Central Asian IT Start-up Hub. A way to integration
Fostering single market rules for small, but innovative business
A favorable environment has been implemented for the development of the information technology (IT) industry in the Central Asian region by the growth of the IT sector in neighboring countries like China and India, the possibility of the Central Asian countries offering an alternative route to the Red Sea line, the risk of the fiber optic cable system passing through the Red Sea due to the regional crisis, and the competition between China and the United States of America in the field of technology. Furthermore, the regional countries' mutual integration and the implementation of a single market may be further instruments for quickening the growth of the IT sector.
The implementation of the Central Asian IT Start-up Hub will first provide more chances and a larger market for small and medium-sized enterprises from both domestic and international start-uppers to launch their firms in Central Asia. The world's most startup-friendly countries are ranked according to metrics like business infrastructure, personnel availability in the technology sector, and research potential. It must be acknowledged that local and international business leaders find insufficient appeal in the aforementioned measures for individual indicators in Central Asian countries.
The Central Asia IT Start-up Center gives entrepreneurs launching their start-ups in the region's IT industry more chances to sell goods and services. The implementation and upkeep of a unified system for the registration of IT start-ups in Kyrgyzstan, Kazakhstan, and Uzbekistan is the cornerstone of the center's operations. An IT start-up from one of the organizations of IT Park in Uzbekistan, Astana Hub in Kazakhstan, or High Tech Park in Kyrgyzstan that is registered through the Central Asian Single Start-up Registration System is directly registered in all three countries and will be permitted to conduct business there. The region's technical talent, scientific capacity, and infrastructure are all brought together by the unified system of start-up registration, which also broadens the consumer market.
The start-up-friendly nations on the list can be categorized into three groups based on the examination of the ranking:
The first group consists of high-income countries, which will have the opportunity to expand for start-ups due to the high purchasing power of the population. Examples of this group include the United States of America and Great Britain. The second group is countries with a large population and a large market, such as China and India. The third group is the countries that serve as "access roads" to large markets, such as Estonia, Morocco, and Malaysia. Malaysia serves as a basis for launching a business in the ASEAN region, Morocco serves as a conduit between Africa and Europe, and Estonia serves as a base for start-ups from the former Soviet Union to launch their businesses in the European Union. By adopting the fashion of the third group, Central Asian nations can make themselves more appealing to entrepreneurs. In other words, a company formed under the Central Asian Single Start-up Registration System will be permitted to conduct direct business in Kyrgyzstan, Kazakhstan, and Uzbekistan.
What to do
The Central Asian IT Start-up Hub is a symbolic name given to start-ups registered through the unified registration system and the staff responsible for registration, and will not have its structure as an organization. The staff responsible for registration will continue their activities in Uzbekistan IT Park, Kazakhstan Astana Hub, and Kyrgyzstan High Tech Park. The following activities are required to organize the activities of the Central Asian Start-up Hub:
development of principles and rules for registration of start-ups for Uzbekistan, Kazakhstan and Kyrgyzstan;
launching an electronic platform and database of the single Central Asian start-up registration system (or integration of national systems of existing start-ups in Uzbekistan IT Park, Kazakhstan Astana Hub, and Kyrgyz High Tech Park that is used for the registration of start-ups);
formulation of requirements for local and international start-ups applying for the right to operate in Uzbekistan, Kazakhstan, and Kyrgyzstan in accordance with the national legislation and development strategies of the three countries;
negotiating customs regulations for start-ups aiming at product production;
determining the procedure for paying taxes and using benefits;
determining the rules for excluding start-ups from the Unified Registration System and clarifying the period of transformation of start-ups into transnational companies to avoid the abuse of the opportunity to do business without borders.
Expected benefits
Access to European markets is cited as one of the reasons for the success of the Estonian start-up ecosystem. The right to do business in about 30 countries by registering a start-up with the Estonian state, the opportunity to offer products or services to high-income customers, and high technological literacy consumers make the country a favorable destination for start-up founders.
One of the reasons for opening a start-up in Malaysia is that the country acts as a gateway to regional countries. In addition, Malaysia's proximity to the markets of China and India offers directions for business expansion to these countries.
Although Central Asia has a population of over 80 million people and is oriented towards the markets of India to the south and China to the east, integration among the countries of the region is in its infancy. Establishing a unified system of start-up registration and introducing unified business rules to the markets of Uzbekistan, Kazakhstan, and Kyrgyzstan will increase the attractiveness of countries for local and international start-up founders.
The unified system of registration of start-ups will help regional integration processes. Since the system does not register large business categories and aims to open markets for start-ups, it eases the processes of coordination of representatives of Uzbekistan, Kazakhstan, and Kyrgyzstan in the matter of taxes, customs, and benefits. The new system will form the Central Asian IT Start-up Hub.
Shakhboz Juraev is the Chief Coordinator of Technology in Global Affairs. He is the author of the book "Hybrid Strategy of Cybersecurity: The Role of Information Technology Companies in Chinese Cybersecurity Policy”.