Following the confirmation of Nursultan Nasarbaev as President until 2000 the country offers political stability. Commitment to privatisation, market economy, and encouragement of foreign investment has been stated.
Considerable progress has been made in the reduction of inflation and stabilisation of the currency which, introduced in November 1993 at a rate of 4.5 to the US dollar stood at around 50 to 31 December 1994, and at 63 six months later.
A new law on accounting is to be issued 1 January 1996 based on International Standards.
The country remains committed to privatisation, but the progress with large scale privatisation has been slow. Small scale privatisation has proceeded as has medium scale by coupon auctions to investment funds established for the purpose.
A stock market has recently been established. Three companies are currently listed.
Tax and investment
The taxation system in Kazakhstan has suffered from a wide variety of taxes and regulations, all of which have been subject to a range of interpretations by different officials.
The new tax code which was issued recently, and came into force on 1 July 1995 addresses many of these issues. It reduces the number of taxes and contributions from over 40 to less than 20. There remains however considerable uncertainty over how the code will be applied in practice.
In practice while foreign investment is welcomed there is less evidence of this welcome. No tax privileges are available to foreign investors. Some potential problems for foreign investors remain - absence of double tax treaties (currently only six in force) and 20% VAT on import of capital goods are examples.
Recently a number of contracts have been signed by the Kazakhstani government whereby a "foreign investor" is issued a management contract for the enterprise for a period of time (perhaps 5 years) and receives in return a percentage of profits.
Coopers & Lybrand
Coopers & Lybrand (Kazakhstan) provides audit services, accounting, taxation and consultancy advice to Kazakhstani companies and governmental bodies as well as to overseas companies investing into Kazakhstan. The firm has some 12 staff in Almaty office.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
For further information contact Jonathan Wale on +7 3272 622101, or enter text search 'Coopers & Lybrand' and 'Business Monitor'.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
As is known, the old Turkish Commercial Code No. 6762 set forth an internal auditing system in which an auditor would be appointed as an internal organ of a joint stock company and the company would be subject to "internal audit".
The New Turkish Commercial Code ("New Code") has been enacted and will enter into force in July 2012. One of the major changes brought by the New Code regards mandatory independent audits of corporations.
Companies with substantial assets that may possibly subject to impairment, need to ensure that they fully comply with the disclosure requirements of IAS36 especially now that the financial crisis continues.
Globalisation is quickening its pace. If the UK is to remain competitive in the battle for investment and wealth creation, business and government need to take action.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”