FDI in Kazakhstan

2015 FDI and Investor Incentives

28th LAWASIA Conference Sydney, Australia
November 6 9, 2015
THE REPUBLIC OF KAZAKHSTAN

Population: 17,4 million people

GDP (2014): 264 894 billion USD
Area: 2,724,900 square kilometres (9th largest)
Resources: World's No. 1 producer of uranium,
exporter of industrial metals & wheat
Caspian Sea ports: Aktau, Eralievo, Bautino
Border states: Russia, China, Kyrgyzstan, Uzbekistan,
Turkmenistan
ECONOMY
According to IFC Doing Business 2015 Kazakhstan is on 77th place

Protection of minority investors

ECONOMY
Annual Index of Global Competitiveness

Rate Country Points

1 Switzerland 5,70
2 Singapore 5,65
3 USA 5,54
4 Finland 5,50
5 Germany 5,49
6 Japan 5,47

50 Kazakhstan 4,42
53 Russia 4,37
71 India 4,21
76 Ukraine 4,14
108 Kyrgyzstan 3,73
 ECONOMY
NATURAL RESOURCES
Global Rating of Kazakhstan by production

Global Rating of Kazakhstan by reserves

 ECONOMY
World Uranium Mining Production

Kazakhstan produces the largest

share of uranium from mines (41%
of world supply from mines in 2013),
followed by Canada (16%) and
Australia (9%).

WNA Global Nuclear Fuel Market Report data.

ECONOMY

Kazakhstan ranked 18 in annual survey Where to Invest in Mining 2015 (by Behre Dolbear Mineral Industry Advisors)

The 25 countries considered were ranked based on seven criteria.

Political system
Economic system
Currency stability
Social license issues
Permitting
Competitive taxation
Corruption
A score was calculated from the collective results of all seven criteria; this led to relative rankings. The lower the
numerical ranking, the lower the risk
ECONOMY
FOREIGN DIRECT INVESTMENTS

USD 58, 8 mln.

USD 21 mln.
Since 2005 attracted
more than
$ 200 billion FDI Top 5 investors USD 13 mln.

USD 12 mln

USD 13,7 mln.

FDI
PRIORITY SECTORS Gross FDI inflow by sector
The state program of industrial-innovative development for 2010-2014
Metallurgy
Oil and gas machinery
Energy
Agriculture & Food Processing
Construction Materials
Construction
Textiles
Tourism
Mining
Transport and logistics Manufacturing
Professional scientific and technical activities exploration
Wholesale and retail trade, repair of motor vehicles
Information and communication
Financial and insurance activities
Other
INVESTMENT PROJECTS
Investment projects might
be financed through:

Direct participation of foreign investors

Joint participation of state and private partner
Kazakhstan has established a highly preferential regime for those
investment projects classified as priority investment projects. The
primary criterion for a Project is investment of not less than $ 20 US
mln.
INVESTMENT INCENTIVES
Corporate income tax 0 % 10 years
Tax remissions Land tax 0% 10 years
Property tax 0% 8 years One stop principle for the investor
Up to 30% of the actual costs of construction and installation
Investment grants
works and equipment

Free work permits for foreign labor. Visa-free entrance for Rendering of services to
Assistance in obtaining
Immigration benefits citizens of 19 countries foreign investors and
necessary agreements and
representatives of the
permissions
Kazakhstan business

Stability of the tax legislation for all taxes except VAT and
Stability of legislation
excises (subject to investment contract)

IMPETUS Information, consulting,

Support of the investment
Customs duty of 0% for import: organizational and other
project prior to production
processing equipment and accessories to it, support of the investor
Customs facilities
spare parts,
raw materials and materials

Land grants The land plots, buildings, cars and the equipment in property
AVAILABLE STIMULATING INSTRUMENTS

Road Map for Business 2020, e.g., subsidizing interest rates, consulting services

KazNext Invest facilitate export of goods, e.g., search for customers

Expo-2017

Institutions: Investment Fund of Kazakhstan, Development Bank of Kazakhstan, DAMU,

KazExportGarant, etc.

Foreign Investors Council

Ombudsman; however, only prior to initiation of court proceedings

Investment court

Treaties: tax, investment, others

AVAILABLE STIMULATING INSTRUMENTS

Public Private Partnerships

Availability payments (compensation of investment and operation expenses, management fee)

State guarantees and suretyships

State co-financing / subsidies

Consumption guarantees

In-kind grants
AVAILABLE STIMULATING INSTRUMENTS
SPECIAL ECONOMIC ZONES

SEZPavlodar
SEZ BURABAI
Petrochemical
Tourism
industry
SEZ Astana- new city
Mixed

SEZ NINT
SEZ Saryarka
Petrochemical
Metallurgy
industry

SEZ Khorgos Eastern

gate
Logistics
SEZ Marine port
SEZ Park of Innovation
Aktau SEZ Chemical Park Technologies
Mixed Taraz It-industry
Chemical industry

SEZ Ontystik
Textile
AVAILABLE STIMULATING INSTRUMENTS
SPECIAL ECONOMIC ZONES

Taxation

CIT

Land use tax 0% Until 2020-2025

with possible prolongation

Property tax

No VAT (for goods consumed in SEZ)

Increasing marginal rate of depreciation for tax on software production up to 40% ;
0% social tax in SEZ "Park of innovative technologies" for 5 years, and depreciation rates for the software increased up to
40%;
Gratuitous provision of land in SEZ for a period of 10 years from the time of registration as a resident of SEZ;
Simplified procedure for the recruitment of foreign labor.
PROTECTION OF INVESTOR RIGHTS

according to Annual Index of Global Competitiveness for 2013-2014, Kazakhstan is on the 10th place by
protection of investor rights

signed Bilateral Investment Treaties (BITs) with 48 countries

bound to UNCITRAL Rules & NY Convention on Arbitration Awards

Foreign Investors Board

Foreign Investors Board under the President of Kazakhstan operates in the country. Board develops and offers
recommendations for President and Government of Kazakhstan for consideration on issues concerning
investment activities in Kazakhstan

Investment ombudsman
In order to apply systematic approach in solving issues of investors working in Kazakhstan, Investment
ombudsman is created. Its main function regulation of arguments and prevention of international
investigation
ASTANA INTERNATIONAL FINANCIAL CENTER 2018

Model of Dubai International Financial Center, changes were made into the Constitution

Tax remissions for 50 years

Visa-free regime for 5 years

Establishment of arbitration court governed by English law: court, authority and administration

Free rental office accommodations

Development of Islamic banking within Eurasian Economic Union

Saniya Perzadayeva
Managing Partner
saniya.p@colibrilaw.kz

+7 701 714 01 04
+7 727 344 92 92

www.colibrilaw.kz