Protect Your Business Assets in Unstable Markets

In recent years, businesses worldwide have faced political instability—ranging from trade wars and economic sanctions to government changes and financial crises.

According to the UBS Global Entrepreneur Report 2025, 53% of business leaders consider political instability the biggest threat to their companies.

Kazakhstan’s economy is particularly vulnerable to external factors, including:

• Sanctions and geopolitical conflicts affecting trade and supply chains.

• Frequent changes in tax and regulatory policies, making long-term planning difficult.

• Currency fluctuations and dependence on commodity prices, leading to financial instability.

What can businesses do to safeguard their assets and minimize risks?

Key Risks Facing Businesses in Kazakhstan

1. Regulatory Uncertainty

• Frequent tax reforms create an unpredictable business environment.

• New licenses and restrictions are introduced without long-term stability.

2. Financial Risks

• The Kazakhstani tenge is highly volatile, and foreign currency access may be restricted.

• The economy’s heavy reliance on oil prices makes it vulnerable to external shocks.

3. Geopolitical Pressures

• Sanctions on Russia disrupt logistics and trade flows.

• Kazakhstan must carefully balance its relations with China, the EU, the US, and Russia, creating uncertainty.

What strategies can businesses adopt to navigate these challenges?

How are Business Assets to be protected?

1. Diversify Capital and Investments

A fundamental rule: never put all assets in one place.

• Distribute capital across different jurisdictions (Kazakhstan, UAE, Switzerland, Singapore).

• Open foreign bank accounts to mitigate currency risks.

• Invest in international real estate as a stable asset during crises.

Example: Many Kazakhstani entrepreneurs are opening accounts in the UAE, benefiting from a stable tax system and strong investor protections.

2. Hedge Against Currency Risks

• Use multi-currency accounts (tenge, dollar, euro).

• Sign long-term contracts in stable foreign currencies to secure pricing.

• Invest in gold and other safe-haven assets.

Example: Large Kazakhstani corporations use currency hedging strategies to shield themselves from exchange rate fluctuations.

3. Use Offshore and Alternative Business Structures

• Register holding companies in Singapore, Switzerland, or Dubai.

• Utilize trusts and private funds to protect assets from political risks.

• Leverage legal structures (options, partnerships) to safeguard ownership.

Example: In 2023 many Kazakhstani business owners transferred assets to Dubai, attracted by its zero capital gains tax and strong asset protection laws.

4. Engage in Political Lobbying and Government Relations (GR)

• Build relationships with government agencies to advocate for business interests.

• Join business associations that influence policy-making.

• Develop crisis management plans in collaboration with legal and financial experts.

Example: European corporations invest in GR strategies to stay ahead of regulatory changes and avoid sudden policy shifts.

5. Strengthen Cybersecurity and Data Protection

• Host IT infrastructure overseas (in Europe, the US) for added security.

• Use encrypted communication tools and VPNs to protect sensitive data.

• Establish backup offices in politically stable regions.

Example: Many Russian IT firms relocated to Estonia after facing regulatory risks in their home country.

What’s Next? Future Scenarios for Kazakhstan

Scenario 1: Optimistic Outlook

If Kazakhstan ensures a stable legal and tax environment, we can expect:

• 30–40% growth in foreign investment.

• Greater business confidence in long-term planning.

• Kazakhstan becoming a preferred hub for international companies, similar to the UAE.

Scenario 2: Pessimistic Outlook

If businesses fail to prepare for political and financial risks, we may see:

• Increased asset freezes and legal uncertainties.

• Capital flight, as entrepreneurs move assets abroad.

• Kazakhstan losing its attractiveness for global investors.

The bottom line: protecting assets is not paranoia—it’s a business necessity.

Key Takeaways and Recommendations

✅ Diversify assets – store capital in different countries and currencies.

✅ Use financial risk management tools – hedge against currency fluctuations.

✅ Work with legal and financial experts to create protective structures.

✅ Invest in cybersecurity to safeguard critical business data.

Political instability is a challenge, but businesses that plan ahead will always stay ahead.

 

Timur Useyev, independent expert, specifically for www.economyKZ.org