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As global investors look beyond traditional markets, Kazakhstan is emerging as a compelling destination. Its strategic advantages, rich natural resources, and business-friendly environment are attracting investor interest worldwide.
Beneath the surface lies a complex landscape, blending incentives with challenges. Kazakhstan’s geographical proximity to major consumer markets is a strategic boon. Investors eye the country’s abundant natural resources, from oil and gas reserves to mineral wealth.
But it’s not just about geography and resources; the business environment matters. Streamlined regulations, tax holidays, and customs duty exemptions now sweeten the deal.
“We are committed to providing an investor-friendly environment,” Nazira Nurbayeva, former Deputy Foreign Minister of Kazakhstan told Euractiv. The promise of stability and support lures investors seeking long-term certainty. State grants, including land allocations, further enhance Kazakhstan’s appeal.
Infrastructure and investment support
Kazakhstan’s 41 industrial parks and 14 special economic zones offer more than just physical space. They provide a robust infrastructure for businesses to thrive, supported by KazakhInvest, the national investment promotion agency, which operates a one-stop-shop for investors. In addition, the Astana Financial Center – a unique platform in Central Asia – offers legal and financial services, complete with a common law-based international court and arbitration system.
A significant recent initiative is the Investment Agreement with the government. This agreement, targeted at major projects exceeding $60 million, guarantees tax stability for up to 25 years and offers tax preferences in exchange for technology transfer and social commitments. The success of this initiative is evident, with four agreements signed last year and 14 applications received this year, signalling a promising future for investments in Kazakhstan.
“The Investment Agreement provides long-term certainty for major projects,” said Nurbayeva, “This stability appeals to large-scale investors.”
But it’s not all smooth sailing. Critics point to bureaucracy and corruption. Transparency remains a concern. Investors seek more than tax incentives; they want efficient bureaucracy, legal safeguards, and a level playing field. Kazakhstan acknowledges this and is attempting to foster dialogue through platforms like the Council of Foreign Investors. Chaired by the Kazak President, it allows investors to propose regulatory improvements.
Transparency Reforms
Transparency reforms are seen as essential, and investors need assurance that their concerns will be heard. The reformed Investment Board, under the directive of the Head of State, aims to tackle these issues head-on. With the authority to issue binding decisions for government bodies and national companies, it underscores Kazakhstan’s strengthened commitment to resolving investor challenges.
“Dialogue with investors is key to refining our investment policies,” noted Nurbayeva. “Platforms like the Council of Foreign Investors ensure that we address investor concerns effectively.”
To support strategic investments, Kazakhstan has reformed the Investment Board under the directive of the Head of State. This high-powered body provides comprehensive end-to-end support for strategic projects, with the authority to issue binding decisions for government bodies and national companies. Such measures underscore Kazakhstan’s dedication to resolving issues faced by investors promptly.
“The reformed Investment Board shows our dedication to strategic projects,” said Nurbayeva. “We are committed to resolving issues quickly and efficiently.”
Innovative support systems
To enhance support for large investment projects, Kazakhstan is also introducing a ‘green corridor’ system. This system simplifies and accelerates the permit acquisition process, construction-related procedures, provision of land plots, and other key state services.
Additionally, the government is developing a National Digital Investment Platform to facilitate the monitoring and timely implementation of investment projects by region and streamline requests for investment support measures.
“Our new systems, like the green corridor and digital platform, are designed to streamline the investment process,” explained Nurbayeva. “These innovations are part of our commitment to making Kazakhstan an ideal investment destination.”
Kazakhstan’s efforts to create an open and attractive environment for foreign businesses have not gone unnoticed. According to the 2022 UNCTAD report, Kazakhstan secured the leading position in FDI inflow among post-Soviet, landlocked developing, and Central Asian countries. This achievement is a testament to the country’s strategic initiatives and unwavering commitment to fostering a favourable investment climate.
Kazakhstan’s comprehensive support system for foreign investors, characterised by fiscal incentives, dialogue platforms, strategic project support, and innovative initiatives, increasingly positions the country as a leading investment destination in the region, and a magnet for European FDI.
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