DOING BUSINESS IN KAZAKHSTAN

The investment ombudsman is an official appointed (determined) by the Government of the Republic of Kazakhstan, who is entrusted with the functions of assisting in the protection of the rights and legitimate interests of investors.

In accordance with the Decree of the Government of the Republic of Kazakhstan dated April 20, 2019 No. 216, the Prime Minister of the Republic of Kazakhstan was appointed as the investment ombudsman.

The legal status of the Investment Ombudsman is enshrined in Art. 314–317 of the Entrepreneurial Code of the Republic of Kazakhstan, activities are ensured by the authorized investment body.

The activities of the Investment Ombudsman are regulated by Decree of the Government of the Republic of Kazakhstan dated December 26, 2015 No. 1069.

The main functions of the investment ombudsman:

• consideration of appeals from investors on issues arising during the implementation of investment activities in the Republic of Kazakhstan, and making recommendations for their resolution, including interaction with government agencies;
• providing assistance to investors in resolving emerging issues out of court and pre-trial;
• development and submission to the Government of the Republic of Kazakhstan of recommendations on improving the legislation of the Republic of Kazakhstan on investment activities.

The Commissioner for the Protection of the Rights of Entrepreneurs of Kazakhstan (Business Ombudsman) is appointed to the position by order of the President of the Republic of Kazakhstan for a period of four years and is accountable only to the President.

February 24, 2020 By order of the Head of State, Rustam Manarbekovich Zhursunov was appointed Commissioner for the Protection of the Rights of Entrepreneurs of Kazakhstan.

The legal status of the Commissioner for the Protection of the Rights of Entrepreneurs of Kazakhstan is determined by articles 307-313 of the Entrepreneurial Code of the Republic of Kazakhstan.

The main functions of the Business Ombudsman include representing, ensuring, protecting the rights and legitimate interests of entrepreneurs, considering their appeals, making recommendations to government bodies on the suspension of subordinate regulatory legal acts, sending petitions to the prosecutor's office in case of disagreement with the opinion of government bodies for the purpose of further restoration violated rights of entrepreneurs, filing a claim (application) in court in the manner established by the legislation of the Republic of Kazakhstan, etc.

Also, if violations of the rights of entrepreneurs are systemic in nature and the problems cannot be solved at the level of state bodies, the Commissioner for the Protection of the Rights of Entrepreneurs has the right to submit appeals to the President of the Republic of Kazakhstan for consideration.

The activities of the Commissioner for the Protection of the Rights of Entrepreneurs of Kazakhstan are carried out by the National Chamber of Entrepreneurs of the Republic of Kazakhstan “Atameken”.

To consider complaints from entrepreneurs, the Department of Legal Protection of Entrepreneurs operates within the structure of the NCE. All Regional Chambers of Entrepreneurs have similar units - departments for the legal protection of entrepreneurs, staffed by legal experts.

The department is a key unit in the structure of the NCE on issues of protecting the rights and legitimate interests of business entities and is part of the apparatus of the Commissioner for the Protection of the Rights of Entrepreneurs of Kazakhstan.

The department is the secretariat of the Council for the Protection of Entrepreneurs' Rights and Anti-Corruption, which considers systemic business problems and, based on the results of its meetings, sends recommendations to central government bodies.

Among the methods of work of the Council and the Department, interaction with the Prosecutor General’s Office, as well as the Anti-Corruption Agency, is important. Also, experts from the Department provide legal assistance to entrepreneurs, including assistance in drawing up statements of claim (reviews).

The Atameken Arbitration Center was created in 2014 in the form of a non-profit organization - a private institution for the consideration of disputes between organizations of all forms of ownership in order to help businessmen resolve disputes quickly and without damaging their reputation, while significantly saving on legal costs (the state fee for legal entities is 3% of the claim amount, in the arbitration center - 2%).

The Arbitration Center maintains a register of arbitrators, from which the parties can independently select an arbitrator to resolve their dispute. The parties also have the opportunity to choose any other specialist who can act as an arbitrator.

The regulations of the Atameken Arbitration Center provide for the simplest possible procedure for resolving a dispute. For example, the meeting may be held via video conferencing. At the same time, on most issues the parties themselves can determine the procedure for resolving the dispute. Moreover, due to less formalism when considering a dispute, the disputing party can independently defend its arguments, excluding the costs of a representative or lawyer.

The arbitration decision comes into force from the moment it is made and is mandatory. Enforcement of an arbitration award outside of Kazakhstan is effectively ensured by the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, to which 168 countries are parties.

The parties to disputes that were resolved at the Arbitration Center are Kazakh companies, as well as companies from Belarus, Spain, China, Latvia, Moldova, Poland, Russia, the USA, and Uzbekistan.

legal status of mediators and organizations providing mediation;
procedure for mediation.
Mediation is based on the following principles: voluntariness, confidentiality, equality of the parties, independence and impartiality of the mediator, as well as the inadmissibility of interference in the procedure.

Mediation is carried out by mutual agreement of the parties and upon the conclusion of a mediation agreement between them.

The mediation procedure for disputes (conflicts) involving individuals and (or) legal entities, when one of the parties is a government agency, is applied in cases provided for by the laws of the Republic of Kazakhstan.

The mediation procedure is not applied in criminal cases of corruption crimes and other crimes against the interests of the civil service and public administration.

If during mediation a settlement of the dispute is reached between the parties, a written agreement is drawn up and signed by the parties.

An agreement to resolve a dispute (conflict) is subject to execution by the parties to mediation voluntarily in the manner and within the time limits provided for by this agreement.

From July 1, 2021, in accordance with paragraph 3 of Article 102 of the Administrative Procedural Code of the Republic of Kazakhstan dated June 29, 2020 No. 350-VI (APC), the specialized interdistrict administrative court of Astana is considering claims of investors specified in parts 1-2 of the article 27 of the Civil Procedure Code of the Republic of Kazakhstan (Civil Procedure Code), on appealing administrative acts, administrative actions (inaction) of administrative bodies and officials.

From July 1, 2021, in accordance with paragraphs 1-2 of Article 27 of the Code of Civil Procedure, the specialized interdistrict economic court of Astana considers civil cases on investment disputes, except for cases within the jurisdiction of the specialized interdistrict administrative court of Astana, as well as claims of state bodies against investors related to investment activities of the investor, with the participation of:

1) a foreign legal entity (its branch, representative office) carrying out business activities on the territory of the Republic of Kazakhstan;

2) a legal entity created with foreign participation in the manner established by the legislation of the Republic of Kazakhstan, fifty or more percent of voting shares (stakes in the authorized capital) of which belong to a foreign investor;

3) investors if there is a concluded contract with the state for investment.

In accordance with the Law of the Republic of Kazakhstan dated June 29, 2020 No. 351-VI “On introducing amendments and additions to some legislative acts of the Republic of Kazakhstan on issues of administrative procedural legislation of the Republic of Kazakhstan,” Article 28 of the Civil Procedure Code, according to which the investment panel of the Supreme Court The Republic of Kazakhstan considered disputes of large investors as the first instance. Now all disputes under investment contracts and other agreements between the state and the investor will be considered in the administrative court, if it concerns actions, inactions, administrative acts and actions.

Other disputes arising from legal relations with the participation of an investor, not related to investment activities, as well as disputes with the participation of an investor that are subject to consideration in simplified proceedings, are subject to the jurisdiction of district (city) and equivalent courts in accordance with the jurisdiction established by Chapter 3 of the Code of Civil Procedure.
Judicial collegiums for administrative cases have been established in the Supreme Court and regional courts. By Decree of the President of the Republic of Kazakhstan dated January 31, 2022 No. 799, Aslan Sultanovich Tukiev was appointed Chairman of the Judicial Collegium for Administrative Cases of the Supreme Court of the Republic of Kazakhstan.

By Decree of the President of the Republic of Kazakhstan dated January 26, 2021 No. 500, specialized interdistrict administrative courts were created.

The main provisions regarding the consideration of cases in arbitration courts in relation to disputes arising from civil relations involving individuals and (or) legal entities, regardless of the place of residence or location of the subjects of the dispute within the state or outside it, are regulated by the Law of the Republic of Kazakhstan dated April 8, 2016 “On Arbitration”

According to the Law, arbitration is understood as arbitration established specifically for the consideration of a specific dispute, or permanent arbitration.

Today, in the Republic of Kazakhstan, according to the Arbitration Chamber of Kazakhstan, there are 17 permanent arbitrations.

According to the Law, the following disputes are not considered by arbitration:

• which affect the interests of minors, persons recognized in the manner prescribed by law as incompetent or partially capable;
• on rehabilitation and bankruptcy;
• between subjects of natural monopolies and their consumers;
• between government bodies and quasi-public sector entities.
• arising from personal non-property relations not related to property ones;
• in the absence of the consent of the authorized body to conclude an arbitration agreement with state-owned enterprises, as well as legal entities, fifty or more percent of voting shares (stakes in the authorized capital) of which directly or indirectly belong to the state;

A dispute may be submitted to arbitration if there is an arbitration agreement concluded between the parties. An arbitration agreement may be concluded by the parties in relation to disputes that have arisen or may arise between the parties in any specific civil law relationship.

An arbitration agreement in relation to a dispute that is pending in court may be concluded before the decision on the dispute is made by the said court. In this case, the court issues a ruling to leave the application without consideration.

The arbitration agreement is concluded in writing in the form of an agreement, an arbitration clause in a contract/document signed by the parties, or through the exchange of letters, telegrams, telephone messages, faxes, electronic documents or other documents defining the subjects and the content of their expression of will, as well as the exchange of a statement of claim and response to the claim.

The arbitration award is recognized as binding and, upon filing a written application with the court, is enforced in accordance with the civil procedural legislation of the Republic of Kazakhstan.

If the arbitration award does not specify a time limit, it is subject to immediate execution.

Forced execution of an arbitration award is carried out according to the rules of enforcement proceedings in force at the time of execution of the arbitration award, on the basis of a writ of execution issued by the court for the forced execution of the arbitration award.

Execution of foreign court decisions in Kazakhstan is carried out only in the presence of an international agreement: on legal assistance or a multilateral agreement between the CIS countries (in particular, the Chisinau Convention on Legal Assistance and Legal Relations in Civil, Family and Criminal Matters of October 7, 2002). Kazakhstan has concluded agreements on legal assistance with Azerbaijan, Turkmenistan, Uzbekistan, Georgia, the Kyrgyz Republic, as well as with Lithuania, the UAE, the DPRK, Pakistan, Turkey, Mongolia, the PRC, and Iran.

In general, for the recognition and enforcement of decisions of international arbitration courts, the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, June 10, 1958) (Decree of the President of the Republic of Kazakhstan dated October 4, 1995 N 2485 on accession of the Republic of Kazakhstan to the Convention) and the Convention on the Settlement of Investment Disputes between States and Individuals or Legal Entities of Other States (ICSID) (Washington, March 18, 1965) (ratified by the Republic of Kazakhstan by Law of the Republic of Kazakhstan dated 07/09/04 No. 589-II).

"Agrarian Credit Corporation" JSC was founded in 2001.
Currently, the Corporation is a large financial institution operating in the field of agribusiness development, implementing credit programs in priority areas for the development of agricultural production, defined as part of the State Program for the Development of the Agro-Industrial Complex of the Republic of Kazakhstan for 2017-2021, approved by the Decree of the President of the Republic of Kazakhstan on February 14, 2017, №42.
The mission of the Corporation is to promote the sustainable development of the agro-industrial complex of the Republic of Kazakhstan by forming an affordable and effective financing system through the involvement of private financial institutions and increasing the competence of the agro-industrial complex entities.
The Corporation is a part of "KazAgro" National Managing Holding and carries out the large-scale work for performing its activity in 16 branches and 1 representative office in all regions of Kazakhstan.
Since 2001, Kazakhstan has established 202 credit partnerships, involving about 20,000 agricultural producers. Over 17 years, these partnerships have granted more than 40,000 loans totaling 288 billion tenge.
Activities:

• The implementation of banking loan operations on the basis of an appropriate license;
• Participation in the implementation of programs to support the agricultural sector through lending;
• Attracting domestic and foreign investment;
• Participation in the development and implementation of investment projects in the agro-industrial complex;
• Leasing;
• Holding activity;
• Funding of financial institutions.
• In December 2021, as part of the merger of the Fund for Financial Support of Agriculture with JSC Agrarian Credit Corporation, the functions of lending to microbusiness, an operator in the field of insurance in the agro-industrial complex, and a rural mortgage agent were transferred as part of the project “With a diploma to the village!”.

KazAgroFinance JSC was founded on December 28, 1999, in accordance with Decree No. 1777 of the Government of the Republic of Kazakhstan, dated November 24, 1999, to address a key challenge in agriculture – the renewal of the technical fleet.
The Company is a part of KazAgro National Managing Holding .
In its turn, the Ministry of Agriculture of the Republic of Kazakhstan is a Sole Shareholder of the Holding. The Company carries out its activity based on the Law of the Republic of Kazakhstan ‘On Joint Stock Companies’ and in accordance with the best corporate management practice. The Company serves for the benefit of the Sole Shareholder, is accountable to the Sole Shareholder and the Board of Directors.
Mission:
is to facilitate the renewal of the agricultural machinery and equipment in the Republic of Kazakhstan by providing the quality and competitive leasing services.
Vision:
KazAgroFinance JSC aims to be a national leader in the Kazakhstani leasing market, offering high investment attractiveness and serving as the best partner for agricultural entities in renewing agricultural machinery and equipment.
Activities:
To implement statutory objectives the Company carries out the following activities:

1. leasing activity in the agricultural industry;
2. lending to AIC entities.

In all regions of Kazakhstan the company is represented by 14 branches. The Company has no subsidiaries.

In accordance with the Land Code of the Republic of Kazakhstan (hereinafter referred to as the Code), the entire land fund of the country is divided into 7 following categories according to their intended purpose:

1. agricultural land;
2. lands of settlements (cities, towns and rural settlements);
3. land for industry, transport, communications, for the needs of space activities, defense, national security and other non-agricultural purposes;
4. lands of specially protected natural areas, lands of health-improving, recreational, historical and cultural purposes;
5. land of the forest fund;
6. water fund lands;
7. reserve land.

The use of the land plot must correspond to its intended purpose. The legal regime of land is determined on the basis of their belonging to a particular category and the permitted use in accordance with the zoning of land (territory).
The assignment of lands to the specified categories, as well as the transfer of lands from one category to another in connection with a change in their intended purpose, are carried out by the Government of the Republic of Kazakhstan, local executive bodies of regions, cities of republican significance, the capital, districts, cities of regional significance, within their competence according to ; provision and withdrawal of land plots, including for state needs, established by law.
Land in the Republic of Kazakhstan is in state ownership. Land plots may also be in private ownership on the grounds, conditions and within the limits established by law.
Article 20 of the Land Code of the Republic of Kazakhstan establishes that the Republic of Kazakhstan recognizes and equally protects state and private ownership of land.
Subjects of ownership:

• subject of state property rights to land on the territory of the Republic - the Republic of Kazakhstan;
• subject of private ownership of land on the grounds, conditions and within the limits established by the Code - citizens and non-state legal entities. At the same time, citizens are understood as citizens of the Republic of Kazakhstan, foreigners and stateless persons, unless otherwise provided by law.

State-owned land plots may be provided for private ownership by citizens and non-state legal entities, with the exception of land plots that, in accordance with the Code, cannot be privately owned.
Land plots located in the border strip of the State Border of the Republic of Kazakhstan are not provided for private ownership and temporary land use.
It is allowed to use agricultural land located within the border strip of the State Border of the Republic of Kazakhstan by the population for grazing farm animals of a personal farmstead and haying without the right to erect any buildings (structures, structures).
Privately owned by citizens of the Republic of Kazakhstan there may be land plots for running a peasant or farm enterprise, personal subsidiary plots, afforestation, gardening, individual housing and summer cottage construction, as well as provided (provided) for development or built up with industrial and non-industrial, including residential, buildings (structures, structures) and their complexes, including lands intended for the maintenance of buildings (structures, structures) in accordance with their purpose.
Upon termination of the citizenship of the Republic of Kazakhstan from a person who is the owner of a land plot provided for running a peasant or farm enterprise, personal subsidiary farming, afforestation, gardening and summer cottage construction, from the citizenship of the Republic of Kazakhstan, the right of ownership is subject to alienation or re-registration in accordance with the norms of Article 66 of the Land Code.
Private property of non-state legal entities of the Republic of Kazakhstan may include land provided (provided) for agricultural production, afforestation, for development or built up with industrial and non-industrial, including residential, buildings (structures, structures) and their complexes, including lands intended for the maintenance of buildings (structures, structures) in accordance and with their purpose.

At the moment, in respect of agricultural land until December 31, 2026, a moratorium has been introduced on the provision to foreigners, stateless persons, foreign legal entities, as well as legal entities in the authorized capital of which the share of foreigners, stateless persons, foreign legal entities is more than fifty percent, the right of temporary land use on the terms of the lease of agricultural land in accordance with  of the President of the Republic of Kazakhstan dated May 6, 2016 No. 248.
Agricultural land plots owned by the state may be provided to citizens and legal entities of the Republic of Kazakhstan without foreign participation on the right to land use in the manner and under the conditions established by law.
It is not allowed to provide agricultural land plots to private ownership as state in-kind grants for agricultural production.
After the expiration of the moratorium On December 31, 2026, foreigners, stateless persons, foreign legal entities, as well as legal entities in the authorized capital of which the share of foreigners, stateless persons, foreign legal entities is more than fifty percent, will be able to own agricultural land only on the right of temporary land use under a lease for up to twenty-five years.
After the expiration of the moratorium December 31, 2026, the provision of private ownership of an agricultural land plot is carried out on a paid basis.
After the expiration of the moratorium December 31, 2026, citizens and non-state legal entities interested in granting the right of private ownership of a land plot (land plots) for running a peasant or farm enterprise, agricultural production and afforestation, can:

1. acquire the right of private ownership of a land plot at a price equal to the cadastral (estimated) value of the land plot, determined in accordance with the law;
2. acquire the right of private ownership of a land plot at a preferential price, determined from its cadastral (assessed) value.

At the same time, the size of the preferential price for land plots by administrative-territorial units is established by the Government of the Republic of Kazakhstan.
Citizens and non-state legal entities of the Republic of Kazakhstan who previously purchased from the state the right to permanent land use (the right to long-term land use) of a land plot for running a peasant or farm enterprise and agricultural production in accordance with the legislation of the Republic of Kazakhstan that was in force at the time of the transactions, from the moment the Code came into force become owners of land plots without charging an additional fee for acquiring the right of private ownership within the norms of land plots established by the Code.

Privately owned by foreigners, stateless persons and foreign legal entities (non-state) may be land plots for development or built up with industrial and non-industrial, including residential, buildings (buildings, structures) and their complexes, including land intended for for maintenance of buildings (structures, structures) in accordance with their purpose. Land plots for agricultural production and afforestation cannot be provided for private ownership of foreigners, stateless persons and foreign legal entities (non-state).

Land plots located in the border zone of the State Border of the Republic of Kazakhstan cannot be owned by foreigners, stateless persons, citizens of the Republic of Kazakhstan who are married (matrimony) with foreigners or stateless persons, as well as foreign legal entities and legal entities of the Republic Kazakhstan with foreign participation.

Marriage

When entering into a marriage (matrimony) between citizens of the Republic of Kazakhstan with foreigners or stateless persons, the right of ownership of land plots located in the border zone and border strip of the State Border of the Republic of Kazakhstan is subject to re-registration or alienation in accordance with the norms of Article 66 of the Code.

Joining a legal entity

When a foreigner or a stateless person, a foreign legal entity, a legal entity of the Republic of Kazakhstan with foreign participation becomes a participant (shareholder) of a legal entity of the Republic of Kazakhstan, the right of ownership of land plots located in the border zone and the border strip of the State Border of the Republic of Kazakhstan is subject to re-registration or alienation in accordance with the provisions of Article 66 of the Land Code.

Obtaining a state in-kind grant for ownership

Land plots may be provided as state in-kind grants by the authorized body for investments in agreement with the authorized body for state property management and (or) the central authorized body for land management, as well as local executive bodies for temporary free use, or on the right of temporary gratuitous land use with subsequent gratuitous transfer of ownership or land use in case of fulfillment of investment obligations in accordance with the investment contract.

The basis for the gratuitous transfer of the provided state in-kind grant into ownership or land use is the decision of the authorized body for investments, which is taken after the expiration of the investment contract, if the investor fulfills investment obligations in accordance with the investment contract concluded between the investor and the authorized body for investments.

Obtaining ownership of a land plot within the framework of the SEZ and IZ

Participants of special economic zones, industrial zones of republican and regional significance have the right to redeem land plots received in accordance with the legislation of the Republic of Kazakhstan on special economic and industrial zones, in the manner prescribed by the Code, in the following cases:

1. after the expiration of the period of operation of the special economic zone, subject to the fulfillment of the obligations stipulated by the agreement on the implementation of activities as a participant in the special economic zone;
2. at any time, subject to the commissioning of all facilities provided for by the project of a participant in an industrial zone of republican or regional significance.

At the same time, a participant in an industrial zone of republican or regional significance, in the case provided for in subparagraph 2) above, has the right to buy out a land plot at a price equal to the cadastral (assessed) value established at the time of conclusion of an agreement on activities in an industrial zone of republican or regional significance.

In the event that a participant in an industrial zone of republican or regional significance does not complete the construction of real estate objects and (or) buildings (structures) associated with them at the time of the abolition of an industrial zone of republican or regional significance, local executive bodies are granted the right to paid land use for a period of not more than three years.

Participants of special economic zones, industrial zones of republican and regional significance, submit an application to the relevant management company.

Attached to the application:

• a document or a notarized copy of a document certifying the right to a land plot;
• certificate from the real estate center on the absence of encumbrances on the land plot that prevent transactions;
• certificate of state registration (re-registration) of a legal entity (for legal entities);
• copy of identification document (for individual entrepreneurs).

For participants in a special economic zone, industrial zone of republican or regional significance, who received land plots in accordance with the  of the Republic of Kazakhstan “On Special Economic and Industrial Zones”, documents certifying the right to a land plot are an agreement on the implementation of activities and a scheme of a land plot issued by the relevant management company.

The land use right may be permanent or temporary, alienable or inalienable, acquired for a fee or free of charge.

Land users do not have the right to independently change the purpose of a land plot in the event of alienation and transfer of land use rights.

The land use right arises on the basis of:

1. acts of state bodies;
2. civil law transactions;
3. other grounds provided for by the legislation of the Republic of Kazakhstan.

Right of permanent land use

On the right of permanent land use, land plots are provided to the following state land users:

1. legal entities engaged in agricultural and forestry production, as well as for research, experimental and educational purposes;
2. legal entities engaged in land use on the lands of specially protected natural areas;
3. in other cases provided for by legislative acts of the Republic of Kazakhstan.

The right of permanent land use cannot belong to foreign land users.

The granting of land use rights to citizens and legal entities is carried out on the basis of a decision of the local executive body of the region, city of republican significance, the capital, district, city of regional significance in accordance with the competence to grant the right to a land plot.

When granting land users the right to temporary land use, the authorized body of a region, city of republican significance, the capital, district, city of regional significance, within its competence, concludes with such land users lease agreements for a land plot or agreements for temporary gratuitous land use on the basis of an appropriate decision of the Government of the Republic of Kazakhstan or a local executive body on granting temporary land use rights.

State in-kind grants are one of the types of investment preferences provided by legal entities of the Republic of Kazakhstan, including those with foreign participation, that have concluded an investment contract with the government of the Republic of Kazakhstan represented by the authorized investment body.

As state in-kind grants, the following can be transferred: land plots, buildings, structures, machinery and equipment, computers, measuring and control instruments and devices, vehicles (except for cars), production and household equipment.

To conclude an investment contract, the applicant must apply for investment preferences by applying for the state service "concluding an investment contract", in paper form through the public service centers of the state corporation "Government for Citizens" or electronically through the e-government portal www.egov.kz.

The maximum amount of the state in-kind grant is no more than thirty percent of the volume of investments in fixed assets of a legal entity of the Republic of Kazakhstan.

If the estimated value of the requested state in-kind grant exceeds the specified maximum amount, a legal entity of the Republic of Kazakhstan has the right to receive the requested property with payment of the difference between its estimated value and the maximum amount of the state in-kind grant.

Land plots provided as state in-kind grants are state property transferred on the right of temporary free land use to a legal entity of the Republic of Kazakhstan for the implementation of an investment project with subsequent free transfer to ownership or land use .
It is not allowed to provide agricultural land plots to private ownership as state in-kind grants for agricultural production.

According to the Land Code, the provision of land plots or the right to lease land plots that are state-owned and not provided for land use is carried out at auctions (tenders, auctions), except for cases when a land plot or the right to lease a land plot is granted:

1. for the implementation of investment projects by local executive bodies, in this case, the project must be recognized as an investment authorized body for investments;
2. foreign states and international organizations in accordance with international treaties;
3. private partners for the implementation of projects public-private partnership or concessionaires for the implementation of concession projects;
4. social-entrepreneurial corporations for the implementation of investment and innovation projects;
5. subjects of industrial and innovative activity for the implementation of industrial and innovative projects.

Thus, without concluding an investment contract, the investor has the right to apply for a land plot for temporary free land use by contacting the local executive body at the location of the land plot or a social and entrepreneurial corporation. However, it must be remembered that the guarantee of stability applies only to land provided as state in-kind grants.

State registration is compulsory for all legal entities set up in the territory of the Republic of Kazakhstan, whatever purposes of establishment, profile activities, and participants (shareholders).

Branches and representative offices located in the territory of Kazakhstan are the structural subdivisions of legal entities, accordingly they must be formally registered with the state registration authorities, but they do not have status of legal personality. (Article 3 of the Law of the Republic of Kazakhstan "On State Registration of Legal Entities and Registration of Branches and Representative Offices" (hereinafter – the "Registration Law").

In order to set up a legal entity, it is necessary first to:

• decide on the legal organizational form or organizational legal structure of a business entity to be set up;
• decide on the category of a business entity to be set up;
• when the core activities of a legal entity is provision of financial services, a permit from the National Bank of the Republic of Kazakhstan should be obtained; (Article 6 of the Law on Registration);
• obtain an approval of the antimonopoly agency if a business entity falls under one of the following categories:
• Business entities seeking a dominant or monopolistic position in the relevant commodity market, as well as state-owned enterprises;
• Business entities that belong (hold by) to the government or its affiliated companies for more than fifty percent and, that seek to carry out activities in the Republic of Kazakhstan, except for the cases when the establishment of such business entities are expressly provided for by the laws of the Republic of Kazakhstan, decrees of the President of the Republic of Kazakhstan or resolutions of the Government of the Republic.
• obtain a business immigrant visa "C5"category, if a founder /shareholder of a business entity is a foreign national.
• Pursuant to the Migration Law, foreign nationals cannot set up a business entity or acquire a stock/shareholding without business immigrant visa;
• Other permits due to the type of activity in accordance with the laws of the Republic of Kazakhstan.

Legal entity forms

A legal entity may be commercial or non-commercial, i.e. a profit-oriented company that seeks to generate incomes as the main goal of its activities (a commercial company) or non-profit company that does not pursue incomes generation and not distributing the net income received among the participants (non-commercial company).

A legal entity - commercial company can be set up in the form of a state enterprise, a business partnership, a joint-stock company or a production cooperative. (paragraphs 1-2 of Article 34 of the Civil Code of the Republic of Kazakhstan).

The most common organizational and legal form of Kazakhstani companies is a limited liability partnership.

Business entities and categories

Citizens, Candace (ethnic Kazakh people, immigrated to Kazakhstan under government programme) and non-governmental commercial legal entities that carry out business activities (private business entities), inter alia, state-owned enterprises (state business entities) are regarded as business entity.

In order to set up a business entity, it is required to decide on a business size category – small, medium or large, i.e. to decide on an estimated average annual number of employees and average annual income of the business entity.

Business entities are categorized as small business, including micro business entities;
medium businessand large business entities by the number of the average annual number of employees and average annual income

JSC "Industrial Development Fund" is a subsidiary of Development Bank of Kazakhstan JSC and is part of Baiterek National Management Holding JSC. The Industrial Development Fund (formerly DBK-Leasing JSC) was established on September 6, 2005 to expand the financing options for investment projects provided by Development Bank of Kazakhstan JSC.

In accordance with the Decree of the Government of the Republic of Kazakhstan dated August 18, 2020 No. 521 “On the establishment of the Industrial Development Fund”, as well as within the framework of the Comprehensive Plan for Restoring Economic Growth, the Industrial Development Fund was established, whose activities are aimed at providing affordable lending to breakthrough manufacturing enterprises at a rate no more than 3%, at the expense of funds, including those collected under the extended obligations of producers.

The objectives of the Fund include implementing state investment policies to support entrepreneurs in Kazakhstan operating in priority sectors of the economy, as well as aiding in attracting external and internal investments in Kazakhstan's economy through leasing financing.

The mission of the Fund is to assist in the modernization and renewal of fixed assets of enterprises in the industrial and infrastructure sectors.

Industrial Development Fund JSC, as one of the key operators of state and government programs such as the State Program for Industrial and Innovative Development and the State Infrastructure Development Program "Nurly Zhol", provides medium- and long-term financial leasing services in priority sectors of the economy, such as manufacturing and transportation infrastructure.

The Joint Stock Company "Center for Trade Policy Development" (hereinafter referred to as QazTrade) was established in accordance with the Decree of the Government of the Republic of Kazakhstan dated June 30, 2006 No. September 2019 No. 663 "On renaming the Trade Policy Development Center Joint Stock Company into the QazTrade Trade Policy Development Center Joint Stock Company".

Types of activities of the Company:

1)Export accelerator - a program for small and medium-sized entrepreneurs that helps everyone to prepare for the introduction of goods to foreign markets. QazTrade employees within the framework of the program will help: choose a profitable direction for export; prepare the goods to receive the standards of the importing country; find a potential buyer; draft the text of the contract; determine the optimal logistics route. The export accelerator currently operates in such countries as Canada, Australia, Russia, USA, Germany, France and New Zealand.

2) Reimbursement of part of the costs of promoting processed domestic goods to foreign markets, including costs such as participation in foreign exhibitions, forums, fairs, product advertising, maintenance of branches, representative offices, retail space, foreign certification, accreditation.

3) E-commerce - bringing domestic companies to the Alibaba electronic platform. Based on the selection results, the Company creates profiles for 50 Kazakhstani companies, the Company's employees consult applicants on all issues related to trading on the Alibaba.com site. At the moment, there is an export contract for the supply of bran to Mongolia in the amount of about 230 thousand US dollars.

4) The study and analysis of the trade industry of the Republic of Kazakhstan, which include the identification of new trends and the development of measures for the development and support of domestic trade entities, the study of international best practices for the development of trade, the analysis of the current legislation of the Republic of Kazakhstan in the field of trade and the development of proposals for its improvement, holding a monthly monitoring prices for socially significant food products.

5) External and economic integration

6) Export consulting - a full range of services for the development and promotion of exports, including consulting, service support, acceleration and an educational program.

JSC "Kazakhstan Center for Industry and Export "Qazindustry" - National Think Tank of industrial development, a single operator for increasing labor productivity, technological development, local content and export promotion through reimbursement of part of the costs.

Types of activities of the Company:

1) Reimbursement of part of the costs to the subjects of industrial and innovative activities to increase labor productivity and the development of territorial clusters

2) Reimbursement of part of the costs to the subjects of industrial and innovative activities to promote domestic processed goods, works and services in the domestic market

3) Activities in special economic zones and industrial zones

The export insurance company "KazakhExport" is a state-run export insurance agency whose main activity is to support exports and implement insurance instruments for the protection of export operations. At the moment, he is in trust with Baiterek National Management Holding JSC. The export insurance company “KazakhExport” was established to insure commercial and political risks accompanying the implementation of foreign economic contracts of enterprises exporting the non-primary sector.

"KazakhExport" carries out insurance and reinsurance activities on the basis of a license from the Committee for Control and Supervision of the Financial Market and Financial Organizations of the National Bank of the Republic of Kazakhstan.

The export insurance company “KazakhExport” was the financial operator in support of trade finance operations of the State Program on Forced Industrial-Innovative Development of the Republic of Kazakhstan for 2010-2014, (SPAIID) and the program "Exporter-2020". As part of the implementation of the SPAIID measures in the field of export promotion of products of the non-primary sector, "KazakhExport" received KZT 1.5 billion to increase its share capital for the development of trade finance operations. Currently, the Republic of Kazakhstan is systematically implementing a set of measures aimed at supporting domestic entrepreneurship and the manufacturing industry. Thus, the government’s largest industrial initiative for industrial development of "KazakhExport" is the State Program for Industrial and Innovative Development (SPIID) for 2015-2019, under which "KazakhExport" is an export support operator whose activities are aimed at creating adequate mechanisms to support the production of sectors in overseas markets.

An investment contract is an agreement for the implementation of an investment project, which provides for the implementation of investments and the provision of investment preferences.

Investment preferences are targeted benefits provided in accordance with  the legislation of the Republic of Kazakhstan  to legal entities of the Republic of Kazakhstan implementing an investment project and to leasing companies importing technological equipment as part of the implementation of an investment project on the basis of a financial leasing agreement for a legal entity of the Republic of Kazakhstan implementing an investment project.

The conclusion of an investment contract for the implementation of an investment project, which provides for the implementation of investments and the provision of investment preferences, is a free automated state service that is provided electronically on the electronic government portal www.egov.kz , from where the applicant is automatically directed to the website www.elicense.kz .

List of documents and information requested from the service recipient, necessary for the provision of the public service:

1) an application for the provision of investment preferences in the form of an electronic document certified by an electronic digital signature (hereinafter referred to as EDS) of the service recipient;
2) an electronic copy of the charter of the service recipient, certified by the digital signature of the head of the legal entity;
3) an electronic copy of the business plan of the investment project, drawn up in accordance with the appendix to this list of basic requirements for the provision of public services, certified by the digital signature of the head of the legal entity;
4) if the application for the provision of investment preferences provides for the provision of a state grant in kind, the service recipient shall submit an electronic copy of the documents confirming the amount (cost) of the state grant in kind requested by the service recipient (assessment of the grant in kind) in accordance with paragraph 1 of Article 203 of the Law "On State Property").

In the case of an assessment of the market value of municipal property, the customer is the local executive body at the expense of budgetary funds.

In the case of an assessment of the market value of republican property, the customer is the authorized body in the sphere of management of republican property at the expense of budgetary funds;

5) if the application for the provision of investment preferences provides for the provision of a state grant in kind, the service recipient shall submit an electronic copy of the preliminary approval for the provision of a state grant in kind by the local executive body;
6) if the application for the provision of investment preferences provides for the provision of tax preferences, the service recipient shall submit an electronic copy of the conclusion of the comprehensive non-departmental examination of construction projects in the manner established by Article 64-1 of the Law, certified by the digital signature of the head of the legal entity;
7) if the application for investment preferences provides for the right to attract foreign labor, the service recipient shall submit an electronic copy of the passport or identity document of the foreign worker being attracted (with a translation into Kazakh or Russian), an employment contract concluded between the employer and the foreign worker being attracted (with a translation into Kazakh or Russian), documents confirming his qualifications and (or) education (with a translation into Kazakh or Russian);
8) in the case of implementation of an investment priority project in priority tourist areas, a letter from the central executive body exercising functions of state administration in the field of tourism activities, confirming the implementation of the investment priority project in priority tourist areas, is attached.

Information on identity documents, on state registration (re-registration) of a legal entity, contained in state information systems, is obtained from the relevant state information systems through the “electronic government” gateway.

An investment project is a set of measures that provide for investments in the creation of new, expansion and (or) renewal of existing production of goods, works and services, including the production of goods, works and services created, expanded and (or) renewed during the implementation of a public-private partnership project, including a concession project.

The following types of investment preferences are provided under the investment project:

DUTY-FREE IMPORT
A legal entity of the Republic of Kazakhstan implementing an investment project within the framework of an investment contract is exempt from customs duties when importing technological equipment, components and spare parts for it, raw materials and (or) materials in accordance with  the legislation  of the Republic of Kazakhstan.

The leasing company is exempt from customs duties when importing technological equipment supplied as part of the implementation of an investment project on the basis of a financial leasing agreement for a legal entity of the Republic of Kazakhstan implementing the investment project.

Exemption from customs duties on the import of technological equipment and components for it is granted for the duration of the investment contract,  but not more than five years from the date of registration of the investment contract.

Products, components and raw materials

• Technological equipment  refers to goods intended for use in the technological process of an investment project.
• Components are understood as  components that together make up the structural integrity of process equipment.
• Raw materials and/or materials are understood to mean  any mineral, component, part or other product used to obtain finished products through a technological process.

Release dates

Exemption from customs duties  on the import of technological equipment and components for it is granted for the duration of the investment contract, but not more than five years  from the date of registration of the investment contract.

Exemption from customs duties  on the import of spare parts for technological equipment for a period of up to five years  is granted to legal entities of the Republic of Kazakhstan depending on the volume of investments in fixed assets and in the event that the investment project complies with the list of priority types of activity approved by the Government of the Republic of Kazakhstan.

Exemption from customs duties  on the import of raw materials and (or) materials is granted for a period of five years from the date of commissioning of  fixed assets according to the work program.

The work program is an appendix to the investment contract, defining the calendar schedule of work for the implementation of the investment project before the commissioning of production.

If the work program provides for the introduction of two or more fixed assets, the calculation of the period of exemption from customs duty on the import of spare parts for technological equipment, raw materials and (or) materials is carried out from the date when the first fixed asset is put into operation according to the work program.

TAX PREFERENCES
Tax preferences are granted to legal entities of the Republic of Kazakhstan in the manner and under the conditions stipulated by the tax legislation of the Republic of Kazakhstan.

For investment projects, with the exception of investment priority projects, there is an exemption from value added tax on the import of raw materials and (or) materials within the framework of an investment contract.

IMPORT EXEMPTION FROM VAT
within the framework of an investment contract

Exemption from  value added tax on the import of raw materials and (or) materials  within the framework of an investment contract for investment projects, with the exception of priority investment projects, subject to simultaneous compliance with the following conditions:

• raw materials and (or) materials are included in  the list  of raw materials and (or) materials, the import of which is exempt from value added tax within the framework of an investment contract, approved by the authorized state body for investments in agreement with the central authorized body for state planning and the authorized body;
• the import of raw materials and (or) materials is documented by the documents provided for by  the customs legislation of the Eurasian Economic Union  and (or)  the customs legislation of the Republic of Kazakhstan ;
• imported raw materials and (or) materials will be used by the value added tax payer within the limitation period exclusively when carrying out activities within the framework of the investment contract.

Exemption from value added tax on import of raw materials and (or) materials under an investment contract is granted to legal entities of the Republic of Kazakhstan for a period of five consecutive years, starting from the 1st day of the month in which fixed assets provided for in the work program, which is an appendix to the investment contract concluded in accordance with the legislation of the Republic of Kazakhstan in the field of entrepreneurship, are put into operation. If the work program provides for the introduction of two or more fixed assets, the calculation of the period of exemption from value added tax on import of raw materials and (or) materials under an investment contract is carried out starting from the 1st day of the month in which the first fixed asset under the work program is put into operation.

STATE GRANTS IN KIND
State in-kind grants  are property that is the property of the Republic of Kazakhstan, transferred for temporary gratuitous use or provided on the basis of the right of temporary gratuitous land use to a legal entity of the Republic of Kazakhstan for the implementation of an investment project with subsequent gratuitous transfer to ownership or land use.

State in-kind grants, in accordance with the procedure established by law, are provided by the authorized body for investments in agreement with the authorized body for state property management and (or) the central authorized body for land management, as well as local executive bodies for temporary gratuitous use or on the right of temporary gratuitous land use with subsequent gratuitous transfer of ownership or land use in case of fulfillment of investment obligations in accordance with the investment contract.

The basis for the gratuitous transfer of the provided state in-kind grant into ownership or land use is the decision of the authorized body for investments, which is taken no later than three months from the date of receipt of the audit report, which provides for the fulfillment by the investor of investment obligations in accordance with the investment contract concluded between the investor and the authorized body for investments .

As state in-kind grants, the following can be transferred: land plots, buildings, structures, machinery and equipment, computers, measuring and control instruments and devices, vehicles (with the exception of cars), production and household equipment.

The assessment of state in-kind grants is carried out at their market value in the manner prescribed by the legislation of the Republic of Kazakhstan.

The maximum amount of the state in-kind grant is no more than thirty percent of the volume of investments in fixed assets of a legal entity of the Republic of Kazakhstan.
If the estimated value of the requested state in-kind grant exceeds the specified maximum amount, a legal entity of the Republic of Kazakhstan has the right to receive the requested property with payment of the difference between its estimated value and the maximum amount of the state in-kind grant.

An  investment priority project  is an investment project:

• for the creation of new production facilities for goods, works and services, providing for the implementation by a legal entity of investments in the construction of new production facilities, in an amount of not less than two million times the monthly calculation indicator established by the law on the republican budget and in effect on the date of filing an application for the provision of investment preferences, unless otherwise provided by this Code;
• when creating new investment objects in the food and light industry, the amount of investment of a legal entity shall be no less than one million times the monthly calculation indicator established by the law on the republican budget and in effect on the date of filing an application for the provision of investment preferences;
• when creating facilities capable of satisfying the needs of tourists in priority tourist areas, the amount of investment by a legal entity shall be no less than two hundred thousand times the monthly calculation indicator established by the law on the republican budget and in effect on the date of filing an application for the provision of investment preferences, unless otherwise provided for in part four of this subparagraph;
• when creating new hotels, expanding and (or) renovating (reconstructing) existing hotels, the amount of investment of a legal entity must be no less than a million times the monthly calculation indicator established by the law on the republican budget and in effect on the date of filing an application for investment preferences. In this case, the requirement of this part applies if the creation of new hotels, expansion and (or) renovation (reconstructing) of existing hotels simultaneously meets the following conditions:
• implementation of the project outside the cities of republican significance and the capital;
• compliance of the provided services with the category “three”, “four”, “five” stars in accordance with international standards;
• conclusion of a comprehensive business license agreement (franchising) or franchise with an international hotel chain that has at least a thousand hotels in ten or more foreign countries;
• for the expansion and (or) renewal of existing production facilities for goods, works and services, providing for the implementation by a legal entity of investments in an amount of not less than five million times the monthly calculation indicator established by the law on the republican budget and in effect on the date of filing an application for the provision of investment preferences for changing fixed assets, including renewal (renovation, reconstruction, modernization) of existing production facilities that manufacture products, unless otherwise provided by this Code.

The following investment preferences are provided under the investment priority project:

DUTTY FREE IMPORT

A legal entity of the Republic of Kazakhstan implementing an investment project under an investment contract is exempt from customs duties when importing technological equipment, components and spare parts for it, raw materials and (or) materials in accordance with the  legislation  of the Republic of Kazakhstan.

The leasing company is exempt from customs duties when importing technological equipment supplied as part of the implementation of the investment project on the basis of a financial leasing agreement for a legal entity of the Republic of Kazakhstan implementing the investment project.

Exemption from customs duties on the import of technological equipment and components for it is granted for the duration of the investment contract,  but not more than five years from the date of registration of the investment contract. Notification of this decision is sent by the authorized body for investments within five working days to the customs body.

Goods, components and raw materials

• Technological equipment  refers to goods intended for use in the technological process of an investment project.
• Components are understood as  components that together make up the structural integrity of the process equipment.
• A raw material and (or) material is understood as  any mineral, component, part or other product used to obtain finished products through a technological process.

Release dates

Exemption from customs duties on the import of technological equipment and components for it is granted for the duration of the investment contract, but not more than five years from the date of registration of the investment contract.

Exemption from customs duty on the import of spare parts for technological equipment for a period of up to five years is granted to legal entities of the Republic of Kazakhstan, depending on the volume of investments in fixed assets and if the investment project complies with the list of priority activities approved by the Government of the Republic of Kazakhstan.

Exemption from customs duties on the import of raw materials and (or) materials is granted for a period of five years from the date of commissioning of fixed assets under the work program.

The work program is an annex to the investment contract, which determines the calendar schedule for the implementation of the investment project before putting production into operation.
If the work program provides for the commissioning of two or more fixed assets, the calculation of the period for exemption from customs duty on the import of spare parts for technological equipment, raw materials and (or) materials is carried out from the date when the first fixed asset was put into operation under the work program.

STATE GRANTS IN KIND
State in-kind grants  are property that is the property of the Republic of Kazakhstan, transferred for temporary gratuitous use or provided on the basis of the right of temporary gratuitous land use to a legal entity of the Republic of Kazakhstan for the implementation of an investment project with subsequent gratuitous transfer to ownership or land use.

State in-kind grants, in accordance with the procedure established by law, are provided by the authorized body for investments in agreement with the authorized body for state property management and (or) the central authorized body for land management, as well as local executive bodies for temporary gratuitous use or on the right of temporary gratuitous land use with subsequent gratuitous transfer of ownership or land use in case of fulfillment of investment obligations in accordance with the investment contract.

The basis for the gratuitous transfer of the provided state in-kind grant into ownership or land use is the decision of the authorized body for investments, which is taken no later than three months from the date of receipt of the audit report, which provides for the fulfillment by the investor of investment obligations in accordance with the investment contract concluded between the investor and the authorized body for investments .

As state in-kind grants, the following can be transferred: land plots, buildings, structures, machinery and equipment, computers, measuring and control instruments and devices, vehicles (with the exception of cars), production and household equipment.

The assessment of state in-kind grants is carried out at their market value in the manner prescribed by the legislation of the Republic of Kazakhstan.

The maximum amount of the state in-kind grant is no more than thirty percent of the volume of investments in fixed assets of a legal entity of the Republic of Kazakhstan.
If the estimated value of the requested state in-kind grant exceeds the specified maximum amount, a legal entity of the Republic of Kazakhstan has the right to receive the requested property with payment of the difference between its estimated value and the maximum amount of the state in-kind grant.

TAX PREFERENCES FOR
INVESTMENT PRIORITY PROJECT

In accordance  with Article 290 of the Entrepreneurial Code of the Republic of Kazakhstan,  tax preferences are granted to legal entities of the Republic of Kazakhstan in the manner and under the conditions stipulated by  the tax legislation  of the Republic of Kazakhstan.

Types of tax preferences:

• reduction of the calculated amount of corporate income tax by 100 percent;
• application of the coefficient 0 to land tax rates;
• calculation of property tax at a rate of 0 percent of the tax base;

KPN
An organization implementing an investment priority project to create new production facilities and (or) to expand and upgrade existing production facilities:

1) reduces the corporate income tax calculated in accordance with Article 302 of this Code by 100 percent on income received from the implementation of priority types of activities through the operation of fixed assets that were introduced as new production facilities, expanded or updated within the framework of a priority investment project.

The income of an organization implementing a priority investment project from other types of activities that are not related to priority ones is subject to corporate income tax in the generally established manner.

An organization implementing an investment priority project maintains separate tax records of taxable objects and (or) objects related to taxation for the purpose of calculating tax liabilities.

If the provisions of the investment contract for the implementation of a priority investment project for the expansion and (or) renewal of existing production facilities provide for the phased introduction of fixed assets that produce products, then separate tax accounting is maintained for each fixed asset that produces products in accordance with the tax accounting policy.

An organization implementing a priority investment project does not have the right to apply other provisions of this Code for such a project that provide for a 100 percent reduction in corporate income tax;

2) determines depreciation charges for the value balances of groups (subgroups) of fixed assets put into operation within the framework of a priority investment project by applying the depreciation rates established by paragraph 2 of Article 271 of this Code to such value balances of groups (subgroups) at the end of the tax period.

The deadline for applying such a reduction in CIT:

1) on the creation of new production facilities:

begins on January 1 of the year in which the investment contract for the implementation of the priority investment project is concluded;

ends no later than ten consecutive years, which are calculated starting from January 1 of the year following the year in which the investment contract for the implementation of the priority investment project was concluded;

2) for the expansion and (or) renewal of existing production facilities, except for the cases specified in subparagraph 3) of this paragraph:

begins on January 1 of the year following the year in which the last fixed asset producing output was put into operation within the framework of an investment contract for the implementation of a priority investment project;

ends no later than three consecutive years, which are calculated from January 1 of the year following the year in which the last fixed asset producing output was introduced within the framework of an investment contract for the implementation of a priority investment project;

3) for the expansion and (or) renewal of existing production facilities with the phased introduction of fixed assets producing products, as provided for in the investment contract for the implementation of the priority investment project:

starts on 1 January of the year following the year in which the fixed asset producing the output is put into operation under the investment contract;

ends no later than three consecutive years, which are calculated from January 1 of the year following the year in which the fixed asset producing the products commissioned under the investment contract was put into operation.

The deadline applies to each fixed asset that produces products and is provided for in the investment contract for the implementation of a priority investment project for the expansion and/or renewal of existing production facilities.

LAND TAX

An organization implementing an investment priority project for the creation of new production facilities, when calculating land tax on land plots used for the implementation of the investment priority project, applies a coefficient of 0 to the corresponding land tax rates.

The deadline for applying part one of this paragraph:

1) begins on the 1st day of the month in which the investment contract for the implementation of the priority investment project for the creation of new production facilities is concluded;

2) ends no later than ten consecutive years, which are calculated starting from January 1 of the year following the year in which the investment contract for the implementation of the priority investment project for the creation of new production facilities was concluded.

The provisions of the first part of this paragraph shall not apply in cases of leasing (renting) or using on other grounds a land plot used for the implementation of a priority investment project, or part thereof (together with the buildings, structures, facilities located on it or without them).

PROPERTY TAX

An organization implementing an investment priority project to create new production facilities, for facilities first put into operation on the territory of the Republic of Kazakhstan, calculates property tax at a rate of 0 percent of the tax base.

The provisions of the first part of this paragraph shall apply to assets accounted for as part of fixed assets in accordance with international financial reporting standards and (or) the requirements of the legislation of the Republic of Kazakhstan on accounting and financial reporting and provided for in the work program, which is an appendix to the investment contract concluded in accordance with the legislation of the Republic of Kazakhstan in the field of entrepreneurship.

The deadline for applying part one of this paragraph:

1) begins on the 1st day of the month in which the first asset is recorded as part of fixed assets in accordance with international financial reporting standards and (or) the requirements of the legislation of the Republic of Kazakhstan on accounting and financial reporting;

2) ends no later than eight consecutive years, which are calculated starting from January 1 of the year following the year in which the first asset is recorded as part of fixed assets in accordance with international financial reporting standards and (or) the requirements of the legislation of the Republic of Kazakhstan on accounting and financial reporting.

The provisions of the first part of this paragraph shall not apply in cases of transfer of taxable objects for use, trust management or lease.

A special investment project is understood to mean an investment project implemented (being implemented) by a legal entity of the Republic of Kazakhstan registered as a participant in a special economic zone or the owner of a free warehouse in accordance with the customs legislation of the Republic of Kazakhstan, and (or) acquired from a participant in a special economic zone or implemented by a legal entity of the Republic of Kazakhstan that has entered into an agreement on industrial assembly of motor vehicles.

Special investment contract – an agreement providing for investment preferences for a special investment project;

Under a special investment project, the following is provided in the form of investment preferences (hereinafter referred to as investment preferences for a special investment project):

• Exemption from customs duties on used raw materials and (or) materials imported by legal entities of the Republic of Kazakhstan within the framework of the implementation of a special investment project on the basis of a special investment contract is carried out upon completion of the customs procedure of a free customs zone or free warehouse, subject to the identification of such raw materials and materials in the received product and recognition of the intended use of the conditionally released goods;
• Exemption from value added tax on the import of goods as part of finished products manufactured in the territory of a special economic zone or free warehouse in accordance with the tax legislation of the Republic of Kazakhstan;
• Exemption from value added tax on the import of raw materials and (or) materials as part of vehicles and (or) agricultural machinery, as well as their components, placed under the customs procedure of a free warehouse in accordance with the tax legislation of the Republic of Kazakhstan;
• Exemption from value added tax on sales of household appliances and (or) consumer electronics, as well as their components, manufactured in the territory of a special economic zone or free warehouse until January 1, 2028 in accordance with the tax legislation of the Republic of Kazakhstan.

For the purposes of applying investment preferences for a special investment project in accordance with the legislation of the Republic of Kazakhstan,  a legal entity of the Republic of Kazakhstan must meet one of the following conditions:

1) a legal entity of the Republic of Kazakhstan is registered as a participant in a special economic zone in accordance with the legislation of the Republic of Kazakhstan on special economic and industrial zones;

2) a legal entity of the Republic of Kazakhstan is registered as the owner of a free warehouse in accordance with the customs legislation of the Republic of Kazakhstan;

3) a legal entity of the Republic of Kazakhstan has entered into an agreement on the industrial assembly of motor vehicles.

Application for investment preferences
The applicant submits an application to the authorized body for concluding special investment contracts (hereinafter referred to as the Authorized Body) in electronic form or on paper for the provision of investment preferences as part of the implementation of a special investment project (hereinafter referred to as the application) in the form in accordance with Appendix 1 to this order.

The following documents are attached to the application:

1) certificate of state registration (re-registration) of a legal entity;

2) a copy of the certificate of registration as a participant in the special economic zone for a participant in the special economic zone, or an extract from the register of owners of free warehouses or a copy of the order for inclusion in the register of free warehouses for the owner of a free warehouse;

3) for completed projects - copies of documents confirming the introduction of fixed assets;

for ongoing projects - copies of documents justifying the estimated cost of construction and installation work and the cost of acquiring fixed assets, raw materials and (or) materials used in the implementation of the investment project, certified by the signature of the manager and the seal (if any) of the legal entity.

For manufacturers of vehicles and (or) their components, as well as agricultural machinery and (or) their components - in addition to the documents specified in part one of this paragraph, a copy of the agreement on the industrial assembly of vehicles and (or) their components, as well as agricultural machinery and (or) its components.

For manufacturers of household appliances and (or) consumer electronics devices, as well as their components - in addition to the documents specified in parts one and two of this paragraph, copies of documents reflecting jobs, investments, a list of household appliances and (or) consumer electronics devices are additionally submitted , as well as their components, technological operations for the production of household appliances and (or) consumer electronics devices, as well as their components, certified by the signature of the manager and the seal (if any) of the legal entity.

5. The application is accepted and registered in the office of the authorized body on the day of submission, with a registration number and date assigned, after which it is transferred to the first head of the authorized body or his deputy.

6. On the day of registration of the application, the head of the authorized body or his deputy transfers the application to the structural unit of the authorized body that directly considers the application.

An investment agreement is an agreement for the implementation of an investment project concluded by a decision of the Government of the Republic of Kazakhstan between a person authorized by the Government of the Republic of Kazakhstan and a legal entity, including one registered in the jurisdiction of the Astana International Financial Center, providing for the implementation of investments in an amount of no less than seven and a half million times the monthly calculation indicator established by the law on the republican budget and in effect on January 1 of the relevant financial year.

The legislation does not establish a list of priority activities for concluding investment agreements, but a negative list of activities is established. Investment agreements cannot be concluded for the implementation of projects in the following activities:

1) activities related to the circulation of narcotic drugs, psychotropic substances and precursors;
2) production and (or) wholesale distribution of excisable products;
3) holding a lottery;
4) activities in the gambling business;
5) activities related to the circulation of radioactive materials;
6) banking activities (or certain types of banking operations) and activities in the insurance market (except for the activities of an insurance agent);
7) auditing activities;
8) professional activity in the securities market;
9) activities in the field of digital mining;
10) activities of credit bureaus;
11) security activities;
12) activities related to the circulation of civilian and service weapons and ammunition for them;
13) activities in the field of subsoil use, including the activities of prospectors;
14) sale of minerals, including the activities of traders, activities for the sale of coal and oil.

The investment agreement shall determine the conditions and procedure for granting preferences and benefits stipulated by the legislation of the Republic of Kazakhstan at the time of conclusion of the investment agreement, and shall also establish reciprocal obligations for legal entities that have concluded the investment agreement.

The investment agreement provides for tax exemption:

1) CIT;
2) Land tax;
3) Property tax;
4) VAT exemption for participants of special economic zones (SEZ)
5) Reduction of tax liabilities;
6) Other preferences in accordance with the terms of the Agreement;

To conclude an agreement, the applicant applies to the Task Force Department of JSC National Company KAZAKH INVEST with the following documents in the state and Russian languages ​​on paper and electronic media:

1) application in accordance with Appendix 1;
2) a copy of the applicant’s charter, a certificate of state registration (re-registration) of the applicant;
3) business plan of the investment project in accordance with Appendix 2;
4) feasibility study;
5) design and estimate documentation of the investment project;
6) the conclusion of a comprehensive non-departmental examination of construction projects, certified by the signature of the manager, in the manner determined by the legislation of the Republic of Kazakhstan (in the event of tax preferences being granted);
7) information confirming the right to use the licensed technology (agreement or other document regulating the right to use).

The information specified in subparagraphs 4), 5), 6), 7) of this paragraph shall be provided if available.

The term, procedure and conditions for changing and terminating the SII, as well as the standard application form and the agreement form are established in the Rules for concluding, changing and terminating investment agreements , approved by the authorized investment body.

The provisions of the investment agreement shall remain in effect for twenty-five years from the date of its conclusion in the event of a change in the legislation of the Republic of Kazakhstan, with the exception of those provisions that arise from international treaties ratified by the Republic of Kazakhstan, as well as cases of amendments to the investment agreement by agreement of the parties.