The economy of Kazakhstan is politically, socially, and economically stable. The country has huge reserves of oil, minerals, and metals. Kazakhstan also has significant agricultural potential, which includes animal husbandry and food production. The industrial sector of Kazakhstan is based on the extraction and processing of natural resources, as well as in the machine-building sector, specializing in construction, agricultural equipment, and some military products. Kazakhstan has a developed space infrastructure, which ensures the launch of spacecraft to the International Space Station.
Economy of Kazakhstan
At the moment, the economy of Kazakhstan is the second most powerful among the countries in the post-Soviet space. It is also the largest economic system in Central Asia. A distinctive feature of the country is self-sufficiency in all necessary natural resources. And although the economy of the state experienced the negative impact of external and internal factors, however, today it is developing at a fairly rapid pace. Today, the basis of the national economic system of Kazakhstan can be called the extraction of oil and gas, metals, minerals, as well as metallurgy and manufacturing. The economy of Kazakhstan experienced the main problems after the collapse of the USSR. Due to illiterate political decisions in the early years, economic indicators fell by almost 70%. The economy was able to recover by 2007 and reach the pre-crisis indicators. Today Kazakhstan shows positive economic growth, and its economic system is stable. However, world crises or any changes in the world economy affect economic processes within Kazakhstan. External debt is quite large and accounts for about 12% of the total income received. It is divided into private and public, but recently the main burden has been borne by the state budget. Information is taken from the website of the exchange Author24:
How to enter the market of Kazakhstan
Kazakhstan is considered a business center; we will be favorably located in the very heart of the Eurasian region at the intersection of trade routes. Therefore, export or presence in the country’s market for foreign companies opens up wide opportunities.
There are three ways for foreign companies to enter the Kazakh market. The first is the creation of a joint venture with a local partner or company. Secondly, you can export your products through an agent or distributor. Thirdly, to enter the republican market through the creation of your own new company.
Note that all legal entities, branches, and representative offices in Kazakhstan are subject to state registration. Registration is available online through the e-government website.
In Kazakhstan, commercial companies are formalized as:
- limited liability partnerships, which are independent legal entities and are subject to taxation;
- joint-stock companies. The authorized capital is required in the amount of 500 thousand US dollars;
- representative office or branch. Can conduct commercial activities, but is not a legal entity. It must also be registered with the regional department of the Ministry of Justice. Obliged to comply with certain formalities: registration for value-added tax, obtaining a seal, opening a bank account.
Investment legislation in Kazakhstan applies to both local and foreign companies. In priority sectors, there are special incentives to attract investment.
Although the government officially encourages foreign investment in Kazakhstan, there are mixed opinions within the country regarding its benefits. The government does not always facilitate market access for foreign companies. This is manifested in the overly bureaucratic business management, the style of which has remained since Soviet times.
Companies need to be careful when committing to invest in a country. Since more substantive negotiations begin when the contract has already been signed. It is very important to seek financial and legal advice from a local company and hire a good accountant.
Foreign companies are encouraged to be active in building relationships with central and regional officials who will assist in strengthening their business in the republic. In addition, foreign companies need to form a staff of employees who previously worked in foreign companies and, preferably, who have education in Western universities.
A competent business partner from among local businessmen can help to avoid many of the problems that one may face when entering the Kazakhstan market. For example, an unexpected tax audit is a common occurrence in Kazakhstan. Therefore, it is important to carefully maintain paperwork and accounting.
Moreover, one should be careful about and be aware of the corruption situation in law enforcement agencies, oversight agencies, and customs. Even minor mistakes can lead to serious problems for companies.
It should be borne in mind that the administrative bodies and services are under serious political influence, and within the country, regulations of regional significance may be applied.