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Invest in Kazakhstan
BUSINESS FRIENDLY
ENVIRONMENT SOCIAL AND
ECONOMIC STABILITY ATTRACTIVENESS FOR
INVESTMENTS
SUSTAINED
HIGH GROWTH
INCOME
EQUALITY
FAVORABLE
TAX REGIME
ACCESS TO MAJOR
REGIONAL MARKETS
SKILLED AND EDUCATED
WORKFORCE
GOVERNMENT
SUPPORT
WHY INVEST IN KAZAKHSTAN?
1 2 3
4 5 6
7 8 9
www.invest.gov.kz 2
1
5
18
29
35
40
69
78
New Zealand
South Korea
Ireland
France
Kazakhstan
Russia
Turkey
China
BUSINESS FRIENDLY ENVIRONMENT
Doing Business 2017 provides objective measures of business regulations and their enforcement
Source: World Bank, Doing Business 2017
Rank (out of 138)
Country Score
1 Switzerland 5.81
28 China 5.57
37 Azerbaijan 4.55
43 Russia 4.51
53 Kazakhstan 4.41
55 Turkey 4.39
76 Iran 4.12
111 Kyrgyzstan 3.75
Source: World Economic Forum, GCR 2016 - 2017
Global Competitiveness Index integrates the macroeconomic and the micro/business aspects of competitiveness of countries
Kazakhstan is located on the 53rd position in the ranking of global competitiveness. Among the CIS countries Kazakhstan is in 3rd place after Azerbaijan (37th place) and Russia (43rd place). Kazakhstan showed high results in 13 indicators (top 30), including:
- Transparency of government policymaking; - Strength of investor protection; - Quality of railroad infrastructure; - No. of procedures and time to start a business; - Government debt; - Internet access in schools and etc.
Kazakhstan is ranked 35th among 190 nations in the category “ease of doing business.” Kazakhstan is also marked as the best reformer for the 4th time with the implementation of 7 business reforms in:
- the process of starting a business; - obtaining of construction permits; - getting electricity; - the protection of minority investors; - resolving insolvency; - trading across borders; - contract enforcement.
+16 (compared to 2016)
(out of 190)
www.invest.gov.kz 3
SOCIAL AND ECONOMIC STABILITY
SUSTAINABILITY
Social Stability Development of human capital and equal access to all social services
Economic Stability Dynamic growth of the economy and increasing FDI inflow
International
presence Membership in OSCE, WTO and other international organizations
Harmonious society Ethnic Harmony and Multi-Vector Foreign Policy
Government stability Good governance and the rule of law
Availability of natural
resources Large reserves of natural resources
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FDI inflow Billion USD
22.2 26.5
28.9 24.1 23.7
14.8
20.6
5.4
2010 2011 2012 2013 2014 2015 2016 1Q
2017
ATTRACTIVENESS FOR INVESTMENTS
FDI inflow in 2016, $ mln Breakdown by regions
SOURCE: National Bank of the RK, Committee on Statistics of the MNE RK
0-300
300-1,000
1,000-3,000
over 3,000
Mangystau
region $479.5 mln
Karaganda region $304.2 mln
South Kazakhstan
region $283.5 mln
East Kazakhstan region $2,458.5 mln
Atyrau region $8,512.0 mln
Astana city $197.5 mln
Almaty city $4,675.8 mln
Akmola region $253.4 mln
Kyzylorda region $206.8 mln
West Kazakhstan region $1,356.8 mln
Aktobe region $1,015.0 mln
Almaty region $100.6 mln
Zhambyl region $149.4 mln
Kostanay region $278.1 mln
Pavlodar region $362.8 mln
North Kazakhstan region $2.5 mln
Top 5 investors in Kazakhstan 2016, $ mln
China 960.9
France 1,137.3
Netherlands 7,655.5
Switzerland 2,589.4
USA 3,423.8
FDI inflow, Breakdown by sectors, % of total
26,9%
44,1%
10,1%
6,8%
12,1%
34,3%
23,6%
18,4%
11,1%
12,6% 2016
2010
Mining and Quarrying Professional, scientific and technical activities (including geological exploration and prospecting activities) Manufacturing Wholesale and retail trade Other
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GDP, current prices Billion USD
184.4
133.8 157.9
173.9 188.5
204.6 217.0
232.9
1.2 1.1
2.5
3.4
2.8 3.2
3.9
4.6
-
0,5
1,0
1,5
2,0
2,5
3,0
3,5
4,0
4,5
5,0
-
50,0
100,0
150,0
200,0
250,0
2015 2016 2017 2018 2019 2020 2021 2022
GDP per capita, current prices Thousand USD
10.4
7.5 8.7 9.4 10.0 10.7 11.2 11.9
2015 2016 2017 2018 2019 2020 2021 2022
SUSTAINED HIGH GROWTH
Real GDP growth in Kazakhstan is expected to strengthen to 2.5 percent this year, reflecting higher oil production and the effect of substantial fiscal stimulus spending.
Real GDP growth Constant prices,
% change
SOURCE: IMF www.invest.gov.kz 6
SOURCE: Human Development Report 2016; Committee on Statistics of the MNE RK
Gini coefficient (World Bank most recent Gini index estimates)
According to Human Development Report 2016, Kazakhstan’s Human Development Index (HDI) value for 2015 is 0.794 - which put the country in the high human development category - positioning it at 56 out of 188 countries and territories.
0 = income equality 100 = income inequality
63.4
50.5
42.2
41.6
41.1
35.2
32.1
30.1
28
27.8
0 10 20 30 40 50 60 70
South Africa
Chile
China
Russia
USA
India
Japan
Germany
Netherlands
Kazakhstan 1
Updated Committee on Statistics Data 1
INCOME EQUALITY
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17,7
8,8
18,2
13
16,2
6,4
14,3
28,5
36,1
19,9
24,8
11,2
19,5
19
2,5
3
2
1,8
3,1
2,1
0 10 20 30 40 50 60 70
Tajikistan
Russia
Turkey
Azerbaijan
Kazakhstan
Kyrgyzstan
Georgia
Profit taxes Labour taxes Other taxes
According to the joint report by PwC and the World Bank Group «Paying Taxes 2017» Kazakhstan is 18th in terms of favorable tax climate in comparison with tax regimes of 189 economies.
Paying Taxes
SOURCE: PwC. Paying Taxes 2017
18th
FAVORABLE TAX REGIME
Central Asia & Eastern Europe Total Tax Rate (%)
16.4
29.0
29.2
39.8
41.1
47.4
65.2
34.2 Regional average
Astana International Financial
Centre (AIFC)
The AIFC is a financial hub for Central Asia, EAEU, the Caucasus,
Western China, the Middle East, Mongolia, and Europe. Effective
from 2018, the centre provides a special legal regime based on the
principles of English law, independent financial regulation in accordance with international standards, tax preferences for a
period of 50 years, simplified visa and labour conditions, and has English as an official language.
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500 million people within 2,000 km • Central Asian markets of 49 mln • Countries bordering the Caspian Sea 235 mln • Western China with 21 mln
Access to a common market of Eurasian Economic Union with more than 180 mln consumers
ACCESS TO MAJOR REGIONAL MARKETS
Port infrastructure of Kazakhstan in other countries.
The transcontinental auto corridor “Western Europe – Western China” • Cargo transportation time from
Lianyungang in China to St. Petersburg in Russia about 10 days
SOURCE: IMF
2016
Armenia GDP per capita $ 3.5 thousand
Belarus GDP per capita $ 5.1 thousand
Russia GDP per capita $ 8.9 thousand
Kyrgyzstan GDP per capita $ 1.1 thousand
Seaport of Batumi
Port of Lianyungang
10 days
Kazakhstan
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.
Educational attainment
Rank (out of 130) Country
2 Singapore 18 Russia 34 Italy 40 Kazakhstan 69 Turkey 96 China
Rank (out of 130) Country
5 Singapore 16 Russia 37 Kazakhstan 64 Italy 79 Turkey 96 China
Source: World Economic Forum, The Human Capital Report 2016
Rank (out of 130) Country
7 Kazakhstan 14 Russia 28 Italy 39 Singapore 54 China 89 Turkey
High-skilled employment share (25-54 age group)
Tertiary education attainment (25-54 age group)
Secondary education attainment (25-54 age group)
Human Capital Index 2016 Kazakhstan ranked 29th out of 130 world economies for the Human Capital Index.
Population of Kazakhstan – 18 mln people
9 mln
The economically active population aged 15 +
Unemployment rate 4.9%
8.5 mln
Employed population
of the employed population had higher and secondary professional (special) education (6.3 mln)
74.3%
57% Urban
population
Gross enrolment rate in higher
education in 2015
48.4%
NU is the newest university in Kazakhstan that is committed to working according to international academic standards. Each of the University's schools and research centers is being developed in cooperation with the leading universities and research institutions:
- Duke University (USA) - University of Cambridge (UK)
Bolashak International Scholarship is awarded to high-performing students from Kazakhstan. Throughout the whole period of its realization Bolashak Scholarship has been granted to 12,000 Kazakhstan citizens for study in 170 best universities of 35 countries.
SKILLED AND EDUCATED WORKFORCE
Other universities in Kazakhstan also train highly qualified specialists through cooperation with world-leading institutions like the ENA, National School of Administration (France), Wroclaw university (Poland), Università di Bologna (Italy) and etc.
- University of Warwick (UK) - National University of Singapore, etc.
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Priority sectors
12
Agro – industrial-complex of Kazakhstan
www.invest.gov.kz
Vegeculture
Agriculture
Rice-growing
Cotton breeding
Melon-growing
Meat-and-diary
Cattle farming
Pig breeding
Sheep breeding
Camel husbandry
Аstana
Аqtobe
Усть-
Каменогорск
Кaraganda
Pavlodar Кostanay
Аktau
Кokshetay
Taldykorgan
Semey
Аtyrauy
Uralsk
Dzezkazga
n
Saratov
Аstrahan
Bishkek
Chelabinsk
Kurgan
Petropavlovsk Omsk
Тараз
Аlmaty
Shymkent
Kyzylorda
Horse breeding
Over 80% of the land Is areas in Kazakhstan
The 9th largest country in the world
~ 20% of the population Is employed in agriculture of food industry
More than 7% of the Total contribution to the Gross Value Added of the country (2016)
More than 210 mln ha agricultural land
13
Machinery of Kazakhstan
14
Infrastructure of Kazakhstan
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Retail sector of Kazakhstan
Grocery retail market bln USD
The volume of Internet commerce bln USD
7.3 8.2 9.3 10.2 11.3 12.4
2016 2017 2018 2019 2020 2021
274.3 355.7 469.8 597.5 748.5 923.7
2016 2017 2018 2019 2020 2021
11.7 12.8 14.3 15.5 16.8 18.1
2016 2017 2018 2019 2020 2021
Non-grocery retail market bln USD
Market size
48,6% 28,6%
22,7%
Paid services
Food products Non-food products
The structure of household spending in Kazakhstan (2016)
Grocery
Convenience Stores
Discounters and hypermarkets
Modern Grocery Retailers
Non-grocery Homewares and Home Furnishing
Stores
Home and Garden Specialist
Retailers
Grocery retail
Vacant market size for foreign investors in modern formats of trade can reach more than 2 bln USD by 2021, of which:
The entering of PCs in Kazakhstan reached 74%, while the entering of mobile devices reached 64% of households.
In Kazakhstan, the number of Internet users per 100 people
73
more than 1 bln USD vacant market size in hypermarkets
2016 2018
2021
597.0
mln USD 918.6
1,633.2
Non-grocery retail
Vacant market size for foreign investors in the retail sales of goods for home and garden can reach more than 800 mln USD by 2021. At the same time, the size of the home goods retail market will reach 727.2 mln USD.
E-commerce
The development of the trade sector in Kazakhstan is characterized by the displacement of traditional formats of trade with modern ones, the dominance of large retail chains, the restructuring of the supply system towards vertical integration, the use of modern
sales, marketing and merchandising technologies, and the emergence of new forms of trade such as electronic and mobile commerce.
Potential directions of development in Kazakhstan
GOVERNMENT SUPPORT
Tax preferences
Preferences under investment priority projects
Corporate income tax (up to 10 years)
Land tax (up to 10 years)
Property tax (up to 8 years)
0%
Employment of foreign labour out of quota and without permits
Exemption from customs duties
Preferences under investment projects
Customs duties 0% up to 5 years on imported: – major equipment and spare parts to it; – accessories, raw materials.
The state in kind grants
Free land, buildings, structures, machinery and equipment, etc.
How to get preferences
Free foreign labour employment
GOVERNMENT SUPPORT FOR INVESTMENT PROJECTS
Investment Incentives
* Determined by the Decree of the Government of the Republic of Kazakhstan No. 13 "On some issues of implementation of the state
support of investments“ dated January 14, 2016
** In 2017 1 MCI = 2,269 KZT. According to the exchange rate of the National Bank of Kazakhstan as of 25.08.2017: $1 = 331.22 KZT,
€1 = 390.48 KZT
Conformity to activities included in
the list of priority activities for investment
projects *
Investments volume not less than
two-million-fold rate of MCI**
Conformity to activities included in
the list of priority activities for investment
priority projects
Newly established legal entity
(the state registration is carried out no earlier than 24 calendar months before the
application)
www.invest.gov.kz 17
Investment Ombudsman
Visa-free entrance
Investors Service Centre (One Stop Shop)
The purpose of the Investment Ombudsman is to protect the rights and legitimate interests of foreign investors in Kazakhstan.
• Provision of 363 public services for investors (investment contract, land, visa support, etc.)
• Investment law consultations
From January 1, 2017, a 30-day visa-free regime is introduced for citizens of more than 60 countries, including all 35 OECD member-countries.
Investment Incentives
GOVERNMENT SUPPORT FOR INVESTMENT PROJECTS
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FISCAL INCENTIVES
• Corporate income tax • Land tax • Property tax • Social Tax (for 5 years) • Exemption from the VAT
0%
Free plot of land for the entire period of existence of a SEZ
Simplified procedure for employment of foreign labor
NON-FISCAL INCENTIVES EXEMPTION FROM CUSTOMS DUTIES
For goods • imported into the SEZ
territory • exported* from the SEZ
territory to the Customs Union
In addition, foreign investors may invest in Special Economic Zones of Kazakhstan. Within 10 special economic zones the following preferences are
provided:
GOVERNMENT SUPPORT FOR INVESTMENT PROJECTS
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KAZAKH INVEST – "ONE STOP SHOP"
IMPLEMENTATION OF INVESTMENT PROJECTS
SUPPORT FOR FOREIGN INVESTORS
MONITORING OF THE IMPLEMENTATION OF
INVESTMENT PROJECTS
SOLVING EMERGING ISSUES
FOREIGN REPRESENTATIVES
REGIONAL SUPPORT FOR FOREIGN INVESTORS
EXPORT PROMOTION
SYSTEMIC FEEDBACK FROM GOVERNMENT BODIES AND CLOSE INTERACTION WITH INTERNATIONAL ORGANIZATIONS ARE ALSO INCLUDED IN THE FUNCTIONAL OF THE COMPANY
UNIFIED NEGOTIATOR ON BEHALF OF THE
GOVERNMENT TO ELIMINATE BUREAUCRACY
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INTERNATIONAL NETWORK OF KAZAKH INVEST
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