Doing business in Kazakhstan

Getting started

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Types of legal entities

In accordance with the provisions of the Civil Code of the Republic of Kazakhstan, foreign and local investors may do business in Kazakhstan through a number of organizational and legal forms, including the following:

  • General partnerships
  • Limited liability partnerships
  • Partnerships with additional liability
  • Commandite partnerships
  • Joint stock companies (corporations)
  • Representative and branch offices.

Establishing a legal presence

As a general rule, all legal entities, branches and representative offices in Kazakhstan are subject to state registration.

State registration

State registration in Kazakhstan is performed based on a “one-stop-shop” principle: all the registration documents should be submitted to one state authority, the Public Service Center (TSON).

In accordance with the law on state registration, the procedure takes from 1 to 14 business days. In practice, the general registration term can take up to one month and even longer.

The legislation requires that a standard set of documents be submitted to complete the state registration of an entity.

Having all the right documents is the key to a successful registration process. It is essential to ensure that the documents have been duly signed, sealed, notarized and legalized or apostilled if the documents are executed abroad, otherwise the registration process may be considerably delayed.

The state registration fee is currently 6.5 times the MCI (approximately US$78).

Location (Legal address)

The location of a legal entity is the address indicated in its foundation documents.

In accordance with Kazakh law, the location of a legal entity is the place of the legal entity’s permanent operating body.

For tax proposes, the actual address of a legal entity should be the same as its place of location. The tax authorities have a right to conduct tax inspections to confirm the actual location of a taxpayer at the place of location. If the tax authorities discover that a taxpayer is not present at the place of location, they may impose administrative actions against the taxpayer.

Opening a bank account — for companies and individuals

Bank accounts can be opened with a local bank in Kazakhstan in the national currency, the tenge, and/or in a foreign currency. Branches and representative offices of foreign legal entities may opt to use offshore (foreign) bank accounts.

Antimonopoly legislation

Acquisition of more than 25% of shares or participation shares in a legal entity in Kazakhstan (provided certain criteria are met) may be viewed by the Kazakh state authorities as activities leading to economic concentration, which require obtaining prior approval from the antimonopoly authorities.

Categories of labor immigrants

The Law of the Republic of Kazakhstan “On Migration of Population” (the “Law on Migration”) adopted on 22 July 2011 establishes the following categories of immigrants arriving for the labor activities:

  • Foreign employees, i.e., immigrants attracted by employers to conduct labor activities in Kazakhstan
  • Business immigrants, i.e., immigrants conducting entrepreneurial activities in accordance with the legislation of the Republic of Kazakhstan
  • Seasonal foreign employees, i.e., immigrants attracted by employers to conduct seasonal work that is performed during a definite period (season) in view of the climate and other natural conditions, but for no more than one year

The Law on Migration establishes definite conditions for the arrival and stay in Kazakhstan of each of these categories of labor immigrants, including the following:

  • Confirmation of financial solvency allowing them to leave Kazakhstan for their country of permanent residence upon expiration of their permits
  • Information on previous convictions
  • Medical confirmation allowing them to perform work in Kazakhstan in a particular specialty.

Work permits

Under the Kazakh migration and work permit legislation, there are two types of permits for conducting labor activities by foreign individuals in the Republic of Kazakhstan, in particular:

  • Permit for attracting foreign labor (work permit))
  • Permit issued to a foreign employee arriving in Kazakhstan for individual employment under a certain specialty (permit for employment).

In accordance with the current effective legislation of the Republic of Kazakhstan, internal affairs bodies (migration police) issue work permits for conducting labor activities in Kazakhstan. However, in practice, work permits are still issued by the local executive bodies (Akimats).

This rule is applied to all foreign employees except for those who are specifically exempt, such as heads of branches and representative offices of foreign legal entities and those on business trips, provided the business trips do not exceed, in total, 120 calendar days in one calendar year.

The Government sets an annual quota for work permits. Employers submit an application for a quota of work permits prior to 1 September of the current year for the next year. The process of obtaining a work permit is quite long and requires the collection of a certain set of documents.

Work permits are generally granted with several conditions imposed and monitored by the Akimats. Among the conditions are the following:

  • Training of Kazakh citizens under specialties of technical and professional education demanded on the local labor market in accordance with the list approved by the authorized body
  • Creation of additional work places for Kazakhstan citizens, etc.

Secondment issues

Secondment of foreign personnel is currently a key topic on the Kazakh job market.

The Tax Code provides a “safe harbor” to avoid a foreign entity (that provides secondees from outside of Kazakhstan) becoming taxable in Kazakhstan. This provision requires that certain conditions be met.

Under a secondment, the local host company should act as a tax agent and be responsible for calculating and reporting personal income tax liabilities for seconded individuals.