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Commercial Code of Kazakhstan

25 february 2016, 17:44
0

GRATA Finance & Securities Group has released a legal alert covering important legal developments in the Kazakhstani legislation that occurred in 2015.

Most of the changes were introduced in the legislation pursuant to adoption in May 2015 of a new policy document – the Plan of the Nation: 100 Steps for Implementation of 5 Institutional Reforms – governing the development of Kazakhstan in the short-term perspective.

The legal review covers the following areas:

1. Law on Corruption Countermeasures
2. New Civil Procedure Code
3. Law on Astana International Financial Center
4. Law on Judicial System
5. Law on Supreme Judicial Council
6. Resolution on Application of Bankruptcy and Rehabilitation Legislation by the Courts
7. New Commercial Code
8. PPP Law
9. Law on WTO Accession
10. Law on Special Defensive, Antidumping and Compensational Measures
11. Law on Ownership Right Further Protection
12. Law on Amendments to Electric Power Industry
13. Law on Amendments Related to Non-performing Loans,  Financial Services and Financial Organisations
14. Law on Agricultural Cooperatives
15. Privatisation Decree
16. Rules of Electronic Trades
17. New Procurement Law

Each of them is addressed in a separate release on our website, whereas the today’s release deals with the new Commercial Code.   

COMMERCIAL CODE

The Commercial Code was signed by the President on 29 October 2015 and was entered into force (except for certain provisions) on 1 January 2016. The Code was adopted to facilitate the implementation of the President’s Plan of the Nation – 100 Particular Steps for Realisation of 5 Institutional Reforms. The main purpose of the Commercial Code is to improve and develop legislation regulating cooperation between subjects of entrepreneurship and state including state regulation and support of entrepreneurship, filling gaps and collisions in regulation of entrepreneurship and to systematise legal, economic, social conditions and guarantees ensuring freedom of entrepreneurship in Kazakhstan.

Due to entering into force of the Commercial Code on 1 January 2016 the following laws have been terminated:

1. Law On Peasant or Farm Enterprise;
2. Law On Investments;
3. Law On Private Entrepreneurship;
4. Law On Competition;
5. Law On State Control and Supervision in the Republic of Kazakhstan;
6. Law On State Support of Industrial and Innovative Activities.
 

Please note the following major novelties of the Commercial Code:

Presumption of Good Faith

In state regulation of entrepreneurship good faith of entrepreneurs is assumed. Subject of entrepreneurship shall be assumed to be in good faith if in exercising of rights and/or performance of obligations it followed official clarification from a state body issued within its competence.

Register of Subjects of Entrepreneurship

This register will be maintained by the authorised body and will contain information on categories of subjects of entrepreneurship. Information on category of the subject will be provided in the form of electronic certificate to interested parties (including state bodies) to use in work.

One Stop Principle

State services on basis of one stop principle will be rendered by state corporation “Government to Citizens”.

Access to Information

Information held by state authorities and required to subjects of entrepreneurship shall be made available on free of charge basis unless otherwise provided by Kazakh law.

Entrepreneurs Rights Commissioner

Entrepreneurs rights commissioner will be appointed by the President of Kazakhstan to represent, ensure and protect rights and legal interests of subjects of entrepreneurship in state bodies and protect interests of business community. It shall examine applications of subjects of entrepreneurship and submit to state bodies proposals in order to protect interests of subjects of entrepreneurship and recommendations to suspend legislative acts, file application to courts, etc.

State Registration of Prices and Tariffs of Subjects of Entrepreneurship

Prices on the following goods, works and services will be subject to state regulation:

1.      socially important food products;

2.      goods, works and services in the area of natural monopoly and state monopoly;

3.      goods, works and services of regulated market;

4.      goods, works and services in international business operations and transactions arising from transfer pricing;

5.      retail trade of relevant kinds of oil products;

6.      establishing minimal prices of ethyl alcohol produced from edible and non-edible raw material and alcoholic products (except for beer);

7.      establishing minimal retail prices of filter-tipped cigarettes;

on goods market which is not a natural monopoly in certain cases (emergency situations, disasters, national security protection.
As a temporary measure antimonopoly body may introduce price regulation on any goods market or goods, works, services of certain subject of market for the maximum period of 180 calendar days.

Social Liability of Subjects of Entrepreneurship

Subjects of entrepreneurship shall not be forced to carry out activities related to social liability. Subjects of entrepreneurship carrying out such activities will have right to get tax relief and some other benefits.

Major Investor

The new term of a “major investor” was introduced. A major investor is a private individual or a legal entity investing in Kazakhstan in the amount not less than 2,000,000 monthly calculation indexes.

Investment Dispute

The new term of an “investment dispute” was introduced. An investment dispute means a dispute arising from contract obligations between investors including major investors and state bodies in connection with investment activities of an investor.  Investment disputes may be settled with international arbitral courts determined by agreement of parties.

Investment Incentives

Investment projects (except for priority and strategic projects) will be subject to exemption from VAT on importation of raw materials and/or materials within investment project.

In case of pre-term termination of the investment contract upon an initiative of a Kazakh legal entity being a party of the investment contract unilaterally or by agreement of the parties the legal entity shall pay taxes and tax duties not paid due to the provided investment incentives and return state in-kind grant or its initial value as of the date of transfer.

Register of Subjects of Market Occupying a Dominant or Monopoly Position

This register comparing with the current version will be limited to subjects of market occupying a dominant or monopoly position on regulated markets only and will be kept until 1 January 2017.

Examination of Draft of Agreement to Check its Compliance with Antimonopoly Legislation

Parties will be able to apply to antimonopoly body asking to review the draft agreement to check its compliance with antimonopoly requirements and it shall revert with its conclusion within 30 calendar days.

Removal of Limitations of Activities of Subjects of Natural Monopolies

Certain limitations of activities of subjects of natural monopolies will be removed from 1 January 2017. These limitations include, inter alia: rendering services and carrying out activities not related to natural monopolies, owning property not related to regulated services.

Notifications of the Antimonopoly Body

Antimonopoly body will be able to send “notifications” without examination in relation to subjects of market if their actions bear features of abuse of dominant or monopoly position.

 

Comments and recommendations can be sent to schikanayev@gratanet.com. We will make sure we fix any problems and continue to offer you the best service we can.

Shaimerden Chikanayev, Partner

Email: schikanayev@gratanet.com 

Mob: 7701 7878020

Marina Kahiani, Partner

Email: mkahiani@gratanet.com 

Mob: 7701 7251269

This Legal Alert is provided for your convenience and does not constitute legal advice. It is prepared for the general information of our clients and other interested persons. This Legal Alert should not be acted upon in any specific situation without appropriate legal advice and it may include links to websites other than the GRATA website. If you no longer wish to receive legal alerts from the GRATA Finance & Securities Group, please send an email to schikanayev@gratanet.com


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