Guidance

Doing business in Kazakhstan: Kazakhstan trade and export guide

Updated 31 October 2022

Managing risk

Find out how UK companies can control risks when doing business in Kazakhstan.

Export opportunities and advice

Find more export advice and explore opportunities overseas on great.gov.uk.

1. Kazakhstan export overview

The Republic of Kazakhstan, located in central Asia, is the ninth largest country in the world. It’s also one of the most sparsely populated.

Contact a Kazakhstan export adviser at the Department for Business and Trade (DBT) for a free consultation if you’re interested in exporting to Kazakhstan EECAN.exporthub@fcdo.gov.uk.

Contact UK Export Finance (UKEF) about trade finance and insurance cover for UK companies. You can also check the current UKEF cover position for Kazakhstan.

Kazakhstan was ranked:

• 55th in the Global Competitiveness Report
• 25th in the World Bank’s ‘Ease of Doing Business’ ranking
• 64th in the Index of Economic Freedom

Benefits for UK businesses exporting to Kazakhstan include:

• a gateway to the markets of the Eurasian Economic Union
• wide ranging opportunities as the economy diversifies
• a gateway to other central Asian markets

Strengths of Kazakhstan’s market include:

• a stable economy
• easy to start a business
• a strong regulatory environment for companies
• transparent and effective business cultures
• low tax rates and other preferences for investors

2. Challenges

Companies engaged in oil and gas and mining activities shall organise tenders for most goods, works and services procured in Kazakhstan.

Subsoil users should give preferences to local goods, works and services in accordance with percentage/ratio specified in their subsoil use contracts. However, the obligations on procurement of local goods from local manufacturers were removed from subsoil use contracts executed after 1 January 2015 in connection with Kazakhstan joining the World Trade Organization (WTO). The minimum level of local works and services should not exceed 50%.^{[footnote 1]}

Other challenges in Kazakhstan include:

• economy over reliant on the extractive sector
• ranked 102nd in ‘Corruption Perceptions Index’
• new laws to improve business environment often incorrectly implemented at local level
• replacement of Value Added Tax (VAT) by the sales/turnover tax in 2017
• heavy regulation with regard to filing tax, obtaining credit and registering property

You should ensure you take the necessary steps to comply with the requirements of the UK Bribery Act.

3. Growth potential

3.1 Economic growth

Kazakhstan is an upper middle-income country. Its economy is almost one third bigger than all of its Central Asian neighbours (Uzbekistan, Tajikistan, Turkmenistan and Kyrgyzstan) combined (based on 2021 GDP converted to US dollars).

Natural resources still dominate the economy and it retains exceptional mineral wealth. Despite attempts at diversification, hydrocarbon output comprised 21% of GDP and about 70% of exports. ^{[footnote 2]}

Kazakhstan’s economy grew by 4.1% in 2021. In 2022 Kazakhstan’s economy has been hit by the impact of sanctions against Russia, one of its main trading partners. The weakening of the national currency, rising inflation, and the reliance on goods imported through Russia (c. 40%) are of main concern. The World Bank forecasts that growth will go down to 3% in 2022. ^{[footnote 3]}

3.2 Membership in International Organizations

Eurasian Economic Union (EaEU) - The EaEU came into effect in January 2015 and its current members are Russia, Belarus, Armenia, Kyrgyzstan and Kazakhstan. It provides for:

• the free movement of goods, services, labour and capital
• the implementation of a coordinated, coherent and unified policy in economic sectors

World Trade Organization (WTO) - Kazakhstan joined the WTO in 2015. Kazakhstan has committed to harmonise its legislation with WTO Accession Protocol provisions. On services, Kazakhstan has made specific commitments in 10 services sectors, including 116 sub-sectors. In December 2019 Kazakhstan started negotiating accession to the Government Procurement Agreement (GPA) in accordance with its WTO membership terms. From December 2020, foreign banks and insurance companies are permitted, subject to compliance with certain requirements, to set up branches in Kazakhstan.

4. UK and Kazakhstan trade

Total trade in goods and services (exports plus imports) between the UK and Kazakhstan was £2.0 billion in the 4 quarters to the end of Q1 2022, an increase of 38.6% or £556 million from the 4 quarters to the end of Q1 2021.

Total UK exports to Kazakhstan amounted to £731 million in the 4 quarters to the end of Q1 2022

The top 5 goods exported from the UK to Kazakhstan in the 4 quarters to the end of Q1 2022 were:

• aircraft (£37.7 million or 14.3% of all UK goods exported to Kazakhstan)
• mechanical power generators (intermediate) (£33.2 million or 12.6%)
• medicinal & pharmaceutical products (£19.8 million or 7.5%)
• general industrial machinery (intermediate) (£18.9 million or 7.2%)
• general industrial machinery (capital) (£16.7 million or 6.4%)

Data for the trade in services between the UK and Kazakhstan in the 4 quarters to the end of Q1 2022 is not available from UK sources.

The UK is among the largest foreign direct investors in Kazakhstan.

5. Opportunities for UK businesses in Kazakhstan

DBT provides free international export sales leads from its worldwide network. Search for export opportunities.

5.1 Mining

Kazakhstan is one of the world’s most promising emerging markets for natural resources. The sector is responsible for:

• around 14.1% ^{[footnote 4]} of GDP
• 17.5% ^{[footnote 5]} of exports
• employment of around 200,000 people

There are opportunities for UK companies in:

• geological exploration
• mining software and systems development
• drilling
• integrated project management
• contract mining
• innovative equipment supply
• laboratory and consultancy services
• engineering services

Contact EECAN.ExportHub@fcdo.gov.uk for more information on opportunities in the mining sector.

5.2 Financial and professional services

The Astana International Financial Centre (AIFC) is a global centre for finance and business. AIFC developed a Common Law jurisdiction with its own court and arbitration centre and is now becoming the regional hub and the gateway to Central Asia.

In addition to that the AIFC established the Legal Services Board (LSB) to regulate the profession of solicitors. This is the opportunity for legal services companies to consider registration with LSB and gain access to new projects and clients across wide range of areas of law.

AIFC offers the following tax preferences:

• zero corporate, property and land tax rates on certain conditions until 2066
• zero income tax rate for foreign employees until 2066
• no permits needed for attraction of foreign labour
• special visa regime

Major opportunities are expected in financial, legal and consulting services.

Contact EECAN.Export.Hub@fcdo.gov.uk for more information on opportunities in the financial services sector.

5.3 Agriculture

Agriculture is an important pillar of the Kazakhstan economy. For 7 months from January to July 2022, Kazakhstan’s GDP growth amounted to 3.3 %. Approximately 75% of the country’s territory is suitable for agricultural use, and only about 30% is arable.

The agriculture sector is developing in 2 main directions: animal husbandry and crop production. Sheep, cattle farming, dairy products, meat and wool account for a large share. In the context of crop production, wheat, barley, cotton, and rice are the dominant crops, and wheat exports are the primary source of hard currency.

According to the Ministry of Agriculture of the Republic of Kazakhstan, from July 2021 to June 2022, the agricultural producers of Kazakhstan exported 9.1 million tonnes of grain and flour. 52% of wheat and flour exports went to other central Asian states. Other destinations included Afghanistan, Iran, Azerbaijan, China, Russia and Georgia. Kazakhstan also made exports to Italy, Turkey, Britain, Norway, Latvia, Lebanon, Tunisia, Switzerland, Mongolia and Poland. Kazakhstan is one of the ten largest grain exporters in the world.

Due to the National Project for the development of agro-industrial complex for 2021-2025 (based on Ministry of Agriculture), Kazakhstan plans to:

• double the export of agro-industrial complex products, bringing the share of processed products to 70%
• implement a 2.5 fold increase in labour productivity
• increase the revenue of 1 million rural residents due to the formation of 7 large ecosystems (meat, milk, grain, oilseeds, fruits, vegetables and sugar)
• commission 582 investment projects worth over 4.1 trillion tenge

Major areas of opportunity for UK exporters and investors include:

• the supply of pedigree animals and genetic material, artificial insemination and embryo transplant technologies
• supplying seeds, feed premix and vaccines
• providing agricultural machinery and software
• implementing farm management technologies and services
• agricultural consulting services,
• cooperation between scientific research institutions
• water saving technologies and sustainable irrigation/water supply systems
• the development of organic agricultural standards

Contact EECAN.ExportHub@fcdo.gov.uk for more information on opportunities in the agriculture sector.

5.4 Clean Energy

Kazakhstan signed the Paris Agreement on climate change in August 2016 and pledged to reach carbon neutrality by 2060 as part of the nation’s strengthened climate plan.

Kazakhstan intends to phase out coal and reach 50% (~34 GW installed capacity) of renewable energy sources (RES) in the total energy balance by 2050, with an intermediate goal of 3% by 2020 (reached) and 10% (15% voluntary) by 2030.

Kazakhstan has a particular interest in development of the following renewable energy projects:

• wind power plants
• hydropower plants
• solar power plants
• biopower plants

The country has a significant geothermal energy potential of 4.3 GW. Also, grey, blue and green hydrogen projects are being considered for implementation. Waste to value, electrical networks and energy storage and civil nuclear projects are of high interest for the government of the Republic of Kazakhstan.

An auction mechanism for selection of renewable energy projects was introduced in 2018 and for waste-to-energy (WtE) in 2021, which is aimed at selection of the most effective projects at the lowest prices. JSC, the Kazakhstan Electricity and Power Market Operator is responsible for the holding of renewable energy sources (RES) and WtE auctions.

Standard power purchase agreement contracts for RES projects are offered for a period of 20 years and 15 years for WtE projects via the Financial Settlement Centre for Renewable Energy Sources.

Opportunities for UK companies include:

• Engineering, procurement, construction and financing (energy performance certificate F or higher)
• Investment opportunities (solar power plants (SPP), wind power plants (WPP), hydro power plants (HPP), biomass power plants (BPP), combined heat and power plants (CHPP), grey/blue/green hydrogen, green ammonia, civil nuclear, waste management, energy storage, electrical networks, and water supply projects)
• Services and goods for SPP, WPP, HPP, BPP, CHPP, grey/blue/green hydrogen, green ammonia, civil nuclear, waste management, energy storage, electrical networks, and water supply projects

Contact EECAN.ExportHub@fcdo.gov.uk for more information on clean energy sector opportunities.

5.5 Education

The UK has long been seen as a natural partner for Kazakhstan in education. 2024 will mark the 30th anniversary of the 1994 Intergovernmental Agreement on Cooperation in the Fields of Education, Science and Culture between the UK and Kazakhstan.

There are opportunities for the UK education services providers in:

• split master’s and PhD programmes
• joint research programmes
• academic mobility (HE, students and lecturers exchange)
• dual diploma programmes
• teacher training programmes
• qualification standards development
• assessment systems
• corporate training programmes
• professional qualifications training
• launching of independent school branch
• establishing a branch campus of a UK university both online/offline

Contact EECAN.ExportHub@fcdo.gov.uk for more information on education and training opportunities.

6. Start-up considerations

The main routes to market are:

• setting up a Joint Venture (JV) with local partner
• exporting via a local agent or distributor
• setting up a company

6.1 Establishing a company

All legal entities, branches and representative offices in Kazakhstan are subject to state registration. You can register using a standard set of documents from the Ministry of Justice.

A business enterprise in Kazakhstan can be operated as:

• limited liability partnerships which are separate legal entities and subject to taxation
• Joint Stock Companies (JSC) where shareholders have no liability and about USD $500,000 in capital is needed
• a representative office which can only conduct activities such as marketing and advertising
• a branch which can carry out commercial activity, but is not a separate legal entity

Representative offices and branches must also be registered with the relevant regional department of the Ministry of Justice.

A newly registered representative office or branch must comply with certain formalities, including:

• registration for Value Added Tax (VAT)
• obtaining a seal (official stamp of the entity)
• opening a bank account

7. Legal considerations

UK companies entering into agreements in Kazakhstan should seek professional legal advice.

7.1 Standards and technical regulations

Kazakhstan is gradually adopting international standards. It’s a member of the International Organization for Standardization (ISO) and International Laboratory Accreditation Cooperation (ILAC).

The Committee on Technical Regulation and Metrology (Gosstandart) is responsible for technical regulation in Kazakhstan.

The government owned National Center of Expertise and Certification manages product certification. It has introduced a hologram which acts as a mark of conformity with the inscription ‘Memstandard’.

Most products imported into Kazakhstan must be labelled in both Kazakh and Russian. Product labels should include:

• product name
• manufacturer
• country of origin
• information on date of production
• period of validity
• storage conditions
• usage

Product manufacturers or sellers who obtain a certificate of conformity can use a mark of conformity.

Your partner may need to seek licences and certifications from state authorities for certain activities.

7.2 Intellectual Property (IP)

The National Institute of Intellectual Property (Kazpatent) has responsibility for IP.

Kazakhstan is a signatory to most major international agreements and conventions on intellectual property, but enforcement of the law is not strong.

You must discuss strategies for protecting your intellectual property in Kazakhstan with lawyers and other specialists before you enter the market.

8. Tax and customs considerations

The UK and Kazakhstan have signed a double taxation agreement and also an agreement for the promotion and protection of investments.

8.1 VAT

VAT is charged at 12% on most goods and services in Kazakhstan. It is also charged on imported goods.

VAT is chargeable on company turnover that takes place in Kazakhstan.

8.2 Corporate income tax

The Tax Code has a corporate income tax rate for tax residents of 20% on worldwide income.

An annual property tax of 1.5% of average annual balance sheet value of property owned is payable by legal corporate entities.

Corporate income tax and social tax at aggregate rate of 3% of income can be paid if the legal entity has:

• income not exceeding about USD $166,000 over a calendar quarter
• average number of employees not exceeding 50

8.3 Income tax

Kazakhstan has a flat 10% personal income tax. It also has a 10% ‘social insurance’ payroll tax levied on employers.

8.4 Customs duties

The Customs Control Committee of the Ministry of Finance has responsibility for customs in Kazakhstan.

You can find more about import tariffs in the Market Access Database.

9. Business behaviour

The official language is Kazakh. However, if possible you should translate your most important materials into both Kazakh and Russian as the latter is used widely.

10. Entry requirements

All visitors must have a valid passport.

Kazakhstan has established a visa free regime for visits up to 30 days for UK citizens. You will still need a visa for longer visits. The Kazakh Embassy in London provides full information on getting a visa for travel to Kazakhstan.

10.1 Travel advice

If you’re travelling to Kazakhstan for business, check the Foreign and Commonwealth Office (FCO) travel advice beforehand.

10.2 Work permits

You need a permit to work in Kazakstan. The permit must be obtained by the Kazakh employer.

11. Contacts

Contact the DBT team in Kazakhstan for more information and advice on opportunities for doing business in Kazakhstan

1. https://www.bakermckenzie.com/-/media/files/insight/guides/2022/doing-business-in-kazakhstan-2022.pdf?sc_lang=en&hash=D42AF508B2641F0D5C8FA1767448E273 (PDF, 7,112KB) ↩

2. https://www.worldbank.org/en/country/kazakhstan/overview#3 ↩

3. https://www.worldbank.org/en/country/kazakhstan/overview#3 ↩

4. https://invest.gov.kz/doing-business-here/regulated-sectors/mmc/ ↩

5. https://invest.gov.kz/doing-business-here/regulated-sectors/mmc/ ↩