The Commonwealth of Independent States (CIS) provides a plethora of unexplored commercial and investment prospects, particularly for UAE-based firms seeking to grow into more easily accessible markets.
The Commonwealth of Independent States (CIS) was established in 1991 as an organization of countries that were previously members of the Union of Soviet Socialist Republics (USSR). Armenia, Azerbaijan, Belarus, Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan, and Uzbekistan are currently members of the CIS. Ukraine and Turkmenistan are both members of the Commonwealth of Independent States (CIS), although they are not formal members.
According to the research, the ease of doing business in all CIS economies has improved, as judged by the World Bank. Reforms in property registration, contract enforcement, and taxation have also been undertaken in several CIS countries.
In the last ten years, the CIS countries have emerged as a prominent investment hub with a business-friendly environment and measures aimed at attracting foreign investors with outstanding financial benefits.
The following are the primary benefits of investing in the CIS region:
Kazakhstan, which is located on the Silk Road, serves as a gateway for enterprises looking to penetrate the Central Asian market, which has a population of 50 million people. The CIS market offers significant opportunities in a variety of sectors for firms looking to extend their worldwide consumer base.
Kazakhstan, Russia, and Belarus formed the Eurasian Customs Union in 2010 to make economic transactions easier. The Eurasian Customs Union eliminated customs tariffs between the three nations. They then formed the Eurasian Economic Union in 2014, along with Armenia and Kyrgyzstan.
Foreign investors who participate in priority investment projects and sign an investment contract with the applicable authorized entity in Kazakhstan can benefit from corporate income tax exemptions of up to ten years and land tax exemptions of up to ten years.
Foreign investors may also be eligible for reimbursement of up to 30% of their construction and equipment acquisition costs. Kazakhstan has also negotiated agreements with 53 nations to avoid double taxation.
Kyrgyzstan, a mineral-rich country, features special economic zones that provide a tax-free environment and exemption from customs duties. Meanwhile, if the VAT is applicable on imported equipment and goods for government-approved investment projects, Armenia enables international investors to defer VAT payments for up to three years.
Georgia, on the other hand, levies no corporate income tax on retained and reinvested profits; profit tax is only levied on disbursed gains. In addition, there are no taxes on capital gains, wealth, or inheritance in Georgia.
In certain industries, like banking, construction, tourist and retail, health care, and waste management, complete foreign ownership is permitted in all CIS countries.
Given their huge oil and natural gas reserves, the energy sector plays a significant economic role in several CIS countries. Insurance, software technology, the aviation industry, and airport infrastructure are just a few of the high-potential investment industries in the CIS.
Because of the vast untapped potential of CIS countries, firms can get access to new markets and grow their international footprint by establishing a presence in the region. It also puts them in close proximity to one of the world’s largest economies: China.
As a result of the rapid economic development in the CIS region’s rising markets, Alya Auditors assist enterprises headquartered in the UAE and elsewhere in gaining access to Central Asia’s trade and economic prospects.