Kazakhstan Chamber of Commerce in the USA

KazCham



Kazakh enterprises ready to export goods to Russia 0

Posted on September 03, 2014 by KazCham

Business Intelligence from Colibri Law Firm: Issue #93

Kazakhstan’s trade turnover with the other member states of the Customs Union has decreased by 23% over the worsening economic situation in Russia.

“[In the H1 2014] the trade turnover with the Customs Union totaled around $9 billion, a fall over the economic slowdown in the neighboring Russia. The drop stands at 23% as compared to the first half of 2013”, Alikhan Samilov, Head of the Statistics Committee of the country’s National Economy Ministry told a briefing at the President’s Service for Public Communications.

According to him, in the period under review Kazakhstan’s exports to Russia fell by 22% due to the falling demand for Kazakhstan-made products. Following the 20% currency devaluation in Kazakhstan back in February, Russia’s imports to Kazakhstan decreased by 24%.

Mr. Smailov elaborated that Kazakhstan’s trade turnover with the other Customs Union member states stands at 15% of the country’s overall foreign trade. “There are 6 types of goods accounting for 91% of all the imports from the other Customs Union member states. These are foodstuffs, oil and petroleum products, chemicals industry products, timber products and paper, metals and metalware, vehicles. These are the types of products that have seen their imports decreased”, he said.

Kazakhstan’s economic and investment policy 0

Posted on November 19, 2011 by Alex

Kazakhstan was listed in the top 10 countries for creating a favorable environment for entrepreneurship

The Government of Kazakhstan continues  to pursue its economic priorities under its  2030 Strategy and 2020 Strategic Development Plan. The outcome of the presidential elections last April provided a powerful impetus to deepen the ongoing reforms, enhance the Government’s institutional support for entrepreneurship and increase its efficiency.

In recent years, much has been done to create a favorable business climate in Kazakhstan. Today, the number of active small and medium-sized businesses exceeds 675,000, accounting for one-third of the GDP and providing jobs for more than 25 percent of Kazakh citizens. Even during the time of the worldwide financial crisis, the Government did not ignore domestic entrepreneurs, developing various tools of business stimulus, while the legal framework for business support is being improved all the time.

Roadmap 2020, a large-scale initiative to spur entrepreneurship in modern Kazakhstan, has been implemented since 2010. In 2011, under the program, a credit portfolio of domestic entrepreneurs will to be subsidized to the tune of $2.5 billion.

With the operation of the Customs Union, extensive opportunities have opened for entrepreneurship. In 2010, bilateral trade with Russia increased by 27.2 percent, while trade with Belarus rose by 55.8 percent. Further increases are expected once internal borders are eliminated within the Union and progress is made in setting up a Single Economic Space.

Kazakhstan aspires to become a trade, logistical and business hub for Central Asia. All these efforts come under one strategic task set forward by the President. His goal: to raise Kazakhstan’s GDP per capita to $15,000 and make it a high-income country.     Such a task foresees seven percent economic growth over the mid-term, mostly through processing industries. This means that investments to fixed capital during the next five years will have to rise by at least 50 percent.

The Government of Kazakhstan pursues a favorable investment climate, maximum openness and stability. Major joint projects have been launched with leading foreign companies, with the level of foreign investment reaching $130 billion since 1993.

A large portion of foreign investment, about 33 percent, goes to the mining industry, mainly concerning oil and gas. From 1993 to 2010, inward manufacturing investment amounted to $12.5 billion, or about 10 percent of the total.

Kazakhstan has adopted the five-year State Program for Accelerated Industrial-Innovative Development, which is aimed at shifting investors’ focus from extractive industries toward the establishment of export-oriented and high-tech and innovative industries.

The program is designed to ensure industrial growth through the implementation of 469 large investment projects and the opening new production facilities.  The estimated total of direct expenditure for investment projects under the Industrialization Program is in excess of $40 billion.

Of particular importance is the implementation of niche projects for manufacturing products that are not yet produced in Kazakhstan – investors who are interested in these industries and in such projects  will be specially supported by the Government of Kazakhstan.

The establishment of the Customs Union will create a free and unified goods market of 170 million consumers. Within the Union there are additional opportunities for business, including the reduction of transactional costs and transitory expenses, and the release of substantial working capital, which can be used for developmental purposes. Within the framework of the CES, the free movement of goods, investment capital, services and labor will be ensured. Economic integration will facilitate a coordinated macroeconomic policy to enable competition, while streamlining public procurements as well as government subsidies for industry and agriculture. These reforms are all aimed at creating favorable conditions for domestic exporters to access the transport infrastructure of partner countries, thereby reducing transport costs and improving competitiveness of Kazakh products both inside and beyond CES markets.

The Customs Union and CES are designed to establish favorable conditions and encourage the development of new industries. It is designed to expand to include other states in the region and, if conditions warrant, even to establish a monetary union with a common currency. The Kazakhstan Government pursues a pro-business, yet equitable and predictable, corporate tax policy that  allows businesses sufficient income for further growth and development while meeting the needs of our social policy.

In light of the current economic situation, further gradual reductions are planned. The Government has also been taking significant steps to combat corruption and form an adequate legislative framework to meet the contemporary demands of free-market entrepreneurship.

These reforms have brought about results. According to the World Bank’s Doing Business 2011 report (see page 26), Kazakhstan was listed in the top 10 countries for creating a favorable environment for entrepreneurship.

Further reforms and measures aim to improve the business climate in Kazakhstan. The focus will be made on reducing administrative barriers and completing reform of the legal system. Kazakhstan also plans to improve its economic attractiveness by prioritizing much-needed infrastructure investment projects. In the transportation sector, these include: the modernization of airports in Semey and Ust-Kamenogorsk; the construction of modern port facilities in the Shulbinsk gateway; highway reconstruction and expansion; and several major railway projects.

Another massive, but necessary, investment is needed in the country’s electrical power grid. Modernization, renovation and construction of new generating capacity will require more than $5 billion by 2014 – more than $1.7 billion of that co-financed from the public budget. The development of ‘green’ energy projects is also of particular interest, with a plan to boost electricity production from renewable resources. In total, more than $7 billion will be invested in the electric power industry in the medium term.

These much-needed infrastructure investments will help speed Kazakhstan’s overall development, trade integration and position our nation for further growth in the global economy of the 21st century.

SOURCE: Invest in Kazakhstan, 2011, p. 28-29

Kazakhstan’s Economic and Investment Policy 0

Posted on November 13, 2011 by Alex

The Government of Kazakhstan continues to pursue its economic priorities under its  2030 Strategy and 2020 Strategic Development Plan. The outcome of the presidential elections last April provided a powerful impetus to deepen the ongoing reforms, enhance the Government’s institutional support for entrepreneurship and increase its efficiency.

In recent years, much has been done to create a favorable business climate in Kazakhstan. Today, the number of active small and medium-sized businesses exceeds 675,000, accounting for one-third of the GDP and providing jobs for more than 25 percent of Kazakh citizens.

Even during the time of the worldwide financial crisis, the Government did not ignore domestic entrepreneurs, developing various tools of business stimulus, while the legal framework for business support is being improved all the time.  Roadmap 2020, a large-scale initiative to spur entrepreneurship in modern Kazakhstan, has been implemented since 2010. In 2011, under the program, a credit portfolio of domestic entrepreneurs will to be subsidizedto the tune of $2.5 billion.

With the operation of the Customs Union, extensive opportunities have opened for entrepreneurship. In 2010, bilateral trade with Russia increased by 27.2 percent, while trade with Belarus rose by 55.8 percent. Further increases are expected once internal borders are eliminated within the Union and progress is made in setting up a Single Economic Space.

Kazakhstan aspires to become a trade, logistical and business hub for Central Asia. All these efforts come under one strategic task set forward by the President. His goal: to raise Kazakhstan’s GDP per capita to $15,000 and make it a high-income country.

Such a task foresees seven percent economic growth over the mid-term, mostly through processing industries. This means that investments to fixed capital during the next five years will have to rise by at least 50 percent.

The Government of Kazakhstan pursues a favorable investment climate, maximum openness and stability. Major joint projects have been launched with leading foreign companies, with the level of foreign investment reaching $130 billion since 1993.

A large portion of foreign investment, about 33 percent goes to the mining industry, mainly concerning oil and gas. From 1993 to 2010, inward manufacturing investment amounted to $12.5 billion, or about 10 percent of the total. Kazakhstan has adopted the five-year State Program for Accelerated Industrial-Innovative Development, which is aimed at shifting investors’ focus from extractive industries toward the establishment of export-oriented and high-tech and innovative industries.

The program is designed to ensure industrial growth through the implementation of 469 large investment projects and the opening new production facilities.  The estimated total of direct expenditure for investment projects under the Industrialization Program is in excess of $40 billion.

Of particular importance is the implementation of niche projects for manufacturing products that are not yet produced in Kazakhstan – investors who are interested in these industries and in such projects will be specially supported by the Government of Kazakhstan.

The establishment of the Customs Union will create a free and unified goods market of 170 million consumers. Within the Union there are additional opportunities for business, including the reduction of transactional costs and transitory expenses, and the release of substantial working capital, which can be used for developmental purposes. Within the framework of the CES, the free movement of goods, investment capital, services and labor will be ensured.

Economic integration will facilitate a coordinated macroeconomic policy to enable competition, while streamlining public procurements as well as government subsidies for industry and agriculture. These reforms are all aimed at creating favorable conditions for domestic exporters to access the transport infrastructure of partner countries, thereby reducing transport costs and improving competitiveness of Kazakh products both inside and beyond CES markets.

The Customs Union and CES are designed to establish favorable conditions and encourage the development of new industries. It is designed to expand to include other states in the region and, if conditions warrant, even to establish a monetary union with a common currency.

The Kazakhstan Government pursues a pro-business, yet equitable and predictable, corporate tax policy that allows businesses sufficient income for further growth and development while meeting the needs of our social policy.

In light of the current economic situation, further gradual reductions are planned. The Government has also been taking significant steps to combat corruption and form an adequate legislative framework to meet the contemporary demands of free-market entrepreneurship.

These reforms have brought about results. According to the World Bank’s Doing Business 2011 report (see page 26), Kazakhstan was listed in the top 10 countries for creating a favorable environment for entrepreneurship. Further reforms and measures aim to improve the business climate in Kazakhstan. The focus will be made on reducing administrative barriers and completing reform of the legal system.

Kazakhstan also plans to improve its economic attractiveness by prioritizing much-needed infrastructure investment projects. In the transportation sector, these include: the modernization of airports in Semey and Ust-Kamenogorsk; the construction of modern port facilities in the Shulbinsk gateway; highway reconstruction and expansion; and several major railway projects.

Another massive, but necessary, investment is needed in the country’s electrical power grid. Modernization, renovation and construction of new generating capacity will require more than $5 billion by 2014 – more than $1.7 billion of that co-financed from the public budget. The development of ‘green’ energy projects is also of particular interest, with a plan to boost electricity production from renewable resources. In total, more than $7 billion will be invested in the electric power industry in the medium term.

These much-needed infrastructure investments will help speed Kazakhstan’s overall development, trade integration and position our nation for further growth in the global economy of the 21st century.

SOURCE: Invest in Kazakhstan, 2011, p. 28-29.

Kazakhstan Daily News Roundup – November 8, 2011 0

Posted on November 08, 2011 by Alex

Kazakhstan Daily News Roundup – September 20, 2011 0

Posted on September 20, 2011 by Alex

ENERGY:

Kashagan first oil production on track for 2012 – Nazarbayev
(SRI) – Kazakh President Nursultan Nazarbayev said on Friday that first oil from the Kashagan oil field will be produced by 2012 as planned.

BMB Munai completes sale of its production subsidiary to MIE Holdings
(SRI) – Kazakhstan-focused oil junior MBM Munai said on Monday it had completed the sale of its subsidiary Emir Oil LLP to China’s MIE Holdings Corporation after it secured all necessary regulatory approvals.

Kazakhstan raises export duty on petroleum products (SRI)

KAZENERGY Forum to be held in Astana on October 4-5 (SRI)

BUSINESS AND ECONOMY:

Kazakhstan to move ahead with IPO program despite global market turmoil
(SRI) – Kazakhstan will move ahead with its plans to sell shares in some of its largest companies to the public as part of the so-called people’s IPO, despite the current global market turmoil, Minister of Economic Development and Trade Kairat Kelimbetov said.

SH loses ?20-million Ablyazov account to Addleshaws (The Lawyer)

Indicators – September 19, 2011 (Reuters)

METALS AND MINING:

First Quantum says court upholds $2 billion Congo claim over ENRC (Reuters)

REGIONAL:

Customs Union paves way to rebuild old economic ties (The Moscow Times)

SOURCE: http://silkroadintelligencer.com/2011/09/20/kazakhstan-daily-news-roundup-september-20-2011/

Free seminar in Washington: Discover Kazakhstan 0

Posted on July 07, 2011 by KazCham

The Embassy of the Republic of Kazakhstan

Kazakhstan Chamber of Commerce in the USA, Linkage & Mind Kazakhstan Law Firm

GRATA Law Firm

request the pleasure of your company at the seminar on:

Discover Kazakhstan: Business Opportunities

within Single Economic Space

Date: Thursday, July 18, 2011

Time: From 16.00 pm to 18.00 pm

Venue: International Trade Center, Ronald Reagan Building, Oceanic Room,  1300 Pennsylvania Avenue, Northwest, Washington D.C., 20004

The Customs Union between Kazakhstan, Russia, and Belarus is now a reality. What is the next step? Single Economic Space. What does it mean for business within and outside of the Customs Union? A joint team of representatives from Kazakhstan embassy, Kazakhstan Chamber of Commerce and regional law firms will address these topics.

Agenda:

1. Legal framework of the Customs Union as the first step toward single economic space by Arlan Yerzhanov, Partner, Grata law firm

2. Economic & Investment situation & opportunities in the Customs Union by Anuar Kurzhikayev, Second Secretary, Commercial Section, Embassy of Kazakhstan

3. Legal aspects of doing business in Kazakhstan within the Customs Union by Yuliya Daurova, Executive Director, Kazakhstan Chamber of Commerce in the USA (KazCham), Partner of Linkage & Mind Law Firm

There is no charge for attendance. Places are limited. Early registration is advisable.

RSVP by Thursday, July 14, 2011

Tel: +1-202-232-5488 (Ext 117)

Fax: +12022325845

E-mail: anuar@kazakhembus.com

 

Doing business and Public Procurement in Kazakhstan 0

Posted on January 24, 2011 by KazCham

On January 20 and 21, 2011 KazCham, together with the Embassy of the Republic of Kazakhstan and Linkage & Mind Law Firm held two webinars dedicated to legal issues of doing business, current economic situation and public procurement in Kazakhstan.

There were 30 registrants from Canada, Latvia, Austria, USA, Great Britain and Kazakhstan. It was the first webinars  among planned events this year. The next seminars will be held in Astana and Almaty and will be dedicated to Public Private Partnerships. It’ll be early March.

As for today, you can find all materials of webinars on KazCham slideshare channel and video of Doing business in Kazakhstan on youtube or here:

Unification of export customs duty rates for crude oil within the Customs Union territory 0

Posted on December 01, 2010 by KazCham

According to the Deputy Chairman of the Customs Control Committee of RK, Kazakhstan does not intend to unify the
export customs duty rates on crude oil with the rates of other Customs Union member states, i.e. Russia and Belarus.

PwC Tax & Legal Alert, No 18, N0vember 30, 2010

Kazakh WTO bid, customs union membership help define economic policy 1

Posted on September 28, 2010 by KazCham

Central Asia Newswire

WASHINGTON, DC – Thursday, September 16, 2010 – Kazakh First Deputy Minister Umirzak Shukeyev told Central Asia Newswire (CAN) in an interview in Washington on Wednesday that Kazakhstan’s decision to join a customs union with Russia and Belarus is a natural extension of its efforts to join the World Trade Organization (WTO).

“For us, joining the World Trade Organization and the Customs Union is part of the same economic policy,” Shukeyev said. “Our main policy is to expand our customer base.”

Kazakhstan wants to diversify its economy beyond the oil and gas sector – which accounts for 70 percent of all foreign direct investment, Shukeyev said. The country would like to attract investors for “light customer goods.”

Kazakhstan’s small 16-million population, however, hasn’t been large enough to attract major investors to these industries.

“Our attempts [to bring investors to Kazakh light industries] have been encountering problems” because of the small domestic market, he said.

Joining the customs union “means we will go from having a consumer base of 16 million to 170 million.”

Shukeyev also told CAN that the new customs union has already begun to show the benefits of increased trade with Russia.

“Getting rid of customs points with Russia [on the Russian-Kazakh border] means our trade has expanded by 40 percent over the last 8 months when compared to the same period last year,” Shukeyev told CAN.

Shukeyev also said that the Customs Union could grow to include other nations down the line.

“As far as other members, we have always wanted it to be open to the Eurasian countries,” he said. “There are many who want it, and there are specific requests from Tajikistan and Armenia” to join the customs union.

He played down, however, Russia’s suggestions earlier this year that the customs union should adopt a unified currency.

If it happens at all, it will be “far into the future,” he said.

“We look to Europe [which has the integrated currency system] and have seen that there are negative implications as well,” Shukeyev noted.

“After the crisis in Greece, many started to think twice” about integrating currency.

Greece, a member of the European Union and the European Monetary Union, discovered last year that its debt far outstripped previous estimates and thus threatened the stability of the shared currency. To stabilize the euro and the euro-zone, the EU was forced to provide Greece with an emergency bailout totaling $145 billion. Greece has imposed another round of austerity measures to minimize its debt.

Related to Kazakhstan’s WTO bid and customs union membership, Kazakh Trade and Economic Development Minister Zhanar Aitzhanova said on Tuesday from Washington that if the customs union countries are admitted to the WTO, they would need time to adjust to the removal of import duties and to harmonize their trade regulations.

Shukeyev could not say how long precisely the adjustment period would last.

“It’s hard to tell how long it will take,” he said. “The most important thing is that we have agreed that there will be an adjustment process.”

He said the adjustment period would depend on whether the three participant countries could agree on a specific formula on which to base their trade relations.

“If we reach a specific formula, [the adjustment period] won’t take very long. But if we will start negotiations again [on specific goods and services], it will take a long time.”

SOURCE: Kazakhstan News Bulletin No 28, Released by the Embassy of the Republic of Kazakhstan to the United States of America

Customs Union 0

Posted on September 06, 2010 by KazCham

A series of international agreements and legislation effective in the Customs Union member states (i.e., Kazakhstan, Russia and Belarus) came into force as of 1 July 2010, introducing changes to the customs and tax legislation of Kazakhstan. This includes the Customs Code of the Customs Union (“CU Customs Code”), Agreement on levy of indirect taxes within Customs Union territory , etc.

The Government adopted the new Code of Customs Affairs in the RK (“Customs Code of RK”) based on the CU Customs
Code. The changes included amendments to the Tax Code with respect to VAT on transactions within Customs Union.

Legislation relating to the Customs Union is subject to mandatory publication on the Customs Union Committee website: www.tsouz.ru which represents the Customs Union’s official publishing authority.

Customs legislation

The CU Customs Code shall regulate cross border economic operations involving Customs Union member states
and third countries. Issues which are not regulated by the CU Customs Code shall be governed by the Customs Code of RK.

The CU Customs Code, as an international treaty, shall prevail over the Customs Code of RK.

The main changes to the customs legislation include:

  • Introduction of the definition of an authorized economic operator. An authorized economic operator is a legal entity meeting certain requirements, and which is entitled to use special simplified procedures for customs
    clearance, including the right to release goods into free circulation prior to customs clearance and the right to temporarily store goods in their territories. To qualify as an authorized economic operator certain conditions must be met; including guaranteeing customs payments of Euro 1 million and having performed the foreign economic activity for at least two years.
  • Increase in the term for settlement of the deferred customs payments. The term for settlement of customs payments in relation to conditionally released goods has been increased from three to five years. Similar to the previous legislation, there is a list of goods and requirements to be met to qualify as conditionally released goods.
  • Introduction of the procedure forclassification decision on Foreign Economic Activity Commodity Nomenclature of the Customs Union. When submitting a customsdeclaration, a declarer mustclassify the related goods according to the Foreign Economic Activity Commodity Nomenclature of the CustomsUnion. The customs authorities shall review the correctness ofthe classification and, if mistakesare identified, they can reclassifythem.
  • The customs authorities can also provide clarification of classifications of individual types of goods and these clarification must be published. Preliminary classification decisions, issued bythe Kazakhstan customs authorities, shall only apply to Kazakhstan. The Customs Union Committee is empowered to cancel preliminary classification decisions issued by the Kazakhstan customs authorities.
  • The suspension of certain customs legislation provisions for subsoil use contracts. With respect to subsoil use contracts signed before 1 July 2010, the customs regime in force at the time of the conduction of the contracts should be applied in the certain areas of the customs regime, provided that subsoil use contracts contain certain provisions.
Please note that the customs control at the Kazakhstan-Russia borders is prolonged till 1 July 2011 and is solely for the
gathering of statistics in cross border traffic.

Please note that the customs control at theKazakhstan-Russia borders is prolongedtill 1 July 2011 and is solely for thegathering of statistics in cross bordertraffic.

SOURCE: Tax & Legal Alert, Pricewaterhouse Coopers Kazakhstan • Issue No 13 • August 2010



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