Investment preferences

The goal of state support for investments is to create a favorable investment climate for the development of the economy and stimulate investment in the creation of new, expansion and renewal of existing industries using modern technologies, improving the skills of Kazakhstani personnel, and also protecting the environment.

Government support for investment is to provide investment preferences.

State support of investments is carried out by the authorized body on investments, determined by the Government of the Republic of Kazakhstan, for the conclusion of investment contracts and control over their execution.

In accordance with the legislation of the Republic of Kazakhstan, the procedure for granting investment preferences for investment, investment priority and special investment projects is provided.

Investment preferences are the benefits of a targeted nature, provided in accordance with the legislation of the Republic of Kazakhstan:

1) to legal entities of the Republic of Kazakhstan implementing an investment project;

2) leasing companies importing technological equipment on the basis of a financial leasing agreement for a legal entity of the Republic of Kazakhstan implementing an investment project as part of an investment project.

Legal entity of the Republic of Kazakhstan is a legal entity, including a legal entity with foreign participation, established in accordance with the legislation of the Republic of Kazakhstan.

The investment project provides the following types of investment preferences:

1) exemption from customs duties and value added tax on imports;

2) state in-kind grants - the maximum size of the state in-kind grant is no more than thirty percent of the volume of investments in fixed assets of a legal entity of the Republic of Kazakhstan (land, buildings, structures, machinery and equipment, computing equipment, measuring and regulating devices and tools, vehicles (with the exception of passenger cars), production and household equipment).

According to the investment priority project, the following types of investment preferences are provided:

1) tax preferences:

- corporate income tax;

- land tax;

- property tax;

2) investment subsidy;

3) exemption from customs duties;

4) state in-kind grants.

The special investment project in the form of investment preferences (hereinafter - investment preferences for a special investment project) is exempted from the following taxes:

- import customs duties;

- taxes in accordance with the tax legislation of the Republic of Kazakhstan.

INVESTMENT PROJECTS

The investment project is a set of activities involving investments in the creation of new, expansion and (or) renewal of existing industries, including those created, expanded and (or) updated during the implementation of a public-private partnership project, including a concession project.

An investment priority project is an investment project:

- on creation of new productions, providing for a legal entity to invest in the construction of new production facilities (factory, plant, workshop) in the amount of at least two million times the monthly calculation index (2405 tenge) established by the law on the republican budget and valid on the date of filing the application for provision of investment preferences;

- on expansion and (or) updating of existing productions, providing for a legal entity to make investments in the amount of at least five million times the monthly calculated indicator established by the law on the republican budget and valid at the date of filing an application for granting investment preferences to change fixed assets, including renewal (renovation, reconstruction, modernization) of existing production facilities that produce products.

A special investment project is an investment project implemented and (or) being implemented by a legal entity of the Republic of Kazakhstan registered as a member of a special economic zone or owner of a free warehouse in accordance with the customs legislation of the Republic of Kazakhstan, or a project implemented by a legal entity of the Republic of Kazakhstan that has entered into an agreement industrial assembly of motor vehicles.

TERMS OF PROVISION

Investment preferences are granted only to Kazakhstani legal entities that are planning to implement investment projects in priority activities according to the list of priority activities established by the Government of the Republic of Kazakhstan. The list of priority activities consists of two parts: part 1 - a list of activities for investment projects; Part 2 - a list of activities for investment priority projects. Extensive conditions for granting preferences provide only investment priority projects, while for investment projects the main and only condition is the status of a legal entity of the Republic of Kazakhstan with the recipient, and in a special investment project recipients can only be participants of special economic zones, owners of free warehouses and legal entities that have entered into an agreement on the industrial assembly of motor vehicles.

Investment preferences for an investment priority project are provided subject to the following conditions:

1) the recipient is a legal entity of the Republic of Kazakhstan;

2) a legal entity makes investments in the amount of at least two million times (to create new production) or five million times (to expand and (or) update existing production) of the size of the monthly calculation indicator established by the law on the republican budget and valid on the date of application for investment preferences ;

3) a legal entity carries out the activities included in the list of priority activities identified for the implementation of investment priority projects;

4) a legal entity is not:

- an autonomous organization of education in accordance with the tax legislation of the Republic of Kazakhstan and the legislation of the Republic of Kazakhstan on education;

- an organization operating in the special economic zone in accordance with the tax legislation of the Republic of Kazakhstan and the legislation of the Republic of Kazakhstan on special economic zones;

5) the share of the state and (or) the subject of the quasi-public sector - a legal entity of the Republic of Kazakhstan as the founder and (or) participant (shareholder) of a legal entity of the Republic of Kazakhstan does not exceed twenty-six percent.

The participation of the state and (or) the subject of the quasi-state sector - a legal entity of the Republic of Kazakhstan as the founder and (or) participant (shareholder) of a legal entity of the Republic of Kazakhstan is not more than five years from the date of registration of an investment contract. Within five years, the state and (or) the subject of the quasi-public sector are required to withdraw from the founders and (or) participants (shareholders) of the legal entity of the Republic of Kazakhstan. In case of non-fulfillment of this condition, the application of investment preferences is suspended until its (their) full withdrawal from the founders and (or) participants (shareholders) of a legal entity of the Republic of Kazakhstan, but not more than one year.

Failure to comply with the conditions of withdrawal from the founders and (or) participants (shareholders) of a legal entity of the Republic of Kazakhstan during the suspension period entails the early termination of the investment contract and the return of previously granted investment preferences.

6) for the implementation of the investment priority project, budgetary funds are not attracted as sources or guarantees of financing, with the exception of money allocated under conditions of repayment, urgency and payment, including leasing financing and lending;

7) investment activity is not carried out within the framework of a public-private partnership agreement, including a concession agreement.