RESTRICTEDWORLD TRADE
ORGANIZATIONWT/ACC/KAZ/25
22 September 2000
(00-3794)
Working Party on the
Accession of KazakstanOriginal:  English
ACCESSION OF KAZAKSTAN
Information on Trade-Related Investment Measures in the
Republic of Kazakstan
The Ministry of Economy of the Republic of Kazakstan has submitted the following
information.
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Legal regulation of investments
Legal regulation of investment activity in the Republic of Kazakstan (RK) is implemented
based on the main laws  as follows:
- The Law “On Foreign Investments”;
- The Law “On State Support of Direct Investments”;
- The Law “On Subsurface and Subsurface Utilization”;
- The Law “On Petroleum”; and
- The Edict of the President “On Approval of Procedures for Granting Privileges and 
Preferences when Entering into Contracts with Investors, Implementing Investment 
Activity in Priority Sectors of Economy”.
The Law “ On Foreign Investments” determines legal and economic basis for attraction of
foreign investments to the Republic of Kazakstan, provides for the state guarantees on the protection
of foreign investments, determines organizational forms of their implementation, as well as the
procedure for settlement of disputes with participation of foreign investors.
In particular, Article 4 states that any form of foreign investments and the activity related to
them, which is not prohibited by current legislation of the Republic of Kazakstan is implemented on
the terms, not less favorable, than those, which ar e granted to the investments of physical persons and
legal entities of  he Republic of Kazakstan in the similar situation.
Besides, in accordance with this Law, foreign investments can not be nationalized,
expropriated or be subject to other measures, which have the same consequences as nationalization
and expropriation, except for the cases when such expropriation is carried out for public interests
under the condition of observation of an appropriate legal procedure and on non-discriminatory basis
with immediate payment of an adequate and efficient compensation.
Foreign  investments are granted several guarantees, aimed at protection of their interests in
case of changes in the legislation, illegal actions of the state bodies and officials, when using the
incomes and own currency reserves in the course of the implementation of state control.
For the purposes of encouraging of investors, the Law provides for certain privileges, in
particular, the exemptions from payment of the customs duty on equipment and spare parts thereof,imported to the RK as contribution of a foreign investor to the charter fund of an enterprise withWT/ACC/KAZ/25
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foreign participation. Besides, personal property of foreign staff of enterprises with foreign
participation, affiliates and representatives of foreign legal entities are also exempted from payment of
customs duties.
The Law of the Republic of Kazakstan “On State Support of Direct Investments” provides for
granting several privileges to investors in the priority sectors of economy.
The Law “ On Subsurface and Subsurface Utilization” and the Law “On Petroleum” regulate
the performance of subsurface utilization transactions for the purposes of protection of the interests of
the Republic of Kazakstan  and its natural resources, as well as rational utilization and protection of
subsurface of the Republic of Kazakstan, creation of  conditions for equal development of all forms of
economy, strengthening of legality in the area of relations related to subsurface utilization.
Allocation of Investments
According to the data of the National Bank of the Republic of Kazakstan, in 1999,
US$1,799.3 million of direct foreign investments (DFI) were invested to Kazakstani economy, that is
more than in 1998 (US$1,233 million), and more than the annual average level of the last years.
Excluding repayment of credits and loans, which have been granted to enterprises, DFI net  inflow for
1999 comprises US$1,202.2 million. In general, for the period 1993 - 1999 gross and net DFI inflow
was correspondingly US$9,728.6 million and US$8092.6 million.
Three groups of the countries – investors can be distinguished pursuant to the volume of DFI
inflow:
- the first group - with the volume of investments of more than US$100 million;
- the second group - from US$50 million to US$100 million; and- the third group - less than US$50 million.
Table 1 (US$ million)
Groups of countries
Years I II III Total
1998 1. United States –
399.3 (32.3 per cent)2. Japan – 227.4(18.4  per cent)1. Turkey - 88. 8 (7.2
per cent)2. China - 86. 7 (7.3per cent)
3. United Kingdom -
86.5 (7.0 per cent)4. Germany - 69.3(5.62 per cent)5. Indonesia - 55 (4.46 per cent) the rest countries: 24
countries + others
Total on
Groups  for
1998626. 7 (50.8 per cent) 386.3 (31.3 per cent) 220.3 (17.9 per cent) 1,233.3 (100 per
cent)
1999 1. United states -
902.7 (50.2 per cent)
2. Netherlands -
218.5 (12.1 per cent)1. United Kingdom -
162. 5 (9 per cent)2. Italy - 126.8(7 per cent)The rest countries:
23 countries + others
Total on
Groups   for
19991,125.7
(62.6 per cent)289.3 (16.1 per cent) 303.8 (21.3 per cent) 1,799.3
(100 per cent)WT/ACC/KAZ/25
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As it is shown in the Table 1, according to the results for 1999, the United States (US$902.7
million), as previously is included into the fi rst group, and for the first time - the Netherlands
(US$218.5million), that is the eviden ce of the growth of the interest in respect of the investment
opportunities in Kazakstan from the side of Dutch companies.  The volume of the US investments was
increased as in absolute digits from US$399.3 in 1998 to US$902.7 in 1999, and with respect to othercountries - from US$32.3 per cent to 51.6 per cent. For 1999, in aggregation, the first group reports
for US$1125.7 million or 62. 6  per cent of the total DFI inflow.
Notwithstanding the changes in the composition of the first group, the United States -
US$3.7 billion, or 39.9 per cent of the total DFI in flow, take the leading place in investments to
Kazaktani economy during 1993 - 1999, then, the Republic of Korea (US$1.5 billion - 15. 9  per cent
and the United Kingdom (US$ 1.1 billion - 12.3 per cent) follow.
In industries, the biggest portion of the DFI - US$ 1523.5 million, or 84.7 per cent, invested
in 1999, was allocated in the oil ad gas complex. Considerable volumes of DFI have also been
invested to:
- non - ferrous metallurgy - US$51.2 million, or (3.3 per cent);
- food industry - US$ 47.7 million (2.6  per cent);
- consumer goods - US$53,7 million(3.0);
- energy complex - US$ 23.4 million (1.3 per cent);
- financial sector - US$42.6 million (2.4 per cent).
Table 2 (US$ million)
Inflow of Direct Foreign Investments to the Republic of Kazakstan in 1993-1999
( in industries)
Industry 1993-97  % 1998  % 1999  % Всего  %
Oil and Gas complex 2,940.0 43.9 824.5 66.9 1,523.5 84.7 4,909.9 52.8
Non- ferrous metallurgy 1,830.2 27.3 77.4 6.3 51.2 3.3 1,952.9 21.0
Food Industry 237.2 3.5 43.9 3.5 47.7 2.6 322.8 3.5
Energy complex 254.4 3.8 86.2 7.0 23.4 1.3 367.4 3.9
Financial sector 60.1 0.9 85.0 6.9 42.6 2.4 170.0 1.8
others 1,374.2 20.5 117.2 9.5 107.5 5.7 1,569.4 16.9
Totally invested 6,696.1 100.0 1,233.3 100.0 1,799.3 100.0 9,292.4 100.0
Totally repaid -1,342.6 -81.3 -212.1 -1,585.0
Total 5,353.5 1,152.0 1,587.2 7,707.5
Plans
The main objectives of the Republic in investment area for 2000 are as follows: attraction of
big volumes of DFI to the economy of the country by way of improvement of the investment climate,
improvement of the legislation, regulating investment issues, stimulation of direct investments,
invested in the priority sectors of economy.
In particular, at  the beginning of 2000, the Agency of the RK on Investments (RKIA)
adopted  normative and legal acts on standardization and  procedures for granting  privileges and
preferences. In particular, the following documents were signed:
- on 6 March 2000- the Edict of the President of the RK No. 349 “ On Approval  of 
Procedures  for Granting  Privileges and Preferences when  Entering into Contracts WT/ACC/KAZ/25
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with Investors, Implementing Investment Activity  in  the Priority Sectors of  
Economy”,  and
- the Order of the  Investment Agency of the RK of 14 April 2000 No. 01/7 “ On  
Improvement of Procedures  for Granting  Privileges and Preferences when  Entering 
into  Contracts with Investors, Implementing Investment Activity  in Priority Sectors of  Economy”, as well as the  List  of  the most important enterprises for attraction of 
direct  domestic and foreign investments for the period  till 2002, approved by  the 
Order of the Investment Agency of the Repub lic of Kazakstan  “ On Investments” of  
22 May 2000 No. 01/31.
For the purposes of increase of investment inflow to the priority sectors of economy,
reduction of investment risk and increase of the efficiency of attracted investment proceeds, the workon monitoring and control  of  investors’ contract  obligations is constantly improved.
Informational and Presentation work.
This work is carried out in accordance with the Informational Work Plan on presentation of
investment opportunities of the Republic of Kazakstan for 2000, which has been approved by  the
Resolution of the Government of the Republic of Kazakstan of 22 April 2000, No. 624
The activity of the Foreign Investment Council under the President of the Republic of
Kazakstan, as the body, which must immediately and operatively react to the issues related investors’situation and current work though the Working Groups on legislation, taxation issues and the issues,
related to the improvement of  investment image of the Republic of Kazakstan will be further speeded
up and intensified.
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