Stimulus package for foreign investors presented in Kazakhstan 05 мая 2014, 16:27
- Found a bug?
- Select it and press Ctrl + Enter
The government of Kazakhstan has prepared a comprehensive package of incentives for foreign investors, Tengrinews reports citing the Ministry of Economy and Budget Planning of Kazakhstan.
The Minister of Industry and New Technologies Asset Issekeshev said that the government envisioned a plan consisting of two parts. The first part included general issues, such as “removing barriers like visas and similar issues” and other incentives for attracting “the best companies”. The second part of the plan was what Issekeshev called “a definite plan of attracting investors”. This part was more specific and set a list of priorities including sectors of Kazakhstan's economy and a list of transnational companies of particular interest.
During the briefing Yerbolat Dossaev, Minister of Economy and Budget Planning, said that a list of 10 countries had been put together. Those countries were identified as the biggest investors of Kazakhstan. The list is needed to “improve the nature of negotiations”, he said. It now includes of OECD countries, but Minister Dossaev promised that the list would be expanded later on.
Minister Dossaev elaborated on the specifics of the plan. Speaking about the first part of the package, he said that a visa-free regime would be put in place for citizens of the most developed countries letting them enter Kazakhstan for 90 days without needing to obtain a visa. Special ‘investor’ visas would be issued to top management of structural units of foreign companies.
As part of other measures in this package, the foreign companies investing into commercial agriculture would be allowed increased rental periods on agricultural land.
It was also suggested to create a special institution called "investment ombudsman", which would guarantee the investors rights.
The second part of Issekeshev’s plan was also elaborated upon by Minister Dossaev. The Minister said that the government was willing to subsidize a portion of investors’ costs. He said that those would include the costs of hydrocarbons and transportation expenses.
Investors would also be granted the right to hire foreign employees for the duration of their investment project plus one year after the production kicks off without needing to obtain a permission from the Kazakhstan authorities and outside the foreign workforce quotas set by the Kazakhstan government every year.
Additional measures of governmental support offered to the investors will include the legal framework as well. The Investments Law will be amended in the part of the mechanism of awarding contracts to investors. It is proposed that the government will compensate 30% of the capital expenses after the beginning of production. The measure is called an investment subsidy. Additionally, they will be exempt from corporate income tax for 10 years. To provide incentives to foreign investors, the government will guarantee them long-term contracts on purchase of their goods and services by national holdings, national companies and government agencies.
Besides, it is planned to introduce the "one-contact principle" to issue permissions to and process requests of the foreign investors faster. The Committee for Investments of the Ministry of Industry and New Technology will be dealing with it.
And, the government has plans to introduce the "principle of stability" of the legislation for 10 years. It will cover tax, migration and environmental laws, as well as regulated tariffs and prices.
Such measures are needed because of the general situation in the world, the Minister of Industry and New Technologies Asset Issekeshev said. There is a general decline in foreign direct investment in the world and in Kazakhstan. In 2007 the FDIs reached $2 billion, in 2012 they decreased to $1.3 billion, that is, a 30% decrease. He said that there was a need to continue attracting foreign investments to Kazakhstan, which had a better climate than the rest of the countries in the region. Kazakhstan holds the 19th place in the world by the amount of attracted FDIs.
Reporting by Renat Tashkinbayev and Assemgul Kassenova, writing by Dinara Urazova, editing by Tatyana Kuzmina