A. General
1. What is the main legal framework applicable to companies in your jurisdiction?
The main legal framework applicable to companies in Kazakhstan includes the following legal acts:
- Civil Code;
- Law on Limited and Additional Liability Partnerships; and
- Law on Joint Stock Companies.
2. What are the most common types of corporate entities (e.g., joint stock companies, limited liability companies, etc.) used in your jurisdiction? What are the main differences between them (including but not limited to with regard to the shareholders' liability)?
Under Kazakhstan law, the most common forms of corporate entities are the jointstock company (“JSC”) and the limited liability partnership (“LLP”). In both cases, the basic legal features are similar. In particular, each corporate form has a separate legal personality and shareholders enjoy limited liability.
The main difference between the JSC and LLP is that the JSC is a complex and strictly regulated corporate form. For example, the minimum authorized capital of the JSC must be approx. USD 400,000. Also, there are rigorous legal requirements to incorporation, governance, accounting, audit and public disclosure in the JSC. On the contrary, the LLP is a fairly simple and flexible corporate form. In general, the LLP is the most popular corporate form of doing business in Kazakhstan. Noteworthy that curtain business can only be organised as JSCs (e.g., banks, insurance, and regular passenger air travel).
B. Foreign Investment
3. Are there any restrictions on foreign investors incorporating or acquiring the shares of a company in your jurisdiction?
In general, there are no restrictions on foreign investors incorporating or acquiring the shares of a company in Kazakhstan. However, there are a few exceptions. For instance, a foreign person cannot own, directly or indirectly, more than 20% of shares in a local company that owns mass media.
4. Are there any foreign exchange restrictions or conditions applicable to companies such as restrictions to foreign currency shareholder loans?
In general, any transaction between a foreign shareholder and a local company in excess of USD 500,000 (an equivalent in any other currency) is subject to a currency control regime which implies a prior registration with the National Bank of Kazakhstan. Noteworthy that the dividend distribution is exempted from the currency control requirements.
5. Are there any specific considerations for employment of foreign employees in companies incorporated in your jurisdiction?
Normally, a foreign employee would need a work permit in order to be employed by a local company. In addition, the visa and local content requirements shall apply. Certain categories of employees are exempted from the obligation to obtain a work permit (e.g., General Directors of companies wholly owned by foreign shareholders).
C. Corporate Governance
6. What are the standard management structures (e.g., general assembly, board of directors, etc.) in a corporate entity governed in your jurisdiction and the key liability issues relating to these (e.g., liability of the board members and managers)?
The standard management structure in LLPs is the General Assembly (or the Sole Shareholder) and the General Director. Instead of the General Director, the Management Board can be appointed. In addition, the shareholders may decide to create a Supervisory Board and/or Audit Committee.
The standard management structure in JSCs is the General Assembly (or the Sole Shareholder), the Board of Directors, and the General Director. Instead of the General Director, the Management Board can be appointed (in some cases, e.g., banks, the Management Board is a must). In addition, the shareholders may decide to create an Audit Committee.
As a general rule, board members and managers shall be liable for the company's losses that occurred as a result of their improper actions/omissions and can be obliged to compensate such losses. Board members and managers of JSCs enjoy the business judgment rule (which is not available for board members and managers of LLPs).
7. What are the audit requirements in corporate entities?
In general, the LLPs are not required to obtain an external auditor's report in relation to their financial statements. Only certain types of LLPs (subsoil users, airlines, developers, etc.) are obliged to conduct an external audit of their annual financial statements.
All JSCs must conduct an external audit of their annual financial statements.
D. Shareholder Rights
8. What are the privileges that can be granted to shareholders? In particular, is it possible to grant voting privileges to shareholders for appointment of board members?
In general, no specific privileges can be granted to shareholders. However, a shareholder of the LLP may be granted an increased number of votes in relation to certain matters discussed at the General Assembly resulting in the ability of such shareholder to cause the General Assembly to take a decision on such matter even if other shareholders vote against it. Also, a shareholder of the JSC can be granted a “golden share” that gives the right to veto decisions of the General Assembly, Board of Directors, or General Director (Management Board).
9. Are there any specific statutory rights available to minority shareholders available in your jurisdiction?
Yes, there are specific statutory rights available to minority shareholders in Kazakhstan. For instance, a shareholder that owns (or shareholders that in aggregate own) at least 5% of the votes are entitled to include items to the agenda of the General Assembly. In addition, any shareholder of the LLP, notwithstanding the votes owned, or a shareholder of the JSC that owns at least 10% of votes, may appoint (at their own expense) an external audit of the company. Also, any shareholder has the right to challenge the decisions of the governing bodies in court.
10. Is it possible to impose restrictions on share transfers under the corporate documents (e.g., articles of association or its equivalent in your jurisdiction) of a company incorporated in your jurisdiction?
It is possible to impose restrictions on share transfers under the corporate documents of the LLP. The restrictions on share transfers in JSCs are controversial as such concept is not expressly recognized by the law.
11. Are there any specific concerns or other considerations regarding the composition, technical bankruptcy and other insolvency cases in your jurisdiction?
There are no specific concerns or other considerations regarding the composition, technical bankruptcy and other insolvency cases in Kazakhstan.
E. Acquisition
12. Which methods are commonly used to acquire a company, e.g., share transfer, asset transfer, etc.?
In Kazakhstan, share transfer and asset transfer are commonly used to acquire a company.
13. What are the advantages and disadvantages of a share purchase as opposed to other methods?
The main advantage of a share purchase is that the company is acquired as a whole (including the team, contracts, assets, reputation and licenses). The key potential disadvantage is that certain historical legal risks may be attached to the company.
14. What are the approvals and consents typically required (e.g., corporate, regulatory, sector based and third-party approvals) for private acquisitions in your jurisdiction?
Corporate approvals of the parties to the transaction are typically required. If the certain thresholds are exceeded a merger clearance requirement may be triggered. Also, there are a few sector-based approvals for example permits for acquisition of shares in subsoil users or banks.
15. What are the regulatory competition law requirements applicable to private acquisitions in your jurisdiction?
If more than 50% of voting shares are being acquired, the prior merger clearance is required if any of the following exceeds approx. USD 80,000,000:
- global assets of the acquirer's group and the target;
- global turnover (for the previous year) of the acquirer's group and the target.
16. Are there any specific rules applicable for acquisition of public companies in your jurisdiction?
There are no specific rules applicable for acquisition of public companies in Kazakhstan.
17. Is there a requirement to disclose a deal, for instance to regulatory authorities? Is it possible to keep a deal confidential?
There is no requirement to disclose deals in relation to shares of LLPs, save for the disclosure for the purposes of obtaining regulatory permits, if applicable.
As for JSCs, details of any “major” transactions must be disclosed on the website of the Financial Reporting Depository.
18. Can sellers be restricted from shopping around during a negotiation process? Is it possible to include break fee or other penalty clauses in acquisition documents to procure deal exclusivity?
In general, it is not prohibited to restrict a seller from shopping around during a negotiation process and include break fee or other penalty clauses in acquisition documents to procure deal exclusivity. However, such concept is not expressly recognized by the law and its enforcement may be problematic.
19. What are the conditions precedent in a typical acquisition document? Is it common to have conditions to closing such as no material adverse change?
The most common condition precedent is obtaining all applicable approvals, consents and waivers. No material adverse change is also quite common condition precedent. Another widely met condition precedent is the completion of the due diligence exercise to the satisfaction of the acquirer.
20. What are the typical warranties and limitations in acquisition documents? Is it common to obtain warranty insurance?
In Kazakhstan, warranties and limitations used in acquisition documents are quite standard (i.e., those normally used in English law governed acquisitions). It is not common to obtain warranty insurance.
21. Is there a requirement to set a minimum pricing for shares of a target company in an acquisition?
There is no such requirement.
22. What types of acquisition financing are available for potential buyers in your jurisdiction? Can a company provide financial assistance to a potential buyer of shares in the target company?
This matter is not regulated by the law. As a result, a wide range of acquisition financing are available for potential buyers in Kazakhstan. In particular, a company can provide financial assistance to a potential buyer of the shares.
23. What are the formalities and procedures for share transfers and how is a share transfer perfected?
The transfer of shares in an LLP is subject to registration with the State Corporation “Government for Citizens” NJSC or with Central Securities Depository if the registers of shares of the LLP are maintained by Central Securities Depository.
The transfer of shares in a JSC is subject to registration with Central Securities Depository.
24. Are there any incentives (such as tax exemptions) available for acquisitions in your jurisdiction?
There are no incentives available for acquisitions per se. However, certain taxes, customs and other incentives apply to investment projects related to the creation of new or renovation of existing production facilities as well as the implementation of projects in special economic zones.
F. Enforceability
25. Can acquisition documents be executed in a foreign language?
Yes, acquisition documents can be executed in a foreign language.
26. Can acquisition documents be governed by a foreign law?
The acquisition documents must be governed by Kazakhstan law.
27. Are arbitration clauses legally permissible or generally included in acquisition documents?
Yes, arbitration clauses are legally permissible and are often included in acquisition documents.
28. Are there any specific formalities for the execution of acquisition documents? Is it possible to remotely/digitally sign documents?
Yes, it is possible to remotely/digitally sign acquisition documents.
G. Trends and Projections
29. What are the main current trends in M&A in your jurisdiction?
The main current trend in M&A in Kazakhstan is the acquisition of local startups by major local and foreign market players.
30. Are any significant development or change expected in the near future in relation to M&A in your jurisdiction?
To the best of our knowledge, no significant developments or changes are expected in the near future in relation to M&A in Kazakhstan.
Originally published by Ergun Books on the 22nd of July, 2025.
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.
