Employing in
Kazakhstan

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Expanding into
Kazakhstan

Global expansion is a step to make for any business, regardless of what you wish to achieve. The opportunities that can come with an expansion can be both incredibly exciting as well as intimidating and confusing, especially when you consider all the registration procedures that need to be done and the documentation required.

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The Republic of Kazakhstan is the largest landlocked country in the world, larger than all of Western Europe, predominantly in Central Asia with a small area in Eastern Europe. Kazakhstan’s estimated nominal Gross Domestic Product of 224 billion US dollars in 2022, made it the strongest economy in Central Asia and on the fringe of the world’s top 50.

Kazakhstan has significant and diverse reserves of natural resources, led by oil and natural gas with more reserves still being discovered. Kazakhstan is the world’s largest producer of uranium, with 33% of global output in 2021, and has the second largest deposits behind Australia. In 2020, Kazakhstan was the world’s largest exporter of radioactive chemicals. In global production, Kazakhstan ranked third for titanium, seventh for zinc and eleventh for gold in 2021 and also has reserves of coal, iron ore, copper and manganese.

Each new markets bring new challenges, and these can be worked through more efficiently and cost-effectively with the support of a Professional Employer Organisation (PEO) such as Bradford Jacobs, especially through our Employer of Record (EOR) framework.

This can be best utilised when businesses are just beginning their expansion process and require more information before committing to incorporating an entity and fully establishing themselves in that market.

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Country EOR Guide - Bradford Jacobs

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Learn all about expanding into Kazakhstan and see what we can do to make your expansion easier.

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Download our Guide to Kazakhstan

Learn all about expanding into Kazakhstan and see what we can do to make your expansion easier.

Country EOR Guide - Bradford Jacobs
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Hiring Staff
in Kazakhstan

The Republic of Kazakhstan is a huge country, with a landmass equating to the size of Western Europe, and in the context of Central Asia it has an economy to match. Based on significant and varied deposits of natural resources, the economy is the most powerful in the region, even though the former Soviet republic is only on the fringe of the world’s top 50. The World Bank gave Kazakhstan’s Gross Domestic Product at 197.1 billion US dollars in 2021 with an estimate of 224 billion US dollars for 2022.

Oil, natural gas, gold, titanium, zinc, coal, iron ore, copper and manganese are all on the export list. Kazakhstan also holds the world’s second-largest reserves of uranium and is the No.1 uranium producer, accounting for 33% of global output. Overall, Kazakhstan is the world’s leading exporter of radioactive metals.

These commodities are all subject to global demand and in 2022 the economy was affected by the conflict between Ukraine and Russia … one of Kazakhstan’s main trading partners. The Kazakh government acknowledged that these challenges created disruption of production, logistics and supply chains in addition to increasing inflation that particularly affected food prices. Nevertheless, the government claimed a 2.7% increase in GDP and 34% increase in foreign trade to 111 billion US dollars during 2022 and a 45% increase in foreign trade. The World Bank, however, assessed that the economy would have decelerated by 3% in 2022.

The government introduced a programme to ease business regulatory procedures as part of the drive to attract more Foreign Direct Investment (FDI). This is in line with Kazakhstan’s long-term strategic drive towards diversification, upgrading its manufacturing and industrial sector and finding an integrated high-tech role in the global economy to be reflected in its growing services sector.

The Foreign Ministry and the Ministry of National Economy, jointly responsible for attracting FDI, stated that the first nine months of 2022 saw a 17.8% increase to US$22.1 billion, compared with US$18.7 in the same period of 2021.

Another of Kazakhstan’s natural resources is its huge expanse of steppes, rolling plains and cultivated lowlands to support the agriculture sector, which is important economically and socially. Kazakhstan is Central Asia’s largest producer of grain and its only significant exporter to many countries in the region. Around 45% of Kazaks live in the sparsely-populated rural regions and around 30% depend on the agricultural sector for their income.

Kazakhstan’s position as the region’s strongest economy is underlined by a number of international memberships. These include: the United Nations, the Organisation for Security and Cooperation in Europe, the North Atlantic Cooperation Council, the Commonwealth of Independent States, the World Trade Organisation and the Eurasian Economic Union.

Country:
The Republic of Kazakhstan
Local Currency:
Tenge
Time Zone:
GMT+6
Country Dial Code:
+7
Tax Year:
January 1 – December 31
VAT:
12%
National Minimum Wage:
70,000 KZT (€148, US$158)
Taxpayer Identification Numbers:
12-digit Individual Identification Number, first six of which are date of birth in yyyy-mm-dd format. There is a 12-digit Business Identification Number for entities.
Main trading partners:
Russia, China, Germany, US, Italy, Netherlands, Turkey, India, Brunei, South Korea, Poland and France.

Hiring Staff
in Kazakhstan

The Republic of Kazakhstan is a huge country, with a landmass equating to the size of Western Europe, and in the context of Central Asia it has an economy to match. Based on significant and varied deposits of natural resources, the economy is the most powerful in the region, even though the former Soviet republic is only on the fringe of the world’s top 50. The World Bank gave Kazakhstan’s Gross Domestic Product at 197.1 billion US dollars in 2021 with an estimate of 224 billion US dollars for 2022.

Oil, natural gas, gold, titanium, zinc, coal, iron ore, copper and manganese are all on the export list. Kazakhstan also holds the world’s second-largest reserves of uranium and is the No.1 uranium producer, accounting for 33% of global output. Overall, Kazakhstan is the world’s leading exporter of radioactive metals.

These commodities are all subject to global demand and in 2022 the economy was affected by the conflict between Ukraine and Russia … one of Kazakhstan’s main trading partners. The Kazakh government acknowledged that these challenges created disruption of production, logistics and supply chains in addition to increasing inflation that particularly affected food prices. Nevertheless, the government claimed a 2.7% increase in GDP and 34% increase in foreign trade to 111 billion US dollars during 2022 and a 45% increase in foreign trade. The World Bank, however, assessed that the economy would have decelerated by 3% in 2022.

The government introduced a programme to ease business regulatory procedures as part of the drive to attract more Foreign Direct Investment (FDI). This is in line with Kazakhstan’s long-term strategic drive towards diversification, upgrading its manufacturing and industrial sector and finding an integrated high-tech role in the global economy to be reflected in its growing services sector.

The Foreign Ministry and the Ministry of National Economy, jointly responsible for attracting FDI, stated that the first nine months of 2022 saw a 17.8% increase to US$22.1 billion, compared with US$18.7 in the same period of 2021.

Another of Kazakhstan’s natural resources is its huge expanse of steppes, rolling plains and cultivated lowlands to support the agriculture sector, which is important economically and socially. Kazakhstan is Central Asia’s largest producer of grain and its only significant exporter to many countries in the region. Around 45% of Kazaks live in the sparsely-populated rural regions and around 30% depend on the agricultural sector for their income.

Kazakhstan’s position as the region’s strongest economy is underlined by a number of international memberships. These include: the United Nations, the Organisation for Security and Cooperation in Europe, the North Atlantic Cooperation Council, the Commonwealth of Independent States, the World Trade Organisation and the Eurasian Economic Union.

Country:
The Republic of Kazakhstan
Local Currency:
Tenge
Time Zone:
GMT+6
Country Dial Code:
+7
Tax Year:
January 1 – December 31
VAT:
12%
National Minimum Wage:
70,000 KZT (€148, US$158)
Taxpayer Identification Numbers:
12-digit Individual Identification Number, first six of which are date of birth in yyyy-mm-dd format. There is a 12-digit Business Identification Number for entities.
Main trading partners:
Russia, China, Germany, US, Italy, Netherlands, Turkey, India, Brunei, South Korea, Poland and France.

The Main Sectors of the South African Economy

The country focuses on the following key sectors, which all have a significant impact on the country’s economy:

Oil and Gas Production

Kazakhstan produces more oil than any other country in Central Asia and Eurasia, apart from Russia, and is also a major gas producer. Production of both is dominated by three international joint ventures, with the national oil and gas company KazMunayGas (KMG) responsible for licences and tenders.

Despite a global slowdown, increased government investment stimulated production of oil, for which Kazakhstan ranked 18th out of 127 nations in 2022. Economic opportunities for international companies centre on offshore drilling, an area where local companies have limited experience and expertise.

Kazakhstan’s vast land area contains significant and diverse reserves of mineral resources to support its mining industry. These include uranium (world’s largest producer); titanium (third largest): zinc (seventh); lead (eighth); gold (11th).

Around 230 enterprises are involved in mining, producing and processing operations, which also include coal, iron, steel, copper, lead, manganese and aluminium. In 2021, mining accounted for 17% of GDP, with hard minerals and metals totalling 16% of export value. Mining attracted US$10.1 million of FDI in 2022, 11.7% of total foreign investment.

Kazakhstan’s Foreign Ministry and the Ministry of National Economy recorded that the manufacturing sector attracted the greatest percentage of Foreign Direct Investment in 2022 at US$4.9 billion and 36.9% of the total FDI for the year. The sector’s logistics and supply chains have been adversely affected by the Russia-Ukraine conflict. With around 40% of imports coming through Russia, manufacturers waited longer for supplies or were forced to find alternative options.

Leading components in the manufacturing sector are food and beverages, chemicals, textiles, industrial machinery and equipment, healthcare products, computer equipment and peripherals, construction materials, consumer electronics and tobacco products. Manufacturing focuses on exports rather than producing for the domestic consumer market, which is small.

The sector is growing but hampered in the wider perspective due to the limited size of the consumer market, which is concentrated in comparatively few urban areas widely spread across the huge country. Following the restrictive Soviet era, small businesses entered the sector in such areas as repairs, maintenance and construction, financial and legal services.

The sector grew to include transport and warehousing; professional, business and personal services; education, healthcare, hospitality and real estate. The services sector performed erratically in 2022, suffering from low demand, with providers passing on higher costs to clients amid reduced business confidence.

Tourism

Kazakhstan’s vast expanse as the ninth-largest country on the globe offers many tourist opportunities, from the Caspian Sea in the west to the Altai Mountains in the east, with many lakes and rivers in between. Culture, heritage, skiing, trekking and climbing are all on the tourism agenda. The sector, however, is largely under developed.

According to the World Tourism and Travel Council, in 2021 Kazakhstan was 129th on the list of most visited countries, earning under eight billion US dollars and contributing 6.2% to GDP. Visitors will find few higher quality hotels outside Astana and Almaty. To redress general shortcomings, the Ministry of Culture and Sports announced initiatives including upgrading the major resort areas in Mangistau, Shchuchinsk-Borovoye, Turkistan and Alakol.

The Ministry of Economy’s Statistics Bureau estimated that two million work in the agricultural sector out of a total labour pool of 9.2 million. Around 30% of Kazakhstan is under cultivation out of a potential 75%, with 45% of the population living in rural areas.

Almost a third of the workforce derive their incomes from the sector. Kazakhstan is Central Asia’s largest producer and exporter of grain, supplying over 70 countries, and also produces barley, cotton, sunflower seeds and rice. Husbandry is also a significant component of the sector, with farmers raising sheep, cattle and producing dairy goods, leather, wool and meat.

The central bank is the National Bank of Kazakhstan (NBK), which sets monetary policy, regulates the supply and value of the national currency, the tenge, and tries to achieve a stable rate of inflation, which was increasing into 2023.

The NBK reports to the Kazakh president and is the top tier of the banking system. The second tier comprises commercial banks, a state-owned bank and more than a dozen banks in which foreigners have a 30% shareholding; most of which are subsidiaries of foreign banks. There are also a number of ‘correspondent ‘banks’, where one financial institution (the correspondent) provides banking services to another financial institution (the respondent), where they carry on business through permanent establishments in different countries.

In Kazakhstan these include American Express Bank New York, Citibank, Deutsche Bank Trust, JP Morgan Chase Bank among others. The NBK oversees these, along with insurance, the pension system, the stock market, credit organisations and debt collection agencies. In October 2022, the government introduced legislation aiming to redress non-compliance with regulatory procedures, to improve quality of financial statements and increase electronic services to attract more investment into the capital markets. The proposals are in line with the 2030 Agenda for Sustainable Development.

The Main Sectors of the South African Economy

The country focuses on the following key sectors, which all have a significant impact on the country’s economy:

Oil and Gas Production

Kazakhstan produces more oil than any other country in Central Asia and Eurasia, apart from Russia, and is also a major gas producer. Production of both is dominated by three international joint ventures, with the national oil and gas company KazMunayGas (KMG) responsible for licences and tenders.

Despite a global slowdown, increased government investment stimulated production of oil, for which Kazakhstan ranked 18th out of 127 nations in 2022. Economic opportunities for international companies centre on offshore drilling, an area where local companies have limited experience and expertise.

Kazakhstan’s vast land area contains significant and diverse reserves of mineral resources to support its mining industry. These include uranium (world’s largest producer); titanium (third largest): zinc (seventh); lead (eighth); gold (11th).

Around 230 enterprises are involved in mining, producing and processing operations, which also include coal, iron, steel, copper, lead, manganese and aluminium. In 2021, mining accounted for 17% of GDP, with hard minerals and metals totalling 16% of export value. Mining attracted US$10.1 million of FDI in 2022, 11.7% of total foreign investment.

Kazakhstan’s Foreign Ministry and the Ministry of National Economy recorded that the manufacturing sector attracted the greatest percentage of Foreign Direct Investment in 2022 at US$4.9 billion and 36.9% of the total FDI for the year. The sector’s logistics and supply chains have been adversely affected by the Russia-Ukraine conflict. With around 40% of imports coming through Russia, manufacturers waited longer for supplies or were forced to find alternative options.

Leading components in the manufacturing sector are food and beverages, chemicals, textiles, industrial machinery and equipment, healthcare products, computer equipment and peripherals, construction materials, consumer electronics and tobacco products. Manufacturing focuses on exports rather than producing for the domestic consumer market, which is small.

The sector is growing but hampered in the wider perspective due to the limited size of the consumer market, which is concentrated in comparatively few urban areas widely spread across the huge country. Following the restrictive Soviet era, small businesses entered the sector in such areas as repairs, maintenance and construction, financial and legal services.

The sector grew to include transport and warehousing; professional, business and personal services; education, healthcare, hospitality and real estate. The services sector performed erratically in 2022, suffering from low demand, with providers passing on higher costs to clients amid reduced business confidence.

Tourism

Kazakhstan’s vast expanse as the ninth-largest country on the globe offers many tourist opportunities, from the Caspian Sea in the west to the Altai Mountains in the east, with many lakes and rivers in between. Culture, heritage, skiing, trekking and climbing are all on the tourism agenda. The sector, however, is largely under developed.

According to the World Tourism and Travel Council, in 2021 Kazakhstan was 129th on the list of most visited countries, earning under eight billion US dollars and contributing 6.2% to GDP. Visitors will find few higher quality hotels outside Astana and Almaty. To redress general shortcomings, the Ministry of Culture and Sports announced initiatives including upgrading the major resort areas in Mangistau, Shchuchinsk-Borovoye, Turkistan and Alakol.

The Ministry of Economy’s Statistics Bureau estimated that two million work in the agricultural sector out of a total labour pool of 9.2 million. Around 30% of Kazakhstan is under cultivation out of a potential 75%, with 45% of the population living in rural areas.

Almost a third of the workforce derive their incomes from the sector. Kazakhstan is Central Asia’s largest producer and exporter of grain, supplying over 70 countries, and also produces barley, cotton, sunflower seeds and rice. Husbandry is also a significant component of the sector, with farmers raising sheep, cattle and producing dairy goods, leather, wool and meat.

The central bank is the National Bank of Kazakhstan (NBK), which sets monetary policy, regulates the supply and value of the national currency, the tenge, and tries to achieve a stable rate of inflation, which was increasing into 2023.

The NBK reports to the Kazakh president and is the top tier of the banking system. The second tier comprises commercial banks, a state-owned bank and more than a dozen banks in which foreigners have a 30% shareholding; most of which are subsidiaries of foreign banks. There are also a number of ‘correspondent ‘banks’, where one financial institution (the correspondent) provides banking services to another financial institution (the respondent), where they carry on business through permanent establishments in different countries.

In Kazakhstan these include American Express Bank New York, Citibank, Deutsche Bank Trust, JP Morgan Chase Bank among others. The NBK oversees these, along with insurance, the pension system, the stock market, credit organisations and debt collection agencies. In October 2022, the government introduced legislation aiming to redress non-compliance with regulatory procedures, to improve quality of financial statements and increase electronic services to attract more investment into the capital markets. The proposals are in line with the 2030 Agenda for Sustainable Development.

Commercial Laws in
South Africa

Tax and Labour Authorities

State Revenue Committee of the Ministry of Finance:  Oversees and implements payment of taxes and customs duties and mandatory payments into the tax and social security systems.

State Revenue Authorities:  These bodies operate throughout Kazakhstan, as part of the State Revenue Committee, collecting taxes, customs duties and other mandatory payments. They operate in Akmola, Pavlodar, Abay, Turkestan, Mangistau, Kyzylorda, Astana, Almaty, Shymkent, Aktobe, Zhambyl, Atyrau, Karaganda, Ulytau, Zhetysu, North Kazakhstan, West Kazakhstan, East Kazakhstan and Kostanay.

The Ministry of Labour and Social Protection:  The authority deals with employment; social assistance and social services; retirement benefits and social insurance; social protection of people with disabilities; digitalisation of the social and employment sphere; international collaboration. There are also regional divisions of the Ministry.

Open-ended, permanent employment contracts: The usual contract, lasting until retirement, resignation or termination according to the relevant regulations.

Fixed-term or temporary employment contracts:  These are generally for one year and can be extended for a period not less than one year, but only twice. This restriction does not apply to businesses classified as small enterprises, or to an employee continuing work after statutory retirement age. Fixed-term contracts can be for less than one year, if temporarily replacing a full-time employee, or within the work permit or permission-to-work period of a foreign employee. Contracts for president or CEO level personnel must be fixed-term, as established by the company’s charter or bylaws, or in the employment contract.

Probation periods:  These are generally for three months, but can be for six months for such as a CEO or chief accountant and their deputies, and must be included in the written employment contract.

Part-time or Temporary Employees: There are no statutory regulations.

Collective Bargaining Agreements (CBAs): These internal company agreements between employers and employees cover such as salaries and allowances; working hours, breaks and health and safety; training and development of skills; vacation, leave and other benefits. Agreements can also be implemented in branches and representative establishments of foreign entities.

Commercial Laws in
South Africa

Tax and Labour Authorities

State Revenue Committee of the Ministry of Finance:  Oversees and implements payment of taxes and customs duties and mandatory payments into the tax and social security systems.

State Revenue Authorities:  These bodies operate throughout Kazakhstan, as part of the State Revenue Committee, collecting taxes, customs duties and other mandatory payments. They operate in Akmola, Pavlodar, Abay, Turkestan, Mangistau, Kyzylorda, Astana, Almaty, Shymkent, Aktobe, Zhambyl, Atyrau, Karaganda, Ulytau, Zhetysu, North Kazakhstan, West Kazakhstan, East Kazakhstan and Kostanay.

The Ministry of Labour and Social Protection:  The authority deals with employment; social assistance and social services; retirement benefits and social insurance; social protection of people with disabilities; digitalisation of the social and employment sphere; international collaboration. There are also regional divisions of the Ministry.

Open-ended, permanent employment contracts: The usual contract, lasting until retirement, resignation or termination according to the relevant regulations.

Fixed-term or temporary employment contracts:  These are generally for one year and can be extended for a period not less than one year, but only twice. This restriction does not apply to businesses classified as small enterprises, or to an employee continuing work after statutory retirement age. Fixed-term contracts can be for less than one year, if temporarily replacing a full-time employee, or within the work permit or permission-to-work period of a foreign employee. Contracts for president or CEO level personnel must be fixed-term, as established by the company’s charter or bylaws, or in the employment contract.

Probation periods:  These are generally for three months, but can be for six months for such as a CEO or chief accountant and their deputies, and must be included in the written employment contract.

Part-time or Temporary Employees: There are no statutory regulations.

Collective Bargaining Agreements (CBAs): These internal company agreements between employers and employees cover such as salaries and allowances; working hours, breaks and health and safety; training and development of skills; vacation, leave and other benefits. Agreements can also be implemented in branches and representative establishments of foreign entities.

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