Software Outsourcing to Central Asia: Uzbekistan, Kazakhstan, Azerbaijan

Companies worldwide, ranging from startups to Fortune 100 giants, increasingly use the services of IT consultancies.  This helps businesses streamline staffing, cut software development costs, and maintain high-quality standards. According to Statista, the global IT outsourcing market is projected to reach $812.71  billion by 2029.

Based on Deloitte

Despite Eastern Europe remaining the most popular destination for companies from North America, Canada, Australia, the United Kingdom, and other European Union countries to outsource IT services, new locations appear on the map. One is Central Asia, which is projected to grow significantly over the coming years due to its favorable business environment.

Benefits of IT Outsourcing to Central Asia

Central Asia is a relatively new outsourcing destination yet offers tremendous business potential. The benefits include a large working-age talent pool, a moderate cost of living, and the government’s interest in attracting foreign tech companies and investors. Hence, the region’s IT Outsourcing market, according to Statista, is projected to grow at a steady annual rate of 12.48%, resulting in a market volume of US$1.93bln from 2025-2029.

The benefits of IT outsourcing to Central Asia include:

• Steadily growing talent pool – With the rapid digitalization in the region, many local universities are extending and intensifying their IT education programs, increasing the number of IT professionals every year.
• Substantial governmental support – Many Central Asian countries have introduced digitalization programs and initiatives.
• Favorable business environment—Beneficial conditions are being created to attract foreign companies and train qualified personnel, including special state programs and incentives for IT companies. The taxes are 15%-20%, and many governments offer tax incentives for foreign investment.
• Competitive prices—the average hourly rate in the region’s three top software development locations—Uzbekistan, Kazakhstan, and Azerbaijan—is around $25–$49, depending on technology and seniority level.

For the past five years, we have seen a decent spike in growth in the IT sector in Asian markets. We attribute this to the continuous government support for IT businesses by providing preferential tax regimes and long-term investments in technical education.

Realizing the demand for IT specialists for internal digitalization projects and IT outsourcing, Uzbekistan, Kazakhstan, and Azerbaijan are taking extensive measures to enhance IT infrastructure, foster the required expertise, and create a business-friendly environment.

Top IT Outsourcing and the Biggest Countries by Population in Central Asia

The countries with the biggest population and employed workforce in the region are:

• Uzbekistan – 35.6 million with over 100,000 individuals employed in the IT Outsourcing industry
• Kazakhstan – 20.3 million with over 187,000 individuals employed in the Information and Communication sector
• Azerbaijan – 10.1 million with over about 42,000 individuals employed in the area of Telecommunications

Below is a detailed overview of IT sectors in these countries.

Uzbekistan

In 2020, the Uzbekistan government launched a strategic initiative, “Digital Uzbekistan—2030” and ever since the country’s IT sector has been experiencing rapid growth. As a result, in 2024, over 100K specialists were employed in the industry, boosting the market volume up to $1 billion.

Key factors driving the growth of the IT industry in Uzbekistan include modern IT infrastructure, governmental business support, and high-quality IT education aimed at preparing highly skilled professionals. The country’s young and highly educated workforce attracts foreign companies looking for skilled IT professionals.

Important figures:

• In 2025, the projected revenue in the IT Outsourcing market in Uzbekistan is expected to reach $480.07mln – Statista.
• The internet connection bandwidth continually increases, reaching 3200 Gbps by March 2023, with nationwide internet coverage at 99% – IT Park Uzbekistan.
• The country has ~ 60 IT universities.
• Almost 2/3 of the country’s 36 million population are individuals under 30, with a high literacy level and proficiency in foreign languages.

The country also implemented other reforms to improve the business environment and provide beneficial conditions for IT outsourcing. These reforms include liberalizing the foreign exchange market, tax reform, and simplifying business procedures. Thus, many foreign companies are establishing their presence in Uzbekistan, contributing to the development of the IT outsourcing market.

IT companies willing to do business in Uzbekistan can benefit from government support incentives. To do so, the company must register as a legal entity in Uzbekistan and become a resident of IT Park Uzbekistan.

Expressly, IT Park’s resident status confers substantial tax incentives. Compared to Non-residents’ corporate taxes, which range from 5% to 12%, residents are free from paying them. Social taxes also do not apply to IT Park residents, whereas for non-residents, they are 12%. Income tax is also lower for residents. Non-residents are subject to VAT (Value-added Tax) on imported services, whereas residents are not.

Additionally, an IT Park Uzbekistan resident company can apply for IT Visas provided to its founders, investors, and employees. It is valid for 3 years and allows residents to work in Uzbekistan without a work permit.

Another key driver of Uzbekistan’s growing IT outsourcing market is its strategic location. Situated at the crossroads of major transportation routes between Europe and Asia, Uzbekistan is an ideal hub for companies seeking to expand their regional footprint.

Kazakhstan

Kazakhstan’s IT services market is experiencing rapid growth, fueled by the government’s digital transformation initiatives. The Country has various business support programs, including tax incentives, funding programs, and infrastructure improvements to foster industry development. These initiatives create a favorable environment for IT service providers to establish and expand their operations in Kazakhstan.

Important figures:

• The IT Services market in Kazakhstan is expected to reach a revenue of $1.44bln in 2025 – Statista
• 36 universities provide IT education in Kazakhstan – TopUniversities.
• The Kazakhstan ICT market is moderately competitive due to the presence of significant players like Microsoft Corporation, Andersen Inc., and LeverX International Company LLC – Mordor Intelligence.
• The Eurasian Development Bank expects Kazakhstan’s gross domestic product (GDP) growth to reach 5% in 2024, one of the fastest growth rates in the region – AstanaTimes.

The local IT outsourcing market has been steadily growing over the past few years, driven by rising demand for digital transformation and the integration of emerging technologies. A significant milestone in this progress was the launching of the “Digital Kazakhstan” program in 2018. The program’s main goal was to strengthen the local tech ecosystem while helping Kazakh IT companies expand into global markets, such as the US, Europe, the Baltic states, and Southeast Asia.

Another catalyst for boosting industry growth was establishing Astana Hub – an international technology park designed to attract global IT talent and foster the development of competitive and innovative startups. The hub provides special visa policies and tax incentives to its residents.

Another beneficial factor is the inflow of entrepreneurs and IT specialists from other Central Asian countries, who have widely chosen Kazakhstan as a relocation destination.

Azerbaijan

Like its competitors, Azerbaijan has been advancing as a favorable outsourcing destination in Central Asia. With their government investments in infrastructure and education, the IT sector received a favorable business environment and attracted local and international companies. Additionally, Azerbaijan has a relatively low cost of living compared to other countries in the region, which enhances its appeal as an outsourcing destination.

Important figures:

• The IT outsourcing market in Azerbaijan is projected to experience a substantial revenue surge, reaching $157.30 million in 2025 – Statista

• The Internet penetration in Azerbaijan is estimated to amount to 91.97% in 2025 – Statista
• Azerbaijan’s Vision 2030 strategy invests more than USD 400 million per year in IT projects – BusinessWorld

The country also boasts a highly educated workforce, with many young IT and software development professionals. This has contributed to the constant growth of a talent pool capable of delivering high-quality IT services.

Furthermore, the Azerbaijani government continues to foster industry expansion through tax incentives and business-friendly policies, making it easier for IT companies to attract foreign investment and scale their operations.

Thus, in 2024, Azerbaijan introduced a package of tax preferences and incentives for businesses operating in the System Integration and Software Development domains. Azerbaijan’s Technopark residency program offers a 10-year tax incentive, creating a “tax haven” for its participants. Under the program, personal income up to USD 4,700 per month is tax-free, while earnings above are taxed at 5%.

Additionally, Technopark companies benefit from complete exemptions on corporate, property, land, and dividend taxes, according to BusinessWorld.

Beyond tax incentives, the initiative also streamlines migration processes for tech specialists and senior executives by waiving work permit requirements and offering assistance with residency permits, office space, and housing.

Conclusion

As we see, Uzbekistan, Kazakhstan, and Azerbaijan are actively promoting the development of the IT sector, with a focus on creating a favorable environment for IT outsourcing. The countries make substantial efforts to enhance their IT infrastructures, improve STEM education, and create business-friendly conditions. They attract more and more international IT companies looking to optimize costs and expand their operations.

While each destination has advantages and challenges, the region is emerging as a strong outsourcing hub. As digital transformation accelerates worldwide, Central Asia is well-positioned to take its place in the global IT outsourcing landscape.

Moreover, the rise of remote work has significantly transformed collaboration with distributed teams, making the Smart-shoring approach increasingly popular. At Sigma Software, we actively embrace this strategy to establish highly efficient international delivery centers. By leveraging top talent worldwide, we ensure seamless execution and delivery of thousands of successful projects.

Why choose Sigma Software as an IT outsourcing development company in Central Asia?

Sigma Software has been delivering outsourcing services for over 22 years and has been featured in. We leverage the Smart-shoring approach to efficiently build and manage international distributed teams for our clients worldwide. As reported in our latest survey, this strategy enables us to align with our client’s unique needs and expectations, contributing to a 98% client satisfaction rate.

Sigma Software in numbers:

• We are a reliable partner for more than 300 leading global companies, including AstraZeneca, AOL, Scania, IATA, SAS, IGT, Formpipe, DanAds, etc.
• Sigma Software employs 2,000 software specialists with extensive technical experience in leading technologies, including Java, .NET, Node.JS, React Native, Angular, Golang, Python, iOS, Android, and more.
• We have a local presence in 22 countries on four continents with 43 offices, including Uzbekistan.
• Sigma Software expert team can deliver over 40 services and 25+ innovative products, including Software Product Development, Application Implementation and Managed Services, Legacy Migration and Modernization, and Technology Consulting.

If you are planning to hire a dedicated team or outsource a project to Central Asia or are hesitating about which country to choose, contact our team, and we will provide a solution tailored to your business needs.

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