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Company Formation in Kazakhstan

Overview :

Business in Kazakhstan is often focused on the oil and gas sector, which has been responsible for the country’s strong economic expansion over the last decade. Kazakhstan, however, has developed into the leading market in Central Asia and is positioning itself as a transit route between China and Europe. It is also actively seeking ways to use its new mineral wealth to diversify its economy. Like other former Soviet Republics, Kazakhstan is still developing a transparent and effective business culture that is attractive to foreign investment.

  •  Privatisation and economic reform have transformed the Kazakh market resulting in a higher GDP and an increase in economic influence.
  • Kazakhstan is renowned for its abundance of natural resources and is currently one of the leading exporters of uranium, hydrocarbon, natural gas and other metals.
  • Kazakhstan’s thriving energy industry has played a large part in its role as an emerging world economy and it continues to attract foreign investment.

Tax Regime
  •  The tax rate for individuals in Kazakhstan is as follows :
    • Employment income of residents and non-residents is 10%
    • Capital gains, interest and winnings is 10%
    • Income of non-residents registered in a tax haven is 20%
    • Other income (non-employment) paid to non-residents is 20%
  • Corporate Income Tax is applied to companies at the current general rate of 20% of taxable income. In addition, net income (after deduction of CIT) of a non-resident’s PE (branch) in Kazakhstan is subject to branch profits tax at a rate of 15%.
  • A European Union-style VAT applies in Kazakhstan. The VAT rate has fallen progressively from 20% in the late 1990s to 12% currently.

Types of Entities :

Limited liability partnerships (LLP) :

LLP are very similar to joint stock companies. The main difference between the two entities is that an LLP does not issue shares; instead, participants have interests in the partnership. An LLP may be formed by one or more participants. Generally, the participants of an LLP are not liable for the debts of the LLP beyond the value of their contributions.

Joint stock companies (JSC) :

A JSC is a legal entity that is separate and distinct from its shareholders, i.e. shareholders are not liable for JSC liabilities. It may have one or more shareholders. The minimum capital required for a JSC is 50,000 times MCI (approximately US$500,000).

Representative office :

Kazakhstan’s law allows a foreign company to establish a representative office in Kazakhstan in order to represent its interests on the territory of Kazakhstan. A representative office protects and represents the interests of a foreign legalentity and carries out preparatory and auxiliary activities, such as marketing and advertising. Generally, a representative office may not conduct commercial activity. The representative office is not recognized as a separate legal entity.

Branch :

A branch is a subdivision of a foreign legal entity that carries out all or part of the functions of the foreign entity and in particular can carry on commercial activity. A branch is not considered to be a legal entity separate from its foreign parent company (head office). However, branches and representative offices must complete state registration.

Time Period

It usually takes 19 days to set up a business in Kazakhstan.