3.1 Transactions subject to approval

The following types of transactions are subject to preliminary consent given by the Antimonopoly Agency:

1. merger and consolidation of unions, associations, concerns, interindustrial, regional and other integration of enterprises, as well conversion to the said structures of public authorities or business entities;
2. merger, consolidation and liquidation of state and municipal enterprises if such leads to the creation of an entity with a dominant position;
3. creation, merger and consolidation of joint stock companies and limited liability partnerships;
4. creation, merger and consolidation of other partnerships and integrations the participants of which are legal entities, if such actions lead to creation of an entity having a dominant position;
5. acquiring by a business entity which has 35% market share of certain good of shares in another business entity operating in the same market, as well as purchase by any person of 50% or more shares in a business entity having a dominant position;
6. increase of charter capital of a business entity (consolidation thereof) having the charter capital of 15,000,000 KGS;
7. re-organization (merger, consolidation, conversion) of business entities if the total value of their assets for the last financial period exceeded 10,000,000 KGS;
8. liquidation of business entities which have assets with a total value of more than 5,000,000 KGS;
9. all transactions leading to a natural or permitted monopoly acquiring ownership right or right to use fixed assets not designated for production (sale) of goods under the regulation, subject to the balance value of such assets exceeding 10% of the net assets of a natural or permitted monopoly, determined in accordance with the last approved balance sheet;
10. sale, leasing or other transactions leading to a business entity acquiring ownership right or right to the use of a part of a natural or permitted monopoly's fixed assets designated for production (sale) of goods falling under the regulation, subject to the balance value of such assets being 10% of the net assets of a natural or permitted monopoly determined in accordance with the last approved balance sheet;
11. investments of a natural or permitted monopoly into production (sale) of goods not falling under the regulation, subject to the balance value of such investments being more than 10% of the natural/permitted monopoly's net assets determined in accordance with the last approved balance sheet.

go to top

3.2 Notification requirements

In addition to the transactions described above, Kyrgyz antimonopoly laws require business entities to provide notification to the Antimonopoly Agency in the following cases:

1. creation of a business entity (association of business entities) having the charter capital equal to or exceeding 1,500,000 KGS – the notification shall be submitted within 10 days after establishment of the business entity;
2. if a person or a group of persons through the purchase of shares or other transactions (including agent, trust management, pledge agreement) acquires more than 10% of the shareholding in natural/permitted monopoly or any further change to the number of votes owned, or if a natural/permitted monopoly acquires more than a 10% shareholding in another business entity - the notification shall be made within 30 days after acquisition of shares.

go to top

3.3 "Group of persons"

As can be inferred from the provisions of the Law on Monopolies, it defines a group of persons.

A group of persons is an aggregate of individuals and/or legal entities with one or more of the following features:

1. a person or a group of persons that jointly, based on agreement (agreed actions) has the right to directly or indirectly dispose of more than a 50% shareholding in the charter capital of a business entity;
2. two or more persons have an agreement pursuant to which one has a right to give to another, or other persons, mandatory instructions related to conducting entrepreneurial activities, or to exercise the powers of its management body;
3. a person has a right to appoint more than 50% of the management body and/or supervising body (board of directors) of a business entity;
4. the same individuals represent more than 50% of the management body and/or supervising body (board of directors) of two or more business entities.

go to top

3.4 General approval procedure

Pursuant to legislation, application for consent for economic concentration must precede the execution of transaction.

To receive consent to create the union, association, concern, interindustrial, regional or other amalgamation of enterprises, founders shall submit, to the Antimonopoly Agency, the application for consent, data on primary activities of each of uniting business entities, their share in a respective goods market and consent to associate. The Antimonopoly Agency, no later than 30 days from the date of application, reports to the applicant in writing detailing the decision - consent or refusal. Refusal should be for a reason. There is no state charge for filing an application. Due to uncertainty about the documents and information required by the Antimonopoly Agency, it may request the maximum scope of information on all entities of the group.

The Antimonopoly Agency has the right to issue its consent to economic concentration, even if such concentration will result in the dominant position and/or restriction of competition, if such concentration may lead to saturation of the market, improvements in the quality of goods and their competitive advantage, including in external markets.

go to top

3.5 Implications of failure to obtain approval

Failure to obtain approval of the Antimonopoly Agency might lead to the administrative fine of up to KGS 2,000 unless the actions are qualified as a crime due to the broad definition provided in the Criminal Code.

go to top