The Kazakhstan government’s message to foreign investors: We’re open for business and ready to provide a favourable and enabling platform for investment in Kazakhstan and the broader CIS region

The Kazakhstan government recently announced a roadmap of specific and immediate measures designed to incentivise foreign direct investment and further privatise key sectors of its economy. The roadmap broadly outlines a series of measures to be implemented by the government in 2014. 

Proposed incentives for qualified investment projects:

  • Stabilization of tax rates, tariffs and environmental obligations
  • Exemption from corporate income tax
  • Rebate of up to 30% of investment costs upon completion of investment project
  • Guaranteed off-take by state-owned companies of goods and services produced by the investment project
  • Improved dispute settlement mechanisms and access to international commercial arbitration

Proposed investment reforms and undertakings:

  • State authorities and state-owned companies to participate in direct negotiations in relation to implementation of “anchor” investment projects
  • Single-window system for obtaining various state authorisations and the investment ombudsman
  • Maximum term for lease of agricultural land by foreign investors to be extended and subsidies to agricultural companies
  • Improvement of VAT administration and procedures for VAT return
  • Natural monopoly reforms including a new tariff policy
  • Reforms related to concession projects
  • Financing and improvement of bank distressed asset buy-out procedures by a specialised state-owned fund

The roadmap also mandates the continuation of the “People’s IPO” programme of national companies and a new wave of privatisation of state-owned companies beginning in June 2014. The Kazakhstan government has approved the privatisation of 106 companies affiliated with the Kazakhstan Sovereign Wealth Fund “Samruk-Kazyna” JSC between 2014 and 2018. Major players in the Kazakhstan market to be privatised by auction in 2014 include:

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Kazakhstan: key facts

  • Ninth largest country in the world
  • Sixth largest country around the world in terms of mineral resources
  • Mineral and resources base consists of 5,004 fields: estimated cost is around USD46 trillion
  • Customs union with Russia and Belarus provides access to Russian and Belarusian markets
  • Three of four BRIC countries are situated next to Kazakhstan: Russia, China, and India
  • Russia and China are the largest trading partners
  • Trade relations with Germany, Turkey, Switzerland, the Czech Republic, Italy, the U.S., Great Britain, South Korea, and others