The Kyrgyz Republic nestles in the heart of Central Asia, sometimes referred to as “Middle Earth”.

Since the turn of the decade, the country has been propelled to international recognition, partly because of its geographic location, an abundance of minerals, the growth in ecological tourism and the economic and political stability. The country, for a long time regarded as an outpost only visited by intrepid explorers and adventurers headed into neighbouring China, and certainly not as a place for business or commerce, is now quickly shedding that image.

This year, Kyrgyzstan has taken another major step in opening up to the international business and investment community and in boosting its credentials as an important link between East and West. On July 3, President Sadyr Japarov inaugurated the Tamchy Special Financial Investment Territory (Tamchy SFIT).

The footprint of the territory is 6,000 hectares located on the shore of the mountain lake Issyk-Kul, the jewel of the fastest growing tourist region in Central Asia, which includes a new international airport.

Tamchy SFIT is different from other financial centres, such as the AIFC in Astana, DIFC in Dubai or similar centres in Singapore and Hong Kong. It aims to attract operating businesses rather than legal registrations alone.

Set in a location with a mild climate, Tamchy is positioned as a place to live as well as to work. By 2035, the target is to attract 4,000 companies and create at least 10,000 jobs.

How does Tamchy SFIT differ from peers? It aims to provide a fully transparent international standard system but with operating and regulatory costs up to 60% lower than in other international finance centres and a less bureaucratic regulatory environment, without compromising integrity and credibility.

Those registered in Tamchy will enjoy 0% tax on corporate profits, dividends, and capital gains, and a 0% VAT rate, all for 49 years. Tamchy allows 100% foreign ownership and unrestricted profit repatriation.

Additionally, Tamchy operates under English Common Law and hosts an International Dispute Resolution Centre, also developed with British legal expertise and support.

Of course, while Tamchy SFIT looks almost idyllic, companies and investors will primarily consider the country environment – is the Kyrgyz Republic a safe economic and political space in which to operate? The critical conditions for most investors in a developing economy are economic predictability and political stability. Without these things, the risk assessment can often be too high, even with otherwise attractive opportunities. Without either, a country is un-investible.

Major change in the country came with the election of Japarov in 2021. That brought an end to leadership instability that had led to public protests and general uncertainty in the Kyrgyz Republic since independence in the early 1990s.

Japarov also moved quickly to end the long-running legal dispute over Kyrgyzstan’s flagship gold mine with Canada’s Centerra Gold, which was damaging to the country’s investment case. An April 2022 agreement drew a line on the issue and allowed Japarov’s government to start focusing on a strategy to attract more international investors into a broader range of industries, to create much greater diversification across the economy.

The next presidential election is set for January 2027. Japarov is constitutionally entitled to serve one more five-year term and the current indications are that he will win with a comfortable majority.

The continuity under Japarov has so far underpinned a period of rapid economic expansion. In just five years, the country's GDP nearly tripled — from $8 bn in 2020 to $22 bn in 2025. Over the same period, GDP per capita grew from $1,290 to an estimated $3,081 in 2025. The World Bank estimates that GDP per capita on a purchasing power parity (PPP) basis reached $9,219 in 2025, so there is a lot more scope for growth ahead. Last year, GDP expanded by 11.1% year-on-year, one of the highest growth rates in the world. For the first six months of this year, growth is estimated at almost 12% year-on-year and should comfortably achieve close to a double-digit rate for the full year.

Unlike many developing economies, the strong growth in the Kyrgyz Republic is not because of one product – it is because of investments being made by the state and strong growth in such areas as tourism and construction.

The major projects, at least partly funded by the state along with international funding, include the CASA-1000 power project, which aims to supply Kyrgyz hydropower to Pakistan, thus boosting export receipts. Another major project is the Kambarata-1 Hydropower Plant (HPP), a massive 1,860-MW joint project on the Naryn River with backing from Kazakhstan and Uzbekistan. When completed, the HPP will provide power for the local grid and export power (and earnings) to the two neighbouring states.

Another major project, which, when completed, will help open trade routes to China, Western markets, and major seaports, is the China-Kyrgyzstan-Uzbekistan (CKU) railway. This line is part of China’s BRI Southern Corridor, which will be a major game-changer for the country in terms of trade connectivity. It also means that the Tamchy SFIT will attract significant customs clearance and logistics handling business from what is now a latter-day Silk Road.

Another reason why the Kyrgyz Republic is firmly on the international map is because of its potential as a producer/exporter of some of the critical minerals that both the United States and the European Union are moving to source as part of plans to reduce dependency on China's supply.

Bishkek, like its neighbours in Central Asia, is pursuing a strategy of looking for comprehensive investment deals that will not only explore for and extract minerals but will also lead to in-country processing for higher value-added (and higher tax paying) production and exports.

The Kyrgyz economy has, meanwhile, successfully managed to lower two previously significant risks. At the end of 2021, public debt was close to 56% of GDP, and the external public debt was at 47% of GDP. Projections at the time saw both numbers rising and risking a default scenario. But today, the picture is a lot more comfortable with public debt down to circa 39% of GDP and the external public debt close to 24% of GDP. The investors’ view has improved such that, last year, the country was able to issue a $700mn eurobond on the London Stock Exchange. The issue was three times oversubscribed and ended up exceeding $2.1bn.

The other previous threat was a very high dependence on foreign currency remittances from Kyrgyz workers employed in other countries. In 2021, those remittances equalled 30% of GDP, while today, the indicator is closer to 15% of GDP. Still a very important source of FX and a big portion of household incomes, especially in rural areas, but less of a critical risk than it used to be.

The Kyrgyz Republic has other challenges to deal with, such as climate changes which are affecting all of the states in Central Asia. The mountainous country is home to one of the largest concentrations of glaciers in the world. They amount to a major source of water for irrigation and hydropower generation. But the glaciers are melting at an accelerating pace, leading to the country working with neighbours – Kazakhstan and Uzbekistan also rely on water from the Pamir glaciers in Kyrgyzstan and Tajikistan – and international organisations to find a solution.

Today, the Kyrgyz Republic is quickly emerging from the shadows. Once seen as a backwater “post-Soviet stan”, it has, over the past five years, established a more stable political system and government and is fast putting in place the infrastructure that will lead to much greater economic predictability than it has had in the past.

The government’s effort to showcase the reforms and progress in the country was rewarded in June when Kyrgyzstan was elected to serve as a non-permanent member of the United Nations Security Council for the 2027–2028 term.

The Issyk-Kul region has come to symbolise the transformation. Not only does it look and feel like a region in the Swiss Alps – home to one of the four UN headquarters – but now that it hosts the Tamchy SFIT, it also offers the sort of financial, legal and business services long associated with Switzerland. But at considerably less cost, with much less bureaucracy and brooking no compromise on integrity, transparency and safety.