Invest in Kazakhstan Embassy of Kazakhstan Rome, 18.02.2016 1
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Invest in KazakhstanEmbassy of Kazakhstan Rome, 18.02.2016
1
Basic Facts
● Area: 2,724,000 km2 (1,051,742 sq.miles), 9th
largest● Population: 17,476,141● Official language: Kazakh, Russian● Currency: Tenge (KZT)● Capital: Astana● Administrative division: 14 regions + 2 cities of
republican significance● Member of organizations: UN, IMF, WB, OSCE,
OIC
National Flag National Emblem
2
DOING BUSINESS 2016Rank Country
1 Singapore8 South Korea
20 Turkey25 Kazakhstan36 Azerbaijan49 Armenia57 Belgium66 Russia81 Hungary
134 China
Protecting minority investors
Rank Country1 UAE5 Singapore
18 Kazakhstan34 Azerbaijan41 Armenia47 Russia61 Turkey90 Belgium95 Hungary
132 China
Paying taxes
Economy
Source: World Bank, Doing Business 2016
Kazakhstan ranked 41st
8483
68636160
555351
4544434241
3525
41
ChinaUkraine
QatarAzerbaijan
LuxembourgGreeceTurkeyIsrael
RussiaItaly
BelarusBelgiumHungary
KazakhstanArmeniaPoland
South KoreaSingapore
3
GLOBAL COMPETITIVENESS INDEX RANKINGS
Economy
Source: World Economic Forum, Global Competitiveness Report 2015-2016
Rank Country Score1 Switzerland 5,762 Singapore 5,683 USA 5,614 Germany 5,535 Netherlands 5, 506 Japan 5,47… … …42 Kazakhstan 4,4945 Russia 4,4451 Turkey 4,3780 Tajikistan 4,03
102 Kyrgyz Republic 3,83
4
Kazakhstan in the world ranking for reserves
EconomyNATURAL RESOURCES
Kazakhstan in the world ranking for production
128
12
2
1411
1
710
5
13 11
18
1013
1
11 12
3
9
18
12 11 10
Source: U.S. Geological Survey, Mineral Commodity Summaries 2014; BP Statistical Review of World Energy, June 2014; U.S. Energy Information Administration, Independent Statistics and Analysis; The Global Source, The Silver Institute; Thomson Reuters GFMS, Gold Survey 2013 Update 1. 5
Economy
TAXATION: COMPARISON WITH CHINA AND RUSSIA
Kazakhstan Russia China
Corporate income tax (CIT) 20% 20% 25%
Value-added tax (VAT) 12% 18% 17%
Land tax from 0.03 to 0.16 USD per 1 sq.m
(10.8 sq.ft);0.3%, 1.5% -
Property tax1.5% 2.2%
1.2% assessed value;
12% rental property.
Source: Ministry of Finance of the RK; Federal Tax Service of Russia; State Administration of Taxation of the People’s Republic of China
TAXES
6
0.3 0.7 1.1 2.1 1.8 2.25.7 3.5 2.5 3.7
7.912.1
19.4 21.3 21.4 22.226.5
28.924.0 23.9
Manufacturing Total
Source: National Bank of the RK
FDI in the manufacturing sector
17.6 $ bln.74%
FDI in the manufacturing sector
6.1 $ bln.26 %
Since 2005, gross inflows of FDI in the manufacturing sector amounted to $ 23.7 billion, of which: From 2010 to 2014 gross inflow of FDI in the manufacturing industry was 17.6 billion USD, which corresponds to 74% of total FDI inflows in the manufacturing industry since 2005.
EconomyFDI ATTRACTION
7
Source: UNCTAD, World Investment Report 2015
Top 5 host economies, FDI inflowsTransition economies, 2014, $ bln.
(change)
Top 5 host economies, FDI inflowsLandlocked developing countries, 2014, $ bln.
(change)
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.
EconomyFDI ATTRACTION
Serbia
Turkmenistan
Azerbaijan
Kazakhstan
Russia
2 (-2,7%)
3,2 (+2,8%)
4,4 (+68,3%)
9,6 (-6,4%)
21 (-69,7%)
Ethiopia
Zambia
Turkmenistan
Azerbaijan
Kazakhstan
1,2 (+26%)
2,5 (+37%)
3,2 (+2,8%)
4,4 (+68,3%)
9,6 (-6,4%)
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1st levelBorder regions of Russia
2nd level Russia Ukraine Belarus
3d levelWestern regions
of China
5th level Iran
Azerbaijan and other Caucasian
countries
4th level China
Uzbekistan Tajikistan
Turkmenistan Kyrgyzstan
High Low
Level of integration of the macro-region
12
4
3
5
Kazakhstan is a member of the Eurasian Economic Union: - free trading without customs duties
- access to population over 170 mln. people
Market of the macro-region
Metallurgy1
1. Ferrous metallurgy
2. Non-ferrousmetallurgy
3. Agricultural chemistry
4. Production ofchemicals for industry
5. Oil refining6. Petrochemical
industry
13. Production ofconstruction
materials
7. Manufacture of motor vehicles8. Electrical equipment9. Agricultural machinery engineering10. Railway machinery engineering 11. Mining equipment12. Oil producing equipment; oil and gas refining equipment
14. Food production
Chemical Industry2 Petrochemical
Industry3
Machinery4Production ofconstruction materials
5 Food Industry6
Priority sectors
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INCENTIVES
IN-KIND GRANTSIn-kind grants of not more than 30% of the total investment in fixed assets.
Free land
EXEMPTION FROM CUSTOMS DUTIES1) When transporting manufacturing equipment and components 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 spare parts 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
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FREE ENTRY FREE WORK PERMITSVisa-free entranceVisa-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
NEW INCENTIVES (since 2014)
Investment
In 2017, Kazakhstan plans to abolish visa requirements for citizens of the 34 member states of the OECD,
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*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)
CASHBACK ON INVESTMENTSReimbursement up to
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.
Corporate income tax (10 years)
TAX EXEMPTIONS:
Land tax (10 years)
Property tax (8 years)
Incentives for priority investment projects*
NEW INCENTIVES (since 2014)
Investment
30 %0 %
13
STABLE LEGISLATION STRONG PROTECTION OF INVESTOR’S RIGHTS
Stability of tax legislation for all taxes except VAT and excise (subject to investment contract)
Ombudsman’s OfficeFor 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.
Investment
Incentives for priority investment projects*
NEW INCENTIVES (since 2014)
*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)
14
SPECIAL ECONOMIC ZONES
«Pavlodar» SEZ Petrochemical
industry
«NIPT» SEZPetrochemical
industry
SEZ «Saryarka» Metallurgy
«Seaport Aktau» SEZ Mixed
«Burabai» SEZTourism
«Ontystik» SEZ Textile industry
«Astana - new city» SEZ
Mixed
«Chemical Park Taraz» SEZChemical industry
«Khorgos – Eastern Gate» SEZ
Logistics
Investment
«Park of Innovative Technologies» SEZ
IT - Innovations
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• Increase of marginal rate of depreciation for tax on the production of software to 40%• For «Park of Innovative Technologies» SEZ – social tax is 0% for 5 years, under
certain conditions and depreciation rate for software increased to 40 %
• Provision of free land in SEZ for a period of up to 10 years from registration time as SEZ resident
• Simplified procedure for the recruitment of foreign labor
NON-FISCAL INCENTIVES
FISCAL INCENTIVESINVESTMENT INCENTIVES IN SEZs
Investment
Corporate income tax
Land tax
Property tax
until 2020-2025 with possibility for extension0 %
Exemption from VAT (for products consumed in SEZ)
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LOCATION AND INFRASTRUCTURE● 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.
Infrastructure
RUSSIAN FEDERATION143.5 mln.
UZBEKISTAN30.2 mln.
TURKMENISTAN5.2 mln.
KAZAKHSTAN17 mln.
PEOPLE’S REPUBLIC OF CHINA1.4 bln.
MONGOLIA2.8 mln.
INDIA1.3 bln.
BELARUS
9.5 mln.
IRAN77.4 mln.
PAKISTAN182.1 mln.
TURKEY74.9 mln. Lianyungang
St. Petersburg
Aktobe
ShymkentKYRGYZSTAN
5.7 mln.
Western Europe – Western China corridor on the territory of Kazakhstan (2,787 km=1,732 miles)
Western Europe – Western China corridor (8,445 km=5,247 miles)
17
SUCCESS STORIES
Investment
18
EXPO 2017 ASTANA - FUTURE ENERGY
19
FUNCTIONAL USE:
- EXHIBITION AREA- PUBLIC AREA
- ENTERTAINMENT AREA
SUSTAINABLE FEATURES:
- PHOTOVOLTAIC CELLS- -WIND TURBINES
- -GEOTHERMAL ENERGY
OVERALL AREA – 24 760 m2
NATIONAL PAVILION “KAZAKHSTAN” – THE SPHERE
20
THEMATIC PAVILIONS
FUNCTIONAL USE: 4 THEMATIC PAVILIONS:
- EXHIBITION AREA - MY FUTURE ENERGY
- WORLD OF ENERGYRENEWABLE ENERGY:
- ENERGY FOR LIFE- PHOTOVOLTAIC PANELS - ENERGY FOR ALL
OVERALL AREA: 17 440 m2
21
8 GENERAL CONTRACTORS
12 CONSTRUCTION SECTORS
OVERALL MORE THAN 150 BUILDING PARCELS
MORE THAN 2000 UNITS OF WORKERS INVOLVED IN THE
CONSTRUCTION
MORE THAN 120 UNITS OF CONSTRUCTION MACHINE
AND EQUIPMENT INVOLVED IN THE CONSTRUCTION
36 HIGH PRIORITY EXHIBITION BUILDING
PARCELS
CONSTRUCTION
22
23
PERSPECTIVES FOR THE RENEWABLE ENERGY
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Ministry of Investment and Development of the RK
www.mir.gov.kz
Electronic Governmentwww.egov.kz
National Export and Investment Agency «KAZNEX INVEST»
www.kaznexinvest.kz
National Investment Internet Resource
www.invest.gov.kz
Useful Links
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