Head of Corporate Secretarial and Domiciliation Services at TMF Group Kazakhstan, Olesya Sokol offers an insider's view on what is making Kazakhstan a serious investment contender on the world stage.
Since the collapse of the Soviet Union 21 years ago Kazakhstan has made notable progress in the business world – and it is now emerging as an attractive prospect for potential investors.
Kazakhstan has big opportunities on offer – including, as it does, the sixth-largest reserve of mineral resources in the world - and potential investors are being urged to watch this space.
Business culture
For an outsider investing in Kazakhstan there can be many cultural differences. As part of the old Soviet Union the people of Kazakhstan can appear abrupt - however, this is unintentional on their part.
Unlike in the western world, in Kazakhstan appointments are rarely made; people tend to just show up during business hours and expecting to be seen. Despite that, decisions are not quickly made; they often take a long time, several meetings and thorough negotiations before a conclusion is reached.
Business appeal
Kazakhstan is considered one of the most business and investment friendly of the 12 members of the Commonwealth of Independent States (CIS).
It's been busy in recent years and has already achieved its Strategy 2030 goal of becoming one of the world's 50 most developed countries. Due to this speedy goal-kicking many believe there will be no trouble becoming one of the 30 most competitive nations in the world by 2050, as stated in the country's Strategy 2050 campaign.
Kazakhstan has been busy setting itself up as the transportation hub of Europe and Asia with a series of intercontinental highways and large capacity railway lines recently constructed. In a major coup for Kazakhstan, the highways and railway lines will link two of the greatest industrial regions in the world: the European Union and China.
President Nazarbayev has also asked the government to lift licenses and permits not directly affecting safety and this is expected to stimulate new business growth.
The Kazakh government hopes to leverage impending World Trade Organisation membership to boost international trade. Meanwhile, Kazakhstan's membership in the Customs Union with Russia and Belarus and its work creating a Common Economic Space with those countries also make it an attractive base for companies wanting to enter the Russian market while operating out of Kazakhstan's more business-friendly climate.
The challenges
One snare in the Kazakh framework is an issue with obtaining construction permits and cross-border trade. However, in February 2014 Prime Minister Serik Akhmetov called for new legal and administrative reforms to improve the country's competitiveness within the next 12 months.
The Kazakhstan parliament also recently approved its first border security law in 20 years. The new law will make it possible for citizens of Kazakhstan to enter and leave the country using only their regular identification. This will improve security while making it easier for imports to enter the country and be further transported across international borders.
The government is also streamlining its procedures for regulating imports and exports. Over the next two years many procedures will be computerised and all licences and authorisations will be able to be applied for online, greatly reducing the current time frames. This will also significantly reduce the costs of obtaining a licence and permit to do business in Kazakhstan.
The future
Kazakhstan has a bold new strategy to bring industry, jobs and increased prosperity to its outlying regions and is aiming to become one of the 30 most competitive nations in the world by 2050.
President Nursultan Nazarbayev and Prime Minister Serik Akhmetov have brought in new policies and legislations along with a talented new team of go-getting experienced technocrats to carry these plans out. It's certainly a market to keep a close eye on.
To find out more about doing business in Kazakhstan, register for the TMF Group webinar on 10 December.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
