DOING BUSINESS IN KAZAKHSTAN CONTENT ABOUT SAYAT ZHOLSHY & PARTNERS ................................................................................................................................ 4 WHY SAYAT ZHOLSHY & PARTNERS? ................................................................................................................................... 5 PREFACE ................................................................................................................................................................................. 6 COUNTRY OVERVIEW............................................................................................................................................................. 7 KAZAKHSTAN LEGAL SYSTEM ............................................................................................................................................ 11 BUSINESS ORGANIZATION AND LEGAL FORM IN KAZAKHSTAN .................................................................................... 13 FOREIGN WORK PERMITS ................................................................................................................................................... 20 VISAS ...................................................................................................................................................................................... 24 LICENSING ............................................................................................................................................................................. 26 INVESTMENT IN KAZAKHSTAN ............................................................................................................................................ 29 BANKING LEGISLATION ........................................................................................................................................................ 33 FINANCIAL LEASING ............................................................................................................................................................ 36 STOCK MARKET AND SECURITIES ..................................................................................................................................... 38 INSURANCE ........................................................................................................................................................................... 41 CURRENCY REGULATION ................................................................................................................................................... 43 REGULATION OF FOREIGN TRADE .................................................................................................................................... 49 CUSTOMS LEGISLATION ...................................................................................................................................................... 52 TAXATION ............................................................................................................................................................................... 57 TRANSFER PRICING ............................................................................................................................................................. 72 EMPLOYMENT AND LABOR LAW ........................................................................................................................................ 75 ANTI-MONOPOLY, UNFAIR COMPETITION AND NATURAL MONOPOLIES LEGISLATION ............................................... 77 INTELLECTUAL PROPERTY RIGHTS ................................................................................................................................... 81 SUBSOIL USE AND PETROLEUM OPERATIONS ................................................................................................................ 83 LAND AND OTHER IMMOVABLE PROPERTY ...................................................................................................................... 89 CONSTRUCTION .................................................................................................................................................................... 96 TRANSPORT AND COMMUNICATIONS ............................................................................................................................... 99 COURTS AND ARBITRATION .............................................................................................................................................. 101 CRIMINAL LAW AND CRIMINAL PROCEDURE .................................................................................................................. 105 OUR TEAM ............................................................................................................................................................................ 109 3 ABOUT SAYAT ZHOLSHY & PARTNERS The history of Sayat Zholshy and Partners began on 25 December 1998 in Almaty and the firm celebrated its 10th anniversary in 2008. The firm has been rated as one of the largest local law firms in Kazakhstan by The Legal 500 Europe, Middle East and Africa 2008 edition. Our Mission is to protect business, private property and free competition. Our Goal is to become the best legal practice in Kazakhstan. Sayat Zholshy & Partners was named the best law firm in three nominations in 2009 by a qualification commission (comprising CEOs of the RFCA Agency, Mittal Steel Temirtau, Kazkommertsbank, ATF Bank, Halyk Bank, National Business, Business and Power, Vox Populi, ZAN Media Corporation, Yurinfo, Atameken Union National Economic Chamber of Kazakhstan, and the Business Forum of Kazakhstan) based on the poll of members of the Forum of Corporate Lawyers representing about 120 major local and foreign companies, law firms’ clients, as well as members of the Bolashak Alumni Association: • Litigation Team of the Year; • Tax Team of the Year; and • Antitrust Team of the Year. Since our establishment and up to the present day, we have aimed at providing our clients, meeting their expectations and requirements, with high quality legal services in accordance with international practices and standards applied by international law firms. To service our clients to the highest possible level and provide legal assistance in Kazakhstan in a timely manner, we have our head office in Kazakhstan’s major city of Almaty. The office is conveniently located in the city center and is furnished with up-to-date IT and telecommunications equipment. For our clients' convenience, and where necessary, we ensure that our attorneys and stuff are available in other regions of Kazakhstan as well as outside the country. Sayat Zholshy & Partners's team consists of a managing partner, five partners, six senior attorneys, and seven attorneys who are graduates from law schools in Kazakhstan, Russia, USA, Germany, and Poland. Our partners have teaching experience in top universities and laws schools of Kazakhstan and are regularly published in leading print and electronic media publications. Sayat Zholshy & Partners initiated the establishment and was a co-founder of the Taxpayers Association of Kazakhstan which is one of the today's most reputable organizations actively advocating taxpayers' interests before the Parliament, the Government and other government authorities of Kazakhstan. Sayat Zholshy & Partners and the firm's attorneys are members and partners of the following organizations: • The American Chamber Of Commerce; • The Kazakhstan Petroleum Lawyers Association; • The Almaty Bar Association; • The Union of Attorneys of Kazakhstan; • The Taxpayers’ Association of Kazakhstan; • Kazakhstan International Arbitration; and • The Almaty Chamber of Commerce. 4 WHY SAYAT ZHOLSHY & PARTNERS? Guarantees of Confidentiality Sayat Zholshy & Partners has the status of a firm of attorneys and counselors at law (advocates) while virtually all other well-known law firms in Kazakhstan are registered as limited liability partnerships. Pursuant to the Law of the Republic of Kazakhstan On Advocacy: 1). Interrogating an attorney as a witness on the circumstances that have been made known to him in the course of his professional duties is prohibited; 2). Attorney-client privilege consists of: • the fact that the attorney has been approached for legal advice; and • the information on the contents of oral or written negotiations with the client, or any other persons, as well as any other information relating to the provision of legal assistance; 3). Attorney's files, records and documents are exempt from examination, seizure and/or inspection, except when permitted by law; and 4). Attorneys and attorney firms bear statutory liability for disclosing attorney-client privileged information. Unlike attorney firms, limited liability partnerships (LLPs) acting as law firms cannot provide to their clients any statutory guarantees of confidentiality similar to those provided to clients of attorney firms. International Standards of Practice As a local law firm, we have first-hand knowledge and understanding of the local specifics (both legally and culturally) while aiming at international standards in our work and it is the combination that makes us stand out against competition and promote our clients' business. The best proof that we have the correct strategic approach is the fact that our clients are international companies who require common standards for all their legal advisers worldwide and they keep