Kyrgyzstan PEO & Employer of Record

WeHG offers you an International PEO and global Employer of Record service in Kyrgyzstan to companies willing to enter the Kyrgyz market or hire local/expat employees in this country.

The conventional approach requires establishing a subsidiary in Kyrgyzstan.  Still, our decision allows you to start the operations in Kyrgyzstan within days hence save time and finances.  WeHG would hire candidates on your behalf while you maintain full operational control of their work. So legally they would be our employees, on our local payroll, 100% compliant but will work on your behalf.

Kyrgyzstan fast facts

Population, million: 6
Land area: 199,951 km²
Capital: Bishkek
Local currency: Som (KGS)

GDP per capita:$ 5,470
GDP in currency:$ 35,324 billion

Kyrgyzstan (officially – Kyrgyz Republic (Kyrgyz Kyrgyz Republic, Russian Kyrgyz Republic, Kyrgyz Republic) is a state in Central Asia. It borders Kazakhstan to the north, Uzbekistan to the west, Tajikistan to the south, and China to the east. Its capital and largest city is Bishkek.

Since the country became independent, Kyrgyzstan has been an officially unitary parliamentary republic, although it has continued to experience ethnic conflicts, riots, economic problems, transitional governments, and political party scandals.

The majority of the country’s population consists of ethnic Kyrgyz – 5.7 million people, and national minorities are Uzbeks and Russians. The state language, Kyrgyz, is closely related to other Turkic languages, Russian has official status. The majority of the population (64%) are Muslims. In addition to Turkic origins, Kyrgyz culture has elements of Persian, Mongolian, and Russian influence.

Federal labor and employment law applies to:

• banking;
• interprovincial and international transportation;
• broadcasting;
• telecommunications;
• aeronautics; and
• a few other limited areas.

Hiring, Negotiating and Doing Business in Kyrgyzstan

Necessity of written employment contract

The form of employment contract in Kyrgyzstan is written and it has to be sighed by both parties. The duration of hiring candidates lasts 3 days and the procedure is based on special instruction or resolution, which is explained in the working contract. 

In case of an incorrectly written labor contract, an employee has the right to continue his/her work with the permission of the employer. Also, such permission doesn’t relieve the employer of the claim to sign a written form of labor contract with the employee.

Different forms of engagement: employment, contracting, work with private entrepreneur

While entering the Kyrgyz market, you need to take into account the legal documents which claim the procedure and the process of labor relations: the Constitution of the Kyrgyz Republic, the Labor Code, decrees of the President of the Kyrgyz Republic, resolutions of the Kyrgyz Republic government, acts of local governance bodies and internal normative labor acts. If there’re any international treaties and other norms of international law, check if they’re ratified by the Kyrgyz local law.

Kyrgyzstan Employment Contract

Types of employment agreements

Terms of the labor contract can be changed upon consent of both parties only in writing.

Labor contract shall be concluded for: 

• indefinite terms; 
• for fixed term not exceeding five years (fixed – term labor contract) unless other duration is set forth in this Code, other legislation

Employment contracts are executed for an indefinite period or definite period (of not more than 5 years for fixed-term employment contracts) or such other period as may be set forth in Kyrgyz law.

Kyrgyzstan working hours

The number of working hours per week shouldn’t exceed 40 hours regarding the Labor Code.  Talking about shifts,  the maximum duration is 8 hours.

Overtime

Regarding the Kyrgyz Law, overtime is a paid, initiated by the employer work, which is done by the worker in excess of established work time (daily work, shift). There’re some cases, claimed by the Law, which allows the employer to establish overtime work:

1) Extreme cases (countries’ defense, prevention of natural or production disasters)

2) Social works (removal of utility issues)

3) In case of unfinished work tasks during a normal working day caused by unexpected circumstances (destruction of company’s or organization’s property or conditions which pose a threat to other workers, etc)

4) If there’s a need to replace a worker who is absent, the other one can be recalled to finish necessary tasks.

5) In case to fix mechanisms or facilities when disrepair thereof may lead to termination of work for a significant number of employee.

Vacation leave in Kyrgyzstan

The duration of vacation during the working week shouldn’t exceed 42 hours. Days off are granted for every worker and they’re counted like this:

1) 5 working days – 2 days off

2) 6 working days – 1 day off

3) Sunday is the official day off

4) Usually, days off should follow each other 

Kyrgyzstan Maternity Leave

The maternity leave lasts for 136 days: 70 days before the birth of a child and 56 days after. Additionally, female workers have the right to receive unpaid maternity leave up to the child’s 18 months, and – this period and the payment can be increased for additional 18 months.

Kyrgyz Severance Laws

The duration of the Probation period is 3 months (not more), for some other positions (such as managers) it can be up to 6 months. Both parties can terminate the probation period in a writing form and not later than 3 days. 

Talking about the indefinite contract, it can be terminated for the reasons claimed in the Law (the Kyrgyz Labor Code). The duration of the Notice period depends on the reasons for termination. The amount of severance pay depends on the reasons for terminations, claimed in the Law.

Kyrgyzstan Tax

–          Personal income tax – 10%

–          Social security contributions due by an employer and an employer

Employer:

• Social contributions: 2.25% (2% to the fund of obligatory social security, 0.25% to the employees health fund).
• Pension contributions: 15% (3% in respect of foreigners temporary residing in Kyrgyzstan).

Employee:

• State cumulative pension fund: 2%.
• Pension contributions: 8%.

Health Insurance Benefits in Kyrgyzstan

Regarding the Kyrgyz Labor Code, all employees are entitled to receive a paid sick leave. The medical primary services in the country are free. 

Additional Benefits in Kyrgyzstan

Usually, the employees receive the salary in cash instead of using credit cards, a promissory note, a debt instrument, etc. Before signing the employment contract, take into consideration if it consists of all minimal requirements (due to Kyrgyz Labor Code and CBA (Collective bargaining agreement); the last one is not that widespread in this country)). 

Additional benefits in Kyrgyzstan may include:

1) Performance-based bonuses 

2) A 13th-month bonus

3) Include the terms of these bonuses in the employment contract 

General market practice benefits/additional allowances

The main characteristics of the Kyrgyz economy now are active investment incentives (such as the absence of VAT on machinery imports), growth of well-educated specialists, effective reforms in regulatory structure, centralized system of services for Central Asian businesses; the profitable geographical location of the country, etc.

In addition, Kyrgyz Law provides companies with free services of currency international transfers and convertibility. International financial structures such as IMF, World Bank, IFC, ADB, and others provide you with total lawful support. 

Kyrgyzstan Holidays

Kyrgyz people are entitled to receive 8 days off for celebrating such public holidays: 

• The New Year (the 1st of January) 
• Women’s Day (the 8th of March); 
• Nooruz (21st of March);
• International Labor Day (the 1st of May); 
• Constitution Day of the Kyrgyz Republic (the 5th of May); 
• Victory Day (the 9th of May); 
• Independence Day (the 31st of August); 
• Anniversary of the Great October Socialist Revolution (the 7th of October)

Why Choose WeHireGlobally

WeHG takes care of all the onboarding hurdles, payroll, compensation and benefits, tax filing, and termination of employment. Our Employer of Record solution allows you to manage your overseas teams efficiently while minimizing cost and risk.