National Export & Investment Agency KAZNEX INVEST Ministry of Investment and Development Invest in Kazakhstan
Basic Facts National Flag National Emblem Area: 2,724,000km 2 (1,051,742 sq.miles),9 th largest Population: 17,476,141 Official language: Currency: Capital: Administrative division: Member of organizations: Kazakh, Russian Tenge(KZT) Astana 14 regions + 2 cities of republican significance UN, IMF, WB, OSCE, OIC
Economy DOING BUSINESS 2016 Kazakhstan ranked41st Singapore South Korea Poland Armenia Kazakhstan Hungary Belgium Belarus Italy Russia Israel Turkey Greece Luxembourg Azerbaijan Qatar Ukraine China 1 4 25 35 41 42 43 44 45 51 53 55 60 61 63 68 83 84 Protecting minority investors Rank Country 1 Singapore 8 South Korea 20 Turkey 25 Kazakhstan 36 Azerbaijan 49 Armenia 57 Belgium 66 Russia 81 Hungary 134 China Paying taxes Rank Country 1 UAE 5 Singapore 18 Kazakhstan 34 Azerbaijan 41 Armenia 47 Russia 61 Turkey 90 Belgium 95 Hungary 132 China Source: World Bank, Doing Business 2016
Economy GLOBAL COMPETITIVENESS INDEX RANKINGS Rank Country Score 1 Switzerland 5,76 2 Singapore 5,68 3 USA 5,61 4 Germany 5,53 5 Netherlands 5, 50 6 Japan 5,47 42 Kazakhstan 4,49 45 Russia 4,44 51 Turkey 4,37 80 Tajikistan 4,03 102 Kyrgyz Republic 3,83 Source: World Economic Forum, Global Competitiveness Report 2015-2016
Economy TAXATION: COMPARISON WITH CHINA AND RUSSIA TAXES Kazakhstan Russia China Corporate income tax (CIT) Value-added tax (VAT) 20% 20% 25% 12% 18% 17% Land tax from0.03to0.16 USD per 1 sq.m (10.8 sq.ft); 0.3%, 1.5% - Property tax 1.5% 2.2% 1.2% assessed value; 12% rental property. Source: Ministry of Finance of the RK;Federal TaxServiceof Russia; State Administration of Taxation of the People s Republic of China
Economy FDI ATTRACTION Top 5 host economies, FDI inflows Transition economies, 2014, $ bln.(change) Top 5 host economies, FDI inflows Landlocked developing countries, 2014, $ bln. (change) Russia 21 (-69,7%) Kazakhstan 9,6 (-6,4%) Kazakhstan 9,6 (-6,4%) Azerbaijan 4,4 (+68,3%) Azerbaijan 4,4 (+68,3%) Turkmenistan 3,2 (+2,8%) Turkmenistan 3,2 (+2,8%) Zambia 2,5 (+37%) Serbia 2 (-2,7%) Ethiopia 1,2 (+26%) According to the UNCTAD, in 2014 Kazakhstan has entered top 5 host economies for FDI inflow among transition economies and became the largest FDI recipient in the landlocked developing countries group. Among all countries Kazakhstan was ranked the 28th. Source: UNCTAD, World Investment Report 2015
Priority sectors 1 Metallurgy 2 Chemical Industry 3 Petrochemical Industry 1. Ferrous metallurgy 2. Non-ferrous metallurgy 3. Agricultural chemistry 4. Production of chemicals for industry 5. Oil refining 6. Petrochemical industry 4 Machinery 7. Manufacture of motor vehicles 8. Electrical equipment 9. Agricultural machinery engineering 10. Railway machinery engineering 11. Mining equipment 12. Oil producing equipment; oil and gas refining equipment 5 Production of 6 Food Industry construction materials 13. Production of 14. Food production construction materials
Investment INCENTIVES EXEMPTION FROM CUSTOMS DUTIES 1) When transporting manufacturing equipment and spare parts for it the exemption from customs taxation is granted for the term of investment contract but not later than 5 years after the investment contract registration. IN-KIND GRANTS In-kind grants of not more than 30% of the total investment in fixed assets. Free land 2) When importing components for the manufacturing equipment, raw stock and (or) materials for term up to 5 years the exemption from customs taxation is granted to the legal companies depending on the volume of investment in the fixed assets.
Investment NEW INCENTIVES (since 2014) FREE ENTRY Visa-free entrance Visa-free entrance for citizens of Australia, Hungary, Italy, Monaco, Belgium, Spain, the Netherlands, Norway, Sweden, Malaysia, the United Arab Emirates, Singapore, the United Kingdom, the United States of America, Germany,Finland, France, Switzerland, and Japanfor the period from 16 July 2015 till 31 December 2017 if the stay does not exceed 15 days (general application). FREE WORK PERMITS Foreign labor Without permit for the duration of construction + 1 year after commissioning of the investment project for those with investment contracts In 2017, Kazakhstan plans to abolish visa requirements for citizens of the 34member states of the OECD,
Investment NEW INCENTIVES (since 2014) Incentives for priority investment projects* TAX EXEMPTIONS: Corporate income tax (10 years) Land tax (10 years) Property tax (8 years) 0 % CASHBACK ON INVESTMENTS Reimbursement up to 30 % of the actual expenses for installation and construction works and equipment acquisition without value added tax and excises on the basis of supporting documents, but not exceeding the cost of expenses provided by preproject documentation having the conclusion of state expertise. *Criteria for priority investment projects: - matching the List of Priority Activities (approved by the Government) - newly created legal entity with investments of more than 2 million MCI (MCI monthly calculated index, approved by the Law on the national budget)
Investment NEW INCENTIVES (since 2014) Incentives for priority investment projects* STABLE LEGISLATION Stability of tax legislationfor all taxes except VAT and excise (subject to investment contract) STRONG PROTECTION OF INVESTOR S RIGHTS Ombudsman s Office For ensuring protection of the rights and legitimate interests of the investors, the investment ombudsman: 1) considers addresses of investors on issues arising during the implementation of investment activity and gives recommendations for their solution, including interacting with government bodies; 2) assists to investors in solution of arising issues in extrajudicial and pre-judicial procedures. *Criteria for priority investment projects: - matching the List of Priority Activities (approved by the Government) - newly created legal entity with investments of more than 2 million MCI (MCI monthly calculated index, approved by the Law on the national budget)
Investment SPECIAL ECONOMIC ZONES «Burabai» SEZ Tourism «Astana -new city» SEZ Mixed «Pavlodar» SEZ Petrochemical industry «NIPT» SEZ Petrochemical industry SEZ «Saryarka» Metallurgy «Seaport Aktau» SEZ Mixed «Chemical Park Taraz» SEZ Chemical industry «Khorgos Eastern Gate»SEZ Logistics «Park of Innovative Technologies» SEZ IT - Innovations «Ontystik» SEZ Textile industry
Investment INVESTMENT INCENTIVES IN SEZs FISCAL INCENTIVES Corporate income tax Land tax 0 % Property tax Social Tax (for 5 years) Exemption from VAT (for products consumed in SEZ) EXEMPTION FROM CUSTOMS DUTIES Exemption from customs duties for goods imported into the SEZ territory and exported* from the SEZterritorytotherestofthecustomsterritoryoftheCustomsUnion(CU). *CU commodities produced (processed) by SEZ residents registered before January 1, 2012 with the use of imported components, but recognized as EAEU products, are not subject to customs duties until January 1, 2017 NON-FISCAL INCENTIVES Free plot of land for the entire period of existence of a SEZ Simplified procedure for employment of foreign labor
Infrastructure LOCATION AND INFRASTRUCTURE The Kazakhstan s geographical position makes it a natural crossroads for major transit corridors from East to West, from North to South. The transcontinental automobile road corridor Western Europe Western China passes through the territory of Kazakhstan. The corridor will allow to deliver freights from China to Europe in 10 days. There is a territory with population of more than 3.3 bln. people within a radius of 2 thsd. km (1,243 miles) from Kazakhstan. The flight time from most European destinations is five hours. St. Petersburg RUSSIAN FEDERATION 143.5 mln. BELARUS 9.5 mln. Western Europe Western China corridor (8,445 km=5,247 miles) Western Europe Western China corridor on the territory of Kazakhstan (2,787 km=1,732 miles) Aktobe KAZAKHSTAN 17 mln. Shymkent INDIA 1.3 bln. MONGOLIA 2.8 mln. TURKEY 74.9 mln. PEOPLE S REPUBLIC Lianyungang IRAN OF CHINA 77.4 mln. 1.4 bln. PAKISTAN 182.1 mln.
Investment SUCCESS STORIES
Useful Links Ministry of Investment and Development of the RK www.mir.gov.kz Electronic Government www.egov.kz National Export and Investment Agency «KAZNEX INVEST» www.kaznexinvest.kz www.facebook.com/kaznexinvest NationalInvestment Internet Resource www.invest.gov.kz
National Export & Investment Agency KAZNEX INVEST Ministry of Investment and Development Thank you for your attention