Investment Agreement
An investment agreement shall mean an agreement signed by virtue of a decision of the Government of the Republic of Kazakhstan between an entity authorized by the Government of the Republic of Kazakhstan and a Kazakh legal entity, inter alia, those registered in the jurisdiction of the Astana International Financial Centre, for investment project implementation and investments in the amount of at least seven and a half million fold of the monthly calculation index established by the Law on the republican budget for the year in which the Agreement is concluded.
The conditions and procedure for granting preferences and benefits stipulated by the laws of the Republic of Kazakhstan shall be specified in the investment agreement at the time of conclusion. From 1 January 2023, the Investment Agreement should provide for the counter obligations of legal entities that have signed an investment agreement.
The types of investment preferences, terms and conditions of granting of preferences are also set out in the Investment Agreement.
Prioritized industries list
From 1 January 2023, the laws do not establish any prioritized industries list for the projects under the Investment Agreement, while a negative list of activities is provided for in the Entrepreneurial Code. Thus, the investment agreements cannot be concluded for the implementation of projects in the following types of industrial areas:
1) Trafficking of narcotic drugs, psychotropic substances and precursors;
2) Production and (or) wholesale of excisable products;
3) Lotteries;
4) Gambling business;
5) Circulation of radioactive materials;
6) Banking (or certain types of banking operations) and business in the insurance market (except for the activities of an insurance agent);
7) Audit;
8) Professional activity in the securities market;
9) Digital mining;
10) Credit bureaus;
11) Security activities;
12) Circulation of civilian and service weapons and ammunition;
13) Subsoil use, including the activities of prospectors;
14) Sale of minerals, including the activities of traders, activities for the sale of coal, oil.
The terms, procedures and conditions for the amendment and termination of the investment agreement are set forth in the Rules for the conclusion, amendment and termination of investment agreements approved by the authorized investment authority.
The provisions of the investment agreement remain in effect for twenty-five years from the date of its signing and in the event of changes in the legislation of the Republic of Kazakhstan, except in cases of amendments to the investment agreement by agreement of the parties.
Conclusion of an investment agreement
Pursuant to the Rules for the conclusion, modification and termination of investment agreements, signing of investment agreement is subject to the following requirements:
1) The cost of the investment project amounts to at least seven and a half million fold of the monthly assessment indices established by the law on the republican budget for the year in which the agreement has been signed.
It should be noted that the above requirement implies only project costs made 24 months prior the date of filing an application for an agreement and (or) the costs of future periods before commissioning;
2) Availability of a bundle of documents, prescribed in paragraph 6 of the Rules,;
3) Availability of a consent of the Commission to negotiate on the draft agreement and specify investor's counter obligations.
In order to enter into an investment agreement, the applicant shall apply to and file with the Task Force Department of KAZAKH INVEST National Company JSC the following documents both in Kazakh and Russian languages in paper and electronic forms:
1) A standard application form as established in Appendix 1 to the Rules;
2) A copy of the applicant's by-laws and certificate of state registration (re-registration);
3) Business plan of the investment project as per the Appendix 2 to the Rules;
4) Feasibility study;
5) Design and estimate documentation of the investment project;
6) Appraisal statement from comprehensive and independent experts on the construction projects, to be signed by the chief officer, in manner prescribed by the laws of the Republic of Kazakhstan (in case of applying for the tax preferences);
7) Document on the right to use a licensed technology (agreement or other document regulating the right to use).
Submission of documents specified in the sub-paragraphs 4), 5), 6), 7) is subject to their availability.
Once a complete package of documents has been collected and submitted, inter alia, information on investment preferences, terms and conditions for granting preferences, investor’s counter obligations under the Article 295-2 of the Entrepreneurial Code, Task Force Department will transmit the documents to the central state body which is in charge of government administration in the field or industry related to the investment project (authorized body).
If some documents or data is missing, Task Force ask investor then, inter alia, via arranging preliminary negotiations and discussions with the applicant.
The entire period for the authorized body to review the submitted documents as provided for in paragraph 6 of the Rules and prepare its statement on terms and conditions of the agreement, with due regard to expert’s opinion, draw up the draft agreement, and obtain approvals of the Commission takes at most 3 (three) months from the date of submission.
Based on the findings of review of the documents, the authorized body issues a statement on terms and conditions of the agreement annexed with the draft agreement to be approved by the Negotiating Commission, and submits this to the Investments Staff in order for them to review and take a decision on signing.
The Investment Staff may approve terms and conditions of the agreement, return it back for re-drafting, or refuse to sign.
In cases when the Republican Budget Commission approves the draft agreement, the authorized body or the authorized body for investments should draw up a draft Decree of the Government of the Republic of Kazakhstan on resolution to sign an agreement for investment project and submits such draft to the interested state bodies and/or organizations for approval within 10 (ten) business days.
The authorized body should draw up a draft agreement using a standard agreement established by the Rules and annexed in Appendix 4 to the Rules.
