Introduction
Kazakhstan has established itself as a prime destination for foreign direct investment in Central Asia, owing to its political and macroeconomic stability, strategic geographic location, wealth of natural resources, and favourable business environment. This presents myriad opportunities across sectors for international firms looking to incorporate in the country.
This guide offers a brief overview of the company registration process in Kazakhstan, including the key requirements, steps involved, and primary considerations for foreign investors. It examines the prevalent business structures available, the documentation needed, regulatory compliances, post-registration procedures, and costs. The objective is to equip businesses with the understanding required to seamlessly navigate through company formation and operation.
General requirements for business registration in Kazakhstan
Kazakhstan has implemented structural economic and regulatory reforms focused on improving the ease of doing business and attracting foreign investment. While the business registration process has been simplified, companies must meet certain statutory prerequisites to legally incorporate and operate.
Incorporated entities must develop constituent documents like charters and bylaws that determine the company's structure, capitalisation, management hierarchy and governance policies. These must elucidate the ownership framework, decision authorities, shareholder rights and other regulatory aspects guiding operations.
Companies need to establish a legal registered address in Kazakhstan through ownership or rental of office premises to meet incorporation needs. This enables documentation submission and communication with authorities.
Present norms mandate $740 as the min. capitalisation for incorporated entities in Kazakhstan. Hence, ventures must make this threshold contribution at the time of registration to open a corporate bank account and commence business in Kazakhstan.
Comprehensive information on the entity's promoters, shareholders and ultimate beneficiaries have to be furnished during registrations for transparency and due diligence. This encompasses full legal names, citizenship, percentage ownership, contact information and related data as per prescribed formats.
Corporate bylaws need to clearly define the governance structure with details on the Board of Directors, executive leadership positions and their respective decision rights. Clear delegation of financial, operational and administrative powers and duties enhances compliance.
Meeting these key prerequisites enables seamless business registration and operations in Kazakhstan's regulated environment for both domestic and overseas investors through the build-up of a robust legal and compliance framework.
Taxation framework for businesses
Kazakhstan offers a competitive tax regime to attract foreign investment by instituting business-friendly reforms centred around lowering overall rates and providing exemptions across key direct and indirect tax components.
- The standard CIT rate stands at 20% presently, which companies can further reduce by opting for preferential regimes like special economic zones with partial or full CIT exemptions.
- Kazakhstan levies a VAT rate of 12% on companies exceeding the prescribed turnover threshold, necessitating VAT registration and filings.
Leveraging available tax minimization avenues by company type while accounting for ownership-linked taxes aids investors in optimizing net returns when operating in Kazakhstan.
Business registration in Kazakhstan by foreign investors in 2024
Kazakhstan has implemented structural reforms focused on streamlining and standardising the registration framework for incorporated entities looking to formally operate in the country. All legal entities created in Kazakhstan are mandated to go through a uniform statutory registration process administrated by designated authorities.
The Government for Citizens State Corporation (GCSC) through its Public Service Centres serves as the agency responsible for company registrations in Kazakhstan.
The applicant must submit the standard registration application form to GCSC in prescribed format along with:
- Two copies each of the founding charter and bylaws in Kazakh and Russian languages
- Other supporting documents contingent on company type
Upon successful verification of submitted documentation, the GCSC provides the certificate of state registration and simultaneously allots a unique business identification number to the company which also gets recorded in the National Business Registry.
Kazakhstan encourages foreign direct investment by permitting overseas individuals and corporate entities to establish wholly owned limited liability partnerships (LLPs) subject to certain regulatory compliances. A partnership in Kazakhstan can be established by both ф a citizen of the Republic of Kazakhstan and a foreigner, provided that he/she is in the country and is engaged in business activities in the country legally. The process entails preparing and submitting standard documents along with additional regulations applicable for foreign nationals.
If foreign individuals seek to register an LLP in Kazakhstan, they must provide the following documentation in addition to the standard registration papers:
- Copy of passport from country of citizenship with notarized Kazakh/Russian translation
- Proof of contribution towards minimum capitalisation norms
- Constituent agreement and company charter
- Details on source of funds and capital allocation
By meeting these criteria, overseas nationals and corporates can undertake LLP registration on par with local Kazakh investors in the streamlined process requiring 2–4 weeks for completion. Appointing local tax/legal consultants further aids in ensuring compliance.
Registering a joint stock company (JSC) in Kazakhstan entails meeting certain additional requirements above the standard registration documents. Above the basic company registration application and forms, registering a JSC must submit:
- Charter, except JSCs operating based on a standard charter
- Minutes of the founding meeting, undersigned by shareholders, or the decision of the sole participant
- Proof of registration fees payment
Per immigration norms, foreign nationals seeking to register firms in Kazakhstan must necessarily obtain a business immigrant visa. This authorizes them to legally incorporate and operate companies in Kazakhstan.
Foreign companies seeking to establish local subsidiary branches or representative offices in Kazakhstan must submit standard documentation to designated authorities for statutory registration and accounting purposes.
The key documents include:
- Application in prescribed format with branch details
- Internal regulations and charter with notarized Kazakh/Russian translations
- Parent company's incorporation certificate and charter
- Corporate resolution sanctioning Kazakhstan office
- Power of Attorney delegating local branch head
- Trade register extract or certificate of incorporation of legal entity in the country of origin
- Registration fees payment evidence
- Additional papers like trade licences contingent on activities
If foreign nationals are nominated as heads of the local Kazakh branch, further documents must be submitted, including:
- Passport copy with notarized translation
- Application for the ITIN formation
- Immigration registration application
- Duly authorized Power of Attorney for the legal representative if applications are filed through a third party
Corporate bank account opening in Kazakhstan also entails submitting standard documents and selecting suitable banks based on corporate needs. Top banks recommended for business accounts in Kazakhstan include ForteBank, Jysan Bank and Halyk Bank among others.
Conclusion
Kazakhstan has significantly enhanced the ease of doing business for foreign investors through comprehensive reforms targeted at simplifying incorporations, optimizing taxation and enhancing transparency. By streamlining registrations via a single window clearance mechanism, rationalizing tax rates under preferential regimes, and strengthening legal protections, the country has positioned itself as a leading FDI destination in Central Asia.
For overseas entities keen on entering Kazakhstan, understanding the updated regulatory framework around selecting business structures, meeting compliance requirements across board and shareholder formats, navigating post-registration formalities for unhindered operations, and leveraging fiscal incentives constitutes the optimal pathway. Investing in professional advisory services for legal, tax, and accounting matters further aids in risk-proofing the Kazakhstan market entry and expansion process. With its business-friendly strides, Kazakhstan beckons immense opportunities across sectors for global corporates establishing local footprints.
