Open Business in Central Asia
The region has begun to aggressively tap into its geographic potential that links Europe to Asia. The "Belt and Road" will great benefits for those Chinese forethoughtful entrepreneurs for next decades.
How can CACCIA help you?
Businesses entering the region must have strong market knowledge or a diligent local partner to navigate unique challenges
Law Consultancy
We understand that when doing business in a foreign country, the biggest concern is situations such as contract and debt disputes. Therefore, CACCIA provides legal assistance to its members or legal consulting services to non-member Chinese individuals.
Financial Support
When doing business in any country or region around the world, taxation and accounting are very important obligations and responsibilities. Therefore, we provide members with corporate accounting services to help you save personnel expenses and avoid unnecessary tax violations.
Policy Connection
Our members may not be able to effectively and promptly resolve issues from local government departments due to language barriers or communication software issues. For this reason, we provide special assistance and guidance services to handle such situations.
Belt and Road Initiative (BRI) Effect
The Belt and Road Initiative has brought unprecedented development opportunities to the five Central Asian countries. The most significant achievement is the China-Europe Railway connecting the Black Sea and Xinjiang. It carries a considerable amount of cargo transshipment from the five Central Asian countries and has greatly solved the transportation problems faced by enterprises in conducting business activities in Central Asian countries.
Often overlooked, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan are countries that foreign businesses may want to consider. These countries are rich in minerals and hydrocarbons but often lack the refined products and machinery needed for domestic consumption and further development. As a result, they have historically relied on imports to support economic growth.
Despite this, prospects in Central Asia remain optimistic. The Regional Economic Prospects (REP) report published by the European Bank for Reconstruction and Development (EBRD) stated that the regional economies will grow by 5.4 percent in 2024 with the figure predicted to rise to 5.9 percent in 2025. There are several reasons for the positive outlook.
The region has begun to aggressively tap into its geographic potential that links Europe to Asia. A great example of this is the Middle Corridor route. This proposed land and sea transportation corridor will allow products to travel between China and Europe through Central Asian countries and across the Caspian Sea and Black Sea.
Another interesting advancement is the focus of Central Asian countries on sustainable development.
Kazakhstan, Uzbekistan, and Turkmenistan intend to reduce methane emissions by 30 percent by the end of the decade.
Other notable sustainability initiatives include Kazakhstan’s Joint Energy Transition Partnership which aims to improve renewable energy contributions and streamline project processes. However, the region is still in the early stages of green transition efforts.
Elsewhere, countries throughout Central Asia have either established or planned to create economic zones catering to foreign investment. Uzbekistan has launched 23 Free Economic Zones (FEZs), Kazakhstan has 14 Special Economic Zones (SEZs), and Kyrgyzstan developed the China-focused Maimak FEZ. Plans for similar zones in Tajikistan and Turkmenistan are in the works.
Improving the Legal Environment for Business in Central Asia
It is undeniable that the Central Asian countries have made good progress in the rule of law business environment in the past few years. It has played a significant role in promoting the rule of law business and giving foreign investors confidence. Especially after cooperating with the EU OECD, many rule of law issues have moved closer to European law and humanitarianism, which has significantly improved the legal lag in Central Asia in the past.
On 11 June 2024, the joint EU/Council of Europe Central Asia Rule of Law Programme organised its Closing Regional Conference in Astana, Kazakhstan. The aim of the meeting was to take stock of the programme results and lessons learned during its implementation years from 2020 to 2024. Central Asian partners, representatives of the European Union and the Council of Europe also discussed the Programme’s added value and needs for future co-operation in the region.
Participants acknowledged the many achievements of the Central Asia Rule of Law Programme. The programme among others:
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increased the interest of Central Asia partners in Council of Europe Conventions;
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supported national efforts to prevent and fight corruption and money laundering/terrorist financing;
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raised the awareness of human rights standards among hundreds of legal professionals;
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facilitated the adaptation and translation of HELP courses, making them accessible and relevant to local legal contexts;
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provided expertise on draft legislation on institutional frameworks and towards the promotion of the Rule of Law principles;
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fostered a collaborative environment where Central Asian countries could engage with European legal standards, enhancing mutual understanding and co-operation.
9 opportunities to open or expand a business in Central Asia NOW
Uzbekistan
State Fund for Business Support
The Fund supports projects of small businesses.
Compensation is provided to cover part of loans from commercial banks.
Amount: up to 5 000 000 000 sums.
Rate: 1.5 times the rate of the Central Bank of Uzbekistan.
Term: up to three years.
The guarantee covers up to 50% of the allocated loans.
Amount: up to 2 500 000 000 sums.
Financial assistance within the framework of the Fund is allocated only for one project, but an entrepreneur can apply again.
Program of preferential lending to small businesses
Within the framework of the state program, commercial banks allocate loans.
Size: up to 5 000 000 000 sums, depending on the loan term
Term: up to five years, including a grace period of up to two years, at a rate of 14% per annum.
Kazakhstan
National Project on Entrepreneurship Development for 2021-2025
There are two main areas of support within the project:
1. Support for micro and small businesses.
Small and microenterprises in various industries can participate, except pawnshops, microfinance, factoring organizations and leasing companies.
Entrepreneurs can get a loan of up to 20 million tenge for investment purposes and up to 5 million tenge for replenishment of working capital.
Interest rate on the loan: the base rate of the National Bank + 7%.
2. Support of entrepreneurs/subjects of industrial and innovative activity.
Aspiring entrepreneurs can get a loan in the amount of up to 360 000 000 tenge, and existing ones — up to 1 000 000 000.
Funds can be obtained as investments, for replenishment of working capital or refinancing.
Interest rate on the loan: the base rate of the National Bank of the Republic of Kazakhstan + 5%.
The program is intended for private entrepreneurs — small, medium and large businesses in the manufacturing industry and the agro-industrial complex.
Rate: 15%.
The maximum amount for one borrower: up to a billion tenge.
Subsidy amount: up to 9% of the nominal remuneration rate.
Subsidy period:
— for investments — up to 10 years
— for replenishment of working capital — up to three years.
Purpose of the loan:
— investments and replenishment of working capital
— replenishment of working capital on a renewable basis is allowed.
The purpose of the program is to help in the development of small and medium—sized businesses in priority sectors of the economy for the regions of Kazakhstan.
Loan amount: up to 750 000 000 tenge.
Rate: determined by the decision of the Board of the Fund.
Loan term:
— for an investment of no more than 84 months
— to replenish working capital for no more than 36 months.
Citizens of Kazakhstan who have the status of unemployed, self-employed, beginning and existing entrepreneurs and other segments of the population can participate in the program. They can get a loan for starting a business in the amount of up to 8000 MCI in Astana, Almaty, Shymkent, Aktau and Atyrau, and up to 6000 MCI in other cities. In 2023, 1 MCI is equal to 3450 tenge.
Lending rate: no more than 6% per annum.
Loan term:
— for investment — up to five years
— for replenishment of working capital — up to three years.
Kyrgyzstan
The Fund provides loans to entrepreneurs for business development. The purposes of obtaining funds can be: replenishment of working capital, acquisition of fixed assets and equipment, financing of production processes, increasing the volume of commodity purchases.
Araket-Express
Loan amount: 20 000-300 000 SOM.
Term: 3-36 months.
Rate: 24%-30%.
Loan amount: 300 001-1 000 000 SOM.
Duration: 3-36 months, possible increase to 60 months.
Loan rate: 22%-24%.
The program of the "Guarantee Fund"
The Fund provides access to financial resources for small and medium-sized entrepreneurs.
Maximum loan amount: up to 100 000 000 SOM.
Duration: up to 48 months.
The size of the tariff for granting a loan: 2%-2.5%, depending on the purpose.