Legal Life in... Kyrgyzstan and Tajikistan

Denis Bagrov and Zhanyl Abdurakhmanova from Centil Law Firm talk to us about their firm and share some tips for foreign lawyers

Tell us about your firm

Centil (formerly Colibri) Law Firm is a regional independent law firm focusing on Central Asian, Caspian countries and Mongolia. It has over 50 lawyers in eight jurisdictions, with main offices located in Kazakhstan, Kyrgyzstan, Uzbekistan and Tajikistan.

Having advised on complex transactions across the region, we specialise in a wide range of products generated by our firm’s organically interacting practices staffed by lawyers from different cultures, industries and backgrounds. Most of our partners and associates graduated from the oldest US, German and UK law schools, and have previously worked in international law firms.

Our team’s core values are professionalism, objectivity, honesty, responsibility, confidentiality and close co-operation with clients.
Centil has been top listed by Chambers Asia, PLC, WhichLawyer, Legal500, Who’s Who, and IFLR1000.

Have you ever worked as a lawyer abroad?

No, but most of the lawyers within our firm are qualified to advise under laws of most of the neighboring jurisdictions across the region covered by the firm. Lawyersfrom Uzbekistan provide legal advice under Kazakhstani laws and Kyrgyz lawyers work on the Tajik law matters.

What’s the current business climate in your country?

Kyrgyzstan’s business climate may be described as rather liberal, non-discriminatory and investor-friendly. It has the lowest tax rates in the region and a broad base of various, in particular, commercial laws in place. Unfortunately, these are not always enforced consistently. Individual investors have been, and are, involved in disputes over licensing, registration, and enforcement of contracts. The government occasionally raises the nationalization issues.

Corruption is declining slightly and transparency seems to be increasing due to the government’s efforts.

Kyrgyz authorities often listen to feedback from the local business community and take steps to reduce regulatory measures to simplify doing business and make it more beneficial for the business community as much as possible.

Another negative issue we see is diminishing the measures taken by the government to improve the country’s business and investment climate is the political instability. For instance, many investors have put their investment projects on hold in anticipation of the presidential elections scheduled for November.

The business climate in Tajikistan may be described as stagnating and less inspiring than in Kyrgyzstan. Unfortunately, any notable improvements in the country’s business climate still come up against administrative barriers, corruption, bureaucracy, discriminatory practical approaches. In many cases they lack transparency.

What are the main opportunities and challenges for foreign law firms in your country?

There are opportunities for legal work on cross-border M&As, project finance transactions and dispute resolution matters, albeit often performed jointly with local law firms.

The key challenges for foreign law firms in Kyrgyzstan and Tajikistan are the differences between the common law and civil law legal systems, language barriers, lack of the local knowledge, practical difficulties with enforcement of contracts, judgments and arbitral awards.

What advice would you give to companies new to the country?

A good understanding of the legal framework that regulates the sector they are planning to work in, from both theoretical and practical perspectives. They should always obtain – or apply for – all necessary permissive documents before starting work.

We always advise our clients to carefully check and choose local partners, have sufficient and various security in the contracts with local counterparties, especially long-term ones, and try to submit disputes under such contracts to the international arbitration courts in all cases where it is at all possible.

What opportunities for co-operations are there between your country and UK law firms?

To the best of our knowledge, UK law firms are often engaged to represent state interests in various disputes tried by foreign and international state and arbitration courts.

Also, there’s great potential for UK law firms to be retained for representation of state interests in various cross-border transactions, or to provide legal advice to the state on the transactions, in where the state has interests/issues abroad and, especially, in the common law jurisdictions.

Our law firm and other local law firms in most of the cases are subcontracted/engaged by UK law firms to act as a local counsel and provide legal advice/represent interests of their clients locally on a variety of matters.

Do clients prefer smaller local firms or larger international networks?

Local and small foreign clients prefer local firms or even individual lawyers. Big foreign/international clients usually retain a large international law firm to co-ordinate and guide local legal counsels, particularly for cross-border and multi-jurisdictional transactions, which then engages/subcontracts a local law firm to provide the local law advice and support.

What are the practice areas you definitely think a European firm would find business in?

European law firms would be most likely to find business in areas such as cross-border M&As, project finance, representation of interests in disputes tried by foreign/international arbitration courts.

We also expect to see the growing interest of European and other foreign investors towards Kyrgyzstan given that it’s now part of the Eurasian Economic Union and may become a gate to the EAEU market offering its relatively cheap energy and qualified workforce.

An increase of foreign investment into the country’s economy will in turn generate work for both foreign/international and local legal, financial, technical and other advisors.

What recent legal developments you have seen in your country?

Kyrgyzstan has recently joined the Eurasian Economic Union and therefore the majority of the legal developments are connected to bringing local legislation in line with requirements of the EAEU in areas such as customs and technical regulations, taxation, employment, antitrust legislation, etc.

Additionally, a new banking law, plus a new civil procedure code and administrative procedure code have been adopted and will come into force in June and July of this year. A new criminal code, criminal procedure code and code on misconduct will become effective from 1 January 2019.

Another trend in legal developments is minimising the number of administrative barriers which still exist in the country’s legal framework. Unfortunately, we have not recently observed any major legal developments in Tajikistan.

Are you aware of any changes that may affect or changes that took place which had an impact on the profession and practice rights in your country?

We are not aware any recent changes.

What are your recommendations for visitors to the country?

Visitors to Kyrgyzstan and Tajikistan are primarily recommended:

  • To check for visa and residence address registration requirements prior to the visit
  • not to use public transportation, use licensed taxis or reliable drivers only
  • not to carry large amounts of cash, only carry enough to cover routine expenses
  • to attend only safe and approved locations in the cities
  • to visit remote and rural areas with a guide or a local person well known to them
  • to always carry ID when not at the hotel
  • to always carry the number of their Embassy

 

These views are the views of the authors and not those of the Law Society.

About the authors

Denis Bagrovis a partner in Centil’s Kyrgyzstan office. He has five years’ experience and considerable experience in the mining industry. His recent activity includes advising foreign investors on the acquisition of gold, copper, iron and coal, as well as on uranium exploration and domestic mining projects. He also works on our Tajik projects, and recently advised on the SPO shares of the leading gold mining companies in Tajikistan.

Zhanyl Abdurakhmanova is also partner with Centil and has over 14 years’ experience. For the last five years she has focused on contract law, corporate law, international private law, M&A, and arbitration and mediation issues in both Kyrgyzstan and Tajikistan.

Prior to joining the Centil team, Zhanyl held prominent positions within the Ministry of Justice, the government’s office and parliament. She has extensive experience in lawmaking and worked as the head of the legal department within the business association dealing with multi-billion dollar investments in Kyrgyzstan’s economy and representing the interests of the investors at the state level.

Zhanyl has also worked as an independent national expert for international organisations including the United Nations Development Programme, The World Bank, and the UK’s Department for International Development, advising on issues relating to foreign investments and the protection of creditor rights.