Doing Business in Kazakhstan 2019
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DOING BUSINESS IN KAZAKHSTAN 2019 Doing Business in Kazakhstan 2019 Baker McKenzie – CIS, Limited Almaty Office Samal Towers, 8th Floor 97 Zholdasbekov Street Almaty, Kazakhstan 050051 Phone: (7-727) 3-300-500 Facsimile: (7-727) 258-40-00 [email protected] www.bakermckenzie.com The information in this brochure is for informational purposes only and it may not reflect the most current legal developments, judgments or settlements. This information is not offered as legal or any other advice on any particular matter. The Firm and the contributing authors expressly disclaim all liability to any person in respect of anything and in respect of the consequences of anything done or omitted wholly or partly in reliance upon the whole or any part of the contents of Baker & McKenzie’s “Doing Business in Kazakhstan” brochure. No client or other reader should act or refrain from acting on the basis of any matter contained in this brochure without seeking the appropriate legal or other professional advice on the particular facts and circumstances. Doing Business in Kazakhstan Table of Contents 1 Kazakhstan — An Overview .................................................................. 11 1.1 Geography ................................................................................... 11 1.2 Population ................................................................................... 11 1.3 History .......................................................................................... 11 1.4 Government and Political System ......................................... 12 1.5 Economy ..................................................................................... 14 1.6 Foreign Relations ....................................................................... 17 2 Foreign Investment in Kazakhstan .................................................... 18 2.1 Investment Bodies ................................................................... 18 2.2 Investment Protections .......................................................... 18 2.3 State Support for Direct Investment .................................. 19 2.4 Bilateral Investment Treaties ................................................. 21 2.5 Foreign Investment Restrictions .......................................... 25 3 WTO and Eurasian Economic Union ................................................... 25 3.1 WTO ............................................................................................. 25 3.2 Eurasian Economic Union ....................................................... 27 4 Privatization ............................................................................................. 29 4.1 General ........................................................................................ 29 4.2 Privatization Procedure .......................................................... 30 5 Establishing a Legal Presence .............................................................. 30 5.1 Representative Offices and Branches of Foreign Legal Entities .............................................................................. 31 5.1.1 Legal Form..................................................................... 31 5.1.2 Management and Capitalization ............................. 31 5.1.3 Registration and Post-Registration Formalities ................................................................... 32 5.2 Forming a Kazakhstani Legal Entity .................................... 33 5.3 Limited Liability Partnerships ................................................ 34 5.3.1 Legal Form and Number of Participants .............. 34 Baker McKenzie i 5.3.2 Charter Capital ............................................................ 36 5.3.3 Management Structure ............................................ 36 5.3.4 Registration Procedure ............................................. 38 5.4 Joint Stock Companies ............................................................40 5.4.1 Legal Form and Number of Participants .............. 40 5.4.2 Formation of a Joint Stock Company .................... 40 5.4.3 Charter Capital ............................................................ 40 5.4.4 Shares and Other Types of Securities .................... 41 5.4.5 Management Structure ............................................. 41 5.4.6 Registration ................................................................. 42 5.5 Issue and Registration of Securities .................................... 44 5.5.1 Introduction ................................................................. 44 5.5.2 Issue and Placement of Securities ......................... 45 5.5.3 General Disclosure Requirements .......................... 45 5.5.4 Special Disclosure Requirements ............................ 45 5.6 Regulation of the Securities Market ................................... 46 5.6.1 Activities Requiring a License.................................. 46 5.6.2 Stock Exchanges ......................................................... 46 6 Licenses, Permits and Notifications ................................................... 46 6.1 Introduction ............................................................................... 46 6.2 Applying for a Permit .............................................................. 47 6.3 Consequences of Operating without a Permit ................. 48 7 Taxation .................................................................................................... 48 7.1 General ........................................................................................ 48 7.2 Tax Registration ........................................................................ 49 7.3 Taxes ............................................................................................ 49 7.4 Income Tax ................................................................................. 49 7.4.1 Corporate Income Tax ............................................... 49 7.4.2 Withholding Tax ......................................................... 50 7.4.3 Personal Income Tax .................................................. 52 7.5 Double Tax Treaties ................................................................. 53 7.6 Value Added Tax ....................................................................... 59 ii Baker McKenzie Doing Business in Kazakhstan 7.7 Customs Duties ........................................................................ 60 7.8 Withholding Obligations, Social Taxes and Charges ....... 61 7.9 Subsoil Use Taxes ..................................................................... 62 7.9.1 General .......................................................................... 62 7.9.2 Tax Stability of Subsoil Use Contracts .................. 62 7.9.3 Specific Subsoil Use Taxes........................................ 63 7.10 Property and Land Taxes ........................................................ 64 7.11 Special Economic Zones and Investment Benefits .......... 65 7.12 Small Business Benefits for SMEs ......................................... 66 7.13 Transfer Pricing ......................................................................... 66 8 Currency Regulations ............................................................................. 67 8.1 Introduction ............................................................................... 67 8.2 Foreign Exchange ..................................................................... 68 8.2.1 Residents ...................................................................... 68 8.2.2 Nonresident Legal Entities ....................................... 69 8.2.3 Individuals .................................................................... 70 9 E-commerce ............................................................................................. 70 10 Employment ............................................................................................ 72 10.1 Introduction ............................................................................... 72 10.2 Freedom to Employ ................................................................. 72 10.3 Employer’s Obligations ........................................................... 72 10.4 Employment Term .................................................................... 73 10.5 Dismissal ..................................................................................... 73 10.6 Minimum Wage and Salary .................................................... 74 10.7 Working Hours .......................................................................... 74 10.8 Holidays ...................................................................................... 75 10.9 Sick Leave ................................................................................... 75 10.10 Maternity and Childcare Leave ............................................. 75 10.11 Cost of Employment ................................................................ 75 10.12 Withholding Obligations ........................................................ 75 10.13 Payment in Foreign Currency ................................................ 75 10.14 Vacancies .................................................................................... 76 Baker McKenzie iii 10.15 Foreign Workers in Kazakhstan ............................................ 76 10.15.1 Policy ............................................................................. 76 10.15.2 Work Permits ...............................................................