, approved by the Government of the Kyrgyz Republic on April 21, 2017 No. 237.

The concept defines the main directions of development and the necessary measures to be taken by the state bodies and all  participants of the cooperative movement for the furtherdevelopment of agricultural cooperatives.

In the Kyrgyz Republic, only the Law on Cooperatives is in force, which regulates the activities of all types of cooperatives, except for financial cooperatives. The law defines the legal and economic foundations of the formation and activities of cooperatives of the Kyrgyz Republic and their unions.There are no other special laws on cooperatives of workers, youth, educational organizations, women or others. They can be created in accordance with the Law on Cooperatives, it establishes universal norms suitable for creating any kinds of cooperatives. As for cooperative banks, in Kyrgyzstan there are no laws on them and their creation cannot be regulated by the Law on Cooperatives.

Cooperative Friendliness

In general, it can be considered that Kyrgyz legislation is ‘quite cooperative friendly’ for the functioning of cooperatives. In general, the state actively promotes the development of cooperation in the country, which is reflected in many strategic documents and main acts.However, inconsistencies in legal acts coupled with insufficient attention and indecisive actions also lead to the fact that cooperatives, for all the importance of their development, do not receive sufficient support.

Key recommendations for improvement

 A few of the key recommendations are:

-necessary to make the law “On cooperatives” in terms of determining the number and types of subjects for the formation of cooperatives, clarifying the concepts of dividends, cooperative payments, types of shares, the procedure for including and excluding members.

- In the legislation governing cooperative activities, it is necessary to introduce norms on the law of cooperation of cooperative unions, representative bodies of cooperatives with cooperatives of foreign countries and international cooperative organizations.

-It is necessary to disclose in the legislation the concepts and order of organization of the activities of agricultural cooperatives, consumer cooperatives, primary, secondary levels of cooperatives.

Conclusions

In general, the legal framework in Kyrgyzstan regulating the activities of cooperatives is friendly, though the existing disharmony of legal norms reflected in various acts complicates the process of conducting activities and makes it attractive as a legal form of organization.The process of improving and shaping the most favorable climate for the development of cooperatives is not complete and there is a need to refine and make changes in other legal acts, since the definition of cooperation and its use as a tool goes beyond the previously established framework of the sectoral nature.The lack of experience in the development of cooperation requires the help of more experienced and competent experts.

 

The legal frameworks analysis is a tool developed under the ICA-EU Partnership #coops4dev. It is an overview of the national legal frameworks at the time of writing. The views expressed within are not necessarily those of the ICA, nor does a reference to any specific content constitute an explicit endorsement or recommendation by the ICA. 

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