Definition of NGOs

The term “non-governmental organization” is practically not applied in the legislation. The Civil Code defines a concept of a legal entity, specifying that non-commercial organization is one of its types. Public associations belong to the non-commercial organizations having a membership.

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Definition of NGOs

The term “non-governmental organization” is practically not applied in the legislation. The Civil Code defines a concept of a legal entity, specifying that non-commercial organization is one of its types. Public associations belong to the non-commercial organizations having a membership.

The law defines an NGO as a non-commercial organization as “a voluntary, self-governed organization created by individuals and (or) legal entities on the basis of community of interests for implementing spiritual and other non-material needs in the interests of its members and (or) the whole society, where the deriving a profit is not a major objective, and the obtained profit is not distributed among members, founders and official individuals.”  In accordance with the Civil Code the category of non-commercial organizations also includes political parties, trade unions, religious organizations, cooperatives and credit unions and the specific laws regulate them (see the laws listed above and the regulations of the Civil Code)

Founding of an NGOs

The founding of an NGO is done in three ways according to Kyrgyz legislation: public associations, foundations, institution or cooperative. All these three forms have different descriptions (Art. 2 of the Law “On Non-Commercial Organizations”, as of 1 October, 1999).  A public association must be established by “at least three capable individuals.” A public foundation may be established by “one or more capable individuals or (and) legal entities,” and an institution may be established by “one or more legally capable physical or (and) legal entities.” Each of these organizations may be formed for a finite or indefinite period of time (Art. 19, 23, and 31 of the Law).

However, only organizations created in the form of public association have membership with certain authorities of its members to take decisions on organization issues, including appointment of governing bodies. Public foundations and institutions do not have membership and their activity is determined by decisions of a supervisory board or an owner respectively. Public foundation’s founders preserve the right to appoint supervisory board members. Organizations established in the form of an institution are completely governed by their owners.

Aims that may be pursued by NGO and rules applicable to members

A non-commercial organization (hereinafter NGO) is prohibited from pursuing objectives that intend to derive a profit as a main goal (Art. 2 of the Law). The NGO parties can be legal entities and individuals on voluntary basis (Art. 2 of the Law). The charter should setup the rights and responsibilities of the members of the NGO. No one should be discriminated or granted privileges because of the membership of certain NGO (Art. 2 of the Law). The charter of the organisation should set up the main goals and objectives of the organisation mainly in the fields of education, culture, charitable activities and profit-for-public objectives (Art. 2 of the Law).

Functioning of NGOs without state registration

An NGO can be created with or without registration as a legal entity (Art. 6 of the Law). The Civil Code determines, first of all, the status of legal entity and non-formal association of citizens is based on the recognized by the Constitution right to association and can be determined by relevant agreements between citizens.  In practice, however, non-registration has created problems for NGOs since the state will not formally recognize them.

Registration requirements for NGOs

The NGOs may be registered as legal entities by submitting to the bodies of the Kyrgyz Ministry of Justice (MOJ) an application form and three Russian or Kyrgyz copies of the foundation documents. One set of the documents is kept by a registration body and two are returned back to the organization after its registration. The application must be signed by the founder or an authorized individual and authenticated according to the procedure established by the Law.  The Law stipulates that the “Requirement of any other documents and information in addition to those provided for by this Law is prohibited” (Art. 6 of the Law “On State Registration of Legal Entities”, as of 12 July, 1996).

The Regulations On the procedure of registration of legal entities, branches and representative offices by bodies of the Ministry of Justice generalizes requirements set up for registration of each types of organization.  The law requires that the registration of a legal entity should be completed within 10 days after submission of application and all necessary documents (Art. 10 of the Law). The registration of a legal entity shall cost “one minimum wage as set by legislation of the Kyrgyz Republic” and the fees for re-registration of a legal entity or registration of a branch office shall be half of this amount (Art. 11 of the Law).  The fee for annual reporting to the Ministry of Justice shall not exceed one-third of the minimum wage set by legislation (Art. 18 of the Law).

Authorized state bodies and NGO registry

The Ministry of Justice is responsible for maintaining the registry of NGOs.  If an NGO is a nationwide NGO, it will be registered with the central Ministry of Justice’s office in Bishkek.  If it is a regional NGO, it will be registered with the local Ministry of Justice’s administrative office for that oblast.  There are additional requirements for registration of organizations with foreign participation, for instance: when a founder is a foreign citizen or legal entity. Such organizations are registered by the Ministry of Justice only.  The Ministry of Justice maintains a comprehensive list of legal entities registered with its central and regional offices.  The list is available to the public, published quarterly in print and posted on the Ministry of Justice’s website (Art. 5 and 14 of the Law). NGOs report that information is readily available and that Kyrgyz laws are very “friendly” toward the creation of NGOs.

Denial of registration to NGOs

The NGO registration can be rejected if the NGO violates the procedure for establishing a legal entity or if it fails to comply with the founding documents of the legal entity (Art. 86 of the Law).  Other specific cases foreseen by Kyrgyz legislation for the rejection of NGO registration include violating Constitution in terms of breach of peace of peoples living together, propaganda and sow of social, racial, inter-ethnic and religious discord and enmity.(Art. 9 item 4 and Art. 16 item 9 of the Constitution)  Kyrgyz law also provides that “In the event of denial of registration of a legal entity, the registration body must issue in writing the reasons for such denial, with reference to violations of the specific law, within 10 days of the filing of the application” (Art. 12 of the Law on State Registration of Legal Entities, as of 12 July, 1996). In practice the Ministry of Justice can reject for several times the NGO's application for registration with presenting various requirements every time. The Ministry of Justice suspends the counting of a 10 day period until applicant eliminates the discovered drawbacks or submits necessary materials.

Branch offices of NGOs

Branch offices are subject to simplified registration procedures, which require the NGO submitting a certified resolution for the creation of the branch office and a certified copy of the registered foundation documents of the legal entity creating it (Art. 6 of the Law).

Non-commercial organizations may establish branches and representative offices in the Kyrgyz Republic and abroad, but these offices will not be considered legal entities.  A branch office shall carry out its activity on behalf of the main office.  The main office shall be responsible for activity of its branch or representative office (Art. 8 of the Law on Non-Commercial Organizations, as of 1 October, 1999).

Operational requirements for international NGOs

Foreign legal entities are recognized by the Kyrgyz Republic but the legislation, status and legal regulation of the activity on the territory of the Kyrgyz Republic has some contradictions. (The Law “On Non-Commercial Organizations” stipulates for foreign non-commercial organizations acting in the Kyrgyz Republic, to observe provisions of this law with regard to creation, activity, reorganization and liquidation) The Civil Procedural Code acknowledges procedural legal capacity of a foreign organization in accordance with the legislation of the country, in which it was establishes, and an international organization due to on an international agreements based on which it was created. (Art. 69 of the Civil Procedural Code)

Representative offices of international inter-government organizations and their officials are accredited at the Ministry of Foreign Affairs. (Regulations on the Procedure of Accreditation of Representatives of Foreign States and International Organizations and also their Employees at the State Protocol Department of the Ministry of Foreign Affairs of the KR. Adopted by an Order of the Ministry of Foreign Affairs of the KR dated May 8, 2000. In the edition of May 21, 2002) Some international organizations and projects of foreign organizations act within the frameworks of agreements with the Government of the Kyrgyz Republic, which are subject to ratification by the Parliament. (For instance: Agreement between the Governments of the KR and the USA dated May 19, 1993 and also Agreement on Cooperation between the Government of the KR and the Soros Foundation-Kyrgyzstan being a branch of the Open Society Institute (New York) dated January 31, 1997) The citizens of Kyrgyzstan working in foreign and international organizations are covered by general requirements of labor legislation if otherwise is not foreseen by agreements granting certain privileges and immunity.

Re-registration requirements for NGOs

The re-registration shall be allowed only in cases established by law (Art. 86 of the Civil Code).  Non-commercial organizations are subject to re-registration in case of change of their names, types of activity, governing bodies competence, specified in founding documents, change of status of public associations on the territory of activity and also other cases, stipulated by the legislation. (Art. 15 Item 2 of the Law “On State Registration of Legal Entities”)

Right of appeal of NGOs

The refusal of state registration, as well as evasion of registration, shall be appealable in court. (Art. 86 of the Civil Code) The law provides no further guidance on procedures or government responsibility.  In practice, rejected applicants have encountered problems appealing decisions because the NGO is not yet a legal entity (since it was denied registration) and thus is not recognized by the court to petition. In such cases citizens can appeal violations only on their behalf.

Authorized state bodies granting financial and other benefits to NGOs

State support of non-commercial organizations can be provided in the form of targeted financing of some useful for the public programs and also other not prohibited by the legislation forms. (Art. 5 of the Law “On Non-Commercial Organizations”)  In the Kyrgyz Republic there is no any body responsible for the issues of support and interaction with NGO. The adoption of the program of state support of non-government organizations based on the state social order is still only in plans. (The Concept of cooperation between the public associations, public foundations (non-governmental organizations) and the bodies of the state power, adopted by Resolution of the Government of the Kyrgyz Republic, March 25, 2004)

Foreign funding of NGOs

Public associations pursuing political goals are not allowed to receive foreign funding (Art. 161 of the Civil Code). No such prohibition is included in the Civil Code for other public associations, foundations or institutions. The Tax Code defines that a grant and humanitarian assistance are provided free of charge to non-commercial organizations by states, international, foreign and national organizations. (Art. 9 item 4 sub-items 4-2, 4-3 of the Tax Code)

Tax exemptions to NGOs

Received by non-commercial organizations membership and entrance fees, grants and humanitarian assistance are not included into the total annual income and thus are not taxed if they used in accordance with the charter goals. (Art. 93 Item 6 Sub-item 3) Public associations profit received from charitable activity is exempt from taxes, (Art. 112 Part 1 of the Code) whereas definition of charitable activity excludes receiving profit because both the services and works must be rendered free of charge on a beneficial basis or at prime cost. (Art. 9 Item 4-1 of the Code)

Delivery of goods, works and services to non-commercial organizations is exempt from the Value Added Tax (VAT), if its done at prime cost to institutions of public health, education, science, culture and sport; for social security and protection of children, poor elderly citizens and if there is a delivery of specialized goods for disabled. (Art. 145 of the Code) However, the exemption procedure is very complicated.

As a rule, non-commercial organizations, do not report on VAT and paid by them in the form of this tax funds do not set off other payments and represent indirect income of the state. Thus, NGOs are not entitled to receive tax exemptions.  The only exemption is societies for protection of consumers’ rights, which can receive income from bringing claims against infringers.

Reporting requirements of NGOs

The NGOs are required to submit to the state their revenue return structure and a list of property owned (Art. 17 of the Law on Non-Commercial Organizations, as of 1 October, 1999). The organizations are obliged to submit monthly and quarterly reports to tax bodies and Social Fund departments and also semi-year reports to the statistics bodies. In general case NGO report on income tax, in case of paid services organization also reports on VAT.  The organization should annually update the Ministry of Justice with a written notice that it remains an active entity (Art. 18 of the Law on State Registration of Legal Entities, as of 12 July, 1996).  Apart from that, the legislation provides special authorities to tax bodies, social fund and statistics bodies and carry out organizations control to find out whether their reporting correspond to the actual activity, correspond to charter goals and other requirements of the law. Violation of tax reporting requirements leads to imposing of an administrative fee in the amount from 10 till twenty minimum salaries. (Art. 346 of the Administrative Responsibility Code) Violation of the statistics reporting leads to imposing fines on officials in the amount from six up to ten minimum salaries. (Art. 404 of the Code)

Termination, dissolution and liquidation procedure for NGOs

Legal entity can be liquidated upon a decision of the founders, participants or a body of a legal entity based on founders documents provisions or court. (Art. 96 of the Civil Code)

Organization liquidation upon a decision of founders, parties or an authorized body can be connected with expiration of the period for which an organization was created or achievement of the goal for which it was created, other reasons. Reorganization and liquidation procedure of non-commercial organizations is mandatory determined in the charter. (Art. 10 of the Law “On Non-Commercial Organizations”) Public associations’ reorganization and liquidation procedure is within the exclusive competence of the general meeting (Art. 20 of the Law) Liquidation of a public foundation is the subject of the court.

Organization liquidation upon a court decision is made based on acknowledgment of its registration as invalid in connection with made during its establishment violations, which have an unrecoverable character, in case of carrying out activity which is banned by the law, repeated or gross violation of the legislation, systematic carrying out activity contradicting charter goals.

Participation in law-drafting that affects the status of NGOs

Kyrgyz law is silent on this matter.  As no legal guidelines exist for NGO involvement in legislative drafting or lobbying, such activity does not affect the status of an NGO.  The only guaranteed opportunity for citizens’ participation and their associations in law making activity is the right of people’s legislative initiative stipulated by the Constitution for 30 thousand voters. (Art. 64 of the Constitution)

Posted: April 2006

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