On February 1997 the Parliament of Kazakstan adopted a Law on the State Support for Direct Investments in the Republic of Kazakstan.

Under this law investors in priority sectors of the company may be entitled to certain incentives. A list of such sectors was published on 5 April 1997 and includes production infrastructure, processing industry, construction in the new capital of Kazakstan - Akmola, housing, tourism and agriculture. The following incentives to facilitate the effective implementation of an investment project may be available:

1)state grants, credits and subsidies;

2)for a period of 5 years from the contract signing date a reduction of income tax, land tax rate and property tax rates of up to 100% and for the subsequent 5 year period - a reduction of the income tax rate, land tax rate and property tax rate of no more than 50%;

3)full or partial exemption from customs duties on the import of equipment, raw or finished materials necessary for implementation of the investment project.

A list of the more important and preferred areas for attracting foreign and domestic direct investments are stated to include the following:

  • airports, seaports, electric and thermo-stations, telecom nets;
  • production of transport vehicles, industrial electronics, construction materials, high technology equipment, reprocessing of wastes;
  • the city of Akmola necessary for relocation of state bodies of Kazakstan;
  • tourism and recreation
  • cattle breeding and some agricultural sectors.

A format of an application to the investment Committee which shall consider relevant contracts includes a request for information on:

  • the investor;
  • the priority sector chosen by him;
  • a business plan;
  • a list of privileges which the investor believes are necessary;
  • confirmation of investor's financial strengths;
  • confirmation of investors technical and organisational abilities;
  • the investor's commitment to ensure complete and timely realisation of the project.

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 tel: +7 3272 622 or enter a text search 'Coopers and Lybrand' and 'Business Monitor'.