Why Kazakhstan??
Kazakhstan is the ninth largest country in the World covering 2.7 million square kilometers, with a population of approx. 16 million, has immense natural wealth in form of Oil, Gas, Minerals and Rare Metal resources..
Republic of Kazakhstan is a democratic, secular, legal, social and unitary State in which International Agreements signed in past, have to date had priority over laws of the Republic.
Kazakhstan is a member of the UN, UNESCO, UNICEF, IMF, World Bank, EBRD, and World Trade Organisation. Republic of Kazakhstan has also signed bilateral investment and Double Tax treaties with 40 countries including the EU, UK, USA, Canada, India, Turkey, Russia, Switzerland, etc
Foreign currency regulations in Republic of Kazakhstan are not restrictive, and remittances are easily made, in U S Dollar, Euro and Pound Sterling, etc., as long as they are supported with proper Agreements and required signed documents..
The Banking system in Kazakhstan is widely regarded as the best in the former Soviet Union countries.
The Kazakh Tenge has been comparatively stable and has moved with other international currencies. The Kazakh Tenge a few years ago was at KZT 135 to 140 to the U S Dollar and KZT 160 to the Euro,. As a result of the financial crisis which touched all Countries, the Kazakh Tenge moved to KZT 120 to a U S Dollar, and has come to KZT 145 to KZT 147 to US Dollar. Kazakh Tenge parity to Euro & Pound Sterling have moved with Dollar rates.
The National Bank of Kazakhstan does not allow exchange rates to widely fluctuate.
The Tax Code has been comparatively stable and VAT has reduced by 1 % each Year, from 16 % to 12 %. Tax on Individuals has reduced over the Years to 10% and Corporate Tax which is at 20% will be reduced to 17.5% in 2013.
Kazakhstan offers Tax Incentives for Investors, like 5 Year Tax holiday, lower Import Duties etc. for Investments connected with Production / Import substitution. An Agreement is to be negotiated and signed by the Investor with the Investment Agency, in which the amount and dates of Investments and the Tax Incentives are specified. These are strictly monitored by the Investment Agency. Periodic Reports are to be furnished by the Investor, and Incentives cancelled by the Investment Agency, if the agreed conditions are not complied with by the Investor, for example if amount agreed to Invest in Project is not done as per schedule.
In the Oil and Gas Sector, International Giants like BP, Chevron, TotalElf, ENI etc were planning investments of USD 2 billion every year, but restrictive Investment regulations delayed this investment.. The Government of Kazakhstan is in negotiations with Investor to improve the Investment climate..
The Kazakhstan Government is encouraging development of down stream industries to avoid exports of basic materials, eg Oil, Gas, Steel, Copper, Zinc, Aluminum, etc.. In recent years many industries have started in medium and small scale sectors, and collaboration agreements have been signed for setting up Plants for Helicopters, Cars and Trucks, etc.
To start an Industry, or Business or Trade in Kazakhstan, the first step for an Investor is to open an Office, in Kazakhstan which will not be taxed as long as no commercial activity is conducted.
If commercial activity is contemplated, it would be advisable to establish a Limited Liability Partnership which can be a 100% subsidiary of a foreign Entity, with minimum Capital of USD 3,000 to 5,000.
To open a Joint Stock Company, minimum share capital prescribed is approx. USD. 350,000. However, all benefits of Limited Liability concept, applies to both types of Legal Entities, ie LLP & Joint Stock Company..
Tax and Company Laws as well as Import – Export Customs regulations are stringent and need to be strictly complied. Non compliance can result in harassment, fines and penalties and freezing of Bank Account. To avoid this we at Vyapaar can smoothen your path and ensure full compliance with all Legal requirements.
Kazakhstan is a land locked country with the nearest Port outlet being Novorosis Black Sea Port in Russia [approx 2000 miles distance] or Turkey through the Bospherous. Rail wagons take 3 weeks from Kazakhstan to Novorosis. Imports in Containers overland from Bander Abbas take a total of 6 to 8 weeks.
Charter Freight connections are available from Almaty ( the commercial Capital ) to Europe, Dubai, Beijing, Turkey, India and Russia . Passengers can use Air Astana flights from Almaty and Astana ( Seat of the Government) to all major Countries. Lufthansa, KLM, British Midlands, Etihad, Air Arabia, Turkish Airlines, Air China, etc also have flights through Amsterdam, Frankfurt, London, AbuDhabi, Dubai, Delhi, Sharjah, Beijing, Seoul, Moscow, to Europe, USA, South America, Africa, China, Asia and the World.