About 40 companies that have left Russia this year may relocate to Kazakhstan

Other 50 companies refused to do so as they prefer to monitor the situation

Kazakhstan has negotiated with 43 foreign companies that have left Russia this year, about opening new production sites or moving their headquarters to Kazakhstan, according to Almas Aydarov, deputy foreign minister in Kazakhstan. He made this statement at the opening ceremony of a new production site of Honeywell in Almaty. 

After the Russian invasion of Ukraine, more than 500 foreign companies left Russia or suspended their activity in that country. Kazakhstan’s MFO in conjunction with Kazakh Invest has negotiated with half of them, as the country wants them to relocate their production sites or headquarters to Kazakhstan.

“We have specified 265 big companies that officially announced leaving the Russian market. We’ve been negotiating with those companies and have reached a deal with 43 of them. They have given their preliminary consent to open new production sites or move their headquarters here. I can’t name all these companies as the negotiations are still ongoing,” Aydarov said. He also added that 50 companies have refused Kazakhstan’s offer “as they want to wait and see how the situation would evolve.”

However, the official said that TikTok is ready to open its headquarters in Kazakhstan. The TikTok press service neither confirmed nor denied this information. “The company is always looking for new opportunities in countries where it works,” the press service said.

Aydarov also informed that Carlsberg is going to expand its production in Kazakhstan to offset the decline in its production in Russia. Carlsberg Kazakhstan has already confirmed this information. “We are planning to allocate additional investments to the local production over the period from 2022 to 2023. Our goal is to produce enough ready-to-use products locally. This is about 30% of our annual sales including alcohol-free beer that we can’t produce locally because Kazakhstan prohibits us from producing standard beer and alcohol-free beer on the same equipment,” the company said.

Among other foreign companies weighing the idea of moving to Kazakhstan is Phillip Morris. The company considers the potential relocation of IQOS production to the country. According to Kazakhstan’s MFO, this project may attract about $110 million in investments and more than 200 jobs might be created.

“Depending on the type of production we are suggesting those companies choose any region in Kazakhstan where we have prepared sites ready for launching new production operations. We have no time for construction of any new sites from scratch,” said Aydarov.

Kazakhstan is trying to attract not only international companies but Russian businesses as well. Over the first five months of the year, more than 3,000 companies were opened in Kazakhstan by Russian entrepreneurs. In the same period last year, there were just 450 companies opened by Russians. The vast majority of these new businesses are in the retail and IT sector.

“We need big foreign companies to come to us and launch production here. It might be a vivid marker of our investment climate,” he said.

In turn, Dmitry Peskov, the official spokesperson for President Putin of Russia said that the Kremlin has no objections to Kazakhstan’s intention to facilitate the relocation of foreign companies from Russia to Kazakhstan.

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