Factors of attractiveness
of the investment climate
in Kazakhstan
“NATIONAL EXPORT AND INVESTMENT AGENCY “KAZNEX INVEST” JSC
Ministry of Industry and New Technologies of the Republic of Kazakhstan
KAZAKHSTAN
Territory: 2.7 mln. sq. km.
Population: 17 mln
GDP, 2012: $ 199,5 bill
GDP per capita, 2012: $ 12 068
Major languages
• Kazakh (state language)
• Russian (official, business language)
• English, Chinese (young generation)
 Main ethnic groups:
• Kazakhs: 65%
• Russian: 25%
• Other: 10%
Source: The Agency of Statistics
of the Republic of Kazakhstan
“NATIONAL EXPORT AND INVESTMENT AGENCY “KAZNEX INVEST” JSC | Ministry of Industry and New Technologies of the Republic of Kazakhstan
KAZAKHSTAN: YOUR GATEWAY TO 3/5 BRICS OR TO 3 BILLION PEOPLE
The average minimum duration of flights to
major centers of economic activity (in hours)
4
7
KAZAKHSTAN
5.5
4.5
4.5
4
“NATIONAL EXPORT AND INVESTMENT AGENCY “KAZNEX INVEST” JSC | Ministry of Industry and New Technologies of the Republic of Kazakhstan
MANY FOREIGN COMPANIES HAVE ALREADY INVESTED IN KAZAKHSTAN
• SLIDE TEXT
“NATIONAL EXPORT AND INVESTMENT AGENCY “KAZNEX INVEST” JSC | Ministry of Industry and New Technologies of the Republic of Kazakhstan
FDI FLOWS INTO KAZAKHSTAN
Gross FDI inflows by countries for
the period 2009 – 2q. 2013, bln. $
Gross FDI inflows and outflows for the period
2005 – 2q. 2013, bln. $
Gross FDI inflows - $ 172,3 bln.,
from which 64% were attracted between the
period 2009 – 2q. 2013 ($ 111,6 bln.)
35.0
30.0
25.0
19.4
20.0
21.3
10.5
7.9
Netherlands
22.2
21.4
12.1
15.0
35.4
Switzerland
8.8
USA
8.1
China
7.9
12.6
8.0
France
6.2
UK
5.2
Russia
2 q.
British Virgin Islands
2013
Gross inflow of direct investment in Kazakhstan from foreign direct investors
Italy
4.3
10.0
5.0
0.0
28.8
26.5
0.3
1.3
3.2
5.0
5.4
3.0
2.3
2005 2006 2007 2008 2009 2010 2011 2012
3.7
26.6
42.2
Professional,
scientific and
technical activities
Manufacturing
Mining and
quarrying
Other activities
27.9
14.7
2.9
Gross outflow of direct investment abroad from Kazakhstani direct investors
Structure of FDI by types of economic activities in bln. $ and %
1 half of 2012, bln. $
1 half of 2013, bln. $
4.5
5.5
FDI in manufacturing for 2009 – 2q. 2013 in mln. $
7%
2.9
3.7
4.3
1.6
668
4.5%
854
5.8%
1,008
6.8%
8%
18%
1.5
4.7
47%
12,210
82.8%
Manufacture of food
products, beverages and
tobacco products
Manufacture of basic metals
and fabricated metal
products
Manufacture of computer,
electronic and optical
products
Other sectors
Source: National Bank of the RK
“NATIONAL EXPORT AND INVESTMENT AGENCY “KAZNEX INVEST” JSC | Ministry of Industry and New Technologies of the Republic of Kazakhstan
KAZAKHSTAN HAS ATTRACTED GREATEST FDI PER CAPITA IN CIS
Accumulated FDI in the CIS,
2000-2011, bln. USD
CAGR*
Russian
28%
Kazakhstan
21%
Russian
3203
23%
Turkmenistan
3257
16.6
30%
Azerbaijan
13.0
34%
Armenia
9.1
22%
Ukraine
1443
6.8
28%
Belarus
1359
5.0
14%
Moldova
7%
Kyrgyzstan
236
63%
Uzbekistan
244
Tajikistan
142
457.5
Kazakhstan
93.6
Ukraine
Turkmenistan
Belarus
Azerbaijan
Uzbekistan
Armenia
Moldova
Kyrgyzstan
Tajikistan
FDI in the CIS countries per capita,
2011, USD
65.2
3.2
1.3
1.0
-6%
5777
979
1628
892
Source: UNCTAD Stat
*Compound annual growth rate
“NATIONAL EXPORT AND INVESTMENT AGENCY “KAZNEX INVEST” JSC | Ministry of Industry and New Technologies of the Republic of Kazakhstan
WHY IS KAZAKHSTAN ATTRACTIVE FOR FOREIGN INVESTORS?
1
Political stability and good
investment climate
▪
▪
▪ Attractive corporate tax rate (20%) and
A high level of trust in political
institutions and the effective allocation
of funds (WEF 2012) in comparison
with the countries of the CIS.
Ease of Doing Business (49 on the list
of World Bank Doing Business 2013:
10 place in the investor protection and
17 place in the payment of taxes).
Stable macroeconomic
indicators and high growth
3
2
Regionally attractive fiscal and
non-fiscal regime and protection
of foreign investment
▪
▪
▪
4
Springboard to circa 3 billion
potential customers
▪
▪
▪
▪
▪
GDP growth: 5.5% (IMF 2012)
Low debt / GDP ratio: 15.8% (IMF
2012)
Budget deficit: 2.5% (IMF 2012)
Inflation rate: 6.0% (IMF 2012)
low VAT (12%)
Fiscal and non-fiscal incentives for
investors, including in SEZs
48 bilateral agreements on mutual
protection of investments (US also)
Main international arbitration
instruments ratified
▪
▪
▪
3 of the 5 BRICS countries are in 4
hours flight
Customs Union (Kazakhstan, Russia,
Belarus) with a population of 170
million and a total GDP of 2 trillion.
Open economy (trade 70% of GDP)
Entry into the WTO is expected in
2014 - 2015
“NATIONAL EXPORT AND INVESTMENT AGENCY “KAZNEX INVEST” JSC | Ministry of Industry and New Technologies of the Republic of Kazakhstan
HIGH CONFIDENCE IN POLITICAL INSTITUTIONS AND EFFECTIVE
MANAGEMENT OF PUBLIC FUNDS
The index of trust political institutions
Australia
4.0
Kazakhstan
3.7
Place in the
ranking
27
37
Turkey
4.5
19
Tadjikistan
4.4
23
47
Jordan
4.3
29
54
China
4.3
32
63
Australia
86
India
3.6
75
Brazil
3.6
79
France
3.4
44
Jordan
3.4
45
3.1
Georgia
3.0
RussianFederation
2.5
SouthAfrica
2.4
88
Poland
2.4
90
India
2.2
Croatia
2.1
3.2
100
Poland
3.1
105
SouthAfrica
3.1
106
Ukraine
3.0
109
126
RussianFederation
3.0
110
139
KyrgyzRepublic
2.9
122
115
120
Brazil
2.0
121
CzechRepublic
1.6
56
CzechRepublic
2.0
1.9
3.9
106
Ukraine
KyrgyzRepublic
8
13
43
United States
4.8
4.6
3.4
3.3
Finland
Place in the
ranking
Kazakhstan
Turkey
Azerbaijan
Government provision of services
for improved business performance
Source: The Global Competitiveness Report 2012-2013
“NATIONAL EXPORT AND INVESTMENT AGENCY “KAZNEX INVEST” JSC | Ministry of Industry and New Technologies of the Republic of Kazakhstan
DOING BUSINESS IN KAZAKHSTAN IS MUCH EASIER THAN IN MOST
EMERGING MARKETS
Place in the
ranking
Doing Business 2013
Country rank
Singapore
1
United States
4
Germany
20
Kazakhstan
49
Belarus
58
Kyrgyz Republic
70
Italy
73
China
91
Russian Federation
112
Brazil
130
India
132
Ukraine
137
Tajikistan
141
Uzbekistan
154
0
20
40
60
80
100
120
140
160
Source: World Bank Doing Business 2013
“NATIONAL EXPORT AND INVESTMENT AGENCY “KAZNEX INVEST” JSC | Ministry of Industry and New Technologies of the Republic of Kazakhstan
INVESTMENT PREFERENCES
LAW OF THE RK DATED AS 21.07.11 № 469 «ON INVESTMENTS»
Preferences for projects in priority sectors
Exemption from customs duties on equipment,
components, raw materials and spare parts imported
for a project
CRITERIA for investment projects:
Corresponds to the List of priority activities
In-kind
state
grants
Tax allowances as per Tax
code of the RK (deductions of
the value of the preference
objects, and (or) further costs
to modernization up to 3
years)
Preferences for strategic investment projects *
•
SLIDE TEXT
Land , property tax 0%
for up to 7 years
Guaranteed state order
Industrial subsidies for areas with low
socio-economic development
Corresponds to the List of priority activities
The volume of investment exceeds
50 million USD
OR
Corresponds to the List of hightechnology products
“NATIONAL EXPORT AND INVESTMENT AGENCY “KAZNEX INVEST” JSC | Ministry of Industry and New Technologies of the Republic of Kazakhstan
SECTOR-SPECIFIC INCENTIVES IN 10 DEDICATED SEZS ACROSS COUNTRY
SEZ “Burabai”
SEZ “Astana new city”
(Tourism)
(construction industry)
SEZ “Petrochemical park”
(Oil and gas industry, petrochemicals)
SEZ “Pavlodar”
• SLIDE TEXT
(chemical industry)
Astana
Pavlodar
Karaganda
Atyrau
SEZ “Saryarka”
(metallurgy)
Aktau
Taraz
Almaty
Shymkent
SEZ “Marine Port
Aktau”
(logistics, transport)
SEZ “Ontystik”
(textile industry)
SEZ “Khorgos
Eastern Gate”
(Trade, logistics)
SEZ “Chemical park
Taraz”
SEZ “Innovation
TechnoPark”
(IT-industry, innovations)
(chemical)
“NATIONAL EXPORT AND INVESTMENT AGENCY “KAZNEX INVEST” JSC | Ministry of Industry and New Technologies of the Republic of Kazakhstan
ATTRACTIVE INVESTMENT INCENTIVES IN SEZS
FISCAL INCENTIVES in SEZs
•
0%Corporate Income Tax until 2020-2025 with possibility for extension
•
0% for land and property tax until 2020-2025 with possibility for extension
•
VAT– 0% (for products consumed in SEZ) until 2020-2025 with possibility for extension
•
Increase of marginal rate of depreciation for tax on the production of software to 40%
•
For SEZ “Innovation technopark” – social tax is 0% for 5 years, under certain conditions
•
For SEZ“Innovation technopark”– depreciation rate for software increased to 40 %
NON-FISCAL INCENTIVES
•
Provision of free land in SEZ for a period of up to 10 years from registration time as SEZ resident
•
Simplified procedure for the recruitment of foreign labor
“NATIONAL EXPORT AND INVESTMENT AGENCY “KAZNEX INVEST” JSC | Ministry of Industry and New Technologies of the Republic of Kazakhstan
KAZNEX INVEST: YOUR ONE-STOP-SHOP FOR INVESTING
Providing information about
business / invest
projects and analytical information
Assist in the selection of projects of
Assist
in the of
selection
of
State
program
accelerated
projects ofdevelopment
AIID
industrial-innovative
of
the Republic of Kazakhstan for 20102014
Help in choosing a partner
COMPREHENSIVE ASSISTANCE
TO FOREIGN INVESTORS
Assistance in obtaining
state support for investors
Organization of meetings
with officials
Assistance in administrative
matters
“NATIONAL EXPORT AND INVESTMENT AGENCY “KAZNEX INVEST” JSC | Ministry of Industry and New Technologies of the Republic of Kazakhstan
ЗАГОЛОВОК СЛАЙДА
• ТЕКСТ СЛАЙДА
THANK YOU!
www.invest.gov.kz
АКЦИОНЕРНОЕ ОБЩЕСТВО «НАЦИОНАЛЬНОЕ АГЕНТСТВО ПО ЭКСПОРТУ И ИНВЕСТИЦИЯМ «KAZNEX INVEST» | МИНИСТЕРСТВО ИНДУСТРИИ И НОВЫХ ТЕХНОЛОГИЙ РЕСПУБЛИКИ КАЗАХСТАН