Among Central Asian countries, Kyrgyzstan is becoming the preferred route for Moscow-based entrepreneurs to circumvent sanctions imposed over the conflict in Ukraine. The customs union with Russia, ease of banking transactions and the availability of cheap labor are all factors that encourage companies to move to Bishkek, also looking for new trade routes to the East.
Bishkek (AsiaNews) – Relokatsija – the “transfer” of operations to Kyrgyzstan – is increasingly being exploited by Russian entrepreneurs, as financial newspaper Kommersant explains in an extensive report Best chance.
This has been the case since the 2022 invasion of Ukraine and the introduction of sanctions by other countries in the Caucasus and Central Asia, now becoming the main “business window” for those countries that want to carry out related activities. Nothing to do with the war, or just to circumvent the sanctions themselves.
The first advantage is of course tax exemptions, Kyrgyzstan offers a variety of tax exemptions that are even more favorable to foreign investors than local investors. In many industries, corporate income tax is not levied and personal income tax is significantly reduced.
In addition, activities in these areas open up new market directions, taking advantage of Bishkek’s relations with the most interested countries in Asia, the Middle East and other parts of the world.
Labor costs in Kyrgyzstan are also very low, especially compared to Russia, but also compared to neighboring countries. It’s ideal for businesses that need a large number of employees, as well as those that are looking for workers with certain characteristics (less technical skills, but some factory or construction site experience).
The process of registering a company in Kyrgyzstan is the fastest and easiest, taking only a few days to start business at full speed, with no bureaucratic hurdles and almost no restrictions on company ownership and management.
For Russians, the socio-cultural atmosphere in Kyrgyzstan is particularly favorable, and it is one of the countries in Central Asia that least advocates “decolonization”.
There is certainly a tendency to reintroduce the dominance of local language and culture, but there is no particular hatred for the Russians who have long dominated the region. The problem is exacerbated in Kazakhstan and Uzbekistan, two larger, more developed countries where Russian entrepreneurs face additional business and legal obstacles.
In Kyrgyzstan – as the Russians say, not using the Asian “-stan” (earth) in this case – it is convenient for Russians to work because it is part of the customs union with Russia, which makes the Swift system available for banks Transactions and Russian as the second official language can be used in all practices, while Kazakhstan tries to prevent this. Customs conditions for cars and most materials comply with the rules of the Moscow-controlled Eurasian Economic Union (EAES).
In fact, this is the only country abroad where Russians can easily serve as founders and general managers of companies, although it is always recommended to have Kyrgyz citizens among financiers and managers to ensure that you do not encounter problems with payments and other banking matters.
Even better, if you obtain a second Kyrgyz citizenship, it is compatible with Russian citizenship and can be obtained easily as well. In this way, it becomes simple to open branches and representative offices in other countries as well as in various locations within Kyrgyzstan, and it is possible to carry out effective “customs clearance” of one’s own products, opening up many commercial routes to Europe. Another advantage is the complete freedom of the cryptocurrency market.
Only in Kyrgyzstan can Russians use Visa and MasterCard credit cards, which are now unavailable at home and in other “friendly” countries, and at best they can only be issued from local banks.
However, in Kyrgyzstan you can also make payments without using a check for amounts up to $100,000. Opening an account is often an alternative to registering a Russian company itself, allowing you to use these financial channels to continue doing business in Russia, like many Just like travel agencies do.
As Russia struggles to maintain influence over its former satellites and all of Central Asia increasingly turns toward Beijing, Russian businessmen are preparing for the second scenario.
These are not front-line economic oligarchs still dependent on Kremlin policies, but many entrepreneurs who want to move away from conflict and geopolitical tensions and join hands with their Kyrgyz friends.
Source: Asia News
