Hidden Gems

Hidden gems: Hiring remote workers in Kazakhstan

May 31, 2024

From the shores of the Caspian Sea to the alpine wildlands of the Altai Mountains, Kazakhstan offers remarkable natural beauty from border to border. Historically, the country is known as part of the Silk Road, which connected China to Europe and was traveled by merchants for more than 1,500 years. But for today’s entrepreneurs and remote workers, Kazakhstan offers more tech-focused attractions.

Since declaring independence weeks before the dissolution of the USSR and the Soviet era in 1991, Kazakhstan has grown into Central Asia’s largest economy and — through the Astana Hub International Technology Park — the region’s most prominent tech hub.

When combined with the country’s low cost of doing business, Kazakhstan is an attractive home for IT startups and remote workers who power tech.

Let’s review Kazakhstan’s startup landscape, including the easiest path to hire remote workers from Kazakhstan.

Astana Hub: A Center for Tech and IT in Kazakhstan

To steer Kazakhstan’s economy away from its dependence on oil and gas, President Kassym-Jomart Tokayev spearheaded the Astana Hub, an initiative meant to encourage tech and IT startups.

The Hub promotes entrepreneurship, innovation, and economic development. It provides incubation and acceleration programs, awards grants, and removes caps on the number of international employees that companies can hire.

The Astana Hub has already achieved its goals of raising $200 million in startup investment by 2022 and exporting $500 million in revenue by 2023. So what’s next? Export $1 billion in IT services annually by 2026 and build a local Unicorn by 2027.

Kazakhstan’s Growing IT Market

In 2019, Kazakhstan’s IT market represented 3.2% of its GDP, with 6,900 companies employing more than 32,000 professionals and exporting nearly $93 million in IT services.

By 2023, the IT market expanded to 4.3% of Kazakhstan’s GDP, with 11,000+ companies employing more than 70,000 professionals and exporting over $127 million in services.

State Measures Support Continued Growth

To help ensure startups receive all the benefits of the Astana Hub, Kazakhstan has enacted state measures meant to ensure the initiative has an impact, including:

  • A Zero Tax regime that enables participants to enjoy a 0% rate on taxes, including CIT, VAT, and the social tax for international talent
  • A Seed Money program
  • Partner coupons
  • A simplified labor and visa regime and extending the C3 work visa to five years
  • Provision of offices and accommodations

Startups with financial support from the Astana Hub enjoy additional benefits, such as project mentorship and fundraising assistance, that are core to the Seed Money program.

Astana Hub Technopark Access

Entrepreneurs who want to launch an IT business in Kazakhstan and receive Astana Hub tax preferences can access remote assistance via WhatsApp and Telegram to:

  • Walk through the process of registering a legal entity
  • Explore different types of residence permits
  • Navigate the application process

Boosting Tech with AI

Along with the Astana Hub, Kazakhstan has plans for a National Artificial Intelligence Platform and expectations for a training course that will offer AI certification to 80,000 people by 2029.

Advantages of Hiring in Kazakhstan

Hiring in Kazakhstan offers several advantages for businesses expanding globally. But first, here is a quick overview of the country:

  • Languages: Kazakh, Russian
  • Currency: Kazakhstani Tenge (KZT)
  • Capital: Astana
  • Population: 19.26 million
  • Cost of living rank: 123rd

A Strategically Located Magnet for Global Business

Located on a bridge between Europe and Asia and with one of the world’s cheapest costs of living, Kazakhstan makes a cost-effective Central Asian home base. It provides businesses and global talent with convenient access to multiple markets.

The government of Kazakhstan further enhances this benefit by limiting taxes on entrepreneurs’ income and taxes.

A Business-Friendly Environment

Along with reducing entrepreneurial tax burdens, the government has streamlined procedures for running businesses — reducing bureaucracy and improving regulations to position Kazakhstan as a popular destination for startups.

At the same time, investments in transportation networks, communication systems, and utilities have created a robust infrastructure throughout the country.

A Skilled, Culturally Adaptable Workforce

Kazakhstan’s geographical location, paired with its strong focus on STEM education, offers a bedrock of flexible talent who are well-educated and skilled in engineering, IT, finance, and natural resources.

Many professionals are bilingual, and English proficiency is increasing, particularly among young people. The workforce is also known for its openness to different cultures, making Kazakhstan citizens ideal team members for international workforces.

Additionally, like its cost of living, labor costs are lower than those of many Western countries, offering a significant advantage for startups and small to mid-size businesses looking to optimize their budgets.

Working Hours & Pay

There are several working hour and pay standards businesses need to adhere to when hiring in Kazakhstan, though regulations are far less stringent than in many countries.

The minimum monthly wage is KZT 60,000 for a standard workweek of 40 hours. Overtime requires a written agreement between the employer and employee, is limited to two hours per day and 12 hours per month, and pays 1.5 times the regular salary.

Payroll & Employer Taxes in Kazakhstan

Employer taxes are generally 16%, and employers are responsible for withholding taxes and social contributions from employee salaries. These include:

Payroll Taxes:

  • Individual Income Tax (IITA): A 10% flat rate applied to gross salary
  • Mandatory Medical Insurance Contributions (OMIC): Currently set at 3% of gross salary, and capped at 10 times the monthly minimum wage (around KZT 600,000 as of May 2024)

Employee Social Contributions:

  • Mandatory Pension Contributions (MPC): 10% of monthly income

Employer Social Contributions:

  • Social Tax: Employers must contribute 9.5% of an employee’s gross salary to the Social Tax Fund.
  • Mandatory Professional Pension Contributions (MPPC): Employers in certain professions must contribute an additional 5% of employee salaries to pensions to compensate for potentially harmful conditions.

Termination Process & Severance Pay

Employers in Kazakhstan can terminate employment contracts for various reasons, from redundancy to relocation to misconduct.

  • Termination Process: Regardless of reason, all terminations require a written notice from the employer explaining the reason for dismissal. In case of misconduct, the employer must provide a prior warning and offer the employee an opportunity to address the issue.
  • Notice Period: The statutory notice period for termination in Kazakhstan is generally one month. To shorten the waiting period, the employer can offer payment instead of notice.
  • Severance Pay: Kazakhstan’s labor law does not mandate severance pay for terminated employees. However, collective bargaining agreements or individual employment contracts may include provisions for severance packages.

Mandatory Leave Benefits in Kazakhstan

Kazakhstan’s employees are entitled to various leave benefits, including vacation and holiday pay, sick leave, and parental leave.

Vacation and Holiday

Kazakhstan observes 19 public holidays throughout the year. Additionally, all workers are entitled to at least 24 days of paid annual leave. Additional leave is available for employees who work in hazardous conditions and those with specific disabilities.

Sick Leave

Employees are entitled to at least three days of sick leave per year. Depending on the severity of the illness, this allowance may increase to six days.

Parental Leave

In Kazakhstan, mothers are entitled to 126 days of paid maternity leave, often divided into 70 days before the baby’s due date and 56 days post-birth.

Additionally, mothers residing in areas affected by nuclear testing receive an extended maternity leave of 160 days.

Why Digital Nomads Love Kazakhstan

It’s easy to understand why digital nomads love Kazakhstan. While an influx of tech talent helps boost the country’s economy, the country’s remote work environment benefits digital nomads.

Global talent working in Kazakhstan enjoy an average cost of living lower than that in popular digital nomad destinations like Bali, Bangkok, Barcelona, Lisbon, and Mexico City.

Consider the low cost of living in Almaty, Kazakhstan:

  • One-bedroom apartment outside of the city center: < USD 530/month
  • 0.5 liter bottle of beer: < USD 1
  • Cappuccino: < USD 3

Additionally, Kazakhstan supports numerous coworking spaces, tech incubators, and networking events to help digital nomads do their best work and meet like-minded talent. The country is also home to many remote worker-friendly cafes and coffee shops.

Kazakhstan Visa Requirements

Kazakhstan doesn’t offer a dedicated digital nomad visa, but [whispers of a developing program]( 2024%2C the government of,health insurance in the country.) suggest the country wants to soon. In fact, President Tokayev publicly stated his desire to attract digital nomads to Kazakhstan.

Until a digital nomad visa is introduced, visas that support freelancers and remote work include the Business Visa, which requires an invitation letter from a Kazakhstani company, and the Work Visa, which requires securing an additional work permit.

Confidently Hire in Kazakhstan with Remofirst

Navigating the complexities of hiring employees in a new country can be daunting. That’s where an Employer of Record (EOR) like Remofirst comes in, helping you hire and work with remote staff in over 180 countries, including Kazakhstan.

From payroll and benefits to taxes and compliance, an EOR helps relieve the legal and financial risks associated with employing a global workforce, making it easier for you to access top talent in markets like Kazakhstan.

Book a demo today to learn how an EOR can empower your business to build a better global team.