Hiring and Payroll in Kyrgyzstan
Since 2011, Kyrgyzstan’s Information and Technology (IT) sector has been enjoying consistent growth, exporting IT services to the US and other countries.
According to the Global Innovation Index 2019 to 2021, Kyrgyzstan is sixth among ten Central Asian countries emerging in IT.
In 2011, the Kyrgyz government collaborated with the Kyrgyz Software and Service Developers Association to launch High-Technology Park to promote IT services to overseas clients. After its launch, from 2013 to 2020, the residents’ revenue grew from $3 million to $15 million.
Moreover, Kyrgyzstan offers a tax-free zone, low overhead costs, and a skilled IT workforce, making it an attractive outsourcing market for remote jobs. If you want to leverage these benefits to your advantage, learn how to hire employees in Kyrgyzstan.
Hiring Employees in Kyrgyzstan
By 2022, the Kyrgyzstan population stands at 6,745,711, with an impressive 2,550,724 workforce. With an average cost of living 82% cheaper than Singapore, Kyrgyzstan offers a vast supply of low-cost skilled labor.
As per the current data, it has the fastest internet in all Central Asian countries, placing it 75th in fixed broadband speed.
Kyrgyzstan’s capital Bishkek is home to the country’s major workforce. With a 100% literacy rate, this city is famous for offering remote jobs in IT fields such as programming, software and blockchain development, and gaming.
It’s hardly surprising that organizations that plan to hire a remote team hunt for talent in Kyrgyzstan, especially in the IT and sales sectors.
How to Hire Employees in Kyrgyzstan
To hire employees in Kyrgyzstan, organizations can use job boards like HeadHunter Kyrgyzstan, Careerist, and UNjobnet to post job positions.
Platforms like Upwork are also a good source of hiring employees in Kyrgyzstan contractually. But for hiring full-time employees, your company must own a local entity in the country, or you can take the help of a global employment solution.
Hiring with an Employer of Record in Kyrgyzstan
Kyrgyzstan has its payroll, tax, employment, and work permit requirements to comply with if you want to hire employees in Kyrgyzstan.
But an Employer-of-Record (EOR) platform can hire and pay employees on your behalf. It can help you overcome the regulatory and financial barriers of hiring remotely.
Furthermore, you won’t have to set up a local entity in Kyrgyzstan and will save thousands of dollars with EOR. EOR will hire the most talented and skilled workforce in Kyrgyzstan for your company at a fraction of the cost.
Without violating legal employment laws or risk of misclassification, it can handle payroll, tax compliances, and other regulatory obligations. You can focus on the day-to-day business operations while leaving admin-related work to the EOR.
Payroll in Kyrgyzstan
Payroll in Kyrgyzstan doesn’t work differently. If you want to pay or hire employees in Kyrgyzstan, there are particular employment and payroll rules to adhere to, that is, keeping up with fluctuating currency rates and taxes.
Besides, there are other conditions, such as leave, holidays, termination, and overtime. Managing such rules can be challenging. But there are two ways that you can pay your employees in Kyrgyzstan. Either you can pay through a local entity or work with an EOR.
Pay through a local entity
Paying through a local entity means setting up a subsidiary in Kyrgyzstan. It is the most expensive way to hire employees in Kyrgyzstan and then pay them.
You’ll have to take care of infrastructure and register your company as a local employer in Kyrgyzstan. This will blow a hole through your budget and can take up to a year or more to set up the subsidiary.
Work with an Employer of Record (EOR) Kyrgyzstan platform
Besides hiring employees in Kyrgyzstan, an EOR can help you pay them remotely. You can pay your entire team in Kyrgyzstan or anywhere in the world in one go.
Your EOR service provider will send you a monthly invoice in US dollars and pay the same amount to your employees in Kyrgyzstani Som (KGS).
In addition, the EOR can factor in currency fluctuations, mid-market rates, and any other applicable fees when sending the bill.
The Cost of Hiring an Employee in Kyrgyzstan
The cost to hire employees in Kyrgyzstan depends on the currency conversion rate, average rent, and the cost of living in Kyrgyzstan. Per the current conversion rate, 1000 KGS is equivalent to $12.
One person’s average cost of living in Kyrgyzstan, including rent, is $441/35675 KGS per month, with rent being $196/15855 KGS per month. Thus, the average cost of hiring an employee in Kyrgyzstan is $3000/242,691 KGS.
Conclusion
An EOR offers a simple and inexpensive solution for organizations seeking to hire employees in Kyrgyzstan. It will ensure that all your employment-related activities comply with Kyrgyz employment, payroll, and tax laws.
An EOR platform like Skuad can help your organization expand globally without the hassle of setting up an entity, hunting for skilled labor, or setting up a payroll system by yourself. To learn more, book a demo today.
