When choosing a country to establish a business, non-residents often pay close attention to taxes. One of the key questions is VAT: which country in the Eurasian Economic Union (EAEU) has the lowest rate, and can choosing that country help reduce business costs?
In 2026, tax conditions vary considerably across EAEU member states. Kazakhstan has increased its standard VAT rate, Russia has also changed its tax rules, while the other member states retain their own standard rates and special tax regimes.
Let’s compare VAT rates, explore what foreign entrepreneurs should consider, and explain why the tax rate alone is not enough to choose a jurisdiction.
Comparing VAT Rates in EAEU Countries
The EAEU consists of five countries: Kazakhstan, Russia, Belarus, Armenia, and Kyrgyzstan. Standard VAT rates in EAEU countries in 2026: Kyrgyzstan — 12%
Kazakhstan — 16%
Belarus — 20%
Armenia — 20%
Russia — 22% These rates are provided for general comparison. Depending on the country, type of business, and specific transaction, reduced rates, VAT exemptions, or special tax regimes may apply.
Kyrgyzstan: The Lowest Standard VAT Rate in the EAEU
Kyrgyzstan has the lowest standard VAT rate among the five EAEU member states at 12%.
For entrepreneurs planning to operate in Central Asian markets, the country may be an attractive option due to its comparatively low value-added tax rate.
However, before registering a company, it is important to determine whether VAT registration is required for the intended business activity, what conditions apply to the chosen legal structure, and whether special tax regimes are available.
Business owners should also consider accounting costs, reporting requirements, and corporate income tax.
Kazakhstan: Standard VAT Rate of 16%
As of January 1, 2026, Kazakhstan’s standard VAT rate is 16%, up from the previous rate of 12%. Reduced rates apply to certain categories of goods and services, while specific transactions may qualify for a zero rate or VAT exemption.
For non-residents, Kazakhstan may be an attractive option for accessing the Central Asian market. However, tax conditions should be assessed in the context of the company’s specific activities.
Before registering, it is worth determining:
🡺 Whether VAT registration is required.
🡺 Where goods or services will be supplied.
🡺 What tax obligations apply to the foreign shareholder and the company.
🡺 Whether exemptions or special tax regimes are available.
Belarus: Standard VAT Rate of 20%
Belarus has a standard VAT rate of 20%. Special tax rules apply to certain goods and transactions.
Foreign entrepreneurs considering Belarus should look beyond the VAT rate and examine the requirements for registering a legal entity, maintaining accounting records, and meeting tax obligations.
Particular attention should be paid to trade within the EAEU. Although common principles govern indirect taxation between member states, documentation requirements and the conditions for applying a zero rate depend on the nature of the transaction.
Armenia: Standard VAT Rate of 20%
Armenia has a standard VAT rate of 20%. Certain transactions may qualify for a zero rate.
The country also offers other tax regimes, including turnover tax for eligible businesses. Eligibility depends on the type of activity, turnover, and statutory restrictions.
Foreign entrepreneurs should therefore determine which tax regime is available to their company before comparing the overall tax burden with that of Kyrgyzstan or Kazakhstan.
Russia: Standard VAT Rate of 22%
As of January 1, 2026, Russia’s standard VAT rate increased from 20% to 22%. A reduced rate of 10% remains available for certain categories of goods, while some transactions qualify for a zero rate. In addition, certain taxpayers using the simplified taxation system may qualify for special VAT rates of 5% or 7%, subject to applicable conditions.
For non-residents, choosing Russia requires a separate assessment of the company’s legal presence, tax status, business activities, and reporting obligations.
It is important not to confuse the standard VAT rate with special rates available to specific categories of taxpayers. A foreign company cannot automatically assume that it qualifies for the 5% or 7% rate simply because it is registered in Russia.
What Should Non-Residents Know Before Registering a Company?
A low VAT rate does not automatically make a country the most advantageous place to do business. Before making a decision, consider the following factors.
1. Tax regime. Determine whether the company can use the standard taxation system or a special regime, and identify any restrictions applicable to non-residents.
2. Customer locations. Tax treatment may vary depending on whether the company sells goods domestically, exports products, or provides cross-border services.
3. Trade within the EAEU. Despite common principles governing indirect taxation, trade between member states is subject to specific rules concerning the tax base, documentation, and eligibility for a zero VAT rate.
4. Corporate income tax. A low VAT rate does not necessarily mean a low corporate income tax burden. These taxes must be assessed separately.
5. Where the business is managed. If the owner lives in one country while the company is registered in another, additional tax obligations may arise in either jurisdiction.
Which EAEU Country Is Best for Your Business?
Based solely on standard VAT rates in 2026, Kyrgyzstan has the lowest rate at 12%. Kazakhstan applies a rate of 16%, Belarus and Armenia apply 20%, and Russia applies 22%.
However, for non-residents, the right choice depends on more than the VAT rate. Business activities, customer locations, available tax regimes, and company maintenance costs must also be considered.
The key takeaway: Kyrgyzstan has the lowest standard VAT rate among EAEU member states, but this does not mean that registering a business there will always be more advantageous. The overall tax burden and the legal requirements of the chosen country should be assessed before establishing a company.
Lexicomb can help you find a specialist who will review the tax rules in your chosen EAEU country, compare available options, and explain which jurisdiction best suits your business. You do not need to navigate complex legislation and tax requirements on your own — a specialist can guide you through the necessary steps and help prepare the documents required to register your company.