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Factors of attractiveness of the investment climate in Kazakhstan

Factors of attractiveness of the investment climate in Kazakhstan. JSC “ NATIONAL AGENCY FOR EXPORT & INVESTMENTS “ kaznex invest ”. Date : Location :. Ministry of Industry and New Technologies of the Republic of Kazakhs tan. Country review. Political structure : Republic

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Factors of attractiveness of the investment climate in Kazakhstan

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  1. Factors of attractiveness of the investment climate in Kazakhstan JSC “NATIONAL AGENCY FOR EXPORT & INVESTMENTS “kaznexinvest” Date: Location: Ministry of Industry and New Technologies of the Republic of Kazakhstan

  2. Country review • Political structure : Republic • Territory: 2.7 mln. sq. m. • Capital: Astana • Population: 16,5 mln • Key macroeconomic indicators, 2010: • GDP/GDP per capita: $ 147 bill./$ 8,979 • Industrial output : $ 80bill. • Turnover: $90.6 bill. • Export:$ 59.8 bill. • Import:$ 30.8 bill. • Religion: Islam, Russian Orthodoxy • Major languages • Kazakh (state language) • Russian (official, business language) • The main ethnic groups: • Kazakhs: 65% • Russian: 25% • Ukrainians: 2.9% • Uzbeks: 2.8% • Germans: 1.5% • Koreans: 0.7% • Currency: Tenge (KZT, USD 1~ KZT 146)

  3. GDP per capita of countries-COMPETITORS of Kazakhstan for FDI 0% 2% 4% 6% 8% 10% 12% 14% 16% 20%

  4. Industry of Kazakhstan Source: Agency of the RK on Statistics Source: National Bank of the RK

  5. Comparison of accumulated FDI in the CIS

  6. Foreign Direct Investment in Kazakhstan FDI in Kazakhstan, million USD 3Q 2011 Source: National Bank of the RK

  7. The volume and structure of FDI in Kazakhstan by industry for 2000 - 6M2010 years

  8. Statistics of the Doing Business-2011 rating, the share of FDI in GDP and the level of FDI per capita Source: World Bank, CIA Factbook, Doing Business 2012

  9. Confidence in political institutions and effective management of public funds

  10. Budget Balance and the share of public debt to GDP

  11. Transport infrastructure

  12. Features of the location

  13. The legal framework in Kazakhstan THE LAW OF THE RK AS OF JULY 21, 2011 № 469 "ON SPECIAL ECONOMIC ZONES IN THE REPUBLIC OF KAZAKHSTAN" THE LAW OF THE RK AS OF JANUARY 8, 2003 № 373 "ON INVESTMENTS"

  14. BILATERAL INVESTMENT PROTECTION AGREEMENTS Countries with which Kazakhstan has signed bilateral agreements on mutual investment protection

  15. Governmental Program of Forced Innovative Industrial Development GOAL: Ensure sustainable and balanced economic growth through diversification and competitive recovery. INDICATORS • GDP grown up to 50% than in 2008 • Increasing of labor productivity in manufacturing industry up to 50% and in some sectors up to 100% • Increasing the share of non resource export up to 40% • Decreasing energy intensity of GDP no less than 10% • Increasing the share of innovative enterprises up to10% of active enterprises

  16. PRIORITYSECTORS PRIORITYSECTORS NEW APPROACHES (2010 - 2014) · Metallurgy and production of metal products CRITERION 1. High productivity level Modernization of existing enterprises · Oil refining and 2. Creation andimproving of infrastructure power industry, pipelines, roads Infrastructure of Oil and gas sector · Chemical and pharmaceutical . industries 1. High productivity level Creation of new efficient enterprises · Аgro-industrial sector 2. High added cost · Defense industry 3. Export oriented 4. Competitiveness on domestic market · Construction industry and Production of building materials 1. Innovativeness · Transport and 2. Improving of telecommunications infrastructure Selective support of enterprises of future economy Info communications · Machine construction 3. Influence on production increasing in traditional sectors · Uranium industry · Light industry · Tourism · Space industry

  17. The basic package of preferences for investors THE LAW OF THE RK AS OF JANUARY 8, 2003 № 373 "ON INVESTMENTS" Preferences • Tax preferences according to Tax code of the Republic of Kazakhstan • Exemption from payment of import duties • State in-kind grants • Special regime for strategic investment projects: • Tax preferences (corporate income tax, land, property); • Providing state order; • Industrial subsidies (for social important regions) The volume of investments more than $ 50 million and compliance  to priority activities approved by Government Resolution on May 8, 2003, № 436 (within the framework of the law «On Investments») Strategic investment projects or Compliance to list of high technology products (within the framework of law«On Investments»)

  18. The institutional framework of Kazakhstan

  19. Industrial Infrastructure SEZ “Burabai” (Tourism) SEZ “Astana new city” (construction industry) SEZ “Petrochemical park” (Oil and gas industry, petrochemical machinery) SEZ “Pavlodar” (chemical industry) Astana Pavlodar Karaganda SEZ “Marine Port Aktau” (logistics, transport) Atyrau SEZ “Saryarka” (metallurgy) Aktau Almaty Shymkent SEZ “Khorgos eastern gate” (Trade, logistics) SEZ “Ontystik” (textile industry) SEZ “Park of industrial” (IT-industry)

  20. Measures of investment support in sez THE LAW OF THE RK AS OF JULY 21, 2011 № 469«ON SPECIAL ECONOMIC ZONES IN THE REPUBLIC OF KAZAKHSTAN» Tax preferences: • Reduction of the corporate income tax 100%; • application of the 0 coefficient in the calculation of land tax; • application of the 0 coefficient in the calculation of property tax; • Application of zero-rated VAT on use of products on the territory of SEZ that are fully consumed in carrying out activities, meeting the objectives of special economic zone creation, according to the list of goods specified by the Government of RK; Other preferences: • The simplified procedure of hiring foreign labor; • Provision of free land on the territory of SEZ for a period of up to 10 years;

  21. Rate of tax incentives

  22. Comparison of the severity of the tax burden on the Doing Business rating 105 128 181 183 39 5 44 103

  23. National investment interactive website www.invest.gov.kz • Site objectives: • Processing of requests and inquiries of investors and initiators of the projects online • Promotion of investment image of Kazakhstan • Provision of quality and daily updated information on all aspects of investing in Kazakhstan, including: • investment legislation of the Republic of Kazakhstan; • business conditions in Kazakhstan; • infrastructure conditions; • government programs; • government support for investors and others. Website will be available in 12 languages: English, German, French, Italian, Spanish, Arabic, Korean, Japanese, Turkish, Chinese, Kazakh and Russian.

  24. Working with investors

  25. Thank you for your attention! www.kaznexinvest.kz www.invest.gov.kz

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