Kazakhstan Investment Preferences

Investment preferences

Investment preferences are provided in priority activities according to the list approved by the Decree of the Government of Kazakhstan dated May 8, 2003 No. 436. As per the Law “On Investments”, an investor can be provided with:

 exemption from customs duties of imported equipment and its components required to implement investment project; To obtain preferences, an application shall be  state natural grants: plots of land, filed to the Investments Committee of the buildings, structures, machinery and Ministry of Industry and New Technologies equipment, computers, measuring and of Kazakhstan and a contract shall be control instruments and devices, vehicles, concluded with it. except for cars, industrial and household equipment.

As per the Tax Code, an investor can be provided with: tax allowances: value of preference entities and (or) the Tax incentives for without a contract. subsequent costs for upgrading reconstruction can related to deductions over a period up to three years. Term for tax loss carryforwards is 10 years.

On all matters related to the provision of investment preferences, please contact the Investments Committee of the Ministry of Industry and New Technologies of Kazakhstan.

Support for Small and Medium Enterprises (SME)

Under the “Road Map for Business 2020”, small and medium-sized enterprises will be provided with the following types of state support:

 Subsidized interest on loans;  Loan guarantees;  Assistance in developing production (industrial) infrastructure;  Services to support businesses (consulting, legal, accounting, etc.);  Training of personnel.

To receive state support it is necessary to apply to the akimat of the region or city of national significance.

Akimats' contact details

Akmola region akimat Kyzylorda region akimat Tel: +7 (7162) 257 922, 253 525 Tel.: +7 (7242) 26 21 44 Fax: +7 (7162) 297 298 Fax: 26 12 25, 27 63 73 Address: 83 Abay street, Kokshetau Address: 76 Zhahaeva street, Kyzylorda Aktobe region akimat North- Kazakhstan region akimat Tel.: +7 (7132) 542 908 Tel.:+7 (7152) 464 125 Fax: +7 (7132) 564 758 Fax: 46 36 35 Аddress: 40 Abylhair khan avenue, Aktobe Address: 58 Konstitutsiya street, Petropavlovsk Almaty region akimat South-Kazakhstan region akimat Tel.: +7 (7282) 272 887, 270 822 Tel.: +7 (7252) 537 443 Fax: +7 (7282) 270 743 Fax: 530 527 Address: 38 Tauelsizdik street, Taldykorgan Address: 6 Tauke khan avenue, Shymkent Atyrau region akimat Kostanay region akimat Tel.: +7 (7122) 354 501, 270 960 Tel.: +7 (7142) 575 001, 575 230 Fax: +7 (7122) 35 50 30, 35 51 65 Fax: 575 085 Address: 77A Aiteke bi street, Atyrau Address: 66 Al-Farabi avenue, Kostanay East-Kazakhstan region akimat West-Kazakhstan region akimat Tel.:+7 (7232) 578 580, 26 42 42 Tel.: +7 (7112) 51 06 26 Fax: +7 (7232) 261 363 Address: 109 8th March street Address: 40 Gorkiy street, Ust- Kamenogorsk Zhambyl region akimat Mangystau region akimat Tel.: +7 (7262) 454 628, 430 650, 454 466 Tel.: 8 (7292) 31 42 15, 31 53 65 Fax: 454 628 Fax: 43 45 52 Address: 125, Abay street, Taraz Address: House №1, 14 micro-district Karaganda region akimat Pavlodar region akimat Tel.: +7 (7212) 42 10 67 Tel.: +7 (7182) 32 25 40, 32 33 26 Fax 42 10 67 Address: 49 Satpayev street, Pavlodar Address: 39 Mir avenue, Karaganda

Institutional and Financial Support

Samruk-Kazyna National Welfare Fund JSC

National welfare fund is to provide maximum support to the Government of Kazakhstan, promptly solving the issues of investment attraction to industries, active work in the regions, strengthening inter-industry and inter-regional links. The Fund’s main goal is to manage shares it owns in the national development institutes, national companies and other legal entities in order to maximize their long-term worth and increase competitiveness at international markets. The Fund’s key activity is to contribute to modernization and diversification of the national economy, within the scope of State program of accelerated industrial-innovative development as well.

The Fund invests heavily into national economy and especially into priority sectors such as:

 Oil and gas  Energy  Metallurgy  Chemicals, petrochemicals  Infrastructure.

The Fund’s subsidiaries:

 JSC “KazMunayGas”, www.kmg.kz  JSC “Kazakhstan Temir Zholy”, www.railways.kz  JSC “KEGOC”, www.kegoc.kz  JSC “Kazakhtelecom”, www.telecom.kz  JSC “Kazpost”, www.kazpost.kz  JSC “Air Astana”, www.airastana.com  JSC “Kazakhstan Development Bank”, www.kdb.kz  JSC “DAMU” Enreprneuship Development Fund”, www.damu.kz  JSC “National Company “Kazakhstan Engineering”, www.ke.kz  National Mining Company “Tau-Ken Samruk”, www.tks.kz  “United Chemical Company” LLP, www.ucc.com.kz  and others.

www.samruk-kazyna.kz

“Kazakhstan Development Bank” JSC

JSC “Kazakhstan Development Bank” (KDB) is a state financial development institute that provides medium- and long-term financing of investment projects, leasing operations, and trade financing for export operations in priority sectors of the economy. As of beginning of 2011 with the Bank’s financing 62 new and modernized production lines and infrastructure objects worth $3.3 billion with the Banks’ share of $1.6 billion were put into operation.

Mission

 Contributing to stable economic growth and development of the Republic of Kazakhstan by means of providing long-term financing and other financial services to various industries except mining industry;  Improving and increasing effectiveness the Government’s investment activities in manufacturing industries;  Assisting foreign and domestic investments into Kazakhstan’s economy;  Stimulating and developing industrial infrastructure and manufacturing industries (not related to oil and gas extraction).

KDB aims

 Promoting direct investments;  Financing projects in priority sectors of the economy.

Tools

 Loans for investment projects: from 5 to 20 years, minimum size - $5 million;  Financial leasing: from 3 to 20 tears, minimum size - $1 million;  Loans for export deals: from 1 to 3 years, minimum size - $1 million;  Project financing;  Guarantee issuing;  Agent services to state projects;  Capital subscription;  Mezzanine financing;  Inter-bank loans;  Working capital financing.

“Kazakhstan Development Bank” JSC Republic of Kazakhstan, Astana, Yessil region, Orynbor street 10 (“Kazyna Tower” building) Tel.: +7 (7172) 79 26 79 Fax: +7 (7172) 79 26 38

Republic of Kazakhstan, 050000, Almaty city “Nurly Tau” business center, Al-Farabi 19, Bloc 1B, office 204. Tel.: +7(7273) 110 470 Fax: +7 (7273) 110 470

www.kdb.kz

Kazakhstan Investment Fund JSC

The Fund’s goal – contributing to implementation of industrial-innovative policy of the Republic of Kazakhstan by means of making and attracting investments to projects of perspective companies, rendering financial assistance to the private sector initiatives aimed at creating competitive manufacturing industries. The main tool employed by the Fund is equity participation of investment recipient company.

The Fund’s aims: 1.Investment into equity capital of newly created and existing companies engaged in processing, producing competitive goods, and providing services to industrial companies; 2.Promotion of private investments into non-oil sectors of the economy by means of co- financing investment projects (equity financing) and participating in the respective projects management; 3. Contribution to increase in investment activity of Kazakhstani organizations abroad by co- financing investment projects outside of the Republic of Kazakhstan if the projects related to cooperation between domestic and foreign companies developing adjacent productions.

Kazakhstan Investment Fund JSC 050010, Almaty, Kazakhstan Zenkova str. 80 Tel.: +7 (727) 2598 131, 2588 333 Fax: +7 (727) 2583 799 e-mail: [email protected]

www.ifk.kz

National Innovation Fund JSC

The main goal of the National Innovation fund is to contribute to increase in innovation activities in the country and development of high-tech and knowledge-intensive production.

Main activities:

 Financing innovation projects;  Creating venture funds;  Developing effective innovational infrastructure;  Information and analytical, methodological and expert support to the process of innovational development;  Developing system of technology commercialization;  Administering service tools to support innovations;  Building up innovation activity, increasing innovation activity of people.

National innovation Fund JSC Republic of Kazakhstan, 010017, Astana Syganak street, 29, “Eurocenter” business center, 9 floor Tel.: +7 (7172) 516 982 Fax: +7 (7172) 517 021 E-mail: [email protected]

www.nif.kz

JSC “Damu” Entrepreneurship development Fund”

The “Damu” Fund’s mission is to assist to high quality development of small and medium enterprises in Kazakhstan. The main goals of “Damu” Fund are: 1) Contributing to increase in active enterprises and number of jobs by providing finances to all perspective SMEs; 2) Contributing to development of entrepreneurship in non-oil sectors of the economy; 3) Enhancing SME skills and involving people in entrepreneurship .

The main tools of “Damu” Fund for entrepreneurship are financing enterprises through second- tier banks, subsidizing interest rates, giving guarantees to banks, concessionary financing for leasing operations and microcredit institutions, as well as rendering non-financial support (training, consulting, information and analytical support). “Damu” Fund is a main state institute for entrepreneurship development and has representative offices in all 14 regions of the country, in Almaty and Astana cities.

JSC “Damu” Entrepreneurship development Fund” 050004, Republic of Kazakhstan Almaty, Gogol street, 111 Tel.: +7 (727) 244-55-66 Fax: +7 (727) 244-83-41 E-mail: [email protected]

www.damu.kz

Kazyna Capital Management JSC

Kazyna Capital Management is created with the aim of attracting foreign capital to establish direct investment funds, which will be source of funds for Kazakh companies. KCM encourages development of direct investments market and introduction of best practices of asset management in Kazakhstan.

Goals:

 Increase in investment activity of private domestic and foreign capital in non-oil sectors of the economy and creation of competitive productions;  Institutional development of direct investments market, industry of professional companies;  Systematic development of private-public partnership and infrastructure projects to reach the aims of state policy while considering private business interest. Aims:

 Participating in state programs through equity capital of domestic and foreign funds and project companies;  Attracting largest institutional investors to Kazakhstan, and stimulation of domestic investors to co-finance non-oil sectors of the economy;  Involvement of leading experienced international organizations and managing companies with stable rate of return as strategic partners;  Selection the most attractive from Kazakhstan’s economy viewpoint foreign assets through equity capital of international investment funds and project companies.

At the moment Kazyna Capital Management is a shareholder in 9 investment funds: Aureos Central Asia Fund, Falah Growth Fund, Kazakhstan Growth Fund, Macquire Renaissance Infrastructure Fund,CITIC Kazyna Investment Fund, ADM Kazakhstan Capital Restructuring Fund, Kazakhstan Hong Kong Development Fund, Wolfenson Capital Partners, Kazakh-Tajik direct investment fund.

Kazyna Capital Management JSC 050020, Almaty, Dostyk avenue, 291/3а, 2 floor. Tel: +7 (727) 334 1417 Fax: +7 (727) 334 1418 E-mail: [email protected]

www.kcm-kazyna.kz

KazExportGarant Export-credit insurance corporation JSC

JSC “Export-credit Insurance Corporation" KazExportGarant has the status of export-credit agency of the Republic of Kazakhstan and provides financial and insurance support for export enterprises of non-oil sectors of the economy in the following areas:

 Export insurance of non-oil products and services;  Insurance of direct investment abroad;  Insurance of banking products (documentary credits and guarantees);  The provision of export trade financing by issuing conditional inputs;  Providing advisory services on foreign trade.

To increase the capacity of the domestic insurance market and the proportion of local content KazExportGarant also carries reinsurance services in the field of "general insurance".

KazExportGarant Export-credit insurance corporation JSC 2nd floor, 80 Zenkova str., Almaty Tel. +7 (727) 250 00 21 E-mail: [email protected]

www.keg.kz

«Kazakhstan Industry Development Institute» JSC

Mission: Promotion of industrial-innovative development of the country through scientific and methodological informational and analytical support, practical recommendations for making decisions on industrial policy in Kazakhstan.

The main tasks:

 research in the field of industrial policy, modernization and diversification of Kazakh enterprises, improving the competitiveness of manufacturing industries and innovation;  study of theoretical, methodological and practical issues of industrial development;  Study the economic factors of restructuring industries and the development of inter- sectoral cooperation, development of measures to stimulate and support the restructuring and inter-sectoral cooperation in the industry;  Development of techniques and practical guidance on assessment and monitoring of economic indicators of industrial development;  preparation of proposals for the integration of segments of industries in Kazakhstan in the global industrial and economic system, international cooperation in the sphere of industrial production;  preparation of proposals for optimal placement of industries, cluster development, creation of special economic and industrial zones;  forecast of major developments in industries.

Key products:

 analytical reports, information and analysis, forecasts and surveys;  expert review of program documents, investment projects;  expert advice and expertise;  techniques, tutorials and other documents;  economic and mathematical models, databases, and monitoring the development of industry by sectors and regions;  organization of round tables, seminars and conferences.

«Kazakhstan Industry Development Institute» JSC 25 Syganak str., Astana, Republic of Kazakhstan, 010 000 Tel: (7172) 79-64-60 E-mail: [email protected]

www.kidi.kz

“KazAgro” National management holding” JSC

Mission The mission of the Holding is implementation of the state policy on stimulating industrial development of agro-industrial complex on principles of effectiveness, transparency and effective corporate management of the Holding’s structures.

Strategic directions of development 1. Stimulating labour productivity increase in agro-industrial complex through industrialization and diversification. 2. Participation in food security of the country by means of internal food market development and regulation. 3. Facilitation in development and implementation of export potential of agro-industrial complex. 4. Increase of corporate management quality and transparency of the Holding’s activities.

Investment and lending activities of the Holding:

 Loans for spring-field and harvesting  Loans for purchase of agricultural and special machinery and equipment  Loans for purchase of farm animals  Loans for working capital and acquisition of fixed assets  Loans for construction, reconstruction and repair  Lending to create a network and expansion of existing dairy farms, poultry farms, greenhouses and vegetable stores  Loans for development of production of fruit, technical, and oilseed crops using drip irrigation  Loans for the establishment of production on the assembly of agricultural machinery  Loans for the development of forage production  Loans for creation a network of breeding farms, to create a network of cattle feedlots  Loans for creation meat-processing complex  Loans for creation a network of slaughterhouses  Loans for development of production and processing of fine wool  Lending to organize production of deep processing of grain  Loans for construction and modernization of grain storage  Loans for purchase, construction and operation of mini greenhouses  Loans to rural credit cooperatives  Loans to rural consumer cooperatives

Subsidiaries:

 "Agrarian Credit Corporation" JSC, website: www.agrocredit.kz  "KazAgroFinance" JSC, website www.kaf.kz  "KazAgroGarant" JSC, website: www.kazagrogarant.kz  "Food Contract Corporation" JSC, website: www.fcc.kz  "KazAgroMarketing" JSC, website www.kam.kz  "Fund for Financial Support of Agriculture" JSC, website: www.fad.kz  “KazAgroOnim” JSC, website: www.kazagroonim.kz

“KazAgro” National management holding” JSC 24 Republic str., Astana, Republic of Kazakhstan Tel.: +7 (7172) 70 56 20 Fax: +7 (7172) 70 56 89 www.kazagro.kz

Service support

National Export and Investments agency “KAZNEX INVEST” - ‘one-stop shop’ for foreign investors in Kazakhstan «KAZNEX INVEST» services

We provide services free of charge, profit is not our goal, all efforts aimed at achieving the ultimate economic effect.

Who do we help?  Foreign investors  initiators of investment projects in Kazakhstan  buyers of products from Kazakhstan  existing and potential exporters

KAZNEX INVEST provides the best services to foreign investors

The organization of business forums KAZNEX INVEST in conjunction with the Ministry of Industry and New Technologies organizes international business forums with participation of Heads of State and Government, which gives impetus to reaching agreement and is an indication of serious intent of political leaders in attracting foreign investment.

Organization and support meetings KAZNEX INVEST assists foreign investors in organizing and conducting meetings with representatives of the Government, ministries, national companies, local authorities, industry associations, private companies, etc., within such meetings, the parties may announce their intentions and discuss specific areas of cooperation.

Information and analytical support KAZNEX INVEST gives advice on doing business in Kazakhstan at all stages of investment project; provides information on current and projected state of investments in Kazakhstan; conducts a review of trends in foreign investment and explores ways to improve conditions for investment in Kazakhstan.

How might be useful KAZNEX INVEST for foreign investors?

KAZNEX INVEST provides customized services Each potential investor will receive personal attention and advice from the first steps of the decision to establish a business and invest in Kazakhstan and assistance in obtaining state preferences to post-investment support.

We facilitate the work of foreign investors

Full support for investment activity in Kazakhstan KAZNEX INVEST assists in obtaining government support (privileges, preferences and other incentives). We also provide assistance with the administrative procedures associated with opening and doing business in Kazakhstan.

Foreign Investors Council In order to ensure and develop a direct dialogue with investors operating in Kazakhstan, the Foreign Investors Council under the President of the Republic of Kazakhstan was created. Council meetings discuss critical issues of development of the country's economy or its individual sectors related to investment activities and investment climate.

We create the most optimal conditions for foreign investors

KAZNEX INVEST is consistently involved in creating the best conditions to attract investment KAZNEX INVEST and the Ministry of industry and new technologies are working to improve laws to encourage foreign direct investment. In 2010, a number of regulatory documents was adapted, according to which package of benefits for investors has been expanded. Details of all services are provided on the corporate portal www.kaznexinvest.kz

Head office: 2 floor, Business center “Ansar”, 25 Syganak street, Astana, 010000 Telephone: +7 7172 79 93 93 Representative office in Almaty: Fax: +7 7172 79 93 92 Room 502, 505, 5th floor, 111 Gogol street, Almaty, Call center: 050004 regarding the investments: Telephone: +7 727 259 06 90 Tel.: +7 7172 79 93 93 (ext. 1070, 1042) Fax: +7 727 258 21 51 E-mail: [email protected] regarding the export: Tel.: +7 7172 79 93 93 (ext. 1010) E-mail: [email protected]

Foreign Investors’ Council

Foreign Investors’ Council chaired by the President of Kazakhstan – consultative advisory board under the President of Kazakhstan.

The Council is aimed to:

 provide and develop direct dialog with investors operating in Kazakhstan  settle the problems related investment activity promptly

The Council develops and submits recommendations on investment activity in Kazakhstan to the President and the Government of Kazakhstan. Council meeting takes place once a year and is chaired by the Head of State. The Council consists of: the heads of the state authorities from Kazakhstan side the heads of international financial and economic institutions, large foreign companies and corporations operating in Kazakhstan from foreign side The Council’s labor authority is represented by the Investments Committee of the Ministry of Industry and New technologies of Kazakhstan. Foreign members of the Council established “Kazakhstan Council of Foreign Investors” association which includes all foreign companies as part of the Council.

Contact details of “Kazakhstan Council of Foreign Investors” association: Office 31/2, floor 3, “Kaskad” Business Center, 6/1 Kabanbay Batyr avenue, Astana. Tel.: +7 7172 925550, fax: + 7 7172 925553, e-mail: [email protected], [email protected].

Priority sectors

Oil Refining and Development of Oil and Gas Infrastructure Kazakhstan takes the 11th place in the world among oil reserves and 17th place among gas reserves. 2010, oil and condensate recovery was about 79.6 Mio tons in the republic, and gas recovery was 37.4 bln cu m. Average daily recovery of oil and condensate is over 200 thou tons.

Natural and associated gases of the fields in the republic (Tengiz, Kaspiy) which contain 13 - 16% and more ethane fraction are economic and technological advantage to manufacture ethylene that is a base petrochemical.

Oil Refining and Development of Oil and Gas Infrastructure

The Main Tasks of Oil Refining Sector in Kazakhstan:

 to increase in volume and improve the quality of manufacturable oil products;  to manufacture petrochemicals with the value added reclaimed in international market;  to manufacture petrochemical raw materials for extended spectrum of petrochemicals with high value added (construction, facing and packing materials, industrial and household goods, etc.);  to ensure complex processing of hydrocarbon material;  to promote construction of small and medium enterprises in the area of additional refining of base petrochemicals and release of innovative products with high value added;  to build up eco-friendly production minimizing negative environmental impact.

What Kazakhstan offers for its investors: Raw Material Base Kazakhstan takes the 11th place in the world among oil reserves and 17th place among gas reserves. 2010, oil and condensate recovery was about 79.6 Mio tons in the republic, and gas recovery was 37.4 bln cu m. Average daily recovery of oil and condensate is over 200 thou tons. Natural and associated gases of the fields in the republic (Tengiz, Kaspiy) which contain 13 - 16% and more ethane fraction are economic and technological advantage to manufacture ethylene that is a base petrochemical.

Manufacture of 2005 2006 2007 2008 2009 2010 industrial products Crude oil 50,869.8 54,338.8 55,265.0 58,646.0 64,354.4 68,084.4 Gas condensate, thou tons 10,616.2 10,664.3 11,860.3 12,025.0 12,128.2 11,600.4 Natural gas in liquid or 24,972.9 26,381.6 29,561.5 32,889.3 35,941.8 37,405.9 gaseous state, Mio cu m Gasoline, thou tons 2,356.1 2,341.7 2,630.9 2,503.4 2,611.4 2,920.4 Jet fuel, thou tons 234.2 270.2 258.9 399.2 373.5 489.6 Diesel fuel, thou tons 3,280.0 3,457.4 3,928.7 3,997.6 3,868.5 4,091.7 Furnace oil, thou tons 3,545.7 3,305.4 2,582.8 3,177.7 3,297.6 3,798.1

Source: Agency of the Republic of Kazakhstan on Statistics

Infrastructure Currently, 3 oil-processing plants operate in Kazakhstan: Pavlodar, Shymkent and Atyrau. Moreover, Kazakhstan does not have complete cycle for advanced processing of hydrocarbon material. The Government modernizes and upgrades OPP; new innovative oil and gas plants are constructed. Oil and gas condensate is exported via oil pipelines (79%), railway (8%) and ships (13%). Competitive Cluster Main oil and gas enterprises are located on the west and in Kyzylorda region, being the mineral resources base and area of oil and gas recovery. Perspective location of new plants will be related to field development of Kazakhstan Sector of the Caspian Sea. Moreover, “National Industrial Petrochemical Technopark” Special Economic Zone was established in Atyrau region. Infrastructure of “National Industrial Petrochemical Technopark” SEZ where small and medium oil and gas enterprises will be located will be constructed by means of the republican budget. Infrastructure facilities of the integrated gas and chemical sector (11 physical facilities) will be constructed under sponsorship of the state as well.

Established Decree of the President of Kazakhstan dated December 19, 2007 No.495 Operates before December 31, 2032 Area / Location Atyrau region, area is 3,475.9 ha Participants 1 participant: Kazakhstan Petrochemical Industries Inc. Establishment purpose development of oil and gas plants of the world level on advanced processing o hydrocarbon material and release of wide competitive petrochemical products high value added

Oil Refining and Development of Oil and Gas Infrastructure

Kazakhstan takes the 11th place in the world among oil reserves and 17th place among gas reserves. 2010, oil and condensate recovery was about 79.6 Mio tons in the republic, and gas recovery was 37.4 bln cu m. Average daily recovery of oil and condensate is over 200 thou tons.

More ... Mining-and-Metallurgical Sector Mining‐and‐metallurgical sector is a strategic branch of national economy which role is to provide the plants of hi‐tech and science‐intensive final products with raw material (machine, building, aircraft, space and defense industries).

The Main Tasks of Mining-and-Metallurgical Sector in Kazakhstan: Development of competitive plants, extension of nomenclature and gain of share of advanced processing products with high value added with attraction of small and medium business. Maximum import volume falls at the pipes, tubes and hollow profiles; iron metal works and its parts; iron or plain steel bars and other ferrous metal works. Hence, import structure shows that the products with high value added prevail in import of MMC products.

What Kazakhstan offers for its investors: Raw Material Base Metallurgy of Kazakhstan is featured by rich mineral resources base with substantial capacity both in the context of the country and across the globe. Providing the metallurgical enterprises with the specified raw material is between 50 and 300 years in case of current capacity. Ore fields are mainly complex, i.e. they contain several types of metals in the ore that requires using different recovery, enrichment and processing methods. Kazakhstan has 30% of the world reserves of chrome ores, 25% of manganese ores, 10% of iron ores. Reserves of copper, plumb and zinc are 10 and 13% of the world reserves respectively. Specific density of chromite reserves is 90%, wolframium is 60%, plumb and copper is 50%, bauxite is 30%, phosphorite is 25% and iron ore is 15% among the CIS countries. Currently, Kazakhstan takes the 3rd place among production of titanium in the world, 7th place – among production of zinc, 8th – among production of plumb, 13th – among production of iron ore, 15th – among production of copper and 35th – among production of steel.

Operating Enterprises As of June 1, 2011, 286 large and medium mining-and-metallurgical enterprises have been registered

Competitive Cluster Aktau Seaport SEZ

Established Decree of the President of Kazakhstan dated April 26, 2002 No.853 Operates before December 31, 2032 Area / Location Aktau, Mangistau region, area is 2000 ha. 3 participants: Keppel Kazakhstan LLP; Arcelor Mittal Tubular Products Participants Aktau JSC; Aktau Glass-Fiber Pipes Plant LLP Establishment Accelerated region development purpose 1) production of household devices; 2) production of leather articles; 3) chemical industry; 4) production of rubber and plastics articles; Sectorial trend: 5) production of other non-metallic mineral commodities; 6) metallurgy industry; 7) production of end metal works; 8) production of machinery and equipment; 9) production of petrochemicals

Metallurgy-Metal Working Industrial Park

Area / Location Karaganda region, Karaganda, Saryarka SEC, area is 540 ha Approach lines, fiber-optic communication lines, electricity, automobile roads, Infrastructure water and sewage systems. Establishment Establishment and location of competitive metallurgy and machine industry purpose plants. The following reserves are concentrated in the region: • 100% of manganese in the republic; • 80% of tungsten trioxide; • 54% of plumb; • 40% of zinc; Advantages • 36% of copper; • 32% of coal, including 100% of crozzling coal; • 100% of wollastonite; • 70% of baryte

The fields: • 32 gold fields; • 27 copper fields; • 22 molybdenum fields; • 21 plumb fields; • 14 zinc fields; • 12 iron fields

“Niche” Projects “Niche” projects in MMC are the following:

Ferrous metallurgy 1) Construction of up-to-date arc-furnace plant – Taraz, based upon infrastructure of Khimprom former plant 2) Construction of steel and sheet rolling plants for production of sheet special steel - Aktobe, Aktobe region 3) Setup of rail production – Pavlodar 4) Setup of electro-metallurgical steel plant – Zhambyl region 5) Setup of delivery pipe production – Mangistau or Atyrau regions 6) Setup of high-strength reinforcing production on Casting LLP Pavlodar Branch – Pavlodar region 7) Increase in volume of chrome alloy production with start-up of a plant on carbonic ferrochrome smelting – Aktobe region 8) Setup of ferromanganese production – Saran, Karaganda region 9) Setup of other ferroalloy production 10) Construction of two plants on production of low-ash special gas carbon - Karaganda 11) Construction of three refractory product plants – Temirtau, Ust-Kamenogorsk, Shymkent

Non-ferrous metallurgy 12) Construction of primary aluminium processing plant – Pavlodar region 13) Construction of metallic aluminum hardware plant – Pavlodar region 14) Construction of plant on metal work production using refined zinc – East-Kazakhstan region 15) Construction of plant on metal work production using refined copper – Karaganda reion

Rare metal industry: 16) Setup of small tonnage production of titanium dioxide – Ust-Kamenogorsk, East- Kazakhstan region 17) Recovery of Irtysh Chemical and Metallurgical Plant JSC and development of the 4th process stage of rare metals – Ust-Kamenogorsk, East-Kazakhstan region 18) Construction of MPC on the base of Stepnogorsk Mining-and-Chemical Mills – Akmola region, Stepnogorsk

Recommended regional location for enterprises In future, mining-and-metallurgical enterprises will be mainly located in north-west, central and north-east parts of the country with the centers of sectorial specializations in Karaganda, Kostanay, Aktobe, Pavlodar, Ust-Kamenogorsk, Zhezkazgan, near by the sources of raw materials and economic power, available production capacities, infrastructure and experienced labour force. Location of new and upgrading of operating plants of higher process stages in metallurgy and metal working will be linked to:

 available enterprises of primary process stages: - steel production (Karaganda region); - titanium bars (East-Kazakhstan region); - ferrochrome (Aktobe region); - rail-rolling production (Pavlodar region); - ferrosilicon manganese (Zhambyl region); - special steel production (Karaganda and Kostanay regions);

 the sources of economic power: - aluminium production (Pavlodar region); - cathode copper (East-Kazakhstan region).

Chemical Industry

Chemical industry ranks among priority industries of Kazakhstan and is one of the largest suppliers of raw materials, semi-finished products, materials for other industries of real economy sectors.

The Main Tasks of Chemical Industry in Kazakhstan: Development of priority competitive chemical plants oriented to release high-technology, export- oriented and innovative products with high value added.

Structure of Export and Import of Chemical Products, 2010

Maximum import volume falls at calcined soda; fertilizers; inorganic compounds (acids, alkalis, oxides, salts, etc.); cleaning agents. Thus, import structure of chemicals shows that products with high value added prevail in import.

What Kazakhstan offers for its investors: Raw Material Base Kazakhstan chemical industry is based upon the richest phosphorite reserves, development of oil and gas industry, recycling of sulfurous gases of metallurgy industry, large stocks of various salts. Location of chemical enterprises with initial process stages is related to linking to the sources of raw materials (Zhambyl, Aktobe, Atyrau and South-Kazakhstan regions - nitrogen, phosphoric, potash, complex mineral fertilizers), the higher process stages are linked to the available production capacities, experienced labor forces, scientific and technical base and demand of consumers, plant facilities (special chemicals and consumer chemistry – Pavlodar, Karaganda, East-Kazakhstan regions and Almaty; caustic soda – Pavlodar, sulphuric acid production – Akmola, Kyzylorda and Zhambyl regions, rubber goods production – Karaganda region). Operating Enterprises As of June 1, 2011, 46 large and medium chemical enterprises and plants have been registered.

Competitive Cluster 1) Development of SEZ in Zhambyl region 2) Development of SEZ in Pavlodar region

“Niche” Projects The Ministry of Industry and New Technologies of the RoK defined “niche” projects of Kazakhstan chemical industry. Implementation of these projects is focused on import substitution, thus meeting domestic consumption using domestic manufacture. “Niche” projects in chemical industry are the following: 1) Potash salt production – Aktobe region; 2) Construction of calcined soda plant – Pavlodar region; 3) Ammonia and carbamide production – Mangistau region.

Recommended regional location for enterprises Location of chemical enterprises with initial process stages is related with linking to the sources of raw materials:

 Zhambyl, Aktobe, Atyrau and South-Kazakhstan regions - nitrogen, phosphoric, potash, complex mineral fertilizers;

The higher process stages are linked to the available production capacities, experienced labor forces, scientific and technical base and demand of consumers, plant facilities:

 special chemicals and consumer chemistry – Pavlodar, Karaganda, East-Kazakhstan regions and Almaty;  caustic soda – Pavlodar;  sulphuric acid production – Akmola, Kyzylorda and Zhambyl regions;  rubber goods production – Karaganda region.

Atomic Industry

According to the International Atomic Energy Agency (IAEA), about 19% of all explored world reserves are concentrated in Kazakhstan. Total national reserves are valued in 802 thou tons of uranium. 2009, Kazakhstan took the first place among uranium extraction in the world. Natural uranium output was 14,241 tons for 2009. Uranium output was 17,803 tons for 2010. Kazatomprom JSC National Atomic Company is the national operator of Kazakhstan on import and export of uranium, rare metals, nuclear fuel for atomic power stations, special equipment, technologies and dual-purpose materials. 100% of the Company’s stocks are held by the Government under Samruk-Kazyna National Welfare Fund.

Kazatomprom JSC is a holding company for managing seven main areas of activity: − uranium extraction and geologic exploration; − manufacture of nuclear fuel cycle products; − nuclear reactor industry, atomic power stations; − non-ferrous metallurgy and manufacture of construction materials; − electric-power industry; − science; − social security and staff training. What Kazakhstan offers for its investors: Atomic industry is developed in traditional regions for extraction of uranium raw materials – in South Kazakhstan, Akmola regions and processing is performed in Akmola (Stepnogorsk Mining-and-Chemical Mill) and East-Kazakhstan (Ulba metallurgical plant) regions. According to international rating, Kazakhstan is among the countries with high competence in basic nuclear physics and radiative study of materials.

Machine Industry

The main task of machine industry in Kazakhstan: maximum satisfaction of domestic needs and expansion of export through increasing in manufacture of the products with value added.

Machine-building sector includes 13 sub-industries: railway, oil and gas, mining and metallurgy, automobile construction, agriculture, electrical system, etc.

The most priority-oriented machine sub-industries in Kazakhstan are the following:

 machine industry for oil and gas industry;

Priority for developing domestic oil and gas machine industry is determined by oil and gas sector which is the large consumer of machine-building products. Kazakhstan enterprises release various complex equipment for drilling, well servicing, extraction, treatment, transport, processing of oil and gas, that makes it possible to master production of offshore platforms.

Oil and Gas Machine Industry Output in Kazakhstan

January-August Item 2008 2009 2010 2011 Liquid centrifugal pumps; other pumps; 10,253 11,100 12,935 9,160 liquid eductors, units Oil and gas processing equipment, 148.4 384.2 1,107.5 795.5 Mio KZT Oil field equipment, Mio KZT 1,385.9 1,613.9 2,686.2 1,574.8

 machine industry for metal mining and metallurgical industry;

The most advanced groups of domestic product in mining and smelting machine industry are the following: load-haul-dump transport, hydroperforators and air perforators, reductors, belt conveyers, steelmaking equipment, high variety of rolling-mill equipment, spare part production, etc.

Mining and Smelting Industry Output in Kazakhstan

January- Item 2008 2009 2010 August 2011 Manufacture of equipment for mining, underground extraction and construction, 8,811.1 6,529.7 11,434.6 7,984.5 Mio KZT

 railway machine industry; Kazakhstan domestic demand for products of railway machine industry is developed by principal user of freight cars and locomotives – “National Company “Kazakhstan Temir Zholy” Joint Stock Company. According to the company’s plan, about 1.4 – 5.2 cars and 100 locomotives will be purchased before 2014 as well as the existing fleet of cars and locomotives will be repaired completely. 2010, cumulative import of freight railway or street cars only was 321.7 Mio USD in Kazakhstan. That builds up significant capacity for establishing import substitution industries.

Railway Machine Industry Output in Kazakhstan

January- Item 2008 2009 2010 August 2011 Manufacture of railway locomotives and 5,193.3 7,542.6 22,394.3 39,935 railway vehicles, Mio KZT

 agricultural machine industry;

Currently, the market of agricultural equipment in Kazakhstan is essentially occupied by import products. Domestic producers play the primary role in agricultural machinery segment (milking plants, agriproduct processing plants, etc.), they have 50% in component and spare part segment and minimal percent in segment of combine harvesters and attached implements. Import volume of ag tractors was 1.2 Mio USD in 2009. Segment of grain combine harvester of 3rd and 4th class, wheeled tractors, attached implements and cereal and feed crop processing plants has the highest capacity for developing agricultural machine industry in Kazakhstan. Kazakhstan has conditions for making attached implements maximum adapted to environment conditions of various Kazakhstan regions. Also, there is considerable demand necessary to renew the fleet and expand the cultivated lands.

Agricultural Machine Industry Output in Kazakhstan

January- Item 2008 2009 2010 August 2011 Manufacture of agricultural and forestry 10,357.4 8,319.5 8,317.1 12,292.4 equipment, Mio KZT

Operating Enterprises As of June 1, 2011, 253 large and medium machinery enterprises have been registered, 8 among them manufacture computers, electronics and optical products, 19 among them manufacture electric equipment, 156 enterprises repair and install plants and equipment and produce other transport means, 6 enterprises produce vehicles, trailers and semi-trailers, 17 enterprisers produce the other transport means according to the Agency of the RoK on Statistics.

“Niche” Projects “Niche” projects in machine industry are the following: 1) Assembly production of tractors and combine harvesters; 2) Production of the attached implements; 3) Production of passenger cars; 4) Production of freight cars; 5) Production of all-rolled wheels; 6) Production of light and commercial vehicles with the leading automobile groups of companies. Recommended regional location for enterprises:

 agricultural machine industry – in regions where agriculture is more developed – north and east regions;  oil and gas machine industry – in west region to provide actively developing gas and oil industry with engineering capabilities focusing on demand of oil and gas production and processing enterprises for dedicated equipment, consumables, accessories and available production capacities – Almaty, North-Kazakhstan and East-Kazakhstan regions;  mining machine industry – in central and east regions, focusing on demand of large mining and smelting enterprises;  electrical machine industry – in south and central regions, focusing on available production base;  vehicle machine industry – in north, central and east regions, focusing on available experienced labor forces, production of accessories and spare parts of the allied industries.

Oil Refining and Development of Oil and Gas Infrastructure

More ... Mining-and-Metallurgical Sector

Mining-and-metallurgical sector is a strategic branch of national economy which role is to provide the plants of hi-tech and science-intensive final products with raw material (machine, building, aircraft, space and defense industries). The Main Tasks of Mining-and-Metallurgical Sector in Kazakhstan: Development of competitive plants, extension of nomenclature and gain of share of advanced processing products with high value added with attraction of small and medium business.

More ... Chemical Industry

Chemical industry ranks among priority industries of Kazakhstan and is one of the largest suppliers of raw materials, semi-finished products, materials for other industries of real economy sectors. The Main Tasks of Chemical Industry in Kazakhstan: Development of priority competitive chemical plants oriented to release high- technology, export-oriented and innovative products with high value added.

More ... Atomic Industry

More ... Machine Industry

The main task of machine industry in Kazakhstan: maximum satisfaction of domestic needs and expansion of export through increasing in manufacture of the products with value added.

Machine-building sector includes 13 sub-industries: railway, oil and gas, mining and metallurgy, automobile construction, agriculture, electrical system, etc.

More ... Pharmaceutical Industry

The Main Task of Pharmaceutical Industry: Creating conditions for import substitution of pharmaceuticals and medicines on the basis of high technologies in accordance with GMP international standards.

Kazakhstan depends on import of pharmaceutical raw material (substances), equipment and packing materials significantly. As of 2010, Kazakhstan medicine output is 11.4% of common pharmaceutical market, export is 1.6% and import is 90.2%. Pharmaceutical industry of Kazakhstan depends on import of pharmaceutical raw material (substances), equipment and packing materials significantly.

Operating Enterprises As of June 1, 2011, 7 major large and medium pharmaceutical enterprises and plants have been registered.

“Niche” projects of pharmaceutical industry are the following: 1) Construction of plant on production of single-use medical goods of polymeric materials – Almaty; 2) Construction of plant on production of infusion solutions, pills, capsules and syrups – Almaty region;

Recommended regional location for enterprises Pharmaceutical enterprises will be located linking to previously established science and production base (South-Kazakhstan region and Almaty) as well as to available education infrastructure, experienced labour force (Aktobe, East-Kazakhstan, Karaganda regions and Almaty and Astana). The largest one among them is construction of pharmaceutical factory in Astana.

Centers of sectorial specializations: Almaty, Shymkent, Astana, Karaganda.

Construction Industry and Manufacture of Construction Materials

Construction sector significantly influences on national economy in whole and, not least importantly, on social position. Further development of construction industry and improvement of safety and quality of construction products in up‐to‐date conditions are the key economic and politic tasks of the state. Maximum import volume falls at vessels, vials and other glass storage containers; ceramic glazed slabs and cubes; bricks, blocks, tiles and similar refractory ceramic construction materials.

Construction Industry and Building Materials Production

The Main Tasks of Construction Industry in Kazakhstan: 1. Increase in gross value added in construction industry; 2. Increase in rate of home-produced construction materials; 3. Increase in labor productivity.

Consumption of Construction Materials in the RoK for 2010, in %

Maximum import volume falls at vessels, vials and other glass storage containers; ceramic glazed slabs and cubes; bricks, blocks, tiles and similar refractory ceramic construction materials.

What Kazakhstan offers for its investors: Raw Material Base Kazakhstan has rich raw stocks to produce construction materials, however only the half of available fields is developed at present. Almost all construction materials, products and semi- finished products are released in Kazakhstan except for flat-glass, sanitary faience and semivitreous wares.

Operating Enterprises As of June 1, 2011, 46 large and medium rubber and plastic enterprises and 150 non-metallic mineral enterprises have been registered.

Competitive Cluster Astana – New City SEZ

Established Decree of the President of the RoK dated January 26, 1996 No. 2823 Area / Location Astana, 7,092.9 ha Participants 269 facilities have been registered in Kazakhstan Establishment Accelerated construction of new capital business center and opening of new purpose plants

“Niche” Projects The Ministry of Industry and New Technologies of the RoK defined “niche” projects in construction industry and manufacture of construction materials. Implementation of these projects is focused on import substitution, thus meeting domestic consumption through domestic manufacture. “Niche” projects in construction sector are the following:

Glass manufacturing: 1) Flat-glass industry – Kyzylorda region; 2) Construction and operation of plants for industrial glass processing and manufacture of energy-saving and environmental friendly insulating glass units – Kyzylorda region; Ceramic production: 3) Facing tile line – Aktobe region; 4) Sanitary ceramic line – Aktobe region; 5) Operation of clay processing enterprise – Khromtau, Aktobe region;

Basalt fiber production 6) Construction of secondary processing line on the basis of Pavlodar LLP “Basalt Technologies” – Pavlodar, Pavlodar region; 7) Construction of plant of basalt thermal insulating material – Almaty, Shymkent;

Industrial construction: 8) Industrial construction mill – Almaty, Astana, Aktobe, Shymkent;

Cement production 9) Clinker and cement terminals – Almaty, Atyrau, Aktobe, Aktau, Pavlodar;

Recommended regional location for enterprises Available demand, infrastructure and technological bases, low costs for product, components and equipment transport will be the predominant factors for developing construction sector as domestic demand-based industry. New plants of this group will be located beside traditional enterprises in Almaty and Astana.

 Centers of sectorial specializations: Almaty, Astana, Shymkent, Ust-Kamenogorsk, Atyrau.  Implementation of investment projects on construction and upgrading of cement plants as well as production of ceramics, glass, gypsum blocks, light structural panels, dry construction mixes will be focused on the raw material base and sales markets (Akmola, Atyrau, Zhambyl, West-Kazakhstan, Mangistau, Karaganda, East-Kazakhstan, Aktobe, Kyzylorda, South-Kazakhstan regions).  Industrial construction mills will be focused on the sales markets (Astana, Almaty, Shymkent, Aktobe).

Agricultural Sector

The Main Task of Agricultural Sector: Increase in labour productivity, assurance of food security of the country and building export capacity of agricultural sector (AS).

Plant Industry The annual average grain production in the republic was 16.2 Mio tons for the last three years (2008-2010). Kazakhstan is among the top 10 largest grain exporters in the world. Kazakhstan grain is exported to over 70 countries of the world. The major importers of Kazakhstan grain are the CIS countries, Middle East, North Africa and European Union. Moreover, oil, melon field fruit and small-fruit crops, grape, sugar beet and potato is planted in Kazakhstan.

Cattle Production Cattle production is one of the primary agricultural industries in the republic. Rich grazing lands and favorable environment conditions provide good basis for developing cattle production. Due to implementing the state policy, cattle production industry is presented with stable increase in cattle and fowl, manufacture of animal products, increase in cattle and fowl yield, improvement of stock reproduction. Meat production in deadweight was 937.4 thou tons, milk yield was 5,381.2 thou tons, 3,720.3 eggs were yielded and wool was 37.6 thou tons in 2010.

Food and Processing Industry Food and processing industry of the country (meat, dairy, fish, flour-and-cereals and formula feed, sugar, fat-and-oil) is one of the strategic industries aimed to provide people of the country with the required foods quantitatively and qualitatively. According to the Agency of the Republic of Kazakhstan on Statistics (hereinafter – the Agency), about 2.1 thou enterprises release food industry products as of January 1, 11. Industry enterprises yielded 7% of republican industrial output and 22% of output was yielded in processing industry in 2010. Food output was 673.3 bln KZT in money terms in 2010 that is 12.9% more than in 2009. Beverage industry output was 137.5 bln KZT for accounting period that is 25% more than in 2009. According to the Agency, about 70 thou people are employed in the industry that is 18% of all workers of the processing industry and 9.7% of the industry. Investments in the basic capital were 50.0 bln KZT in 2010.

The main export items in Kazakhstan are grain and its derived products, rice, meat, fat and oil products and confectionery. Import of Agricultural Products in 2010, Mio USD

Living animals and animal products 584.7 Plant products 533.2 End food products, alcoholic and non-alcoholic drinks and vinegar, tobacco and its 1,704.1 substitutes

Source: Agency of the RoK on Statistics

Operating Enterprises As of January 1, 2011, 161 large and 647 medium agricultural, forest and fish enterprises have been registered.

Recommended regional location for enterprises Agricultural industry will be developed in the center, north, south and east of the country. Location of processing agricultural and fish enterprises will be focused both on the sources of raw materials and the sales markets of large cities. Developing food belts around Astana and Almaty will be prioritized. Primary agricultural plants focused on advanced grain and meat processing will be mainly located in the north regions.

Centers of sectorial specializations: Petropavlovsk, Kostanay, Kokshetau, Shymkent, Taraz, Taldykorgan, Almaty, Kyzylorda, Atyrau.

Light Industry

The Main Tasks of Light Industry in Kazakhstan: Meeting the domestic demand for light industry products through raw material processing, manufacture of products with high value added and its perspective access to foreign markets.

Source: Agency of the RoK on Statistics

What Kazakhstan offers for its investors: Raw Material Base Raw material base of cotton and textile industry in Kazakhstan is cotton. Gross cotton yield in the country was 240 thou tons in 2010. Cotton produced in Kazakhstan refers to medium-fiber types of cotton fiber. Also, Kazakhstan has the required resources for rawstock. Thus, the following was produced in 2010: Item 2010 Cattle skin or horse skin without hairs, thou sq.dm 92,501.7 Furs, tanned skin or leather, thou sq.dm 1,131.7 Lambskin, goat or pig skin without hairs, thou 422.6 sq.dm

Operating Enterprises As of June 1, 2011, 39 large and medium textile enterprises and plants have been registered, 32 enterprises produce clothes, 5 enterprises produce leather and related products.

South region SEZ

Established Decree of the President of the RoK dated July 6, 2005 No. 1605 Operates before July 1, 2030 Area / Location South-Kazakhstan region, area is 200 ha 4 participants: Oxy Textile LLP, Khlopkoprom- Cellulose Participants LLP, Utex-KZ JSC, Yesenzhol-Nazar LLP Establishment development of cotton cluster purpose Total, 8.1 bln KZT was allocated for infrastructure. Budget means Infrastructure construction is completed for 100%

“Niche” Projects “Niche” projects in light industry are the following: 1) Reconstruction and modernization of leather-shoe industry – Zhambyl region; 2) Skin processing and leather production on Alga tanyard – Aktobe region; 3) Geotextile production to reinforce engineering structures – Almaty region; 4) Semi-worsted yarn factory – Almaty region; 5) Carpet and high-density carpet goods factory – Almaty; 6) Woolen cloth factory – Almaty; 7) Worsted yarn and knit goods factory – Kostanay region.

Recommended regional location for enterprises Light industry enterprises will be located in Almaty, Shymkent, Semey in linking to the established production and processing base, available raw material and labor resources as well as to the presented and perspective domestic and world demand.

Tourism Industry

Kazakhstan has a lot of unique wildlife preservations and national parks, over 100 sanatoriums and over 9,000 archeological and historical monuments. Kazakhstan is attractive for people who like wild intact nature, miraculous landscapes, unexplored tourist ways, and for other curious tourists who want to be the discoverers. North branch of the Great Silk Road intersects the country. This is a unique system of historical, archeological and architectural monuments. Such towns as Otrar, Sauran and Turkestan were both trade centers and scientific and cultural centers.

Tourism Industry

Volume of investments in tourism industry increased by 58.3% in 2010 as compared to 2009 (122.9 bln KZT) and amounted to 194.6 bln KZT. 1.720 dwelling and catering service enterprises have been registered in Kazakhstan. Number of the attendants served, thou people

2 quarters 2005 2006 2007 2008 2009 2010 of 2011 Entry tourism 39,872 56,203 62,117 37,937 31,246 39,640 15,320 Exit tourism 210,692 255,626 286,691 261,070 193,951 261,709 128,335 Domestic 1,224,618 1,470,957 1,964,907 1,801,087 1,544,506 2,548,868 1,283,107 tourism

The Main Tasks and Sectoral Strategies Promotion of competitiveness of tourism industry and attraction of Kazakhstan as tourism sector. Sector development will be focused on establishing competitive tourism infrastructure, creating national tourism products, its promoting to international and domestic markets.

What Kazakhstan offers for its investors: Tourism Capacity Kazakhstan has a lot of unique wildlife preservations and national parks, over 100 sanatoriums and over 9,000 archeological and historical monuments. Kazakhstan is attractive for people who like wild intact nature, miraculous landscapes, unexplored tourist ways, and for other curious tourists who want to be the discoverers. North branch of the Great Silk Road intersects the country. This is a unique system of historical, archeological and architectural monuments. Such towns as Otrar, Sauran and Turkestan were both trade centers and scientific and cultural centers. There are the places attractive for people who like active rest in Kazakhstan. Shymbulak ski resort, high-mountain Medeo ice-skating rink and Schuchinsk-Borovoye resort area so-called “Kazakh Switzerland” is popular among the tourists. Infrastructure and Location 118 specially protected natural reservations, including 11 state national parks where eco-tourism is allowed operate in Kazakhstan. “West Europe – West China” transport corridor passing through five regions of Kazakhstan (Almaty, Zhambyl, South-Kazakhstan, Kyzylorda and Aktobe regions) offers unrivaled opportunity to develop tourism cluster alongside it.

The following issues will be studied within the framework of establishment of competitive tourism infrastructure:

 assignment of lands by the local executive authorities for construction of the roadside infrastructure facilities along the transport corridor;  development of engineering and communication infrastructure in addition to recreated tourism facilities;  subsidization of remuneration rates for lending the investment projects of national tourist cluster along the “West Europe – West China” transport corridor.

SEZ Burabay Special Economic Zone is located in Schuchinsk district of Akmola region. SEZ area is 370 hectares. SEZ is aimed to develop high-performance and competitive tourism infrastructure able to satisfy the requirements of Kazakh and foreign tourists. Priority activities of SEZ in the republic are as follows: 1) management and development of culture and cognitive, health-improving, environment, business, sports and other types of tourism; 2) rendering of different tourist services, including health-improving, entertainment, catering, transport, hotel, sightseeing, information services; 3) souvenir production management.

Information Technologies

Market of information and communication technologies is new and developed actively in Kazakhstan.

IT market generally includes the companies which manufacture and sale computer equipment, develop software and render IT services. IT services prevail in the structure of the world market. Sale of computer equipment in Kazakhstan is still at the top. However, software market builds the rates of growth and opens a potential for investors.

Information Technologies

Market of information and communication technologies is new and developed actively in Kazakhstan. IT market generally includes the companies which manufacture and sale computer equipment, develop software and render IT services. IT services prevail in the structure of the world market. Sale of computer equipment in Kazakhstan is still at the top. However, software market builds the rates of growth and opens a potential for investors.

Information Technology Market Mln USD 2005 2006 2007 2008 2009 2010 Total 195.3 353.4 436.4 649.7 858.3 1,001.3 including: purchase of computers 63.5 106.5 134.8 209.1 304.3 391.0 purchase of software tools 34.7 57.1 83.4 197.7 118.9 185.5 self-contained software development within the organization 9.6 14.8 payment for communication services 47.7 117.3 99.5 140.1 259.8 247.5 staff training 3.1 6.5 5.8 9.7 5.6 9.7 payment for outsourced and IT specialists services 24.8 40.9 70.5 66.1 108.1 106.0 hire of ICT means 5.8 6.4 other IT expenditures 21.5 25.2 42.6 26.9 46.3 40.2

Main Task Development of competitive export-oriented national sector of information and communication technologies.

Figures of Global index of competitiveness according to the factor “Technological development level” person 2005 2006 2007 2008 2009 2010 Number of cellular subscribers, per 100 persons 35.6 51.2 81.3 102.6 106.0 118.9 Number of Internet subscribers, per 100 persons 2.0 2.0 2.5 3.8 4.8 6.0 Number of broad-band Internet subscribers, per 100 persons - - - 2.2 3.6 5.3 Provision of people with computers, per 100 persons 2.3 2.8 3.4 4.6 6.2 7.3

What Kazakhstan offers for its investors: Provision with experienced staff resources State grants for ICT trades are planned to be increased twofold as compared to 2009 to study in Kazakhstan universities; to change training programs for IT experts at the levels of tertiary and vocational training according to the accepted international standards.

Implementation of technical regulations Standard base for information and communication technologies will be updated internationally.

Innovation development and promotion in technologic upgrading The grants will be appropriated to implement the projects on development of the Kazakh segment of Internet within the framework of venture financing of the projects through NIF JSC, Science Fund JSC; Radio-frequency spectrum will be free within the range of 450 MHz to develop telecommunication networks using CDMA technologies; No less than 50% of 3 kHz – 400 GHz radio-frequency bands will be redistributed from “joint use” to “civil use” category.

Attractive terms for direct investments, including: development of infrastructure of Alatau IT Park FEZ; appropriation of land grants for the project on data centers construction; implementation of system of state supportive measures in developing the Kazakh segment of Internet; increase in the rendered public services through “e-Government” web portal; state financing of social projects in the Kazakh segment of Internet, including social network for children; development of intellectual part of Alatau IT Park FEZ in Almaty for optimal use of research and technologic capacities of the leading Kazakh universities.

Biotechnology

Currently, home-produced medicines are 11% in Kazakhstan (including 1.1% of vaccines), veterinary drugs are 78 %, and the rest drugs are imported.

The main problem for Kazakhstan is the lack of original domestic biotechnological medicines, although there are promising pilot developments.

Biotechnology

Currently, home-produced medicines are 11% in Kazakhstan (including 1.1% of vaccines), veterinary drugs are 78 %, and the rest drugs are imported. The main problem for Kazakhstan is the lack of original domestic biotechnological medicines, although there are promising pilot developments. Development of starter cultures, enzymatic drugs, dietary supplements and probiotics for the food and processing industry is another priority of biotechnology. The main task for industry development: development and introduction of high technologies and competitive biotechnological products for health care and agriculture, environment protection, food and processing industry.

Sectoral Strategies The flowing measures will be implemented to develop effective and quality biotechnological industry:

 implementation of new test systems based using genomic technologies to diagnose socially significant diseases;  production setup and industrial production of original drugs based upon genetically engineered and recombinant substances;  establishment of development center on transfer of tissue, stem cells, macrobiotic medicines and development of methodological principles for their use in regenerative medicine and cellular therapy;  establishment of plants on diagnosticums and vaccines meeting the international standards of good manufacturing practice (GMP);  development of microorganism collection and biotechnological plants on starter cultures, food protein, amino acids, enzymes, biological preservatives;  breeding of high-yielding competitive plants for agriculture;  development of environmentally friendly biological methods of plant protection against insects and diseases;  establishment of consortiums of microbial strains to use soil and water ecosystems contaminated by oil products in bioremediation;  development of methods for phytoremediation of soils contaminated by heavy metals and pesticides using hyper-accumulating plants;  breeding of high-yield animals.

Space Activity Thank to unique competitive advantage consisting in available the largest Baykonur space complex in the world, Kazakhstan has all the necessary prerequisites to become one of the world’s leading space powers by 2020.

The Earth’s first satellite was put into orbit from Baykonur in 1957, and Vostok spaceship with the first cosmonaut Yuriy Gagarin on board was launched in 1961.

Space Activity

Thank to unique competitive advantage consisting in available the largest Baykonur space complex in the world, Kazakhstan has all the necessary prerequisites to become one of the world’s leading space powers by 2020. The Earth’s first satellite was put into orbit from Baykonur in 1957, and Vostok spaceship with the first cosmonaut Yuriy Gagarin on board was launched in 1961. Then, the first Sun, Lunar and Venus artificial satellites, and spaceships, including satellite vehicles were launched from Baykonur. Baykonur area has the following facilities:

 “Proton”, “Soyuz”, “Zenit”, “Dnepr” space rocket complexes;  ground control of space communication;  basic elements of the National Space Monitoring System, including three Centers for reception of space information from land remote sensing satellites;  basic elements of scientific and technologic infrastructure, including space ray stations, research laboratories and astronomical observatory.

Today, Kazakhstan has developed a significant demand for various space services, particularly the services of space communication system, high-accuracy global positioning systems. The main task of space industry in Kazakhstan: development of comprehensive space industry as high-technology economic sector contributing to accelerate industrial and innovative development of the republic, promote national security and defense, develop science and high technologies. National Space Projects of Kazakhstan

 Joint Kazakhstan and Russia “Bayterek” Project under which Baykonur will launch “Angara” new future-generation carrier rocket in a future which will gradually replace the environmentally dangerous “Proton” carrier.  Implementation of Comprehensive program for researches and space experiments on ISS board.  Development of target systems of space communication, global positioning, and space services provided on their basis, ground space infrastructure as well as experienced staffing for space industry.  Establishment of own special engineering department of space hardware and assembly and test complex at Baykonur.

Establishment of the World Space Observatory – construction with international cooperation, and launching a space observatory vehicle 1.5 million kilometers from Earth which will operate in ultraviolet band. 16 countries, including Russia has already participated in the project.

Alternative Energy Industry The main task of alternative energy industry is to increase the share of renewable energy sources (mini‐hydro power plants, solar plants) in the country’s balance of energy. The capacity of renewable energy sources (hydropower, wind energy and solar energy) is significant in Kazakhstan.

Alternative Energy Industry

The main task of alternative energy industry is to increase the share of renewable energy sources (mini-hydro power plants, solar plants) in the country’s balance of energy. Capacities of hydropower resources of Kazakhstan:

Gross (estimated) capacity 170х109 kWh/year; Technical capacity (possible to use) 62х109 kWh/year; Economic capacity 27-30х109 kWh/year

The capacity of renewable energy sources (hydropower, wind energy and solar energy) is significant in Kazakhstan. Wind industry is one of the advanced types of renewable energy sources. A wind atlas of Kazakhstan has been drawn. In Kazakhstan, 10 construction sites for of wind power plants (WPPs) have been inspected All these sites can be used for the construction of large WPPs with up to 1,000 mW total capacity for commercial electricity production in the amount of 2-3 bln kWh. According to the researches, the capacity of solar energy in southern regions of the country is 2500 – 3000 sun hours per annum.

Sectoral Strategies It is planned to construct 125 mW wind power plants with 400 Mio kWh of electricity output by 2015. It is planned to commission new small HPPs with total capacity over 100 mW, with 300 Mio kWh of the planned electricity output in the republic by 2015. Currently, considering the electricity generated by the facilities that use renewable sources of energy, the electricity output of renewable energy sources is expected to be 1 bln kWh in 2014 per annum.

State Supportive Measures Supportive measures of renewable energy source: reservation and prioritizing when granting land plots for construction of facilities for renewable energy sources; obligations of energy transferring agencies to purchase electricity produced by renewable energy sources; exemption of renewable energy sources from payment for power transporting through networks; assistance when connecting the facilities using renewable sources to the networks of energy transferring agencies.

DOING BUSINESS

Enterprise Registration

To register a legal entity in the registration authority (Ministry of Justice and its territorial offices) all the necessary documents should be submitted.

List of documents required for registration

 statement under the established form, signed by the founder or authorized founder;  list of constituent and other documents in the state and Russian languages, laced up and numbered, in triplicate;  copies of documents proving the identity of the head and founders of the legal entity, their taxpayer’s certificates.

If the founder of the legal entity is other legal entity it is necessary to submit:

 statement from the tax department as to tax arrears of the founding legal entity owing to the budget of the Republic of Kazakhstan, or the absence thereof;  a notarized copy of the certificate of state registration or re-registration;  a notarized copy of the statistics card (if available);  a notarized copy of taxpayer’s certificate.

Legal entities with foreign participation are registered under the procedure established for registration of RK legal entities.

The following additional documents should be submitted:

 legalized extract from the trade register, or other legalized document, certifying that the founding foreign legal entity is a legal entity under the laws of a foreign state, with notarized translations into the state and Russian languages;  copy of the passport or other document proving the identity of the founder where they are a foreign national, with a notarized translation into the state and Russian languages.  document certifying the address of the relevant legal entity,  receipt or other document confirming payment to the budget of the fee for the state registration of legal entities or account registration of branches and representations.

To open a branch or representative office of a foreign legal entity it is necessary to submit:

 a statement of record registration;  regulations of the branch or representative office, confirmed by the legal entity’s management body;  a power of attorney issued by the legal entity’s management body to the head of the branch or representative office, with a notarized translation into the state and Russian languages;  the decision of the legal entity to establish a branch or representative office, with a notarized translation into the state and Russian languages;  a legalized extract from the trade register or other legalized document certifying that the given entity which is opening the branch or representative office in the Republic of Kazakhstan is a legal entity under the laws of its country, with a notarized translation into the state and Russian languages;  a legalized document, confirming tax registration of the foreign legal entity in the country of its incorporation, with a notarized translation into the state and Russian languages;  a legalized copy of the Articles of Association of the foreign legal entity, with a notarized translation into the state and Russian languages;  a copy of the constitutive documents of the legal entity, with a notarized translation into the state and Russian languages;  a document confirming the address;  the receipt or other document confirming payment of the fee for the state registration of a legal entity or account registration of branches and representative offices.

Periods for state registration  small businesses  medium or large businesses  record registration of their branches and no more than one (1) business day, following representative offices carrying out their the day of application, accompanied by the business on the basis of standard necessary documents Articles of Association

 state re-registration of legal entities which are small businesses, and also for those legal entities which are medium or large businesses and carrying out their no more than three (3) business days following business on the basis of standard the day of application, accompanied by the Articles of Association necessary documents  record registration of their branches and representative offices

 state registration or re-registration of legal entities which are small businesses, and also for those legal entities which are medium or large businesses and no more than seven (7) business days following carrying out their business on the basis the day of application, accompanied by the of non-standard Articles of Association necessary documents  record registration or re-registration of their branches and representative offices

Deadlines for release of documents upon registration:

 small businesses  medium or large businesses carrying out at the same time, and not later than five (5) their business on the basis of standard business days from submission of the Articles of Association application, accompanied by the necessary  record registration of their branches and documents representative offices

 medium or large businesses carrying out their business on the basis of non- not later than eleven (11) business days from standard Articles of Association, for submission of the application, accompanied by their branches and representative offices the necessary documents

After obtaining approval and being registered by the state an organization:

 the following will be given: a certificate of state registration, a statistics card, and a certificate of registration with the tax authority,  seal can be made and bank accounts can be opened.

Investors are entitled to open bank accounts within the Republic of Kazakhstan in the national currency and/or foreign currency in accordance with the Republic of Kazakhstan banking and currency laws. Branches and representative offices are entitled to operate through foreign accounts. An enterprise registered on the territory of another state is not prohibited from carrying on business in Kazakhstan. For this purpose it is to become tax-registered in the area where it does its business, where it has its head office, or its assets.

Contact details of the Ministry of Justice of the Republic of Kazakhstan: Entrance 13, House of Ministries, Orynbor Street, Left Bank, Astana, Kazakhstan, 010000 Tel: +7 (7172) 74-07-37, Central-office fax: +7 (7172) 74-09-54

Employment

Before concluding a labor contract with a foreign citizen, an employer shall obtain work permit for him/her in Akimat (local executive authority)[1].

Work permit is not necessary for:

 the heads of foreign branches and representative offices;  employers which attract foreign labor as the first heads of the legal entities of Kazakhstan which the authorized capital share of foreign legal entities and individuals is at least 50%, board directors of joint-stock companies of Kazakhstan where at least 50% of shares are held by the state or foreign legal entities or individuals;  persons being in short-term business trip provided that total duration of such trips do not exceed 60 calendar days during a year.

The Government annually sets a quota on issuance of work permits to foreigners. The quota is 0.85% to economically active population in 2011. Employers shall request quotas on work permits for the next year till September 1 of the current year.

The distribution of quotas in 2011 between the regions, Astana and Almaty

Region Quota for 2011 distributed by MLSP of the RoK (in units)* including by the categories Total 1-2 3 4 Akmola 50 40 10 0 Aktobe 1,200 1,100 100 0 Almaty 4,500 1,500 1,000 2,000 Atyrau 13,500 10,000 3,500 0 EKO 800 450 350 0 Zhambyl 2,100 1,300 800 0 WKO 1,800 1,600 200 0 Karaganda 300 250 50 0 Kostanay 180 30 150 0 Kyzylorda 800 500 300 0 Mangistau 5,000 3,000 1,500 500 Pavlodar 500 200 300 0 NKO 20 20 0 0 SKO 3,000 1,000 500 1,500 Almaty city 5,100 4,500 600 0 Astana 5,800 3,300 2,500 0 Total 44,650 28,790 11,860 4,000

* Actual quantity of quota is determined by the number of operating permits for foreign labor force in the region per each category as of the set date.

In most cases, work permit is issued for one year. It is planned to simplify the process for obtaining of permits for entry of foreign labor force in 2012.

Contact details of the Ministry of Labor and Social Protection of Kazakhstan: Entrance 6, build.2, Orynbor str., House of Ministries, Astana reception tel.: + 7 7172 742851 tel.: + 7 7172 743603, 743604 е-mail: [email protected]

Licensing

To conduct special activities in Kazakhstan it is necessary to obtain a license. The following separate activities are subject to be licensed:

1. industry; 14. health service; 2. atomic energy use; 15. service of individuals and legal entities; 3. toxic turnover; 16. gambling industry; 4. transport; 17. veterinary science; 5. drug, psychotropic substance, precursor 18. judicial and expert; trafficking; 19. culture; 6. information security; 20. financial sector and activity related to 7. special equipment for investigation works; concentration of financial resources; 8. turnover of arms, military hardware and 21. architecture, city planning and particular types of weapons, explosives construction; and its related products; 22. production of state symbols of 9. use of outer space; Kazakhstan; 10. informatization and communication; 23. customs; 11. education; 24. production and turnover of ethyl alcohol 12. mass media; and alcohol products, tobacco production; 13. agriculture and forestry, geodesy and 25. activity related to the use of currency cartography; valuables; 26. export and import of goods.

To obtain a license and license attachment (in case of subtypes of activity) a licensor (competent sectoral authority depending on scope of activity) shall be provided with the following documents: 1) an application; 2) copies of the Charter (except for export and import transactions) and state registration certificates of an applicant as a legal entity (notarized in case of failure to provide the originals for revise) – for legal entity; 3) a copy of ID document – for individual; 4) a copy of the state registration certificate of the applicant as an individual entrepreneur (notarized in case of failure to provide the originals for revise) – for individual entrepreneur; 5) a copy of a certificate on tax registration of the applicant (notarized in case of failure to provide the originals for revise); 6) a copy of document confirming payment into budget for the license for the right to conduct particular activities (notarized in case of failure to provide the originals for revise); 7) information and documents in accordance with qualifying requirements. Additional requirements to the list of documents when issuance of the license on financial activity or activity related to concentration of financial resources can be set by National Bank of Kazakhstan and authorized state agency for regulation and supervision of the financial market and institutions under the laws of Kazakhstan.

To obtain license attachment in the context of licensed type of activity, the following documents shall be provided: 1) an application; 2) a copy of the license (notarized in case of failure to provide the originals for revise); 3) information and documents in accordance with qualifying requirements to activity subtypes.

E-Licensing E-Licensing State database enables to submit documents required to obtain a license electronically over the Internet through filling registration form over e-Government gateway. See detailed information on web-site www.elicense.kz.

License Issue Date

 within 15 working days after submission of the required documents  within 30 working days – for licensing in atomic energy use, financial activity and activity related to concentration of financial resources.

If a licensor does not issue a license and (or) license attachments to an applicant or fails to provide the reasoned refusal in issuance of the license and (or) license attachment, the license and (or) license attachment shall be considered to be issued from expiry of the issue date. Licensor shall issue the corresponding license and (or) license attachment to the applicant within 5 working days after expiry of the date of issue of the license and (or) license attachment. Otherwise, the license and (or) license attachment is considered to be issued and document confirming the legal licensed activity before obtaining of the license itself is a copy of the list with indication of date when the licensor received the documents. Non-licensed activity may result in administrative and criminal responsibility in terms of fines and confiscation of the proceeds from license-free activity of a company. Also, non-licensed activity is formal ground to hold transaction invalid which had been closed at the time of failure to meet a date and liquidate the company which infringed the licensing rules.

Customs tariff

Customs Union (CU) Kazakhstan, Russia and Belarus has a common customs area.

When importing goods and vehicles to Kazakhstan, the following is charged:

 customs duty;  customs charges for customs clearance at a rate of 50 Euros for the base sheet of Cargo Customs Declaration and 20 Euros for each extra sheet of the Cargo Customs Declaration;  value-added tax at 12% of taxable imports (the amount of taxable imports includes the customs good value and the amounts of taxes and other compulsory payments to the budget when importing the goods, exclusive of VAT;  excise tax for some types of the goods.

According to the common customs tariff of the CU, the rates of import customs duties vary between 0% and 80%. Common Customs Code of the CU establishes different customs regimes and some of them provide full or partial exemption from customs duties.

Weight and cost restrictions of the goods for personal use It is allowed to import goods valued at no more than 1,500 Euros and a total weight up to 50 kg per one person without compulsory customs declaration and payment of customs duties. If this limit is exceeded, the fee shall be payable at a rate of 30% of the value of the goods, but no less than 4 Euros per one kilogram in excess.

The rates of export customs duties have been approved by the Decree of the Government of Kazakhstan dated June 7, 2010 No. 520 and vary between 10 and 30% except for particular goods.

Import/export of currency, securities, bills and checks:

 within the customs area of the CU – it is performed without any restrictions and customs declaration.  from the third countries/to the third countries to the amount exceeding the equivalent of USD 10,000 it is subject to customs declaration in writing by filing the passenger customs declaration for total amount of imported or exported values.

Foreign Taxation

Foreign individuals shall be registered in Kazakhstan taxation authorities in the following cases:

1. Opening of the accounts in banks being tax residents of Kazakhstan 2. Acquisition of income from Kazakhstan source non-taxable from source of payment in Kazakhstan 3. Acquisition of tax resident status.

Tax registration is usually performed at the residential address indicated in foreigners’ migration card. Registration:

 of department of non-resident entity is performed based upon data of national registers of identification numbers, i.e. automatically after registration in justice authorities;  of non-resident entity conducting its business in Kazakhstan through permanent agency without opening a branch, representative office – in taxation authorities by the place of location of permanent agency.

The residents are subject to taxation with regard to income earned both in Kazakhstan and abroad. The non-residents are subject to taxation with regard to income from Kazakhstan sources only, irrespective of the place of payment. As a rule, income is considered earned from Kazakhstan source if it is paid for works (services) performed (rendered) in Kazakhstan or income earned from a resident or non-resident acting in Kazakhstan through permanent agency. Kazakhstan source income includes interest, dividend and royalty return among other things. Foreign individuals are deemed to be residents if they stay in the country for at least 183 days in any 12-month period which ends in the current tax period. An individual is considered as non- resident for a period following the last day of its stay in Kazakhstan if a person does not become a resident in a year following the year when a stay of that person in Kazakhstan expired. Double taxation treaties may indicate different rules to define resident status.

Basic taxes

Entrepreneurial activity of a foreign investor is usually subject to the following taxes and dueties:

1. Corporate income tax (CIT); 2. Individual income tax (IIT); 3. Mineral extraction tax (MET); 4. Value added tax (VAT); 5. Land tax from legal entities; 6. Property tax from legal entities and individual entrepreneurs; 7. Vehicle tax from legal entities; 8. Pension taxes, social deductions.

1. Corporate Income Tax (CIT)

CIT payers are legal entities: residents and non-residents which conduct its business through permanent agency or earn income from Kazakhstan sources. CIT rates: for income from production, processing and sale of agricultural products - 10 %; for passive income (fees, winnings, Kazakhstan income of non-residents) - 15%; for taxable income – 20%.

Taxable income is reduced: for the amount of expenses in social and charitable activity of the company within 3% of taxable income; for the amount of expenses for training of an individual. Training expenses include tuition, accommodation, and travel to and from the place for training; for following types of income: financial leasing benefits, income from increased value and premiums from privileged securities.

Period for carrying forward losses: arising before 01. 01.2009 - 3 years; arising before 01.01.2009 and relating to activity under subsoil use contracts - 7 years; arising from 01.01.2009 – 10 years. Advance CIT payments shall be calculated and paid by large business only which total annual income inclusive of adjustments for tax period preceding the previous tax period exceeds the sum equal to 325,000-fold monthly calculation index (459,225 thou KZT for 2012) during a tax period. CIT setoff on advance payments and deductions from payment sources is carried for the following ten years to reduce CIT for those years. The tax period is a calendar year from January 1 to December 31. CIT Declaration is submitted to the local taxation authority no later than March 31 of the year following the accounting tax period. Advance CIT payments shall be made to the budget no later than the 25th day of each month. CIT payment: within 10 calendar days after the date set for submission of the declaration; for tax agents, by the place of location of the tax agent, within 25 calendar days after the end of month when the payment was made. Decrease of income subject to CIT for the following types of income: income (fees and increased value) from dealing with public securities, agent loan stocks, debt securities registered in Kazakhstan stock exchange; income from increased value when selling the stocks and partnership shares in Kazakhstan legal entity or consortium provided that if 50 and more percents of the value of the authorized capital or stocks of this non-resident or consortium is not a property of subsoil user as of selling date.

2. Individual Income Tax (IIT)

IIT payers: individuals having tax entities. IIT deduction from payment source is made for: employee’s income; income of an individual from a tax agent; pension payment from saving pension funds; dividend, fees, winnings; scholarships; income under saving insurance contracts. Assessment and payment of tax from self-declared income (property and other income, individual entrepreneur’s income) is performed by a taxpayer on its own. IIT rates: for dividend income - 5 %; for other income - 10 %. Tax deductions (reduced tax base): standard tax deductions: minimum salary; property-related tax deductions: repayment of loan benefits obtained to purchase a housing; social tax deductions: sums of obligatory pension taxes, medical service costs, insurance premium costs. IIT advance payments are not made. Tax period: from income taxable at the payment source – a calendar month; from income non taxable at the payment source – the calendar year from January 1 to December 31. IIT Declaration: submitted by a tax agent to the local taxation authority no later than on the 15th day of the second month following the accounting quarter; submitted to taxation authority by place of location (residence) for income not taxable at the payment source no later than on March 31 of the year following the accounting tax period.

IIT payment period: for income taxable at the payment source by a tax agent – on income paid on or prior to the 25th day of the month following the month of payment by place of its location; for income not taxable at the payment source – no later than 10 calendar days set to submit ITT Declaration.

Income exempted from IIT income as dividends provided that the following conditions are all met: holding the stocks or partnership shares for more than three years; and 50 and more percents of the value of the authorized capital or stocks (partnership shares) of a legal entity or consortium as of day of dividend payment is owned by the persons (person) which are not subsoil users (subsoil user); income from increased value when selling the stocks and participation shares in a legal entity or consortium established according to the laws of Kazakhstan if 50 and more percents of the value of the authorized capital or stocks (partnership shares) of such legal entity or consortium as of day of dividend payment is owned by the persons (person) which are not subsoil users (subsoil user); income from increased value when selling through public tender on stock exchange operating in Kazakhstan, securities registered in the list of this stock exchange as of selling date.

3. Mineral Extraction Tax (MET) The rates of mineral extraction tax (hereinafter – MET) for crude oil, including gas condensate are fixed according to the scale depending on annual oil volumes. MET rate for natural gas is 10%. When selling natural gas in the domestic market, mineral extraction tax is paid according to the rates depending on the annual volumes extracted. MET rates for processed (enriched) mineral raw materials and coal are set per each kind of mineral products. MET rates for widespread mineral resources, underground waters and therapeutic muds are set as for mineral resources. It is possible to apply the reduced MET rates where level of profitability is lower than 0% for contracts on extraction of hydrocarbon materials classified as low-margin, high viscous, water flooded, low-yield or worked-out. Excess profit tax is paid by a subsoil user according to the sliding scale against each part of net income of the subsoil user, corresponding to the ratio of the total annual income and deductions.

4. Value Added Tax (VAT) VAT payers: VAT registered persons (individual entrepreneurs, resident entities, except for public institutions; non-residents conducting its business in Kazakhstan through branch, representative office; trustees); persons importing goods to Kazakhstan according to the customs laws of Kazakhstan. Threshold for compulsory VAT registration is a sales volume which exceeds a 30,000-fold monthly calculation index during a calendar year (KZT 45,360,000 for 2011 (USD 308,908)). VAT rates 12% - on the amount of taxable sales volume and taxable imports; 0% - when exporting goods, international transportations, for sales volume of home-produced goods for taxpayers conducting its business in Kazakhstan under subsoil use contracts as per which the imported goods are exempted from VAT as well as sale of petroleum, oil, lubricants via airports when fueling foreign airplanes which make international flights, international air traffic.

The following transactions are exempted from VAT: related to land and residence buildings, financial services, non-profit organization services, services and works related to culture, science and education, goods and services related to medical and veterinary activity, invested gold. Import of the following goods is exempted from VAT: banknotes and coins of national and foreign currencies as well as securities; goods imported by individuals according to the principles of duty free importation; goods except for excisable ones imported as humanitarian aid; charity, goods imported for official use by foreign diplomatic and equivalent representative offices; goods subject to declaration according to the customs laws of Kazakhstan; medicines of any forms, including drug substances; medical (veterinary) goods and medical (veterinary) equipment, stamps (except for stamp collections); raw material for production of currency notes performed by the National Bank of Kazakhstan and its institutions; goods imported at the expense of grants provided by states, state governments and international institutions. The procedure for exemption of goods import from VAT was set by the Decree of the Government of Kazakhstan dated December 23, 2008 No. 1229. VAT tax period is a calendar quarter. VAT Declaration is submitted to the local taxation authority for each tax period no later than the 15th day of the second month following the accounting tax period. VAT payment date: no later than the 25th day of the second month following the accounting tax period; for imported goods – on the day set by the customs laws of Kazakhstan for customs duties. VAT return Gradual change-over is provided to return all excess VAT sums paid to suppliers against sums of VAT paid by purchasers of so-called “debit” balance. VAT excess is also to be reimbursed within 180 calendar days and according to sales volumes taxable at a zero rate amounting to over 70% in the total taxable volume, reimbursement is performed within 60 calendar days after submission of the VAT Declaration. Simplified procedure is provided to reimburse VAT excess: within 15 working days without a preliminary tax inspection for taxpayers registered as to be monitored as large taxpayers.

Monitoring of Large Taxpayers According to the Tax Code, the largest taxpayers that have the highest total annual income exclusively of adjustment are to be monitored. Therewith, the restrictions have been set to consider persons which total book values of all assets are lower than 325,000-fold monthly calculation index year end when the list of large taxpayers is to be approved are to be monitored and number of workers is less than 250 persons as the large taxpayer. This restriction does not cover a trustee (operator) and (or) subsoil user specified in production sharing agreement signed between the Government of Kazakhstan or the competent authority and a subsoil user before January 1, 2009 and undergone compulsory tax analysis.

5. Land tax from legal entities Payers: legal entities having tax entities beneficially owned, on the basis of permanent land use, on the basis of primary free temporary land use. Tax base: plot of land area. Tax entity: plot of land (in case of common ownership of plot of land – land share). Tax rate: per 1 hectare or square meter, depending on the quality of the land estimated in points of land capability or type of settlement, respectively.

6. Property tax from legal entities and individual entrepreneurs Payers: legal entities having tax entities beneficially owned, on the basis of economic control rights or of operational management in Kazakhstan, individual entrepreneurs having beneficially owned tax entities in Kazakhstan used in entrepreneurial activity, a concessionaire having a tax entity being concession entity on the basis of ownership according to Concession Contract, departments of legal entities as decided by parent organization, lessee according to the entities placed under finance lease, management company of investment fund according to tax entities included into the assets of such fund. Tax base: the average annual book value of tax entities determined as per accounting figures. Tax entity: buildings, constructions beneficially owned and on the basis of working management and economic control Rates: 1.5 % of the tax base for legal entities; 0.5 % of the tax base for legal entities applying a special tax regime on the basis of the simplified declaration and individual entrepreneurs. 0.1% for non-profit organizations, agencies conducting its activity in the following: social sphere, library service, state certification of scientific personnel; facilities of reservoirs, waterworks facilities and other environment-oriented water facilities; facilities of hydro land reclaiming systems; facilities of domestic water supply. 7. Vehicle tax of legal entities Payers: legal entities, its departments having tax entities beneficially owned, on the basis of working management and economic control. Assessment and payment is performed by a taxpayer on its own. Tax entity: vehicles, except for trailers subject to state registration and (or) registered in Kazakhstan. Tax rate: set multiple to MCI or in percents of monthly calculation index, depending on the type of vehicle and its specifications.

8. Pension Taxes Obligatory pension taxes at a rate of 10% of income of local employees shall be deducted and transferred to pension funds on a monthly basis. Monthly income exceeding 75-fold MMW[1] (approximately USD 8,897) is not subject to obligatory pension deductions. Obligatory pension deductions are ensured with a view of an individual income tax and social tax. Social deductions are set at a rate of 5% and shall be paid by an employer according to income paid to an employee. Monthly income which exceeds the sum of ten-fold MMW (approximately USD 1,180) is not taxable in terms of social deductions. Also, individual entrepreneurs pay social deductions. Rate of social deductions for individual entrepreneurs is 5% as well. This rate is applied to MMW.

[1] MMW – minimal monthly wage

Double Taxation Treaties

Double Taxation Treaties concluded between Kazakhstan and other states

1. Austria 24. Norway 2. Azerbaijan 25. Pakistan 3. Armenia 26. Poland 4. Belarus 27. Russia 5. Belgium 28. Rumania 6. Bulgaria 29. Saudi Arabia* 7. Great Britain 30. Singapore 8. Hungary 31. Slovakia 9. Germany 32. USA 10. Georgia 33. Tadjikistan 11. India 34. Turkmenistan 12. Iran 35. Turkey 13. Spain 36. Uzbekistan 14. Italy 37. Ukraine 15. Canada 38. France 16. Chine 39. Finland 17. Kyrgyzstan 40. Czechia 18. Latvia 41. Switzerland 19. Lithuania 42. Sweden 20. Malaysia 43. Estonia 21. Moldova 44. South Korea 22. Mongolia 45. Japan 23. Netherlands

* Convention has not been ratified

Special Tax Regimes

A special tax regime on the basis of patent is applied by individual entrepreneurs that do not have employees, operate in the form of private entrepreneurship and which income does not exceed 200-fold minimum wage. Tax imputation under this regime is performed according to 2% rate.

A special tax regime on the basis of the simplified declaration is applied by: individual entrepreneurs with income not exceeding KZT 10.0 Mio (USD 68,000) per quarter and with no more than 25 employees, including an individual entrepreneur himself as well as the legal entities with income no more than KZT 25.0 Mio (USD 170,000) per quarter and with no more than 50 employees. 3% uniform rate is applied to impute the taxes according to the simplified declaration.

A special tax regime for farms provides for special procedure of settlements with the budget on the basis of payment of single tax (ST) and covers production, processing and sale of home- produced agricultural goods, aquaculture products (fishery).

A special tax regime for legal entities which manufacture agricultural goods, aquaculture products (fishery) and agrarian consumers' cooperatives provides for reduction by 70% of imputed CIT, VAT, social tax, land tax, land use fee, property tax and vehicle tax in a prescribed manner.

These regime covers production, processing and sale of agricultural goods, animal and poultry products, beekeeping poducts, aquaculture products (fishery) and activity of agrarian consumers' cooperatives.

Transfer Pricing Deals to be Inspected when Transfer Pricing Deals to be inspected when transfer pricing under the law of Kazakhstan “On Transfer Pricing”: 1) international business transactions; 2) deals settled in Kazakhstan directly interrelated with the international business transactions:

 on marketable mineral resources extracted by a subsoil user being a one of the parties;  one of the parties that have tax exemptions;  one of the parties that has a loss on data of tax declarations for the last two tax periods prior to the year of deal.

List of the authorized sources of information on market prices was approved by the Decree of the Government of Kazakhstan dated March 12, 2009 No. 292. ax reporting and tax inspection

Tax reports (including declarations, computations) are made by a taxpayer, tax agent or its representatives. Tax reports can be made both in hard copy and electronically in Kazakhs or Russian.  Tax inspection is one of the forms of tax control.  Tax control is the state control performed by taxation authorities under the tax laws of Kazakhstan, other laws of Kazakhstan.  Tax inspection is performed in due form under the law of Kazakhstan “On Private Enterprise”.  Features of the procedure and terms of tax inspection are determined by the Tax Code.

Upon completion of tax inspection in case of defined violation of the tax laws, the taxation authority notifies of the findings of tax inspection in writing and sends such letter of notification to the taxpayer (tax agent) in terms set by the Tax Code as well as administrative nonpunitive measures are applied under the Code of Kazakhstan “On Administrative Violations”.

Contact details of the Tax Committee of the Ministry of Finance of Kazakhstan: 11, Pobeda avenue, Astana tel.: +7 7172 718002, сall center: +7 7172 580909 е-mail: [email protected], site: http://www.salyk.kz

Currency Regulation

The currency legislation differentiates currency regulation between residents and non-residents of Kazakhstan. Residents - citizens of Kazakhstan (except those who has permanent residence status abroad) and foreigners (and persons without citizenship) that have permanent residence status in Kazakhstan, legal persons registered in Kazakhstan as residents, both diplomatic and sales representatives of Kazakhstan abroad. Non-residents - foreign citizens, foreign legal persons, and also branches and representations of foreign legal persons, the international organizations, diplomatic and other official representatives of foreign states in Kazakhstan. Operations between residents and non-residents can be carried out in any currency; operations between residents should be carried out in national currency (tenge) only; Kazakhstan legislation does not regulate currency transactions between non-residents. It is allowed for individuals (to residents and non-residents) to take out from the country money resources up to 10 000 US dollars without documents confirming the origin of that sum. For any sum over the given limit acknowledgement of source of money resources is necessary. It is also necessary to declare any sum over 3 000 US dollars.

Modes of currency regulation:

1. Licensing Obtaining licenses by the organizations which are engaged in foreign exchange is necessary.

2. Registration Registration in the National Bank of RK is required for residents who take part in certain currency transactions. Registration extends on the following currency transactions:

 Commercial loans for export/import of goods for a period exceeding 180 days;  Direct investments of non-residents in the Republic of Kazakhstan and residents abroad;  Financial loans for the term of more than 180 days;  Payments of residents in favor of non-residents, and also payments of non-residents on behalf of the residents, concerning acquisition of exclusive rights to objects of intellectual property or transfer and reception by residents of money and other property to perform obligations of the participant of joint activity. 3. Notice The notice mode demands representation of information to the National Bank of RK on certain kinds of operations which are carried out by residents, for example:

 Opening of bank account in foreign bank (for legal persons-residents only)  Acquisition of securities, realization of payments in stock capital and carrying out of currency transactions connected with derivative financial instruments.

There are set maximum sums to be followed in order to use these modes upon registration, notification and licensing.

Contact details of the National Bank of the Republic of Kazakhstan: House №31, micro-district "Koktem-3" Almaty, Kazakhstan, 050040 Fax: 8 (727) 2704-703, 8 (727) 2617-352, 8 (727) 2704-799 Call-center: 8 (727) 2704-591 e-mail: [email protected]

Kazakhstan content

Policy on Kazakhstan content development is intended to create conditions for development of competitive production of goods and services through maximum use of internal market capacity. Sectoral program of Kazakhstan content development for 2010-2014 provides for:

 development of flexible customs and tax, rate and non-rate policy to develop investment attraction of processing industries;  implementation of up-to-date management and quality systems by enterprises, harmonization of national and international standards;  establishment of design and consulting companies with participation of the leading world partners in machine engineering, metallurgy, oil and gas and chemical industries;  compensation for partial costs of producers on introduction of services and processed domestic goods into the domestic market;  provision of domestic producers with the guaranteed long-term orders, guaranteeing the state orders for potential investors by the state authorities and national companies;  special priority is planned to be given to development of future economic sectors (nanotechnologies, robotics industry, biotechnologies, space industry).

CT-KZ Certificate

 Certificate assignment is a confirmation that goods was produced in Kazakhstan, and its producer is domestic;  СТ-KZ certificate provides the following competitive advantages: benefits in state procurement participation, right to be included into the Register of domestic producers (placed in Internet portal on Kazakhstan content www.kca.kz), guarantee of minimal long-term state order.  To obtain CT-KZ Certificate, origin expertise is performed which includes document expertise, identification of goods according its external features, expertise to set criteria of origin, computation of the rate of Kazakhstan content in the produced goods;  Certificate is valid for 1 year. Issuance procedure takes 2 days. To assist Kazakhstan enterprises in establishing new plants, implementation of offset cooperation, attraction of high technologies, NADLoC National Agency for Development of the Local Content has been established. Please find additional information on Internet portal on Kazakhstan content (www.kca.kz). Details of NADLoC National Agency for Development of the Local Content Address: 12th floor, Eurocenter Business Center, 29 Sagynak str., Astana, Kazakhstan Tel./fax: + 7 (7172) 79-08-34 (reception) + 7 (7172) 79-08-41 (operator)

Electronic government

“Electronic government” (e-Government) term implies uniform system which will unite all state structures and will allow them to render services to the population through the Internet, electronic terminals or even mobile phones to physical persons, companies or businessmen. The basic models inside the electronic government are: G2C (states-citizens), G2B (state-business) and G2G (state-state).

The stages of Program implementation:

1. Electronic government formation - information publication and distribution; 2. Granting of interactive services through direct and return interactions between state body and the citizen; 3. Transactional interaction by realization of financial and legal operations through the government portal; 4. Information society formation.

The program has started in 2005, and for 2 years of its realization the e-government infrastructure has been constructed, base components are created: web portal and gateway, electronic interdepartmental document circulation, certifying centers, uniform transport environment. State databases of physical and legal persons, connected along the country into uniform register have entered in constant operation in 2007. 20 interactive services of state structures have been realized through the web portal which became a uniform point of access for electronic services of state structures.

On the third, transaction stage “Electronic state purchases” was created. Hence, the businessman can participate in tenders without leaving the office. Since January 1st, 2010 all state purchases, by way of inquiry of price offers, are carried out in an electronic format only, on the web portal of the state purchases www.goszakup.gov.kz.

In 2009 introduction of “E-licensing” project which is basically intended for business entities has begun.

The regional direction of the state program is also under development. “Electronic akimat” system’s prototype on 5 chosen services is developed, introduction of the system in pre- production operation in akimat of Pavlodar region is carried out.

“E-notariate” uniform notarial information system” project is started in commercial operation in a pilot zone of the Astana city in December, 2009; its task is to provide timely and authentic reporting on notarial actions, notaries’ effective work and their interaction with republican and territorial notarial chambers, and with the Ministry of Justice of RK. Qualitative legal notarial services are rendered to the population. It is planned to introduce the Uniform notarial information system along the republic in 2010-2012.

Investment expenses

Plots of Land

Payments for land: 1) Land that are in own, permanent or primary gratuitous temporary use, are subjected to land tax. 2) The fee for the use lands provided by the state in temporary paid land-use (rental) is charged for use. 3) Provision of land from state ownership to private is made on a onerous basis through the sale of one-off or in installments by the decision of the executive authority, except in cases where land ownership is provided at no charge (the owners of residential premises, private residential construction, gardening, country construction, etc.).

The fee is determined on the basis of cadastral (assessed) value, calculated on the base rates with use of correction coefficients.

Cadastral (estimated) value of the The base value of the land * correction coefficient * = land Land area, ha

In turn, the base rates are established by the Government of the Republic of Kazakhstan (not lower land tax rates). Base rate for land

№ Name of region Name of city The size of the base rate, tenge, per 1 sq.m. 1 Akmola region Kokshetau 1290 2 Aktobe region Aktobe 800 3 Almaty region Taldykorgan 1150 4 Atyrau region Atyrau 1060 5 East Kazakhstan Oskemen 1304 6 Zhambyl region Taraz 1040 7 West Kazakhstan Oral 1140 8 Karagandy region Karagandy 1660 9 Kyzylorda region Kyzylorda 1230 10 Kostanay region Kostanay 1357 11 Mangystau region Aktau 1436 12 Pavlodar region Pavlodar 1365 13 North Kazakhstan Petropavl 1270 14 South Kazakhstan Shymkent 1230 15 Astana 3400 16 Almaty 4800

Correction coefficients vary from 0,5 to 2 depending on landscaping, distance from the center and engineering services. Premises

Average cost of lease and sale of office premises in business centers, USD/sq.m

City Lease cost per month Sale cost Almaty 170 2345 Astana 160 1580 Aktobe 14-55 1200 Atyrau 25-40 1125 Aktau 115 1370 Karagandy 13 1300 Kostanay 13-28 1136 Kokshetau 14 1600 Oral 25 1100 Oskemen 10 1300 Pavlodar 7 1300 Petropavl 9 1000 Taraz 7 900 Taldykorgan 15 1000 Shymkent 12 1350

Requirements to a lease contract Contract on real estate lease concluded for a period exceeding 12 months is subject to state registration in the Ministry of Justice of Kazakhstan and is not valid without such registration.

Public Services

Utility rates in region centers (heating, water, gas), in USD*

City HEATING HOT WATER COLD WATER GAS per sq.m rate (m3) rate (m3) m3

Astana 0,48 0,82 0,21 2,16 Almaty 0,76 1,87 0,16 0,15 Aktau 0,32 0,98 1,18/1,66 0,05 Atyrau 0,65 1,21 0,15 0,03 Aktobe 0,43 0,81 0,21 0,03 Karagandy 0,46 1,65 0,34/0,37 0,08 Kostanay 0,73 1,40 0,29 0,11 Kyzylorda 0,46 - 0,17 0,02 Kokshetau 0,53 0,94 0,44 Oral 0,58 1,01 0,15 0,07 Oskemen 0,29 1,05/2,6 0,12/0,91 - Pavlodar 0,33/ 0,34 0,59/0,71/0,6/0,71 0,14 - Petropavl 0,55 0,92 0,18 2,23 Taraz 0,47 1,1 0,13/0,19 0,06 Taldykorgan 0,21 0,97 0,24/0,55/0,57 Shymkent 0,59 1,18 0,27/0,42/0,69 0,12 Electricity rates in region centers, in USD*

CITY Electricity per kWh For individuals For legal entities Day rate Night rate Day rate Evening rate Night rate Astana 0,07 0,02 - - Almaty 0,1 0,02 0,01 11,31 0,02 Aktau 0,03 0,01 0,06 15,36 0,02 Atyrau 0,04 0,01 0,1 32,88 0,03 Aktobe 0,07 0,02 0,08 18,19 0,02 Karagandy 0,04 0,01 - - - Kostanay 0,07 0,02 0,07 9,98 0,07 Kyzylorda 0,08 0,02 0,06 18,35 0,02 Kokshetau 0,1 0,02 0,07 22,6 0,03 Oral 0,05 0,01 0,05 0,12-summer; 0,1-winter0,02 Oskemen 0,05 0,01 0,05 0,09 0,02 Pavlodar 0,061 - spring- 0,095-spring-summer; summer; 0,062 - 0,099-autumn-winter autumn-winter 0,01 0,05 0,01 Petropavl 0,07 0,02 0,05 0,12 0,02 Taraz 0,08 - winter; 0,14 - winter; 0,09 - summer 0,02 0,08 0,18 - summer 0,02 Taldykorgan 0,1 0,03 0,08 0,16 0,03 Shymkent 0,08 0,02 0,06 0,13 0,02

* Data of the Agency of the Republic of Kazakhstan for Regulation of Natural Monopolies

Cost of Communication Services

Telephone communication for legal entities, in USD*

Subscription Fee per each 10 seconds of telephone Fee per each 10 seconds of telephone fee connection interval (domestic long connection interval (connection with distance) the networks of cellular operators) 5,2 - 6,47 From 0.02 (to 100 km) - 0.03 (over 1000 0,03 – 0,04 km)

Long distance:

Rate per each 30 seconds of connection, in USD Direction networks of fixed networks of mobile operators operators Lithuania 0.06 0.14 Estonia 0.06 0.18 Latvia 0.06 0.29 Russia, Uzbekistan 0.09 0.09 Abkhazia, Georgia, Kyrgyzstan, Tadjikistan, Turkmenistan, Ukraine 0.12 0.12 Australia, Germany, Greece, Israel, India, Iran, Spain, Italy, Canada, China (including Hong-Kong), Macao, Malaysia, Netherlands, Poland, Singapore, USA, Thailand, Turkey, France, Czechia, South Korea 0.14 0.14 Armenia, Azerbaijan, Belarus, Moldova 0.15 0.15 Austria, Switzerland, Great Britain 0.21 0.21 Asian, African, Near East, Latin America countries 0.24 0.24 Albania, Andorra, Gibraltar, Belgium, Bulgaria, Bosnia and Herzegovina, Hungary, Denmark, Ireland, Iceland, Liechtenstein, Luxembourg, Macedonia, Malta, Monaco, Norway, Portugal, Roumania, San Marino, Slovak Republic, Slovenia, Serbia, Finland, Croatia, Montenegro, Sweden 0.24 0.24 the rest world 0.52 0.52

*Source: Kazakhtelecom JSC

Cost of cellular services, USD/min.

Inside network Between operators Short distance Long distance calls calls Average* 0.08 0.21 0.17 0.41 Minimum 0.05 0.,05 0.05 0.33

Labor costs

*Data from the Agency on Statistics of the RK Average monthly nominal wages in the regions in 2010 (in USD)

Transport & Agriculture Construction Lawers Economists Accountants Communications workers Akmola 424.47 221.52 496.60 288.36 268.00 354.32 Aktobe 578.12 187.09 410.47 399.93 378.98 418.27 Almaty 434.65 200.90 399.72 318.12 266.03 329.96 Atyrau 822.64 163.04 1015.29 359.83 428.47 797.99 West- Kazakhstan 542.33 251.57 967.69 291.53 535.59 510.14 Zhambyl 470.63 146.35 334.58 319.73 330.17 310.71 Karaganda 465.88 232.21 326.75 306.22 245.42 358.65 Kostanay 408.37 257.61 363.01 234.24 259.21 318.56 Kyzylorda 541.45 183.58 416.40 348.81 333.56 434.52 Mangistau 1006.39 203.88 974.89 258.31 511.78 709.89 South- Kazakhstan 496.74 178.83 391.62 338.98 298.64 304.35 Pavlodar 502.69 197.17 468.75 320.68 261.69 351.28 North- Kazakhstan 459.99 233.93 324.35 359.32 237.97 359.52 East- Kazakhstan 447.99 219.49 432.59 389.83 271.19 369.39 Astana city 1015.32 444.83 516.16 381.60 477.00 717.66 Almaty city 697.52 385.42 607.11 254.39 442.37 818.96

* Data from the Agency on Statistics of the RK

Fuel Prices

Diese Diese Diesel l l summe Petroleum Petroleum Petroleum Petroleum Petroleum Products winte oil r fuel -80 (litre) -92 (litre) -93 (litre) -95 (litre) -96 (litre) r fuel (litre (litre) (litre) ) Astana 72 97 167 70 87 - 99 100 Aktobe 73 88 - 70 88 88 102 - Taldykorgan 71 - - 70 - 87 99 100 Kokshetau 72 - - 70 88 88 103 101 Atyrau 72 - - 72 88 88 103 - Oskemen 74 95 150 72 88 88 102 103 Karaganda 72 - 130 71 87 87 97 98 Kostanay 73 94 137 72 89 - 102 - Kyzylorda 71 - - 70 87 - - 100 Aktau - 74 132 67 87 88 95 103 Pavlodar 74 - 150 72 88 - 104 - Petropavlovsk 71 - 140 69 87 - - 102 Shymkent 69 - - 70 90 - - 100 Almaty 72 - - 69 84 86 102 100 Oral 74 90 - 69 86 - 100 - Taraz 70 - - 70 84 86 - 100 KAZAKHSTA 72 92 143 70 87 87 101 100 N Minimum 69 74 130 67 84 86 95 98 Maximum 74 97 167 72 90 88 104 103

Prices for the main groups of products for industrial enterprises

Prices for fuel and electric power used by industrial facilities as of the end of 2010 fuel prices electric power pr natural gas steam coal prices, diesel fuel prices, furnace oil e prices, KZT/ton KZT/ton prices, KZT/ton p KZT/1000 sq.m Republic of Kazakhstan 1 699 3 273 63 136 29 037 6 Akmola 1920 - - - 9 Aktobe - - 57 071 32 305 7 Almaty - - - - 6 Atyrau - - 44 585 22 336 6 West Kazakhstan - 2 588 67 486 22 000 7 Zhambyl - 5 268 83 000 - 7 Karagandy 2304 - - - 6 Kostanay - - - - 9 Kyzylorda - - - - 6 Mangistau - 4 295 - - 6 South Kazakhstan - - 51 208 25 501 4 Pavlodar 1193 - 62 853 33 586 4 North Kazakhstan - - - - 5 East Kazakhstan - - - - 5 Astana city - - - - 5 Almaty city - - - -

Prices for agricultural products used by industrial facilities as of the end of 2010 plant product prices prices for prices for patent sunflower seed g wheat prices, KZT/ton vegetable raw oil, wheat flour, prices, KZT/ton p KZT/ton KZT/ton Republic of Kazakhstan 33 065 66 104 181 902 62 809 Akmola 33 696 - 233 995 65 678 Aktobe 24 768 70 178 194 615 54 910 Almaty 31 424 - 286 243 59 800 Atyrau - - - 57 356 West Kazakhstan 32 949 44 761 165 274 59 582 Zhambyl 26 800 - 185 000 65 931 Karagandy 30 388 - 166 670 67 041 Kostanay 36 950 - 195 394 60 000 Kyzylorda - - 206 573 46 992 Mangistau - - - 63 767 South Kazakhstan 32 271 61 408 - 66 860 Pavlodar 28 165 - - 57 966 North Kazakhstan 32 773 - 291 041 56 895 East Kazakhstan 31 091 64 373 181 083 63 466 Astana city 35 895 - - 64 155 Almaty city 29 950 75 000 166 702 58 475

animal product prices prices for fresh prices for fresh prices for fresh chicken egg prices, or refrigerated p or refrigerated or refrigerated KZT/1000 pcs horse meat, m beef, KZT/ton pork, KZT/ton KZT/ton Republic of Kazakhstan 15 385 589 293 541 565 707 786 6 Akmola 15 759 517 699 457 421 - 4 Aktobe 14 851 617 378 545 552 4 Almaty 16 500 720 000 730 000 7 Atyrau 13 616 - - - West Kazakhstan 16 611 372 958 497 850 397 000 - Zhambyl 15 806 572 475 544 751 - 5 Karagandy 13 268 538 837 477 424 556 123 7 Kostanay 15 119 - - - 6 Kyzylorda 16 747 700 000 - 750 000 4 Mangistau 15 283 900 000 900 000 - - South Kazakhstan 16 667 650 000 650 000 - 5 Pavlodar 14 385 550 862 494 619 631 444 5 North Kazakhstan 14 032 535 100 423 916 - 6 East Kazakhstan 14 678 530 065 548 551 - 6 Astana city 16 841 629 193 526 414 729 697 9 Almaty city 17 014 688 536 576 480 931 509 7

Prices for textile products used by industrial facilities as of the end of 2010

prices for carding and wool fabric sheep hair prices, cotton fabric s combed cotton prices, KZT/ton prices, KZT/sq.m p (cotton fiber), KZT/sq.m KZT/ton

Republic of Kazakhstan 48 795 257 263 161 1 055 3 Akmola 38 846 - 142 Aktobe - - 163 - Almaty 89 000 - - - 3 West Kazakhstan 91 492 - 132 - Zhambyl - - 550 - - South Kazakhstan - 257 263 130 - Karagandy - - 180 - - Kostanay 45 000 - 113 - 4 Kyzylorda - - 200 - 2 Pavlodar - - 217 - - North Kazakhstan - - 138 - 2 East Kazakhstan 39 120 - 140 467 2 Astana city - - 190 1 853 2 Almaty city - - - 1 250

Prices for construction materials used by industrial facilities as of the end of 2010

prices for converted or particle board portland cement split coniferous timber, prices, prices, KZT/ton KZT/cub.m KZT/cub.m

Republic of Kazakhstan 24 453 46 722 11 983 Akmola 18 700 55 996 10 397 Aktobe 30 237 40 263 12 984 Almaty 15 312 - 13 165 Atyrau - - 15 334 West Kazakhstan 41 000 52 857 14 791 Karagandy - 49 102 12 283 Kostanay 35 210 68 750 - Kyzylorda - 52 500 27 000 Mangistau - - 15 636 Pavlodar 17 024 64 667 11 000 North Kazakhstan 27 034 43 624 13 046 East Kazakhstan 22 067 44 995 12 456 Astana city 34 847 35 341 11 021 Almaty city 33 308 63 350 11 856

Abundant Natural Resources

Kazakhstan’s priceless treasure is its mineral resources. Kazakhstan is the 6th largest country around the world in terms of mineral resources. 99 elements discovered, 70 elements explored, 60 are being recovered and used in Kazakhstan’s soil out of 110 elements of D.I.Mendeleyev’s periodic table, they are: oil, gas, uranium, zinc, tungsten, barium, silver, lead, chrome, copper, fluorites, molybdenum, and gold.

Mineral and resources base of the Republic of Kazakhstan consists of 5,004 fields, estimated cost is around USD 46 trillion.

Globally, Kazakhstan is already the largest wolframium producer, and in terms of wolframium reserves Kazakhstan holds the first place throughout the world and huge reserves of chrome ore and phosphate put Kazakhstan on the second place, Kazakhstan occupies the fourth place in terms of lead and molybdenum reserves, the eighth one - in terms of total ironstone reserves (16.6 billion tones) after Brazil, Australia, Canada, USA, India, Russia and Ukraine.

160 oil and gas deposits only are so far explored in Kazakhstan, and recoverable reserves are 2.7 billion tones. Around 300 significant gold deposits are under forecast in Kazakhstan, 173 of which were explored in detail.

Over 100 coal fields were explored throughout Kazakhstan, the largest is Ekibastuz field, which differs in high capacity of brown-coal layers and Karaganda coal basin with the reserves of over 50 bln tns of crozzling coal.

Kazakhstan possesses a huge bulk of kalium and other sault borate reserves, bromine, sulfate, phosphate compounds, the most varied raw materials for paint and varnish industry, sulphur pyrite that consist of plymetallic ores used to arrange sulfuric acid other chemicals production .

Kazakhstan possesses significant reserves of natural resources for glass and whiteware industry: rare precious stones, a variety of construction and covering materials.