NATIONAL EXPORT AND INVESTMENT AGENCY KAZNEX INVEST JSC

Ministry of Industry and New Technologies of the Republic of Kazakhstan

Factors of attractiveness
of the investment climate
in Kazakhstan
KAZAKHSTAN

NATIONAL EXPORT AND INVESTMENT AGENCY KAZNEX INVEST JSC | Ministry of Industry and New Technologies of the Republic of Kazakhstan

Territory: 2.7 mln. sq. km.

Population: 17 mln

GDP, 2012: $ 199,5 bill

GDP per capita, 2012: $ 12 068

Major languages
Kazakh (state language)
Russian (official, business language)
English, Chinese (young generation)

Main ethnic groups:
Kazakhs: 65%
Russian: 25%
Other: 10%
Source: The Agency of Statistics
of the Republic of Kazakhstan
KAZAKHSTAN: YOUR GATEWAY TO 3/5 BRICS OR TO 3 BILLION PEOPLE
NATIONAL EXPORT AND INVESTMENT AGENCY KAZNEX INVEST JSC | Ministry of Industry and New Technologies of the Republic of Kazakhstan

KAZAKHSTAN
4
7
5 5 .
4 5 .
4 5 .
4
The average minimum duration of flights to
major centers of economic activity (in hours)
MANY FOREIGN COMPANIES HAVE ALREADY INVESTED IN KAZAKHSTAN
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NATIONAL EXPORT AND INVESTMENT AGENCY KAZNEX INVEST JSC | Ministry of Industry and New Technologies of the Republic of Kazakhstan

FDI FLOWS INTO KAZAKHSTAN











NATIONAL EXPORT AND INVESTMENT AGENCY KAZNEX INVEST JSC | Ministry of Industry and New Technologies of the Republic of Kazakhstan

Gross FDI inflows - $ 172,3 bln.,
from which 64% were attracted between the
period 2009 2q. 2013 ($ 111,6 bln.)
Structure of FDI by types of economic activities in bln. $ and %
1 half of 2012, bln. $ 1 half of 2013, bln. $
FDI in manufacturing for 2009 2q. 2013 in mln. $
7%
8%
18%
47%
Source: National Bank of the RK
Gross FDI inflows and outflows for the period
2005 2q. 2013, bln. $
Gross FDI inflows by countries for
the period 2009 2q. 2013, bln. $
3.7
1.6 4.3
2.9 4.5
1.5
4.7
5.5
2.9
3.7
4.3
5.2
6.2
7.9
8.1
8.8
35.4
Italy
British Virgin Islands
Russia
UK
France
China
USA
Switzerland
Netherlands
7.9
12.1
19.4
21.3 21.4
22.2
26.5
28.8
12.6
0.3
1.3
3.2
5.0
5.4
10.5
8.0
3.0
2.3
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
2005 2006 2007 2008 2009 2010 2011 2012 2 q.
2013
Gross inflow of direct investment in Kazakhstan from foreign direct investors
Gross outflow of direct investment abroad from Kazakhstani direct investors
42.2
14.7
27.9
26.6
Professional,
scientific and
technical activities
Manufacturing
Mining and
quarrying
Other activities
1,008
6.8%
12,210
82.8%
668
4.5%
854
5.8% Manufacture of food
products, beverages and
tobacco products
Manufacture of basic metals
and fabricated metal
products
Manufacture of computer,
electronic and optical
products
Other sectors
KAZAKHSTAN HAS ATTRACTED GREATEST FDI PER CAPITA IN CIS
NATIONAL EXPORT AND INVESTMENT AGENCY KAZNEX INVEST JSC | Ministry of Industry and New Technologies of the Republic of Kazakhstan

Accumulated FDI in the CIS,
2000-2011, bln. USD

1.0
1.3
3.2
5.0
6.8
9.1
13.0
16.6
65.2
93.6
457.5
-6%
63%
7%
14%
28%
22%
34%
30%
23%
21%
28%
Tajikistan
Kyrgyzstan
Moldova
Armenia
Uzbekistan
Azerbaijan
Belarus
Turkmenistan
Ukraine
Kazakhstan
Russian
FDI in the CIS countries per capita,
2011, USD

142
244
236
892
1359
1443
1628
979
3257
3203
5777
Tajikistan
Uzbekistan
Kyrgyzstan
Moldova
Belarus
Ukraine
Armenia
Azerbaijan
Turkmenistan
Russian
Kazakhstan
Source: UNCTAD Stat

*Compound annual growth rate

CAGR*

WHY IS KAZAKHSTAN ATTRACTIVE FOR FOREIGN INVESTORS?
NATIONAL EXPORT AND INVESTMENT AGENCY KAZNEX INVEST JSC | Ministry of Industry and New Technologies of the Republic of Kazakhstan

4
Springboard to circa 3 billion
potential customers
3 of the 5 BRICS countries are in 4
hours flight
Customs Union (Kazakhstan, Russia,
Belarus) with a population of 170
million and a total GDP of 2 trillion.
Open economy (trade 70% of GDP)
Entry into the WTO is expected in
2014 - 2015



Political stability and good
investment climate 1
A high level of trust in political
institutions and the effective allocation
of funds (WEF 2012) in comparison
with the countries of the CIS.
Ease of Doing Business (49 on the list
of World Bank Doing Business 2013:
10 place in the investor protection and
17 place in the payment of taxes).



Stable macroeconomic
indicators and high growth
3
GDP growth: 5.5% (IMF 2012)
Low debt / GDP ratio: 15.8% (IMF
2012)
Budget deficit: 2.5% (IMF 2012)
Inflation rate: 6.0% (IMF 2012)




2
Regionally attractive fiscal and
non-fiscal regime and protection
of foreign investment
Attractive corporate tax rate (20%) and
low VAT (12%)
Fiscal and non-fiscal incentives for
investors, including in SEZs
48 bilateral agreements on mutual
protection of investments (US also)
Main international arbitration
instruments ratified
HIGH CONFIDENCE IN POLITICAL INSTITUTIONS AND EFFECTIVE
MANAGEMENT OF PUBLIC FUNDS
NATIONAL EXPORT AND INVESTMENT AGENCY KAZNEX INVEST JSC | Ministry of Industry and New Technologies of the Republic of Kazakhstan

1.6
1.9
2.0
2.0
2.1
2.2
2.4
2.4
2.5
3.0
3.1
3.3
3.4
3.4
3.4
3.7
4.0
CzechRepublic
KyrgyzRepublic
Brazil
Ukraine
Croatia
India
Poland
SouthAfrica
RussianFederation
Georgia
United States
Azerbaijan
Jordan
France
Turkey
Kazakhstan
Australia 27
37
43
44
45
47
54
63
86
88
90
106
115
120
121
126
139 2.9
3.0
3.0
3.1
3.1
3.2
3.6
3.6
3.9
4.3
4.3
4.4
4.5
4.6
4.8
KyrgyzRepublic
RussianFederation
Ukraine
SouthAfrica
Poland
CzechRepublic
Brazil
India
Australia
China
Jordan
Tadjikistan
Turkey
Kazakhstan
Finland
8
13
19
23
29
32
56
75
79
100
105
106
109
110
122
The index of trust political institutions
Place in the
ranking
Government provision of services
for improved business performance
Place in the
ranking
Source: The Global Competitiveness Report 2012-2013

DOING BUSINESS IN KAZAKHSTAN IS MUCH EASIER THAN IN MOST
EMERGING MARKETS

NATIONAL EXPORT AND INVESTMENT AGENCY KAZNEX INVEST JSC | Ministry of Industry and New Technologies of the Republic of Kazakhstan

0 20 40 60 80 100 120 140 160
Uzbekistan
Tajikistan
Ukraine
India
Brazil
Russian Federation
China
Italy
Kyrgyz Republic
Belarus
Kazakhstan
Germany
United States
Singapore
1
4
20
49
58
70
73
91
112
130
132
137
141
154
Doing Business 2013
Country rank

Place in the
ranking

Source: World Bank Doing Business 2013
INVESTMENT PREFERENCES
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NATIONAL EXPORT AND INVESTMENT AGENCY KAZNEX INVEST JSC | Ministry of Industry and New Technologies of the Republic of Kazakhstan

LAW OF THE RK DATED AS 21.07.11 469 ON INVESTMENTS
Preferences for projects in priority sectors
Exemption from customs duties on equipment,
components, raw materials and spare parts imported
for a project
In-kind
state
grants
CRITERIA for investment projects:
Corresponds to the List of priority activities
Tax allowances as per Tax
code of the RK (deductions of
the value of the preference
objects, and (or) further costs
to modernization up to 3
years)
Preferences for strategic investment projects *
Land , property tax 0%
for up to 7 years
Guaranteed state order
Industrial subsidies for areas with low
socio-economic development
Corresponds to the List of priority activities
The volume of investment exceeds
50 million USD
OR
Corresponds to the List of high-
technology products
SECTOR-SPECIFIC INCENTIVES IN 10 DEDICATED SEZS ACROSS COUNTRY
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NATIONAL EXPORT AND INVESTMENT AGENCY KAZNEX INVEST JSC | Ministry of Industry and New Technologies of the Republic of Kazakhstan

SEZ Petrochemical park
(Oil and gas industry, petrochemicals)
SEZ Burabai
(Tourism)
SEZ Astana new city
(construction industry)
SEZ Pavlodar
(chemical industry)
SEZ Saryarka
(metallurgy)
SEZ Khorgos
Eastern Gate
(Trade, logistics)
SEZ Innovation
TechnoPark
(IT-industry, innovations)
SEZ Chemical park
Taraz
(chemical)
SEZ Ontystik
(textile industry)
SEZ Marine Port
Aktau
(logistics, transport)
Aktau
Atyrau
Astana
Pavlodar
Karaganda
Shymkent
Taraz
Almaty
ATTRACTIVE INVESTMENT INCENTIVES IN SEZS
NATIONAL EXPORT AND INVESTMENT AGENCY KAZNEX INVEST JSC | Ministry of Industry and New Technologies of the Republic of Kazakhstan

FISCAL INCENTIVES in SEZs
0%Corporate Income Tax until 2020-2025 with possibility for extension
0% for land and property tax until 2020-2025 with possibility for extension
VAT 0% (for products consumed in SEZ) until 2020-2025 with possibility for extension
Increase of marginal rate of depreciation for tax on the production of software to 40%
For SEZ Innovation technopark social tax is 0% for 5 years, under certain conditions
For SEZInnovation technopark depreciation rate for software increased to 40 %
NON-FISCAL INCENTIVES
Provision of free land in SEZ for a period of up to 10 years from registration time as SEZ resident
Simplified procedure for the recruitment of foreign labor
KAZNEX INVEST: YOUR ONE-STOP-SHOP FOR INVESTING
NATIONAL EXPORT AND INVESTMENT AGENCY KAZNEX INVEST JSC | Ministry of Industry and New Technologies of the Republic of Kazakhstan

Providing information about
business / invest
projects and analytical information
Assist in the selection of
projects of AIID
Help in choosing a partner
Assistance in administrative
matters
Organization of meetings
with officials
COMPREHENSIVE ASSISTANCE
TO FOREIGN INVESTORS
Assistance in obtaining
state support for investors
Assist in the selection of projects of
State program of accelerated
industrial-innovative development of
the Republic of Kazakhstan for 2010-
2014
KAZNEX INVEST |


www.invest.gov.kz
THANK YOU!