HomeReportsBureau of Economic and Business Affairs2019 Investment Climate Statements…Kazakhstan

# 					2019 Investment Climate Statements: Kazakhstan			

 In this section										/

													Executive Summary											

                -  Executive Summary 
                -  1. Openness To, and Restrictions Upon, Foreign Investment   
                -  2. Bilateral Investment Agreements and Taxation Treaties   
                -  3. Legal Regime   
                -  4. Industrial Policies   
                -  5. Protection of Property Rights   
                -  6. Financial Sector   
                -  7. State-Owned Enterprises   
                -  8. Responsible Business Conduct   
                -  9. Corruption   
                -  10. Political and Security Environment   
                -  11. Labor Policies and Practices   
                -  12. OPIC and Other Investment Insurance Programs   
                -  13. Foreign Direct Investment and Foreign Portfolio Investment Statistics   
                -  14. Contact for More Information   

## Executive Summary

Since its independence in 1991, Kazakhstan has made significant progress toward creating a market economy and has achieved considerable results in its efforts to attract foreign investment. As of January 1, 2019, the stock of foreign direct investment in Kazakhstan totaled USD 160.4 billion, including USD 31.2 billion from the United States.

While Kazakhstan’s vast hydrocarbon and mineral reserves remain the backbone of the economy, the government continues to make incremental progress toward its goal of diversifying the country’s economy by improving the investment climate.  Kazakhstan’s efforts to remove bureaucratic barriers – including through a “single window” program for investors – have been moderately successful, and in 2019 Kazakhstan ranked 28 out of 190 in the World Bank’s annual *Doing Business**Report*.

The government maintains an active dialogue with foreign investors, through the President’s Foreign Investors Council and the Prime Minister’s Council for Improvement of the Investment Climate.

Kazakhstan joined the World Trade Organization (WTO) in 2015 and began to lift local content requirements per its WTO accession commitments.  In June 2017 Kazakhstan joined the Organisation for Economic Co-operation and Development (OECD) Declaration on International Investment and Multinational Enterprises, and became an associated member of the OECD Investment Committee.

Despite institutional and legal reforms, concerns remain about corruption, bureaucracy, arbitrary law enforcement, and limited access to skilled workforce in certain regions.  The government’s tendency to challenge contractual rights, legislate preferences for domestic companies, and intervene in companies’ operations continues to discomfit foreign investors.  Foreign firms cite the need for better rule of law, deeper investment in human capital, improved transport and logistics infrastructure, a more open and flexible trade policy, and a more favorable work-permit regime.

In July 2018 the Government of Kazakhstan officially opened the Astana International Financial Center (AIFC), an ambitious project modelled on Dubai, which aims to offer foreign investors an alternative jurisdiction for operations, with tax holidays, flexible labor rules, Common Law-based legal system, separate court and arbitration center, and flexibility to carry out transactions in any currency.  In April 2019 the Government announced its intention to use the AIFC as a regional investment hub to boost attraction of foreign investment to Kazakhstan.

*Table 1*