Doing business in Kazakhstan Deloitte
Since independence, Kazakhstan has achieved significant results in its efforts to attract foreign investment. Most of that investment has been in the natural resources sector. However, in recent years the government has been seen to be trying to change the emphasis on investment to cover a more diverse range of industries and sectors.
To ensure its goal of sustained long-term growth, Kazakhstan still has a lot of work to do to ensure a fully-diversified economy and decrease its dependence on natural resources, which are vulnerable to volatile global commodity prices.
Despite its obvious achievements, the government is still interested in improving the investment climate in Kazakhstan, which is why considerable efforts have been made to remove bureaucratic obstacles to making investments (as testified in Kazakhstan placing 49th in the World Bankâ€™s Ease of Doing Business rankings for 183 countries), but attracting direct foreign investment in the hitherto underdeveloped non-extractive sectors remains difficult and will require more than just the elimination of red tape.
The Kazakhstan Constitution affords foreign companies and individuals the same rights and obligations as Kazakhstan nationals. Foreigners may invest in almost all sectors of the economy, but certain restrictions do exist for specific industries. Foreign investors may also face a number of operational restrictions, although not explicitly discriminatory, that local firms are not subject to (e.g. local content and obligations covering labour, goods and services).
Kazakhstan has signed bilateral investment treaties with many countries, including OECD countries, which guarantee national or most-favoured-nation treatment and stipulate the responsibilities of parties, most notably in the event of expropriation.
Kazakhstan has also established institutions to promote investment, including KazNexInvest and the Foreign Investorsâ€™ Council, and intends to create the role of investment ombudsman to help foreign investors address their issues and concerns to the right institution and ultimately ensure a more favourable investment climate.