Astana or Almaty: where should a European company base itself?

When a European company decides to open in Kazakhstan, the first practical question is usually where. Astana and Almaty are the two obvious choices, and each has real strengths. There is no single right answer: it depends on who your customers are, what you need nearby, and how you plan to grow. This guide sets out the factors to weigh.

The two cities in brief

Kazakh Invest, the national investment agency, describes Kazakhstan as having 17 regions and 3 cities of national significance: Astana, Almaty and Shymkent. Astana is the capital.

• Astana is the seat of government. The presidency, ministries and many state bodies are there, as are foreign embassies such as the British Embassy. It is also home to the Astana International Financial Centre (AIFC) and the Astana Hub technology ecosystem.
• Almaty, in the south-east, is the country’s other major business city, with many companies, distributors, service providers and regional offices.

Many foreign companies end up with a presence in both over time. The question is where to start.

Choose Astana if government is central to your business

If your customers or partners are ministries, national companies or state bodies, being in the capital helps. The UK government’s risk report notes that the economy remains dominated by state-owned enterprises, and that decision-making in Kazakhstan is heavily centralised. Large public projects, national programmes and many tenders are run from Astana.

Being close to government also makes it easier to attend meetings at short notice, which matters in a market where relationships and face-to-face contact count for a great deal.

The AIFC. The AIFC is a distinct legal environment within Astana. The AIFC says its acts are based on the principles, laws and precedents of English law, with its own court for commercial disputes, an international arbitration centre, and an independent financial regulator, the Astana Financial Services Authority (AFSA). It also offers a special tax regime for companies and some incentives for individuals.

The UK government’s risk report notes that the AIFC was set up in 2018 as a one-stop shop for international investment entering Kazakhstan. Its 2022 export guide listed tax preferences for AIFC participants under certain conditions until 2066, along with a special visa regime and simpler rules for hiring foreign staff. Terms change, so check the current position with the AIFC before relying on them.

The AIFC suits financial services, professional services and holding structures especially well. Whether it suits your business depends on your activities and tax position. Take advice in both Kazakhstan and your home country.

Technology companies may also look at Astana Hub, the innovation ecosystem in the capital, which says it has more than 2,500 local and international participant companies. It publishes information on participant status and tax incentives on its site.

Choose Almaty if the commercial market is central

If you are selling to private companies, retailers, consumers or regional distributors, Almaty is often the more natural base. As a major business city, it has a deep pool of commercial partners, service providers and experienced staff. Its location in the south-east also puts it closer to Kyrgyzstan and Uzbekistan.

Practical factors to compare

Whichever city you favour, compare these factors for your own business:

• Customers and partners: where are the people you will meet most often?
• Talent: where can you hire the skills you need, and where will relocating staff want to live?
• Legal framework: do you want to operate inside the AIFC, or under standard Kazakh law?
• Travel: check direct flights to your home base and to the rest of the region.
• Office costs and availability: compare current prices directly, as they change.
• Climate and natural hazards: Astana has long, cold winters. The UK travel advice notes that Almaty is in an active seismic zone, so check building standards and business continuity plans.

Registering your company

The registration process is national, so it is the same in either city, unless you choose to register inside the AIFC under its own rules. Kazakh Invest describes the limited liability partnership (LLP) as the most popular form for small and medium-sized businesses. Steps include checking the name on the eGov portal, establishing a legal address, forming the charter capital, registering online or at a Public Service Centre, and opening a bank account.

You can also register in one city and open a branch or representative office in the other later. The UK government’s export guide notes that branches and representative offices must also be registered.

A phased approach

Many companies avoid an early commitment by phasing their presence:

1. Test the market through a distributor or agent, with regular visits to both cities.
2. Open a small base in the city closest to your main customers.
3. Add a second location once you have business that justifies it.

Visiting both cities before deciding is time well spent. A week split between them, with meetings booked in each, usually makes the choice much clearer.

Whichever you choose, screen local partners and customers against the EU, UK and UN sanctions lists, and check ownership. Kazakhstan’s close trade links with Russia make this essential for European companies.

How Mavericks Go helps

Mavericks Go helps European companies decide where and how to enter Kazakhstan, with a market briefing, an entry plan and introductions to local partners. Mavericks Settle supports staff relocating to Astana or Almaty. Every Go deal is screened against EU sanctions, and legal work is handled by our regulated partner law firms in Kazakhstan.