Transcript Welcome to Kazakhstan

National Export & Investment Agency “KAZNEX INVEST”
Ministry of Investment and Development
Invest in Kazakhstan
Basic Facts
National Flag
National Emblem
● Area:
2,724,000 km2 (1,051,742
sq.miles), 9th largest
● Population:
17,476,141
● Official language:
Kazakh, Russian
● Currency:
Tenge (KZT)
● Capital:
Astana
● Administrative division:
14 regions + 2 cities of
republican significance
● Member of organizations:
UN, IMF, WB, OSCE, OIC
Population
Total: 17,476,141 people
Age structure
● 0-15 years: 27.3%
● 16-62 years: 62.4%
● 63+ years: 10.3%
Urban population
Rural population
55%
45%
Birth rate
Death rate
22.73 births / 1,000 population
7.98 deaths / 1,000 population
Source: Committee on Statistics of the Ministry of National Economy of the RK
Economy
DOING BUSINESS 2015
Kazakhstan ranked 77th
Protecting minority investors
Rank
Country
1
New Zealand
2
Hong Kong
3
Singapore
4
United Kingdom
…
…
25
Kazakhstan
35
Japan
100
Russia
132
China
Source: World Bank, Doing Business 2015
Economy
GLOBAL COMPETITIVENESS INDEX RANKINGS
Rank
1
2
3
4
5
6
…
50
53
71
76
108
Country
Switzerland
Singapore
USA
Finland
Germany
Japan
…
Kazakhstan
Russia
India
Ukraine
Kyrgyz Republic
Source: World Economic Forum, Global Competitiveness Report 2014-2015
Score
5.70
5.65
5.54
5.50
5.49
5.47
…
4.42
4.37
4.21
4.14
3.73
Economy
COMPETITIVE ECONOMY
The Global Competitiveness Report 2014-2015 ranks*
Kazakhstan 50th out of 144 world economies
Competitive Advantages
Rank
Mobile telephone subscriptions/100 pop.
(4)
Government budget balance, % GDP
(9)
General government debt, % GDP
(11)
Pay and productivity
(16)
Flexibility of wage determination
(20)
Strength of investor protection
(22)
Total tax rate, % profits
(33)
Mobile broadband subscriptions/100 pop.
(34)
Gross national savings, % GDP
(37)
Effect of taxation on incentives to invest
(37)
Source: World Economic Forum, Global Competitiveness Report 2014-2015
______________________
*before the new incentives that were approved by the Law of the Republic of Kazakhstan
“On investments” from January 8, 2003 (with ammendments as to June 12, 2014).
Economy
LABOR MARKET EFFICIENCY
Country
Rank Score (out of 144)
Score (1-7)
Switzerland
…
Kazakhstan
Netherlands
Japan
Germany
China
Russia
France
South Korea
1
…
15
21
22
35
37
45
61
86
5.75
…
4.90
4.73
4.73
4.57
4.55
4.42
4.27
4.07
•
experienced labor force.
•
Country
Rank Score (out of 144)
Value
Hong Kong
Malaysia
…
Kazakhstan
United Kingdom
Czech Republic
Russia
Germany
France
Turkey
1
2
…
16
17
19
24
40
77
81
5.5
5.4
…
4.7
4.7
4.6
4.6
4.3
3.9
3.8
Lower costs compared to
Western economies.
•
PAY AND PRODUCTIVITY
Creative, innovative, skilled and
Steady inflow of new graduates
into the labor market.
Source: World Economic Forum, Global Competitiveness Report 2014-2015
Economy
EDUCATIONAL ATTAINMENT
The Human Capital Report 2013. Kazakhstan ranked 45th out of 122 world
economies for the Human Capital Index
ADULT LITERACY
%
Country
99.7
99.7
99.0
95.9
95.1
94.1
Kazakhstan
Russia
Italy
Singapore
China
Turkey
TERTIARY EDUCATION ATTAINMENT
(% POPULATION AGE 25+)
SECONDARY EDUCATION ATTAINMENT
(% POPULATION AGE 25+)
Rank (out of 122)
Country
Rank (out of 122)
Country
5
25
26
61
67
77
Singapore
Kazakhstan
Russia
Italy
Turkey
China
3
19
31
36
41
71
Kazakhstan
Russia
Singapore
Italy
China
Turkey
Source: World Economic Forum, The Human Capital Report 2013
Economy
NATURAL RESOURCES
Kazakhstan in the world ranking for reserves
1
2
8
12
5
7
10
11
12
13
14
11
Kazakhstan in the world ranking for production
1
10
13
18
3
11
9
12
12
11
10
18
Source: U.S. Geological Survey, Mineral Commodity Summaries 2014; BP Statistical Review of World
Energy, June 2014; U.S. Energy Information Administration, Independent Statistics and Analysis; The
Global Source, The Silver Institute; Thomson Reuters GFMS, Gold Survey 2013 Update 1.
Economy
TAXATION: COMPARISON WITH CHINA AND RUSSIA
TAXES
Kazakhstan
Russia
China
Corporate income tax
(CIT)
20%
20%
25%
Value-added tax (VAT)
12%
18%
17%
from 0.03 to 0.16 USD
per 1 sq.m (10.8 sq.ft);
0.3%, 1.5%
-
2.2%
1.2% assessed value;
12% rental property.
Land tax
Property tax
1.5%
Source: Ministry of Finance of the RK; Federal Tax Service of Russia; State Administration of
Taxation of the People’s Republic of China
Economy
TAXATION: COMPARISON WITH CHINA AND RUSSIA
PREFERENTIAL TAX RATES
Kazakhstan*
Income tax
0% (CIT)
Land tax
0%
Property
tax
0%
VAT
-
Russia
10 % on income of foreign
organizations;
0%, 9%, 15% on dividend income;
0%, 9%, 15% on transactions with
certain types of debt obligations;
0% or agricultural producers.
China
20% special CIT rate apply to small and
thin-profit enterprises;
15% CIT rate apply to state-encouraged
new high-technology enterprises.
10% dividends;
10% interest;
10% royalties.
-
-
-
-
0%, 10%
13% reduced rate;
3% for small-scale payers;
0% on export.
*for priority investment projects
Source: Ministry of Finance of the RK; Federal Tax Service of Russia; Deloitte, Taxation and
Investment in China 2014
Economy
FDI attraction
FDI in the manufacturing sector
6.1 $ bln.
26 %
FDI in the manufacturing sector
17.6 $ bln.
74%
26.5
19.4
21.3
21.4
28.9
24.0
22.2
23.9
12.1
7.9
0.3
5.7
0.7
1.1
2.1
1.8
2.2
Manufacturing
3.5
2.5
3.7
Total
Since 2005, gross inflows of FDI in the manufacturing sector amounted to $ 23.7 billion, of which:
From 2010 to 2014 gross inflow of FDI in the manufacturing industry was 17.6 billion USD, which
corresponds to 74% of total FDI inflows in the manufacturing industry since 2005.
Source: National Bank of the RK
Economy
CUMULATIVE FDI INFLOW BY SECTORS 2005– 2014
Total USD: 207,635.2 million
Professional, scientific and technical activities
Mining and quarrying
Manufacturing
Wholesale and retail trade; repair of motor
vehicles and motorcycles
Financial and insurance activities
Construction
Information and communication
Other
Service activities
Transport and storage
Source: National Bank of the RK
Economy
CUMULATIVE FDI INFLOW IN MANUFACTURING 2005– 2014
Total USD: 23,708.9 million
Metallurgy and manufacture of fabricated metal products,
except machinery and equipment
Production of foodstuff, beverages and tobacco products
Production of computer, electronic and optical products
Production of rubber and plastic products, and non-metallic
mineral products
Other sectors
Production of vehicles and equipment
Production of chemical products
Source: National Bank of the RK
Priority sectors
1
Metallurgy
1. Ferrous
metallurgy
2. Non-ferrous
metallurgy
4
Machinery
7. Manufacture of motor
vehicles
8. Electrical equipment
9. Agricultural machinery
engineering
10. Railway machinery
engineering
11. Mining equipment
12. Oil producing
equipment; oil and gas
refining equipment
2
Chemical Industry
3. Agricultural chemistry
4. Production of
chemicals for industry
5
Production of
construction materials
13. Production of
construction materials
3
Petrochemical
Industry
5. Oil refining
6. Petrochemical industry
6
Food Industry
14. Food production
Investment
INCENTIVES
EXEMPTION FROM CUSTOMS DUTIES
IN-KIND GRANTS
1)
When transporting manufacturing
equipment and components for it the
exemption from customs taxation is granted for
the term of investment contract but not later
than 5 years after the investment contract
registration.
In-kind grants of not more than 30%
of the total investment in fixed assets.
2)
When importing spare parts for the
manufacturing equipment, raw stock and (or)
materials for term up to 5 years the exemption
from customs taxation is granted to the legal
companies depending on the volume of
investment in the fixed assets.
Land
Buildings
Free land, buildings, structures, machinery
and equipment, computers, measuring and
control devices and equipment, vehicles
(excluding cars), industrial and household
equipment.
Investment
NEW INCENTIVES (since 2014)
FREE ENTRY
FREE WORK PERMITS
Visa-free entrance
Foreign labor
Visa-free entrance for citizens of USA, Great
Britain, Germany, France, Italy, Malaysia,
Netherlands, UAE, South Korea, Japan for the
period from 15 July 2014 till 15 July 2015 if the
stay does not exceed 15 days (general
application).
Without permit
for the duration of construction + 1 year after
commissioning of the investment project for
those with investment contracts
Investment
NEW INCENTIVES (since 2014)
Incentives for priority investment projects*
TAX EXEMPTIONS:
CASHBACK ON INVESTMENTS
Reimbursement up to
Corporate income
tax (10 years)
Land tax (10 years)
Property tax (8 years)
30 %
0%
of the actual expenses for installation and
construction
works
and
equipment
acquisition without value added tax and
excises on the basis of supporting
documents, but not exceeding the cost of
expenses
provided
by
preproject
documentation having the conclusion of
state expertise.
*Criteria for priority investment projects:
- matching the List of Priority Activities (approved by the Government)
- newly created legal entity with investments of more than 2 million MCI (MCI – monthly calculated index,
approved by the Law on the national budget)
Investment
NEW INCENTIVES (since 2014)
Incentives for priority investment projects*
STABLE LEGISLATION
STRONG PROTECTION OF INVESTOR’S RIGHTS
Stability of tax legislation for all taxes except
VAT and excise (subject to investment contract)
Ombudsman’s Office
For ensuring protection of the rights and legitimate
interests of the investors, the investment
ombudsman:
1) considers addresses of investors on issues
arising during the implementation of investment
activity and gives recommendations for their
solution, including interacting with government
bodies;
2) assists to investors in solution of arising issues
in extrajudicial and pre-judicial procedures.
*Criteria for priority investment projects:
- matching the List of Priority Activities (approved by the Government)
- newly created legal entity with investments of more than 2 million MCI (MCI – monthly calculated index,
approved by the Law on the national budget)
Investment
SPECIAL ECONOMIC ZONES
«Burabai» SEZ
Tourism
«Pavlodar» SEZ
Petrochemical industry
«Astana
- new city» SEZ
Mixed
«NIPT» SEZ
Petrochemical
industry
SEZ «Saryarka»
Metallurgy
«Khorgos – Eastern
Gate» SEZ
Logistics
«Seaport Aktau» SEZ
Mixed
«Chemical
Park Taraz» SEZ
Chemical industry
«Ontystik» SEZ
Textile industry
«Park of Innovative
Technologies» SEZ
IT - Innovations
Investment
INVESTMENT INCENTIVES IN SEZs
FISCAL INCENTIVES
Corporate income tax
Land tax
0%
until 2020-2025
with possibility for extension
Property tax
Exemption from VAT (for products consumed in SEZ)
•
•
Increase of marginal rate of depreciation for tax on the production of software to 40%
For «Park of Innovative Technologies» SEZ – social tax is 0% for 5 years, under certain conditions and
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
Infrastructure
LOCATION AND INFRASTRUCTURE
●
●
●
●
The Kazakhstan’s geographical position makes it a natural crossroads for major transit corridors from
East to West, from North to South.
The transcontinental automobile road corridor “Western Europe – Western China” passes through the
territory of Kazakhstan. The corridor will allow to deliver freights from China to Europe in 10 days.
There is a territory with population of more than 3.3 bln. people within a radius of 2 thsd. km
(1,243 miles) from Kazakhstan.
The flight time from most European destinations is five hours.
RUSSIAN FEDERATION
143.5 mln.
St. Petersburg
BELARUS
9.5 mln.
Aktobe
KAZAKHSTAN
17 mln.
Shymkent
TURKEY
74.9 mln.
IRAN
77.4 mln.
Western Europe – Western China
corridor (8,445 km=5,247 miles)
Western Europe – Western China
corridor on the territory of Kazakhstan
(2,787 km=1,732 miles)
MONGOLIA
2.8 mln.
PEOPLE’S REPUBLIC
OF CHINA
1.4 bln.
PAKISTAN
182.1 mln. INDIA
1.3 bln.
Lianyungang
Infrastructure
CONSTRUCTION OF TRANSPORT AND LOGISTICS INFRASTRUCTURE
Petropavlosk
Kostanay
Kokshetau
Rudniy
Uralsk
Pavlodar
Ekibastus
Aktobe
Oskemen
Astana
Semey
Temirtau
Karaganda
Atyrau
Aktau
seaport
Aktau
Taldykorgan
Khorgos dry port
Kyzylorda
Taraz
Almaty
Turkestan
Shymkent
Population
Electrified, high-speed line (1,320 km=820 miles )
100,000 – 200,000
500,000 – 1,000,000
Freight and passenger line
Constructed in 2010-2014
200,000 – 500,000
> 1,000,000
Western Europe – Western China
corridor (highway)
Investment
SUCCESS STORIES
Useful Links
Ministry of Investment and Development of the RK
www.mir.gov.kz
Electronic Government
www.egov.kz
National Export and Investment Agency
«KAZNEX INVEST»
www.kaznexinvest.kz
National Investment Internet Resource
www.invest.gov.kz
National Export & Investment Agency “KAZNEX INVEST”
Ministry of Investment and Development
Thank you
for your attention