Starting a business in Kazakhstan

What you need to know

Starting a business in Kazakhstan

In 2013, Kazakhstan ranked in 25th place in the world for ease of starting a business. It is a relatively straightforward process, taking on average 19 days and six procedures. However, there are still are few tricky steps to get your head around when you start out.

Initial things to consider

First things first, it’s important to have good knowledge of the country and city you plan to start your business in. It’s a good idea to undertake a lot of research before you arrive about the business sector you plan to operate in and put together a viable business plan that includes a study of the market conditions, competition and forecast results.

Financial support

It’s fairly difficult for new expats to get support from financial institutions in Kazakhstan, so you will probably need to find investment on your own or through your bank at home. A credible business plan will help attract support from local investors however, and increase your chances of getting the go ahead.

Property

When you’ve found a place for your business’ headquarters, you will need to register the property. To do this you will need to obtain a technical passport of the property and register the name at the Registration Service Committee, which takes over 30 days.

It’s recommended to rent or buy somewhere rather than build something from scratch, as obtaining a construction permit takes 189 days and 32 procedures. Getting electricity for a new building is also a long and complicated process, involving going through several boards and procedures and taking around 88 days on average.

Tax

All businesses operating in Kazakhstan are required to pay taxes seven times a year, which is a fairly lengthy process, taking an average of 188 hours to file. Businesses in Kazakhstan are taxed up to 30% , depending on how they operate.

Registering the business

In order to set up a business in Kazakhstan, you first need to establish a legal entity or obtain the status of ‘an individual entrepreneur’. All legal entities who primarily deal in profit making can be established as a state enterprise, a business partnership (including general partnerships and limited liability partnerships), a production cooperative or a joint stock company. Most private businesses in Kazakhstan are set up as joint stock companies or limited liability partnerships.

If the appointed CEO or General Director of the company is an expat, it is required that a work permit should be obtained for that citizen once the business has been established.

There are some differences between the state registration procedure for small and large businesses. The legislative body which establishes businesses has made the process simpler for smaller businesses and simplified the means for state registration.

Registering a small business

  • Submit a completed ‘Notice about Commencing Business Activity’ form to the correct registration authority using the ‘Electronic Government’ resource . (You should note that prior to submitting this you need to register as a residence first and obtain an online signature and resident number).
  • Pay the registration fee for establishing small businesses via the ‘Electronic Government’ internet resource or attach receipt of payment to the ‘Notice about Commencing Business activity’.
  • If the participant is a foreign legal entity, you need to provide a legalized document stating that the participant is a legal entity under the legislation of a foreign country, notarised in Kazakh and Russian.
  • If the participant is a foreigner, you need to provide a copy of your passport or other identity document along with a notarized translation into Kazakh and Russian.

The registration of the business will be issued no later than one business day following the submission of the ‘Notice about Commencing Business Activity’ form.

Registering a medium/large business

  • Submit an application for state registration to the correct authority. If the sole participant of the business venture is an expat, the application must be signed and submitted by a Kazakh citizen authorised by the participant, along with constituent documents that have been notarized.
  • A receipt or copy of the payment order for the registration fee.
  • If the participant is a foreign legal entity, you need to provide a legalized document stating that the participant is a legal entity under the legislation of a foreign country, notarised into Kazakh and Russian.
  • If the participant is a foreigner, you need to provide a copy of your passport or other identity document along with a notarized translation into Kazakh and Russian.

If the documents comply with Kazakhstan legislation, the registration authority will implement the registration of the business within one working day, and then grant a ‘Certificate of State Registration of Legal entity’.

Other things to consider

Once your business is registered, you will need to open an account with a Kazakh bank, as cash transactions between legal entities are limited in Kazakhstan in order to counteract money laundering.

It’s worth taking note that it’s difficult for businesses in Kazakhstan to function correctly without the help of professional legal support from specialised Kazakh legal firms, in terms of arranging contractual work, bookkeeping and personal operations.

It’s also quite expensive to trade across borders, costing double that of neighbouring countries and four times the world average. It also takes substantially longer to export, and there are also many barriers in place for imported goods.  

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