Tech startups represent the future of the tech industry and an estimated 1.35 – 1.4 million tech startups launch each year around the globe — but an estimated 20% of tech startups fail in the first year and another 70% fail within the first five years. The challenges faced by tech startups include financial shortcomings, poor product placement in the market, and intense competition in the market.
When faced with these real-world challenges, many tech startups have looked for ways to create a competitive advantage that can drive long-term success in an ultra-competitive industry. Hiring elite tech talent in emerging markets — like Central Asia or the Caucasus — has proven to be a viable solution for many tech startups, and Truss provides the tools and support that these tech companies need to survive and succeed.
To determine why tech startups are turning to Central Asia, it is important to understand how this emerging tech market sets itself apart from other traditional global hiring markets. Truss has years of experience finding, recruiting, hiring, and managing remote talent in Central Asia as an employer of record, and we hope this in-depth overview highlights why tech startups are choosing Central Asia.
Contact Truss today to learn more about our end-to-end hiring platform and employer of record services!
READ MORE: What Companies Should Be Hiring in Emerging Markets?
The Reasons Why Tech Startups Are Hiring Talent in Central Asia
Central Asia has become one of the fastest growing regions for the tech industry — growing by an estimated 81% in the last two years — and that growth has made it a valuable asset for tech startups in search of talent. A deep talent pool and lower employment costs have made countries like Uzbekistan, Kazakhstan, and Kyrgyzstan alternatives to other traditional hiring markets and the United States for tech companies on a budget. This level of talent, lower salary benchmarks, and attractive financial opportunities have made Central Asia a hotspot for tech startups that want to grow their development teams.
Here is a deeper look at the key reasons why tech startups are hiring talent in Central Asia:
Lower Salaries and Reduced Employment Costs
High costs are a challenge that tech startups need to face, and financial hardship is the primary reason why many tech startups fail. Central Asia possesses a lower cost of living than the United States and other parts of the world, lending itself to lower salaries and lower employment costs for tech companies that hire in this part of the world. Tech startups that hire remote employees in Central Asia may benefit from structural labor costs that are 65% – 80% lower than in the United States without sacrificing talent or skill.
Global Tech Salary Comparison
| Region/Country | Junior Engineer | Senior Engineer |
|---|---|---|
| United States | $70,000 – $90,000 | $150,000 – $220,000+ |
| Central Asia | ||
| Kyrgyzstan | $11,000 – $15,600 | $35,000 – $45,000 |
| Kazakhstan | $12,000 – $18,000 | $40,000 – $55,000 |
| Uzbekistan | $11,000 – $15,000 | $35,000 – $50,000 |
| Nearshore / Offshore Hubs | ||
| Poland | $25,000 – $35,000 | $74,000 – $95,000+ |
| Portugal | $22,000 – $30,000 | $60,000 – $80,000+ |
| Mexico | $18,000 – $28,000 | $55,000 – $75,000 |
| Vietnam | $11,000 – $16,000 | $34,000 – $54,000+ |
Increased Emphasis on the Tech Industry
The tech industry is one of the fastest growing markets in the world and Central Asia continues to gain momentum as a major market for tech startups. Investment by tech companies in the region has surpassed $320 million and is focused on urban hotspots like Tashkent, Almaty, and Bishkek. This incredible growth is driven by government investment with programs like the High Technology Park (HTP) in Kyrgyzstan that has generated more than $195.4 million in revenue via direct investment. Tech startups can benefit from additional programs in the region like the Astana Hub in Kazakhstan and the IT Park in Uzbekistan where these tech companies receive incredible support.
Higher Employee Retention Rates
It is not uncommon for U.S. tech employees to change jobs every 2 – 3 years in order to find something newer or better. This stark reality can make it difficult for growing tech companies or tech startups to retain the talent they need to drive long-term success and growth. U.S.-based tech startups that hire in Central Asia have the ability to offer higher salaries to talented tech professionals in the region and provide fantastic opportunities for remote employees — which contributes to higher retention rates and employee loyalty.
Government Tax Incentives
Taxes are a major financial factor that impact employment costs, and many Central Asian countries provide government tax incentives for global tech startups. Economic zones — like the High Technology Park, Astana Hub, and IT Park — offer reduced employment taxes for global companies that hire there. For example — the Astana Hub offers a flat 5% personal income tax and 0% VAT tax for registered digital entities that employ local tech professionals in the region.
READ MORE: How an EOR Reduces Hiring Costs for a Tech Startup
How Truss Simplifies Hiring in Central Asia for Tech Startups
There is no doubt that Central Asia offers an impressive level of tech talent at competitive price points — but navigating foreign labor laws, cross-border tax compliance, and local finances can be a real challenge for tech startups. This is where Truss can help as your employer of record in Central Asia.
As your employer of record, Truss can help mitigate these challenges and simplify the hiring process for remote tech talent. Truss will act as the legal employer in-country, handling multiple aspects of hiring and managing a remote workforce:
- Ensure local employment contracts remain compliant with labor laws.
- Oversee local tax withholdings, incentives, and mandated employee benefit filings.
- Manage multi-currency, cross-border payroll processing to ensure pay is on-time and accurate.
If you want to know why tech startups are choosing Central Asia as the place to grow their teams, Truss as your employer of record is a key factor. With Truss as your partner, your startup can find, recruit, hire, and manage elite tech talent across Central Asia with little risk to your company and without spending months establishing a legal entity.
Contact Truss today to find out how we can help you build a global team!
