Introduction

Over the past decade, Kazakhstan has established itself as the dominant economic force in Central Asia, evolving into a strategic commercial hub connecting Asia, Europe and the Middle East.

With sustained GDP growth, increasing foreign investment, expanding infrastructure and a young, active population, the country is becoming increasingly relevant in international business and investment discussions.

At the same time, Kazakhstan businesses and investors are seeking efficient ways to access European markets, diversify operations and establish internationally credible structures.

In this context, Cyprus has emerged as one of the most practical and strategically aligned jurisdictions for Kazakhstan entrepreneurs expanding into Europe.

Kazakhstan: Central Asia’s Largest and Strongest Economy

Kazakhstan is the largest economy in Central Asia, accounting for approximately 60% of the region’s combined GDP and is the second largest economy among post-Soviet states after Russia. According to international economic reports, the country continues to lead the region both in absolute GDP and GDP per capita.

The country’s economy has demonstrated strong momentum in recent years:

• GDP grew by 6.5% in 2025, the strongest annual expansion since 2011, according to preliminary data from Kazakhstan’s Bureau of National Statistics.
• Growth has been broad-based, supported by industry transport, construction and trade.
• The country continues to attract significant international investment due to its natural resources, infrastructure development and strategic geographic location.

Kazakhstan’s importance is also reinforced by its position along major international trade corridors linking China, Central Asia, the Caucasus and Europe, including the Middle Corridor (Trans-Caspian International Transport Route).

A Young and Expanding Business Environment

Kazakhstan benefits from a relatively young and economically active population, supporting long-term economic growth and entrepreneurship.

The country has increasingly focused on:

• Economic diversification
• Technology and digitalisation
• Manufacturing and logistics development
• International trade integration
• Financial and investment reforms

As a result, Kazakhstan is no longer viewed solely as a resource-based economy. It is increasingly becoming a regional business and investment centre with growing international ambitions.

A Strategic Moment for Kazakhstan Businesses

Recent developments have created a particularly important opportunity for Kazakhstan businesses to evaluate Cyprus as a European base.

The strengthening of economic cooperation between Cyprus and Kazakhstan, combined with the practical application of the Cyprus-Kazakhstan Double Tax Treaty (effective from 1 January 2021), has significantly improved the efficiency of cross-border structuring and investment planning.

At the same time, increasing connectivity between the two jurisdictions, Air Astana is launching the first-ever direct flights between Kazakhstan and Cyprus from June 2026, connecting Astana and Almaty with Larnaca. This will substantially reduce travel time and operational barriers and facilitate closer commercial relationships.

This combination of:

• stronger bilateral cooperation,
• practical accessibility,
• treaty-based tax efficiency and
• increasing international mobility

creates favourable conditions for Kazakhstan entrepreneurs, investors and corporate groups looking toward Europe.

For many businesses in the region, this represents not simply an expansion opportunity, but a strategic timing advantage.

Why Kazakhstan Businesses Are Looking Toward Europe

As Kazakhstan companies mature and expand internationally, access to the European Union has become strategically important.

Businesses are increasingly seeking:

• Stable and internationally recognised jurisdictions
• Access to EU financial systems
• Credible legal and tax frameworks
• International banking infrastructure
• Asset protection and succession planning
• Corporate structures aligned with OECD and EU standards

This shift reflects a broader trend toward sustainability, transparency and long-term international positioning.

Why Cyprus Has Become a Natural Choice

A Strategic Bridge Between Kazakhstan and Europe

Cyprus occupies a unique geographic and economic position between Europe, Asia and the Middle East.

As an EU member state with a highly international business environment, Cyprus enables Kazakhstan businesses to establish a European presence while maintaining operational flexibility and international accessibility.

The jurisdiction has become increasingly attractive for investors seeking a practical entry point into the European market.

EU Credibility Combined With International Flexibility

One of Cyprus’ strongest advantages is its ability to combine regulatory credibility with business efficiency.

Cyprus operates within:

• EU legal and regulatory frameworks
• OECD compliance standards
• International transparency requirements

At the same time, the jurisdiction maintains:

• Efficient corporate structuring options
• Competitive taxation
• Flexible residency solutions
• International banking access

For Kazakhstan businesses, this balance is particularly valuable.

The Cyprus-Kazakhstan Double Tax Treaty

A key factor supporting cross-border structuring is the Double Tax Treaty between Cyprus and Kazakhstan.

The treaty helps reduce tax inefficiencies related to:

• Dividends
• Interest payments
• Royalties
• Cross-border corporate income

In addition, Cyprus offers:

• A competitive corporate tax environment (the standard corporate income tax rate became 15% from 1 January 2026, aligning Cyprus with the OECD Pillar II global minimum tax, while remaining one of the more competitive jurisdictions in the EU).
• Participation exemptions under certain conditions
• No withholding tax on outbound dividends, interest or royalties (subject to limited exceptions) paid to non-Cyprus tax residents.
• An OECD-compliant IP Box regime, offering an effective tax rate on qualifying intellectual property income substantially below the headline corporate tax rate.

These features make Cyprus particularly attractive for holding structures, international investment vehicles and regional headquarters.

Banking, Substance and International Structuring

In the current international environment, substance and credibility have become increasingly important. Particularly given the Principal Purpose Test (PPT) embedded in the Cyprus-Kazakhstan treaty under the OECD/G20 BEPS framework.

Cyprus has strengthened its position as a jurisdiction capable of supporting:

• Real operational substance
• International banking relationships
• EU-compliant accounting and reporting
• Cross-border management structures
• International holding and investment companies

For Kazakhstan investors, this provides an additional layer of reliability and sustainability when operating internationally.

Mobility and Relocation Advantages

Cyprus also offers practical advantages for internationally mobile entrepreneurs and executives.

These include:

• Flexible tax residency framework
• Residence and employment permits
• Relocation structures for companies and employees
• High quality of life and international business culture

Combined with its climate, infrastructure and strategic location, Cyprus increasingly serves not only as a corporate jurisdiction, but also as a long-term business base.

Conclusion

Kazakhstan’s economic rise is reshaping the commercial landscape of Central Asia.

As businesses from the region continue expanding internationally, the need for credible, efficient and strategically positioned European jurisdictions becomes increasingly important.

In this environment, Cyprus has established itself as more than a tax-efficient destination.

It has become a practical bridge between Kazakhstan and the European Union – combining legal certainty, regulatory alignment, international credibility and operational flexibility within a single jurisdiction.

For internationally minded Kazakhstan businesses, the current period presents a particularly strong opportunity to evaluate Cyprus as a long-term European platform for expansion, structuring, investment and sustainable growth.