"Some initially panicked, but then came a sense of realization that now nothing could be changed," says Salary.cab about the situation in Kyrgyzstan and the way out of it
In 2025, entrepreneurs in Kyrgyzstan faced restrictions from local regulators. These measures were implemented due to pressure from European and North American countries. This sudden change significantly impacted IT teams that had recently relocated to the country from Russia. We discussed this with the Head of Sales at Salary.cab, Daniil Popov.
Alexander Semenov, App2Top: Daniil, hello!
Daniil Popov
Daniil Popov, Salary.cab: Good day! Very pleased and happy to meet you.
Likewise!
Daniil: If I may, I would first like to clarify as a disclaimer that all my responses are not the official stance of our project. These are our observations of the situation, exactly as we see it from our side. Neither I nor the Salary.cab project claims that the answers I provide to you are absolute truth. All answers are based on our personal experience and our observations of the situation.
I'm sure the readers understand this, but I agree, it's always worth reiterating before a conversation.
Daniil: I couldn't avoid doing it.
Now, let's get to the topic. From the outside—and within Russia itself—the situation doesn't look dramatic. Perhaps it's due to a lack of information. Tell us, what's happening? I've heard there are even panic sentiments.
Daniil: Entrepreneurs, not only with Russian passports but all companies involved in international transactions, have encountered a myriad of new checks and restrictions.
Times are tough everywhere, with restrictions being implemented in many places.
Daniil: Yes, but specifically, Kyrgyzstan for many years turned a blind eye to suspicious transactions with transit activity characteristics, allowing billions of dollars of dubious origin to flow through its banking system.
Ah, so there was an objective reason.
Daniil: Definitely. More so, our team consistently advised our clients to prepare for leaving this jurisdiction in advance. Unfortunately, not all clients heeded our advice and now find themselves in a situation where their funds are effectively "locked" within the Kyrgyzstan banking system. Some initially panicked, but eventually realized there's nothing they can do now.
Am I correct in understanding that the country's government began tightening the screws—largely against companies owned by entrepreneurs with Russian passports—so that severe sanctions wouldn't be imposed against Kyrgyzstan itself?
Daniil: Not the government, but the banking system—yes, and quite significantly. Of course, not out of their own volition. They were forced.
What exactly have these restrictions led to?
Daniil: Let me put it this way: there are no clear and established rules of the game. All banks act at their own discretion. Plus, their focus now is on the security of their business, their correspondent accounts, and the desire to protect themselves from fines.
It seems that's always the case in the financial world.
Daniil: Certainly, but under current conditions, this has led to banks in Kyrgyzstan often refusing to open accounts in dollars and euros. They've started allowing payments exclusively in national currencies. Consequently, entrepreneurs are effectively cut off from European and North American markets.
As I understand, it will only get worse. A new wave of restrictions is planned in relation to the country.
Daniil: That's right. The situation with euro payments will definitely deteriorate.
What can be done to stay afloat if you have a business in Kyrgyzstan? Would acquiring a passport help?
Daniil: According to our information, obtaining a Kyrgyzstan passport is very quick and easy for people born in the USSR. The cost is $20,000.
And is that the solution?
Daniil: Look, this scheme is no secret, so, from our observations, citizens of Kyrgyzstan also begin to face discrimination from certain financial institutions in the EU, but not all. So, obtaining citizenship certainly helps in terms of conducting business and processing transactions, but it doesn't completely resolve the issue. Additionally, when opening an account, you must provide information about other citizenships—having a second citizenship will clearly raise questions. Besides, there are tax risks associated with this citizenship.
All right, so what's the plan? Which scenarios do Russian entrepreneurs, caught in this situation, prioritize today?
Daniil: The most reasonable choice is to pause the company's activities until better times and open a company in another jurisdiction that is relatively friendly towards Russian citizenship.
Meaning?
Daniil: In our view, it's best to look at jurisdictions like the UAE, USA, Britain, Switzerland, and Hong Kong. Our team has experts in these areas; reach out to us, and we'll help you establish there.
These aren't the simplest locations. Where else can one go?
Daniil: Many continue to consider Cyprus. It's a good option; they still resist the EU government, aiming to act within the law and avoid discriminating against Russian citizens. Meanwhile, Cyprus's tax system is one of the most attractive in the world. However, it's important to note that Cyprus partially depends on the EU, and sooner or later, they might be pressured into discrimination as well. In our opinion, it's only a matter of time. Again, we currently recommend considering the UAE, USA, Britain, Switzerland, and Hong Kong—these countries can offer you that cherished entrepreneurial freedom and equal rights.
Many also consider Armenia as an option.
Daniil: It's one of the freest countries in the CIS, with democracy, and a very promising jurisdiction. It's feasible to conduct business there if you physically relocate part of your office there. IT companies can receive a tax certificate for a preferential tax rate of 1% of profits.
Yet you didn't include it among the locations you unequivocally recommend.
Daniil: The problem with it is that everything could change overnight—elections are coming up soon. I recommend not rushing into it.
One last question about Hong Kong. I rarely hear it recommended.
Daniil: It's a very good option. The reason you don't often hear about it is simple: you can't open an account within Hong Kong unless you reside there physically. This rule applies not only to Russian-speaking entrepreneurs but to all foreigners. Hence, if you're considering Hong Kong as a jurisdiction, be prepared for the account to be in the UK or another jurisdiction with a developed banking sector. We can help with that, by the way.
Interesting. Thank you for the expert insight on the situation!