Investment Agreement

An Investment Agreement is a contract for the implementation of an investment project concluded by decision of the Government of the Republic of Kazakhstan between a person authorized by the Government of the Republic of Kazakhstan and a legal entity, including one registered in the jurisdiction of the Astana International Financial Centre (AIFC). Such agreement provides for the implementation of investments in an amount of not less than seven and a half million times the monthly calculation index established by the law on the republican budget and effective as of January 1 of the relevant financial year.

The legislation does not establish a list of priority types of activities for the conclusion of Investment Agreements; however, a negative list of activities is предусмотрed. Investment Agreements may not be concluded for the implementation of projects in the following types of activities.

For reference:

1. activities related to the circulation of narcotic drugs, psychotropic substances and precursors;
2. production and (or) wholesale distribution of excisable goods;
3. organization and conduct of lotteries;
4. gambling activities;
5. activities related to the circulation of radioactive materials;
6. banking activities (or certain types of banking operations) and activities in the insurance market (except for insurance agent activities);
7. audit activities;
8. professional activities in the securities market;
9. activities in the field of digital mining;
10. activities of credit bureaus;
11. security services;
12. activities related to the circulation of civilian and service weapons and ammunition thereto;
13. subsoil use activities, including prospecting (artisanal mining) activities;
14. sale of minerals, including trader activities, and activities related to the sale of coal and oil.

The Investment Agreement defines the conditions and procedure for granting preferences and benefits provided for by the legislation of the Republic of Kazakhstan as of the date of conclusion of the Agreement, and also establishes counter-obligations for legal entities that have concluded the Investment Agreement.

For reference:
Within the framework of the Investment Agreement, exemptions are provided from:

1. Corporate Income Tax (CIT);
2. Land Tax;
3. Property Tax;
4. Value Added Tax (VAT) exemption for participants of Special Economic Zones (SEZ);
5. Reduction of tax liabilities;
6. Other preferences in accordance with the terms of the Agreement.

To conclude the Agreement, the applicant shall apply to JSC “National Company “KAZAKH INVEST” with the following documents in the state and Russian languages, both in hard copy and electronic format.

For reference:

1. application in accordance with Appendix 1 to the Rules for the Conclusion, Amendment and Termination of Investment Agreements (hereinafter – the Rules);
2. copy of the applicant’s charter and certificate of state registration (re-registration);
3. business plan of the investment project in accordance with Appendix 2 to the Rules;
4. feasibility study;
5. design and estimate documentation of the investment project;
6. conclusion of the comprehensive non-departmental expertise of construction projects, certified by the signature of the head, in accordance with the legislation of the Republic of Kazakhstan (in case of granting tax preferences);
7. documents confirming the right to use a licensed technology (agreement or other document regulating the right of use).

The documents specified in subparagraphs 4), 5), 6), and 7) of this paragraph shall be submitted if available.

The provisions of the Investment Agreement shall remain in force for twenty-five years from the date of its conclusion in the event of changes to the legislation of the Republic of Kazakhstan, except for provisions arising from international treaties ratified by the Republic of Kazakhstan, as well as cases where amendments to the Investment Agreement are made by mutual consent of the parties.

Procedure for concluding an Investment Agreement:

1. Submission by the investor of a package of documents to the TASK FORCE.
2. Verification of completeness and registration of documents by the TASK FORCE.
   Timeframe: up to 7 working days.
3. Review by the TASK FORCE and forwarding of materials to the authorized central state body and the AIFC.
   Timeframe: up to 7 working days.
4. Provision of a sectoral opinion by the central state body.
   Timeframe: up to 10 working days (if revision is required – additionally up to 5 working days).
5. Development of the draft Investment Agreement (preparation of the main terms of the Investment Agreement).
   Timeframe: up to 5 working days.
6. Consideration of the issue by the Investment Headquarters.
   Timeframe: up to 28 working days.
7. Consideration by the Republican Budget Commission (if the Agreement entails a reduction in budget revenues or an increase in expenditures of the budget and (or) the National Fund of the Republic of Kazakhstan).
   Timeframe: within the procedures of the Republican Budget Commission.
8. Development and adoption of a Resolution of the Government of the Republic of Kazakhstan and signing of the Investment Agreement.
   Timeframe: up to 5 working days.

Total procedure timeframe: up to 2.5 months (excluding suspensions caused by the investor). Compliance with deadlines is supervised by the Prosecutor General’s Office of the Republic of Kazakhstan.