Why Latvian IT Companies Should Pay Attention to Central Asia before Their Competitors

Central Asia is experiencing a digital boom. Kazakhstan, Uzbekistan, and neighbouring countries are actively developing digital payments, artificial intelligence, and cloud services. For Latvian IT companies, the region could become one of the few rapidly growing markets amid the slowdown in the European economy. Kazakhstan, the region’s strongest economy, attracts more foreign direct investment than all the Baltic countries combined, while the population’s digitalisation level is among the highest in the world. Moreover, Kazakhstan is already actively exporting technology, which means resident companies gain access not only to the local market but also to the markets of partner countries.

Why Central Asia Is Becoming an Attractive Destination

The region’s population has exceeded 80 million and is growing by about 1 million per year. More than half of the residents are under 30 years old - this is an audience that quickly adopts mobile applications, marketplaces, and digital finance.

Companies from Europe and the United States are expanding their presence in Central Asia, partly due to the region’s rapid economic growth. Between 2022 and 2024, the region’s GDP grew by an average of about 4.7 % per year, and by the end of 2025, growth reached approximately 7 % - almost twice as high as the average for developing economies overall and significantly higher than the EU’s average indicators. The total nominal GDP of Central Asia has already exceeded half a trillion dollars. The young population and high growth dynamics are driving demand for FinTech, e‑commerce, and cloud infrastructure - precisely the services in which Baltic companies excel.

Why Kazakhstan Could Be the Entry Point

Kazakhstan is the largest economy in Central Asia, with a GDP exceeding $300 billion. According to UNCTAD, foreign direct investment (FDI) in the country reached $151.3 billion in 2024 - about 68 % of all FDI attracted by the region. For comparison, Kazakhstan’s figure exceeds the combined FDI volume for the same period in Estonia, Latvia, and Lithuania - $97.5 billion, according to the same UNCTAD methodology. This figure clearly illustrates the scale of the market that capital is targeting.

In turn, Europe is Kazakhstan’s key trading partner, surpassing neighbouring China and Russia in trade turnover. During his official visit to Brussels, President of Kazakhstan Kassym‑Jomart Tokayev noted:

“Last year alone, bilateral trade turnover exceeded $45 billion. About 4,000 European companies are successfully operating in Kazakhstan. Many of them, including Airbus, Polpharma Group, Air Liquide Group, Škoda Group, and Alstom, have been reliable partners for decades. We are also pleased to welcome a new generation of European investors, which includes Roca Group, Inditex, Maersk, Dewulf, and Damen Shipyards Group.”

Kazakhstan offers technology companies the most favourable business environment. The region’s largest international techno park, Astana Hub, exempts residents from corporate income tax, VAT, individual income tax on salaries of IT engineers, and social tax, as well as duties on the import of IT equipment — the main tax benefits are valid until 2029. Thus, in 2025, Astana Hub residents exported technologies worth $633 million and collaborated with 111 countries, while the e‑residency programme provided access to the country’s digital infrastructure for more than 6,000 foreign professionals. Key partners include the USA, Cyprus, the UK, Ireland, Mexico, the UAE, Singapore, Uzbekistan, and Switzerland. Meanwhile, Kazakhstan’s total IT services exports exceeded $1.142 billion in 2025, outpacing the import of digital solutions by a factor of 2.6.

The Astana International Financial Centre (AIFC) operates under English law with its own independent court and arbitration - this eliminates the usual concerns for foreign investors regarding the legal protection of transactions and assets.

Kazakhstan’s Digital Environment

In the UN E‑Government Development Index, Kazakhstan ranks 24th out of 193 countries and belongs to the group with a “very high” indicator. In terms of the availability of online services, it is among the top 10 countries globally, alongside South Korea, Denmark, and Estonia. For an IT company, this means a market where both the population and the government are already accustomed to digital services and are ready to consume them.

The country has developed its own digital ecosystems and FinTech platforms. Kaspi.kz, Halyk, and Freedom Holding have created technology companies that combine banking, brokerage, telecom, and cloud services - their product maturity level is comparable to that of European neobanks.

The data centre market is actively attracting global players. Authorities are negotiating with Microsoft, Google, and Amazon to deploy server capacities in Ekibastuz: 170 hectares have been allocated for a data centres techno park, with an additional reserve of 1,300 hectares, and electricity costs here start at 2.5 cents per kilowatt‑hour - cheaper than in most European countries. In June, the Government of Kazakhstan, Firebird, and NVIDIA signed a package of agreements worth $10 billion for this project to create the largest data centre cluster in Central Asia with a capacity of up to 1 GW.

“The launch of the project in 2027 will make Kazakhstan one of the ten leading countries in the world,” says Razmik Ovakimyan, co‑founder of Firebird.

Some global companies have entered the country through local businesses: for example, Freedom Holding Corp., as part of building data centres, has involved global IT industry leaders in its projects, including Amazon Web Services, Nvidia, and China Mobile. At the same time, Kazakhstan positions itself as a hub of the digital corridor Europe - Kazakhstan - China, i.e., as an entry point to the markets of the entire region and the Caucasus.

Partnerships between Kazakhstan and Latvia

Latvian businesses are already present in Kazakhstan. According to the International Chamber of Commerce, about 145 Latvian companies operate in the country, with particularly strong activity in the pharmaceutical and banking sectors. Trade turnover between the countries amounted to $231 million in 2024, and in spring 2025, the parties established the Kazakhstan–Latvia Business Council.

Astana views Latvia as one of its key partners in Europe, primarily due to the ports of Riga, Ventspils, and Liepāja and the Trans‑Caspian route. For the IT sector, the connectivity infrastructure provides a ready‑made channel that makes it easier to enter the market following the Latvian businesses already operating in the country.