Invest in Kazakhstan

National Export & Investment Agency “KAZNEX INVEST” Ministry of Investment and Development

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

DOING BUSINESS 2015 Kazakhstan ranked 77th

Tajikistan

India

Iran

Brazil

Indonesia

Kyrgyz Republic

Ukraine

China

Kazakhstan

Russia

Germany

USA

South Korea

Singapore

166

142

130

120

114

102

96

90

77

62

14

7

5

1

Economy

Source: World Bank, Doing Business 2015

Rank Country1 New Zealand2 Hong Kong3 Singapore4 United Kingdom… …25 Kazakhstan35 Japan

100 Russia132 China

Protecting minority investors

GLOBAL COMPETITIVENESS INDEX RANKINGS

Economy

Source: World Economic Forum, Global Competitiveness Report 2014-2015

Rank Country Score1 Switzerland 5.702 Singapore 5.653 USA 5.544 Finland 5.505 Germany 5.496 Japan 5.47… … …50 Kazakhstan 4.4253 Russia 4.3771 India 4.2176 Ukraine 4.14

108 Kyrgyz Republic 3.73

Kazakhstan in the world ranking for reserves

Economy

NATURAL RESOURCES

Kazakhstan in the world ranking for production

12

8

12

2

1411

1

710

5

1311

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.

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

0.3 0.7 1.1 2.1 1.8 2.25.7

3.5 2.5 3.7

7.9

12.1

19.421.3 21.4 22.2

26.528.9

24.0 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.

Economy

FDI ATTRACTION

Germany (74)

Norway (32)Czech Republic

(40)South Africa (41)Japan (70)

China (1)

USA (3)

Singapore (5)

Canada (7)

India (9)

Chile (11)

Mexico (13)

Switzerland (15)

Finland (17)

France (19)

Thailand (21)

Italy (23)

UAE (25)

Korea (27)

Malta (29)

128.5103.3

92.472.2

67.562.5

53.951.9

34.430.3

22.922.922.822.621.921.0

18.616.115.213.912.612.111.510.810.110.09.99.69.39.2

8,75,95,7

2,1 Developed economiesDeveloping economies1,8

Source: UNCTAD, World Investment Report 2015

FDI inflows: top 30 host economies, 2014, $ bln.

According to the UNCTAD, Kazakhstan has joined 30 countries with the highest volume of foreign direct

investments. It was ranked the 28th in 2014.

Economy

FDI ATTRACTION

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)

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.

Economy

FDI 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%)

Kazakhstan (23)

Saudi Arabia (10)

Brazil (9)

Nigeria (8)

Egypt (7)

Malaysia (6)

Vietnam (5)

Indonesia (4)

Mexico (3)

China (2)

India (1)

0.7

9.6

13.4

6.8

5.7

13.8

7.5

8.4

14.5

37.7

12.3

2.5

4.6

4.7

5.2

5.7

7.0

7.5

13.7

14.0

27.8

30.6

1 H 2015 1 H 2014

Czech Republic

Indonesia

South Africa

Bangladesh

Myanmar

Thailand

India

Bosnia-Herzegovina

Slovakia

Kazakhstan

29.63%

61.97%

77.32%

110.86%

114.79%

135.17%

149.01%

228.80%

231.63%

258.84%

Source: fDi Markets, includes estimates

Top 10 economies for FDI, developing countries, $ bln.

Top 10 economies for FDI growth, developing countries,

1 H 2015 to 1 H 2014

Based on FDI Markets data,  FDI inflow to developing countries dropped by 25% in the first half of 2015 comparing to the same period of 2014. Inflows to Kazakhstan reached $2.5 bln. positioning the country on the 23d place in the same group of countries and increased by 2.6 times for which it gives Kazakhstan the 1st place.

Economy

FDI ATTRACTION

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 Industry

2 Petrochemical Industry

3

Machinery4Production ofconstruction materials

5 Food Industry6

Priority sectors

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

FREE ENTRY

FREE WORK PERMITS

Visa-free entranceVisa-free entrance for citizens of USA, Great Britain, Germany, France, Italy, Malaysia, Netherlands, UAE, South Korea, Japan for the period from 15 July 2014 till 15 July 2015 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

+ 10 new countries

*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 INVESTMENTS

Reimbursement 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 %

STABLE LEGISLATIONSTRONG 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)

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

• 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 INCENTIVES

INVESTMENT 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)

LOCATION AND INFRASTRUCTURE● The 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.

UZBEKISTAN

30.2 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)

SUCCESS STORIES

Investment

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

Thank you for your attention

National Export & Investment Agency “KAZNEX INVEST” Ministry of Investment and Development