Kazakhstan : NEW OPPORTUNITIES FOR INVESTMENTS
Agenda I. Why Kazakhstan is attractive for investors? II. Investing in Kazakhstan III. Contact details
Why Kazakhstan is attractive for investors 1. Natural Resources Kazakhstan has the 6 th largest reserve of natural resources in the world
Why Kazakhstan is attractive for investors 2. Stable Macroeconomic Environment 160 140 120 100 80 60 40 20 0 Kazakhstan's GDP, USD billion 132,5 134 104,9 81 57,1 43,2 30,8 2003 2004 2005 2006 2007 2008 2009 Kyrgyz Tajikistan Moldova Armenia Turkmenistan Uzbekistan Azerbaijan Belarus Kazakhstan Ukraine Russia GDP, 2009, USD billion 4 5 6 10 19 30 50 60 134 153 1480 0 500 1000 1500 2000 Source: National Bank of RK
Why Kazakhstan is attractive for investors 2. Stable Macroeconomic Environment GDP per capita, 2009, USD Kyrgyz Republic Tajikistan Moldova Armenia Turkmenistan Uzbekistan Azerbaijan Belarus Kazakhstan Ukraine Russia 951 795 1809 2800 1100 2797 4078 5814 6234 8547 10873 0 2000 4000 6000 8000 10000 12000
Why Kazakhstan is attractive for investors 3. Favorable business climate FDI records serve as an evidence of a favorable investment climate. Kazakhstan attracted more than 118 bln. US dollars if FDI since 1993.
Why Kazakhstan is attractive for investors? Investor Protection Country Strength of investor protection index (0-10) New Zealand 9.7 Kazakhstan 5.7 Russia 5.3 Tajikistan 5.3 Ukraine 4.7 Moldova 4.7 Source: National Bank of RK 7
Why Kazakhstan is attractive for investors? 3. Favorable business climate International ratings also serve as an evidence of a favorable investment climate Source: National Bank of RK
Why Kazakhstan is attractive for investors? 3. Proximity to Largest Regional Markets Kazakhstan is the continental bridge for goods that move from East and West, South to North. 3 out of 4 BRIC countries are located near Kazakhstan: Russia, China and India. Strategically located between European and Asian business centers Serves as a main transit zone in the region Provides 3 out of 4 Eurasian railways
Why Kazakhstan is attractive for investors? 3. Proximity to Largest Regional Markets
Why Kazakhstan is attractive for investors 3. Proximity to Largest Regional Markets West Europe West China 8 445 км 10 days Sea route 24 000 км 30-35 days
Why Kazakhstan is attractive for investors? 5. Market capacity By entering the Customs Union, Kazakhstan creates for investors a more attractive market of 170 million people and opens up additional possibilities for effective investment projects Unified customs territory Uniform trade policy Uniforms customs code Free trade of goods within the customs area Free movement of goods, services, labor and capital
Kazakhstan, Russia and Belarus Customs Union from 2010 Russia Kazakhstan Belarus Market capacity around 170 mln. people Total GDP of almost $ 2 trillion U.S
Why Kazakhstan is attractive for investors? 6. Kazakhstan is reducing the negative impact of current deficiencies In 2010, the State program of accelerated industrial-innovative development for 2010-2014 was adopted, which aims Infrastructure development Creation of new export-oriented high-tech manufacturing Strengthening of the national innovative system Improvement of professional skills of local labor State support (preference, privilege, co-financing etc) is granted to projects in priority sectors (non raw materials sector) in order to decrease the investors' expenses International National export Economic and investment Cooperation agency Committee
State program of accelerated industrialinnovative development for 2010-2014 GOAL INDICATORS GDP grown up to 50% than in 2008 Ensure sustainable and balanced economic growth through diversification and competitive recovery. Increasing of labor productivity in manufacturing industry up to 50% and in some sectors up to 100% Increasing the share of non resource export up to 40% Decreasing energy intensity of GDP no less than 10% Increasing the share of innovative enterprises up to10% of active enterprises
Priority sectors of economy Traditional Mining and Metallurgical Complex Nuclear industry Based on domestic demand Machinery Construction industry Export-oriented Agro-industrial complex Light industry Chemical industry Petrochemicals Pharmaceuticals Tourism Sectors of «the future economy» Information and Communication Technology Space activities Biotechnology Alternative Energy
Investing in Kazakhstan State Support 1. Foreign Investment Protection Guarantees Kazakhstan has signed agreements on mutual investment protection with 44 countries
Investing in Kazakhstan State Support 1. Foreign Investment Protection Guarantees In order to reduce investment risk and guarantee protection to foreign investments, foreign investors are given national status (foreign and domestic companies work under equal conditions) The Foreign investors Council chaired by the President of the Republic of Kazakhstan was established in 1998, 30th of June Purpose: promotion of direct dialogue between the Government of Kazakhstan and foreign investors in order to efficiently address key issues related to their investment activities in the country Council meetings address issues critical to the development of the country s economy, investor protection and investment climate. The Council consists of 29 foreign companies.
MAIN INSTRUMENTS OF INVESTOR SUPPORT Economic incentives for investors Institutional Support Special Economic Zones Investment Preferences Special Permanent Commission on Foreign Investment headed by Prime Minister of Kazakhstan: «OMBUDSMEN» for Investors Service support for investors National Export and Investments Promotion Agency: ONE STOP-SHOP for Investors 19
Investment preferences Recipients of preferences: Types of preferences: Potential and current investors Exemption from customs duties of imported equipment and its components for investment project implementation Tax incentives for investors Granting of the state natural grants value of the objects of preferences and (or) the following costs for the modernization and reconstruction can relate to deductions. Terms of preferences: Priority sectors of the economy
Investing in Kazakhstan State Support Privileges for Members of Special Economic Zones Today, there are 6 Special Economic Zones (SEZ) in Kazakhstan
Investing in Kazakhstan State Support Privileges for Members of Special Economic Zones The members of SEZ enjoy the following privileges: Corporate income tax exemption Customs-free policy VAT exemption on goods and services given on SEZ territories, made or consumed in activities related to SEZ creation 0% to the mid-year cost of taxable objects when calculating property tax 40% in the marginal rate of depreciation used for IT software
Institutional Support for Investors KAZNEXINVEST www.kaznexinvest.kz Government of Kazakhstan (ministries, agencies etc. Foreign economic policy Department Embassy of Kazakhstan Investor www.invest.gov.kz
ONE STOP-SHOP SERVICES FOR FOREIGN INVESTORS Information on investment projects http://www.sendspace.com/file/h57oaq Information on investment opportunities and business conditions Assistance in a choice of projects and partners Assistance in reception of measures for state support Assistance in making decisions on administrative questions Organization of meetings with official representatives
National investment interactive website www.invest.gov.kz Niche investment projects_eng.doc Website will be available in 12 languages: English, German, French, Italian, Spanish, Arabic, Korean, Japanese, Turkish, Kazakh and Russian. 25
More information Website includes information on : Processing of requests and inquiries of investors and initiators of the projects online Provision of quality and daily updated information on all aspects of investing in Kazakhstan, including: Investment legislation of the Republic of Kazakhstan; Business conditions in Kazakhstan; Infrastructure conditions; Government programs; Government support for investors and others. The list of investment projects 26
For further information: 1. Contact the Embassy of the Republic of Kazakhstan 2. Visit our website www.mfa.kz 3. Necessary information for investing in Kazakhstan visit www.invest.gov.kz 27