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China-Kazakhstan Investment and Finance
Cooperation
Investment Opportunities in Kazakhstan
National Export & Investment Agency “KAZNEX INVEST”
Ministry of Investment and Development
March 2016
I. China’s FDI to Kazakhstan
II. Banking System of Kazakhstan
III. Chinese Banks in Kazakhstan
IV. China – Kazakhstan interstate cooperation
V. Silk Road Fund
VI. Current Trends:
A. Eurasian Economic Union
B. Exchange rate fluctuations
C. Investments Incentives
D. Special Economic Zones
VII. Investment opportunities:
A. Agriculture
B. Mining
VIII. Privatization
Table of contents
I. China’s FDI to Kazakhstan
-500.0
0.0
500.0
1,000.0
1,500.0
2,000.0
2,500.0
3,000.0
China FDIs to Kazakhstan (in million
USD)
Netherlands29%
USA17%
Switzerland 10%
China 8%
Russia7%
Other29%
Top 5 FDI to Kazakhstan by
country 2014
0 5,000 10,000 15,000 20,000 25,000 30,000 35,000
2011
2012
2013
2014
9 месяцев 2015
Top FDI industries in
2014 (in million USD)
Mining, oil and gas Services Processing
Trade Transport and logistics Other industries
Chinese Corporations in Kazakhstan
II. Banking System of Kazakhstan
Total assets of 38 second tier banks makes up 25 billion USD as of
01.01.2016.
0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000
Bank RBK
Eurasian Bank
ForteBank
ATFBank
Kaspi Bank
Bank CenterCredit
Sberbank
Kazakhstan Development Bank
Tsesna Bank
Halyk Bank
Kazkommerts Bank
10 biggest banks of Kazakhstan (2015-2016) in millions
2015 2014
III. Presence of Chinese Banks in Kazakhstan
Bank of China and ICBC both started its operations in Kazakhstan in 1993.
Banks are located in Almaty. Do not have subsidiaries in other parts of the
country. As of 1 January 2016 banks are ranked 22nd and 26th
correspondently by the size of assets.
General credit line accommodation agreement (5 billion USD, 15 years)
between JSC Development Bank of Kazakhstan and Export Import Bank
of China was signed in 2009.
General credit line accommodation agreement (500 million USD) between JSC
Development Bank of Kazakhstan and Export Import Bank of China is active
since 2009.
Under the agreement between The National Development and Reform
Commission of the People's Republic of China (NDRC) and Minister for
Investments and Development of the Republic of Kazakhstan currently
following projects are in the pipeline of “52 active projects”
IV. China – Kazakhstan interstate cooperation
Industry Number of projects
Total investments
(million USD) Chinese financing
Agriculture and Food
processing 6 2 855
(EximBank; СDB; Bank of China)
- 4
Mining 13 7 372
(SinoSure; Bank of China; CDB;
EximBank) - 6
IT 4 2 116 (CDB) - 1
Infrastructure and
Logistics 1 200
Space industry 8 364
(Sinosure; Bank of China; CDB;
EximBank) - 4
Petrochemistry 2 75
Construction materials 2 444 (EximBank) - 1
Chemical industry 9 10 291 (CDB; EximBank) - 2
Energy 7 1 381 (CDB; EximBank) - 4
52 25 098 22
Under the agreement between The National Development and Reform
Commission of the People's Republic of China (NDRC) and Minister for
Investments and Development of the Republic of Kazakhstan currently
following projects are in the pipeline of “20 potential projects”
IV. China – Kazakhstan interstate cooperation
Industry
Number of
projects
Total amount of
Investments
(million USD)
Agriculture and Food
processing 2 35
Mining 2 1 400
IT 2 614
Infrastructure and Logistics 2 4 171
Space industry 1 200
Petrochemistry 3 2 608
Construction materials 1 100
Chemical industry 2 2 443
Energy 5 255
20 11 826
V. Silk Road Fund
Silk Road Fund Kazakhstan2 billion USD charter capital
Silk Road Fund 40 billion USD charter capital
Investment Facility Loan Facility
Equity participation in single project cannot exceed 20% of Fund’s total equity
The ratio of debt to equity of the project should not exceed 80:20
The Chinese project content, including but not limited to: engineering, equipment, product sales,
export of technology and the provision of services by Chinese companies must be at least 30%.
Equity participation in one project - no more than
70% of the total equity of the Fund
Loan Financing is channeled through Kazakhstan
Development Bank;
Estimated value of the internal rate of return
(IRR) - not less than 10%.
Interest rate: in correspondence with interest rates
of Chinese state banks
VI. Current trends
A) Eurasian Economic Union
On august 20 the free float exchange rate system was adopted in Kazakhstan.
The next day 35,5% depreciation occurred. The exchange rate peaked at
380,3 tenge per dollar on 27th of January (101,9% depreciation since the
system change).
VI. Current trends
B) Exchange Rate Fluctuations
0
100
200
300
400
500
600
20
13
/1/1
20
13
/3/1
20
13
/5/1
20
13
/7/1
20
13
/9/1
20
13
/11
/1
20
14
/1/1
20
14
/3/1
20
14
/5/1
20
14
/7/1
20
14
/9/1
20
14
/11
/1
20
15
/1/1
20
15
/3/1
20
15
/5/1
20
15
/7/1
20
15
/9/1
20
15
/11
/1
20
16
/1/1
20
16
/3/1
Exchange rate fluctuations 01.01.2013 -
01.04.2016
KZT / USD KZT / EUR
KZT / 10 RMB KZT / 100 RUB
EXEMPTION FROM CUSTOMS DUTIES1) 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.
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.
IN-KIND GRANTSIn-kind grants of not more than 30% of the total investment in fixed assets.
Free land
FREE ENTRY FREE WORK PERMITS
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 Japan for the period from 16 July 2015 till 31 December 2017 if
the stay does not exceed 15 days (general application).
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 34 member states of the OECD,
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.Stability of tax legislation for all taxes except VAT and excise (subject to investment
contract)
STABLE LEGISLATION*
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.
Corporate income
tax (10 years)
TAX EXEMPTIONS:*
Land tax (10 years)
Property tax (8 years)
0 %
*Criteria for priority investment projects:
- provided to a newly established legal entity (the state registration of such legal entity has been completed not earlier than 24 months before filing an
application for the investment preferences), implementing a project matching the List of Priority Activities (approved by the Government);
– investments not less than two-million-fold rate of MCI (MCI – monthly calculated index, approved by the Law on the national budget).
NEW INCENTIVES (since 2014)Visa-free entrance
VI. Current trends
C) Investment Incentives
*Criteria for investment projects:
- provided to a legal entity of Kazakhstan, implementing a project matching the List of Priority Activities (approved by the Government).
VI. Current trends
D) Special Economic Zones
«Pavlodar»SEZ
Petrochemical industry
«NIPT»SEZ
Petrochemical
industry
SEZ «Saryarka»
Metallurgy
«Seaport Aktau» SEZ
Mixed
«Burabai» SEZ
Tourism
«Ontystik» SEZ
Textile industry
«Astana
- new city» SEZ
Mixed
«Chemical
Park Taraz»SEZ
Chemical industry
«Khorgos – Eastern
Gate»SEZ
Logistics
«Park of Innovative
Technologies»SEZ
IT - Innovations
Social Tax (for 5 years)
• Free plot of land for the entire period of existence of a SEZ
• Simplified procedure for employment of foreign labor
NON-FISCAL INCENTIVES
FISCAL INCENTIVES
INVESTMENT INCENTIVES IN SEZs
VI. Current trends
D) Special Economic Zones
Corporate income tax
Land tax
Property tax0 %
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
SEZ territory to the rest of the customs territory of the Customs Union (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
Kazakhstan is a major producer of agriculture products and has significant
reserves for increase of production.
Investment opportunities in agricultural sector are following:
• Investments in existing companies wheat grain producers
• Investments in new meat producers (beef and lamb)
• Investments in production of potable oils (sunflower and others)
• Investments in fruits and vegetables production
• Investments in agriculture on irrigated lands
VII. Investment Opportunities
A) in Agriculture
From 105 elements of chemical table in the area of Kazakhstan identified 99,
explored up to 70, involved in the production of more than 60 elements.
Currently known more than 500 fields containing 1225 types of mineral raw
materials.
Kazakhstan has the world's largest known reserves of zinc, tungsten and barium
sulphate,
Kazakhstan has the world's largest known reserves of zinc, tungsten and barium
sulphate,
The second is a silver, lead and chromite,
The third is copper and fluorite
The fourth in molybdenum, and
The sixth is gold.
In terms of mineral reserves of Kazakhstan occupies the first place among Former
Soviet Union countries for chromite ores and lead, second is on oil, silver, copper,
manganese, zinc, nickel and phosphorus, the third is by gas, coal, gold and tin.
VII. Investment Opportunities
B) in Mining Industry
Currently in Kazakhstan, we can mention following promising investment
projects in mining sector connected to following areas :
Gold or gold ores
Copper
Iron ore production with high grade concentrate as a final product
Production of ferro-vanadium concentrate and production of the titanium
dioxide (raw material for basic paintings)
Lead and zinc concentrate
Vanadium concentrate (raw material for redox-vanadium accumulators)
Molybden-berillium and rare earth concentrates
Tantalum, niobium and rare earth elements
VII. Investment Opportunities
B) in Mining Industry
VIII. Privatization
Energy & Infrastructure Privatization of
refineries
Privatization through IPO
Invest in Kazakhstan