Kazakhstan can boast of economic development like no other country in Central Asia. In contrast to other countries of the region, which have rich natural resources, Kazakhstan has managed to use its economic potential in a way that yields concrete benefits now and, at the same time, creates prospects for further sustainable economic growth.
Kazakhstan owes its position of the regional leader of change to its consistent reform policy during the recent decade, the implementation of which has been definitely facilitated by the stable internal and international situation of the country and its political system. Nevertheless, Kazakhstan’s success would not have been possible, if not for its economic potential and the favourable conditions on the world markets.
In today’s complex geopolitical environment, many Western businesses are focusing on Central Asia specially its regional leader – the Republic of Kazakhstan.
The interest in Kazakhstan is growing year by year as it has managed to remain a stable country in a complicated region due to its ability to negotiate. The country has adopted a so-called multi-vectorial foreign policy, including a strategic alliance with Russia, a growing partnership with China, and good relations with the United States and Europe. That is all because of Kazakhstan business climate. After all, money likes stability. This is evident by the fact that Kazakhstan over the past twenty-odd years, has managed to become a leader in the CIS in attracting foreign direct investment, the total volume of which amounted to about 200 billion dollars.
The increasing income from exports of energy raw materials, the growing GDP and the highest among CIS countries level of foreign investments, combined with the adopted economic development strategy have helped Kazakhstan to achieve the position of the indisputable leader of economic change in the entire region during the last five years. At the same time, it should be emphasised that the political situation of the country makes it stand out among the other Central Asian states.
Kazakhstan abounds in natural resources, whose extraction and export have become “engines” of Kazakhstan’s economy and led her on a path of sustainable growth.
To date, Kazakhstan has positioned itself as one of the largest and promising exporters of most important goods in the global market – oil, metals and grain.
What makes Kazakhstan and why profitable to invest there?
Firstly, we can speak about the openness of the republic for foreign businesses. In July 2014 the authorities launched a pilot project for a visa-free regime with Commonwealth of Australia, Hungary, Italy, Monaco, Belgium, Spain, the Netherlands, Norway, Sweden, Malaysia, UAE, Singapore, UK, USA, Germany, Finland, France, Switzerland and Japan. With the Republic of Korea it signed an agreement on mutual visa-free travel for 30 days.
Second, it created a favorable institutional environment for business development. The Government of Kazakhstan approved a comprehensive plan to attract direct foreign and domestic investments, providing for exemption from tax.
In Kazakhstan, there are 10 special economic zones. In these areas comprehensive support to entrepreneurs is provided in terms of taxes. Investors in priority sectors are exempt from corporate tax, land tax for a period of 10 years and property tax for 8 years. Investors are guaranteed the stability of the tax laws. The state is ready to compensate up to 30% of capital costs after commissioning of objects in the priority sectors of the economy, said President of Kazakhstan, Nursultan Nazarbayev, while speaking to potential investors in Milan.
In general, the Government of Kazakhstan is doing a great job by giving new incentives, simplified procedures, developing “Electronic Government”, implementing the principle of “one window” for investors, and more. Foreign businessmen can count on a guaranteed state order, and their rights are protected by the investment ombudsman.
Kazakhstan’s latest initiative is the creation of an international financial center “Astana”. It will be launched from January 1, 2016. The basis of the “Astana” center was chosen as a model DIFC. Activities are planned in several areas like the development of the capital market with foreign investments, Islamic finance as an alternative to traditional banking services, asset management.
In general, Kazakhstan has created a successful vertically integrated system to attract foreign capital. The work begins with the front office for abroad. Then connect the national agency KAZNEX INVEST, which connects investors with government agencies, ministries, national companies.
All these and other measures brought Kazakhstan to the 77th position among 189 countries by the World Bank in its report “Ease of Doing Business 2015”. In the report Astana outpaced even Beijing, which is on the 90th place.
The third factor in making Kazakhstan attractive for foreign businesses is the country’s unique geo-strategic location as the country has five international transport corridors: the Northern Corridor of Trans-Asian Railway (TARM) TARM Southern Corridor, Central (Central Asian) corridor North – South and TRACECA.
Successful implementation of the “Eurasian project” has opened the space capacity of more than 170 mln. People and combined GDP of more than two trillion US dollars. At first it was a customs union, then the CES, and today the Eurasian Economic Union.
In December completion of all ratification procedures are planned to take place on Kazakhstan’s accession to the WTO. All this suggests that the Kazakhstan market is becoming more open and offers great prospects for foreign capital.