On October 2, the European Business Association of Kazakhstan (EUROBAK) convened for an official meeting with Ms. Nazira Nurbayeva, the esteemed Deputy Minister of Foreign Affairs of the Republic of Kazakhstan. This was a significant interaction, underscoring the commitment of both entities towards enhancing the investment landscape in the Republic of Kazakhstan.
The dialogue encompassed a comprehensive discussion on pivotal areas:
- The strategic framework, objectives, and policies for investment promotion.
- Refinements and improvements in the legal regulations concerning investments in the Republic of Kazakhstan.
- The global legal parameters shaping investments.
- Legislative measures safeguarding property rights and reinforcing investment security.
- Modifications and contemporary adjustments in the visa policy of Kazakhstan.
Furthermore, Mr. Ardak Zebeshev, Chairman of the Committee on Investments of the Ministry of Foreign Affairs of the Republic of Kazakhstan, presented crucial insights on the notable modifications surrounding the improvement of legal regulations on investments in the Republic of Kazakhstan:
- The introduction of the Investment Agreement within the Entrepreneurial Code of the Republic of Kazakhstan, serving as a novel tool for state support to investors.
- Enhanced state support parameters for key sectors like light industry, food industry, and tourism, contingent upon specific investment benchmarks.
- An expanded definition of “investment project,” transcending the previous constraints of the Entrepreneurial Code.
- The provision for concurrent execution of an Investment contract with other state-affiliated contracts.
- Specific stipulations permitting the state to assume ownership rights for in-kind grants delivered under investment contracts, post the fulfillment of stipulated obligations and subsequent audit verifications.
- The recent promulgation of the new Environmental Code and the Law on Industrial Policy of the Republic of Kazakhstan.
A significant revelation during the meeting was the update on expected amendments into Article 264 of the Tax Code of the Republic of Kazakhstan. This article, which concerns the limitation of cost deductions for services from non-resident related parties, is poised for a substantial revision. Ms. Nurbayeva informed that, based on the statement from the Minister of National Economy of RK, this clause would be rescinded starting next year. Emphasizing its significance, Ms. Nurbayeva elucidated that this amendment stands as a testament to the concerted efforts of various associations, showcasing their proactive engagement in ensuring that legislative changes are conducive to a positive economic impact.
H.E. Kęstutis Jankauskas, EU Ambassador to the Republic of Kazakhstan and EUROBAK Honorary Board Member, outlined key points of importance to the European investors:
European Union remains biggest investor in Kazakhstan and would like to maintain that position. Beside oil and gas, areas such as critical raw materials, transport and logistics, green energy, digital connectivity and agriculture and water management present renewed interest and opportunities.
In order to continue successfully attracting European investors, it is imprtant to:
- to ensure that European companies which have already invested in Kazakhstan could testify about their positive experience. Potential new investors heavily weigh the feedback of existing companies when considering entering the Kazakh market. Positive experiences can serve as endorsements, while challenges offer areas of improvement. Honest and transparent feedback is paramount for this;
- addressing corruption: OECD report on the Business Climate in Kazakhstan presented in May 2023 mentiones corruption as one of issues of concern. Kazakhstan‘s rank in the Transparency International global index is looked at by potential investors, and improvement of that ranking is important to potential investors;
- new legislative codes: the impending introduction of new codes on areas like Taxation and Water Management was highlighted. It would be importatnt to consult as many relevant stakeholders in the process of drafting and preparations as possible, including member organizations, associations and businesses. Investors should not be disadvantaged;
- Promotion of OECD Standards: AIFC platform is important for investors during the transition years, but eventually best OECD practices and standarts should be applicable thourghout the whole country;
- Europe is dominated by small and medium size companies, and attractig them as investors beside big giants would be mutually beneficial;
- Building Kazakhstan’s credibility: to sustain and further enhance its global reputation, it is essential for Kazakhstan to continue to exhibit transparency and adherence to international standarts, rules and procedures, including through its ongoing efforts on non-circumvention of sanctions.
Ambassador concluded by praising the existing EU-Kazakhstan Business Platform as useful tool for discussions on topics of mutual interests, and mentioned that the next meeting would be addressing investment climate to give further impetus to dynamic EU-Kazakhstan economic relations.
This meeting accentuates EUROBAK’s unwavering commitment to facilitating a seamless and conducive investment ecosystem in Kazakhstan, in tandem with the strategic vision of the nation’s leadership.