Hotel Investments In Kazakhstan Legal Regulation, Support Measures And Practical Risks

The hotel market in Kazakhstan is entering a new stage of development. Domestic and inbound tourism are growing, while the country continues to host major business, sporting and cultural events. Regional destinations are developing, and international hotel operators are expanding their presence. New hotel projects are underway or in the pipeline in Almaty, Astana, Burabay, Turkestan and other tourist destinations.

Kazakhstan’s public authorities are paying greater attention to the sector, focusing not only on increasing tourist flows but also on improving roads and utility networks, improving the quality of accommodation facilities and attracting private capital. For investors, however, a hotel is far more than a real estate development. It is an operating business and a regulated asset, and its success depends on the site, the operating model and relationship with the hotel operator, the permitting strategy and the availability of financing.

Tourism as a Public Policy Priority

The key sectoral document remains the Concept for the Development of the Tourism Industry of the Republic of Kazakhstan for 2023–2029. It sets out priorities for developing tourism clusters and infrastructure and for promoting Kazakhstan as an international destination. These objectives are also reflected in the National Development Plan of the Republic of Kazakhstan until 2029.

Tourism received renewed political attention following the President’s Address in September 2025, which highlighted the sector’s limited competitiveness, infrastructure gaps and the need to develop promising destinations. Mountain and ski tourism in Almaty and the Almaty Region were identified as particular priorities, with modern infrastructure seen as essential to creating a recognisable international tourism product. This is particularly relevant to hotel projects, whose commercial viability depends not only on the hotel itself but also on the surrounding infrastructure, including airport access, roads, utility networks, restaurants, entertainment facilities and public spaces. Public investment in this supporting infrastructure can materially improve the attractiveness and viability of a private hotel development.

State Support for Hotel Projects

Hotel projects may be eligible for investment incentives and other forms of state support under Kazakhstan’s investment legislation. Depending on the nature, location and scale of the project, available measures may include tax incentives, customs-duty exemptions, state in-kind grants and other forms of support. Eligibility depends on the applicable legal framework, the type of project and the conditions in force at the time of application.

Kazakhstan substantially revised its investment incentives framework with effect from 1 January 2026. The former classifications of priority and special investment projects have been replaced by new contractual instruments. Investors considering a hotel project should therefore assess eligibility under the current regime rather than relying on the previous project classifications.

Additional incentives may be available where a hotel is developed within a special economic zone. Depending on the project, subsidies, financing guarantees and sector-specific support for tourism infrastructure may also be available. Their availability must be assessed on a case-by-case basis, taking into account the project category, investment volume, project location and the terms of the relevant programme at the date of application.

Potential incentives should be reflected in the financial model as an upside rather than treated as a committed source of financing. Eligibility and the conditions for obtaining support should be confirmed before a final investment decision is made.

Development Practice

International brands play an increasingly important role in Kazakhstan’s hotel market. Brands currently represented in the country include Accor, Hilton, InterContinental, Wyndham, Ramada, Holiday Inn, Novotel and Rixos. Further international brands and projects are expected to enter the market as demand develops.

The relationship between the hotel owner and the brand or operator is usually structured through a hotel management agreement, a franchise agreement or, less commonly, a lease. The chosen model determines the allocation of control, operational responsibility, revenue and risk, and should be considered at an early stage of the project.

Under a hotel management agreement, the owner retains the hotel business and appoints an operator to manage it on its behalf, usually in return for base and incentive fees. The operator provides operating expertise and may provide access to its brand, reservation system, loyalty programme and operating standards. The owner generally remains responsible for the project’s financial performance and operating costs.

Under a franchise agreement, the owner, or a third-party manager engaged by the owner, operates the hotel under the brand’s name. The franchisee pays fees and must comply with the brand’s standards, while retaining greater day-to-day control than under a management agreement.

Under a lease, the owner leases the property to an operator, which runs the hotel as its own business and pays rent to the owner. The operator typically assumes the day-to-day operating responsibility and trading risk, while the owner has less influence over operations.

Regardless of the chosen structure, the parties should clearly allocate responsibility for hotel performance, capital expenditure, repairs, refurbishment and brand-mandated upgrades. In a management agreement, particular attention should be given to performance tests, owner approval rights, termination arrangements and the consequences of early termination. Design standards, pre-opening requirements and the budget for mandatory upgrades should be agreed before construction begins. Resolving these points before construction starts gives the project a better chance of opening on time, within budget and in line with the classification and brand standards envisaged by the parties.

Land and Town-Planning Requirements

Land and planning issues are among the most significant early-stage risks in a hotel development. Before acquiring or leasing a site, an investor should carry out legal due diligence on the land plot, including its designated purpose and permitted use, applicable red lines and other planning restrictions, available utility connections, and any sanitary, water-protection, environmental or heritage-related constraints.

A plot may not be used for the construction and operation of a hotel unless its legal status and permitted use allow it. Amendments to the designated purpose or land-use documentation may be possible in some cases, but they are subject to statutory procedures and may not be available for every site.

Projects in resort locations, including Balkhash, Kapshagay, Altai and Kolsai, require particular attention to water-protection zones, specially protected natural areas and other environmental restrictions. Kazakhstan’s town-planning and land legislation treats water-protection areas, protected natural sites and areas containing cultural heritage as territories subject to special planning controls. Non-compliance may delay construction, result in enforcement action or require changes to the project.
The hotel design should also be developed with the intended classification in mind. The Rules for the Classification of Tourist Accommodation, approved by Order No. 01-08/200 of the Minister of Tourism and Sport dated 11 November 2008, as amended, set requirements relevant to room stock, equipment, accessibility and staff conditions. A completed hotel that does not meet the applicable criteria may not obtain the intended star classification.

Historic areas require separate analysis. For a proposed hotel in Turkestan or another area containing protected cultural heritage, the investor should determine whether the site falls within a monument protection zone, a development-control zone or another protected area, and identify all necessary heritage approvals before finalising the design. Development restrictions in such areas can be stringent, and construction within a monument protection zone may be prohibited except for conservation-related works.

Trends and Risks

Kazakhstan’s hotel market continues to develop, but hotel investors must manage a combination of regulatory, construction and financing risks. Lengthy planning and permitting processes, uncertainty around the availability of incentives, rising borrowing costs and the price volatility of imported materials can materially affect project timing and returns. These risks are particularly relevant for developments with a long construction period.

The allocation of rights and responsibilities among project participants also requires careful attention. In joint investment structures, commercial control over the project does not always correspond to formal ownership of the land or hotel building. The ownership structure, funding arrangements, lease documentation and hotel operating agreements should therefore be aligned from the outset. The corporate records of the hotel-owning entity should also clearly reflect the ownership interests of all participants.

A number of policy developments may create additional opportunities for hospitality investors. These include the expansion of designated gambling zones and the establishment of Alatau City under a special legal regime. Their commercial relevance will depend on the implementation of the applicable legislation, infrastructure delivery and the ability of individual projects to qualify for the relevant benefits.

Alatau City is intended to become an international transport, business and investment hub between Europe, China and Central Asia. Its special legal regime provides a separate regulatory framework for residents and investment projects, including potential tax incentives, customs arrangements and a more flexible framework for determining the law applicable to certain contractual relationships. The regime also contemplates the use of international dispute-resolution mechanisms. The precise incentives and legal protections available to a particular investor will depend on its status, project documentation and the rules adopted by the city’s administration.

The recent expansion of designated gambling zones may also support the development of integrated resort destinations. In addition to the existing zones at the Kapshagay Reservoir and in the Burabay District, new zones have been introduced on the Caspian Sea coast in the Mangystau Region, in the Panfilov District and around Lake Alakol in the Zhetysu Region, in the Talgar District of the Almaty Region, and in the Markakol area and Zaysan District of the East Kazakhstan Region.

Access to casinos, slot-machine halls, bookmakers and totalisators in these new locations is restricted to foreign nationals and stateless persons, apart from employees and persons attending in the course of their employment or official duties. The restriction gives these zones a distinctly international-tourism focus. Where infrastructure and transport links are developed alongside gaming facilities, the zones may generate demand for hotels, restaurants, entertainment and related services.

Conclusions

Kazakhstan’s expanding tourism sector is creating new opportunities for hotel investment, particularly in regional cities and resort destinations where the supply of internationally managed, high-quality accommodation remains limited. Public authorities are investing in tourism infrastructure and continue to develop measures intended to attract private capital.

However, a successful hotel project depends on much more than incentives or an international brand. Before committing to a site, investors should assess its permitted use, planning restrictions and access to utility infrastructure. Before construction begins, the project should be aligned with the operator’s technical requirements and the intended hotel classification. The contractual arrangements should also allocate rights, costs and responsibilities clearly among the owner, operator, lenders and other project participants.

A hotel is a long-term operating asset, not simply a completed building. Its value is shaped by the quality of its location, the strength of its operating model and the reliability of its contractual and regulatory foundations. Hotel developments therefore require coordinated legal support throughout the investment cycle, from site acquisition and project structuring to construction, financing, opening and ongoing operations.

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Arina Dovzhenko Partner, Nordic Star

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