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CIS Business Opportunities: Untapped Potential

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.

Advantages of investing in the CIS market

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:

1. Ease of access to a larger market

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.

2. Constant Improvement of the business environment

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.

3. Affordable tax breaks

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.

4. Full foreign ownership

In certain industries, like banking, construction, tourist and retail, health care, and waste management, complete foreign ownership is permitted in all CIS countries.

Best Business Prospects

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.

Best Business Prospects

Kazakhstan

  • Oil and gas equipment and services
  • Renewable energy
  • Agriculture
  • Franchising
  • Healthcare
  • Information and communication technologies
  • Infrastructure
  • Mining equipment and services

Russia

  • Oil and gas
  • Fish and seafood
  • Farming of grains
  • Aviation
  • Mechanical engineering and metalwork
  • Timber and furniture
  • Educational consultancy
  • Coffee shops
  • Clothes and accessories

Armenia

  • Tourism
  • IT
  • Jewelry making and diamond cutting
  • Textile and garment
  • Renewable energy
  • Bottled mineral water

Azerbaijan

  • Agriculture
  • Construction and real estate
  • Hospitality
  • Manufacturing
  • Oil and gas
  • Rent-a-car services
  • Tourism companies and travel services

Belarus

  • IT
  • Pharmaceuticals
  • Food industry
  • Biotechnologies
  • High-tech industry
  • Nanotechnologies
  • Equipment manufacturing
  • Agriculture
  • Construction

Kyrgyzstan

  • IT
  • Mining
  • Light farming hardware
  • Pharmaceuticals
  • Oil
  • Hydroelectricity
  • Horticulture

Moldova

  • Transport infrastructure
  • Telecommunication and mobile export
  • Railway construction
  • Electricity

Tajikistan

  • Energy
  • Mining
  • Chemicals
  • Construction materials manufacturing
  • Food and beverage
  • Agriculture and agricultural processing products
  • Transportation

Uzbekistan

  • Commercial banks
  • Insurance companies
  • Energy, oil, and gas sectors
  • Construction
  • Chemical and pharmaceutical industries
  • Automobile
  • Railway projects

Turkmenistan

  • Fuel processing
  • Cotton processing
  • Gas export
  • Industrial and agricultural raw material export

Ukraine

  • Agriculture
  • Information technology
  • Turbines, trains, and automotive components
  • Pharmaceuticals
  • Food and beverage production

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.

Assisting enterprises in getting access to the CIS Region

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.

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