Why investing in Kazakhstan?

 Why investing in Kazakhstan?

Recently, Kazakhstan has shown a high investment potential and there are several reasons for that:

  • Strategic location of state
  • Favorable business environment
  • Protection of investors’ rights
  • Investment incentives
  • Political stability
  • Rich raw material base
  • Human capital
  • Rich natural resources
  • Favorable strategic location

Strategic location of state

The Great Silk Road once had passed through the territory of Kazakhstan, because Kazakhstan is located in the heart of the Eurasian continent, thereby acting as a “land bridge”. Three states from the “four” BRICS countries are located near Kazakhstan: Russia, China and India.

Kazakhstan is a new strategic location at the crossroads of Europe and Asia. This also means a preferential access to the regional market of more than 500 million consumers and an access to the common market of Eurasian Economic Union of more than 180 million consumers, as well as time-efficient cargo transportation. For instance, route of Europe-China-St. Petersburg takes a 10 days period; a route to Hamburg takes a 16 days period; and a route to London takes a 18 days’ period.

Kazakhstan plays a key role in “The belt and road” initiative implementation meaning that more than 3,000 out of 10,000 km in total has passed through the territory of Kazakhstan, making it an important section of the main land corridor and significantly optimizes the transportation in terms of time and cost.

The seaports of Aktau and Kuryk, the Republic of Kazakhstan have in place infrastructure that is similar to the one of seaports in the other countries: Batumi (Georgia) and logistics Lianyungang (China).

A transcontinental highway on the route “Western Europe – Western China” will enable cargo transportation between China and Europe over a 10 day’s period.

Favorable investment climate

In Kazakhstan, a great attention is paid to all aspects of a favorable business climate for the investors such as alleviated administrative barriers and simplified procedures, improved customs and tax administration.

Favorable tax regime

The general rate of taxes and social charges. Kazakhstan ranks 5th in terms of tax policy in the IMD rating.

The simplified business start-up procedures:

  • It takes 1 day to register a legal entity
  • It takes 3 days to register equity
  • It takes 100 days to obtain permits for carrying out construction activities

There are the following state support measures:

13 special economic zones (0 per cent corporate income tax, land tax, customs duties and VAT on imports of goods into special economic zones, property tax);

24 industrial zones (availability of ready for use infrastructure, long-term land lease agreements and loan repayment schedules based on the value of land, the absence of industry restrictions, the possibility of concluding an investment contract).

Investment Agreement

A new tool for large investment projects is the investment agreement

– Reduction of tax liabilities up to 20%

– Stability of legislation (up to 25 years)

– Reimbursement of up to 20% of the cost of construction and installation works and purchase of equipment

Provision of additional preferences provided for by the Legislation of the Republic of Kazakhstan in agreement with the Government

Investor rights protection

Attraction and effective use of foreign investment is one of the main areas of mutually beneficial trade and economic cooperation of the Republic of Kazakhstan with other countries.

  • Foreign Investors Council under the President of the Republic of Kazakhstan
  • Coordination Council chaired by Prime Minister of the Republic of Kazakhstan
  • Investment Climate Improvement Council under the Government of the Republic of Kazakhstan
  • Court of International Financial Center “Astana” and the International Arbitration Center – a judicial system based on the principle of English law
  • Specialized judicial collegium of the Supreme Court and the court of Astana city for investment disputes settlement
  • Investment Ombudsman – Prime Minister of the Republic of Kazakhstan

Human capital

  • Kazakhstan takes the 31st position in the World Bank’s Human Capital Index-2018
  • The literacy rate of the population is 100%
  • There is a visa-free regime for the citizens of more than 65 countries of the world including all OECD countries
  • There are 128 higher education institutions, including the 8 that are in the world top universities list with “QS Stars Development Road map” international rating for 2018.
  • The International scholarship “Bolashak” awarded to more than 10 thousand specialists who had completed their study in  the “QS Stars Development Road map” international rating 100 world top universities.

Dr. Abdul Rahim

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