Establishing a company (gov.uk):
All legal entities, branches and representative offices in Kazakhstan are subject to state registration. You can register using a standard set of documents from the Ministry of Justice.
A business enterprise in Kazakhstan can be operated as:
A newly registered representative office or branch must comply with certain formalities, including:
Legal considerations
Standards and technical regulations:
Kazakhstan is gradually adopting international standards. It’s a member of theInternational Organization for Standardization (ISO) and International Laboratory Accreditation Cooperation (ILAC).
The Committee on Technical Regulation and Metrology (Gosstandart) is responsible for technical regulation in Kazakhstan.
The government owned National Center of Expertise and Certification manages product certification. It has introduced a hologram which acts as a mark of conformity with the inscription ‘Memstandard’.
Most products imported into Kazakhstan must be labelled in both Kazakh and Russian. Product labels should include:
Your partner may need to seek licences and certifications from state authorities for certain activities.
Intellectual Property (IP)
The National Institute of Intellectual Property (Kazpatent) has responsibility for IP.
Kazakhstan is a signatory to most major international agreements and conventions on intellectual property, but enforcement of the law is not strong.
You must discuss strategies for protecting your intellectual property in Kazakhstan with lawyers and other specialists before you enter the market.
VAT
VAT is charged at 12% on most goods and services in Kazakhstan. It is also charged on imported goods.
VAT is chargeable on company turnover that takes place in Kazakhstan.
VAT is to be replaced by sales tax in 2017.
Corporate income taxThe Tax Code has a corporate income tax rate for tax residents of 20% on worldwide income.
An annual property tax of 1.5% of average annual balance sheet value of property owned is payable by legal corporate entities.
Corporate income tax and social tax at aggregate rate of 3% of income can be paid if the legal entity has:
Foreign Ownership Restrictions
Under Kazakhstan law, all sectors of the economy are open to foreign investors, but with some restrictions in certain cases. Unsurprisingly the oil and gas sector are regulated by the much-amended 2010 Subsoil Law because of their strategic interest. With each amendment, the state’s role in the sector and share in oil production revenue have grown notably because of the subsequent decrease in prices. More specifically, the law gives the state the power to amend contracts of “strategic significance” or even terminate contracts deemed to threaten Kazakhstan’s economic security or national interests. Over 100 oil and gas fields are considered to be of strategic significance, including the major fields at Tengiz, Kashagan, and Karachaganak. The National Security Law limits telecommunication opportunities by not allowing foreign individuals or companies to manage or operate trunk communication lines, or own more than 49% of shares in long-distance or international communications operators owning land communication lines. [1]
The directions of foreign investment and restrictions
Due to its wealth of natural resources, foreign direct investment (FDI) plays a more significant role in the Kazakhstan economy than in most other former Soviet republics, and between 2005 and 2014, Kazakhstan attracted over US$ 208 billion of FDI — second only to Russia in the CIS. In 2014, FDI amounted to almost US$ 23 billion, the equivalent of around 11% of GDP. Together with governmental stability and an improving legal, tax and regulatory framework, Kazakhstan’s impressive mineral reserves (mainly oil and gas, but also uranium, gold, chrome, rare earth metals and diamonds) have been the main attraction.[1]
[1] Deloitte: Doing business in Kazakhstan 2016 Reach, relevance and reliability
All legal entities, branches and representative offices in Kazakhstan are subject to state registration. You can register using a standard set of documents from the Ministry of Justice.
A business enterprise in Kazakhstan can be operated as:
- limited liability partnerships which are separate legal entities and subject to taxation
- Joint Stock Companies (JSC) where shareholders have no liability and about USD $500,000 in capital is needed
- a representative office which can only conduct activities such as marketing and advertising
- a branch which can carry out commercial activity, but is not a separate legal entity
A newly registered representative office or branch must comply with certain formalities, including:
- registration for Value Added Tax (VAT)
- obtaining a seal (official stamp of the entity)
- opening a bank account
Legal considerations
Standards and technical regulations:
Kazakhstan is gradually adopting international standards. It’s a member of theInternational Organization for Standardization (ISO) and International Laboratory Accreditation Cooperation (ILAC).
The Committee on Technical Regulation and Metrology (Gosstandart) is responsible for technical regulation in Kazakhstan.
The government owned National Center of Expertise and Certification manages product certification. It has introduced a hologram which acts as a mark of conformity with the inscription ‘Memstandard’.
Most products imported into Kazakhstan must be labelled in both Kazakh and Russian. Product labels should include:
- product name
- manufacturer
- country of origin
- information on date of production
- period of validity
- storage conditions
- usage
Your partner may need to seek licences and certifications from state authorities for certain activities.
Intellectual Property (IP)
The National Institute of Intellectual Property (Kazpatent) has responsibility for IP.
Kazakhstan is a signatory to most major international agreements and conventions on intellectual property, but enforcement of the law is not strong.
You must discuss strategies for protecting your intellectual property in Kazakhstan with lawyers and other specialists before you enter the market.
VAT
VAT is charged at 12% on most goods and services in Kazakhstan. It is also charged on imported goods.
VAT is chargeable on company turnover that takes place in Kazakhstan.
VAT is to be replaced by sales tax in 2017.
Corporate income taxThe Tax Code has a corporate income tax rate for tax residents of 20% on worldwide income.
An annual property tax of 1.5% of average annual balance sheet value of property owned is payable by legal corporate entities.
Corporate income tax and social tax at aggregate rate of 3% of income can be paid if the legal entity has:
- income not exceeding about USD $166,000 over a calendar quarter
- average number of employees not exceeding 50
Foreign Ownership Restrictions
Under Kazakhstan law, all sectors of the economy are open to foreign investors, but with some restrictions in certain cases. Unsurprisingly the oil and gas sector are regulated by the much-amended 2010 Subsoil Law because of their strategic interest. With each amendment, the state’s role in the sector and share in oil production revenue have grown notably because of the subsequent decrease in prices. More specifically, the law gives the state the power to amend contracts of “strategic significance” or even terminate contracts deemed to threaten Kazakhstan’s economic security or national interests. Over 100 oil and gas fields are considered to be of strategic significance, including the major fields at Tengiz, Kashagan, and Karachaganak. The National Security Law limits telecommunication opportunities by not allowing foreign individuals or companies to manage or operate trunk communication lines, or own more than 49% of shares in long-distance or international communications operators owning land communication lines. [1]
The directions of foreign investment and restrictions
Due to its wealth of natural resources, foreign direct investment (FDI) plays a more significant role in the Kazakhstan economy than in most other former Soviet republics, and between 2005 and 2014, Kazakhstan attracted over US$ 208 billion of FDI — second only to Russia in the CIS. In 2014, FDI amounted to almost US$ 23 billion, the equivalent of around 11% of GDP. Together with governmental stability and an improving legal, tax and regulatory framework, Kazakhstan’s impressive mineral reserves (mainly oil and gas, but also uranium, gold, chrome, rare earth metals and diamonds) have been the main attraction.[1]
[1] Deloitte: Doing business in Kazakhstan 2016 Reach, relevance and reliability