As Kazakhstan continues to attract international investors, it is essential for non-residents to understand the legal and cultural nuances of establishing and running a business in the country. In this article, Meruet Zhunubaeva, senior partner at MG Partners Almaty, outlines the necessary steps, legal forms, and key considerations that foreign entrepreneurs should be aware of when entering the Kazakh market.
Meruet Zhunubaeva, Senior Partner, MG Partners Almaty, Linkedin
I specialize in supporting businesses, including helping non-residents establish themselves in Kazakhstan. The country’s growing investment attractiveness makes it important to highlight the key features and details of conducting business here as a foreigner.
Kazakhstan offers a unique blend of legal systems. While the country predominantly follows the Roman-Germanic law familiar to post-Soviet nations, it has also implemented an English-based system within the Astana International Financial Centre — AIFC. This combination provides significant opportunities for business, particularly for non-residents.
Below are several important points for non-residents interested in doing business in Kazakhstan.
Choosing a legal structure
The most common legal structure in Kazakhstan is the Limited Liability Partnership — LLP. For larger businesses, a Joint Stock Company — JSC, might be more appropriate. However, if you’re more familiar with English legal jurisdictions, the AIFC offers the option to establish a private company — Ltd.
The advantage of setting up a private company within the AIFC lies in its simplicity and minimal regulatory requirements compared to other forms. The AIFC allows both financial and non-financial businesses to operate under its own legal framework, which is based on English law.
Legal preparations
Non-residents must meet certain legal requirements before setting up a business in Kazakhstan.
If the founder is a foreign legal entity: you will need a Business Identification Number — BIN, for the company.
If the founder is a foreign individual: an Individual Identification Number — IIN, is required, along with a temporary residence permit or relevant visa.
For citizens of the EAEU or visa-free countries: a temporary residence permit as a business immigrant is sufficient.
For citizens of other countries: a C5 business immigrant visa is needed.
Additionally, the non-resident director must have an IIN, a temporary residence permit, or a C-3 visa, along with fdactyloscopy.
Tax regimes
Kazakhstan offers several tax regimes, including a general regime, a simplified regime, and special regimes for industries like agriculture and IT.
Corporate income tax: 20%
VAT: 12%
There are also free economic zones that offer favorable tax benefits, simplified customs procedures, and more lenient migration regulations.
Banking services
Kazakhstan’s banking sector provides businesses with access to credit through second-tier banks and state or international support programs. However, international payments and currency transactions are subject to exchange control regulations, including income repatriation, foreign exchange contract recording, and external transaction reporting. Banks also closely monitor sanctions compliance when servicing businesses.
Cultural Considerations
Kazakh business culture values respect for seniority, partnership, personal connections, and trust. Kazakhs are hospitable and aim to establish long-term working relationships. "Trust, but verify" — this saying also applies to Kazakhstan. You need to check the counterparty before you are going to become a partner.
With proper business structuring, Kazakhstan can offer more favorable conditions than other jurisdictions. Given the country’s specific business environment, it’s advisable to consult local legal experts early on to explore opportunities and determine the best approach for your business in Kazakhstan.
