Kazakhstan Country Facts

We provide comprehensive information regarding, Culture, Work life, Taxation, Visa’s & immigration, Labour Law, recruiting in your country of choice and employment contracts.

Global Expansion Made Easy for You

Expanding into Kazakhstan generally comes with challenges, however, partnering with us and using Employer of Record (EOR) eliminates the frustrations you could encounter.

What types of Work Visas and Permits for Kazakhstan are there?

The type of documentation required to stay in Kazakhstan depends on purpose of stay and duration. There are many entry visas for short stays, up to a maximum 90 days, available to foreign visitors, but for how long depends on nationality and type of visa applied for. Most are available as single entry or multi entry visas.

Many nations have agreements with Kazakhstan which allow stays without a visa for 30 days at one time, which should be for no longer than 90 days in total within a 180-day calendar period. From January 2023, Eurasian Economic Union (EAEU) citizens can only stay for 90 days within 180 calendar days. To stay longer requires applying for a temporary residence permit. This also includes visa-free nationals who are no longer able to extend their visas by leaving the country for one day – typically known as ‘visa-runs’.

Check out the link below, which includes further information and which countries are no longer required to supply a formal letter for short stays in particular visa categories:

Visas

Travellers from countries who are not visas-free can apply for some categories through the online portal (e-visa) or through diplomatic missions abroad e.g., an embassy, or ‘on arrival’ if there is no embassy in country of residence. Not all of the following can be done on arrival or through the portals.

The categories of visa are:

  • Business B1, B2, B3 visas cover conferences and exhibitions etc. scientific, cultural, and sporting events; installation and maintenance of machinery; to contract, train and for consulting purposes and investigate new business and investment. Stays for either 30 or 60 days on single entry. Multi entry visas allow visits of 30 or 60 days over 180 days or 12month period depending on visa chosen
  • Work C3 visa for paid employment in legal entities and for employees’ families. Single entry validity from 90 days to one year in some circumstances. For multi-entry up to three years. Employees of the Astana International Financial Centre up to five years
  • Work C4 visa for self-employed foreigners but working in a desirable in-demand profession. Single entry up to 90 days. Multi entry up to three years
  • Work C6 visa for foreign national seasonal workers. Single entry – 90 days; multi entry – one year
  • Family C2 visa for family reunification
  • Investor A5 for heads, directors or company officials conducting investment activities, and can include family members. Single entry for 90 days and multi-entry for three years
  • Tourist B12 visa 30 days stay for either single or multi-entry
  • Private B10 visa for personal reasons e.g., a funeral, or former Kazakhstan citizens; a 30-day’ stay for either single or multi-entry
  • Immigrant working visa for Business C5 for eligible entrepreneurs investing in or opening a company. Single entry visa for 90 days. Multiple for two to three years
  • Obtaining Residence Permit B8 visa if eligible applicants are travelling to the country to apply for Permanent Residence. Single and multiple entry visas are for 90 days

Other visas include Transit B13, for Crew members B5, Humanitarian C8, Study C9, Medical Treatment C12

It was announced in September 2022 that Kazakhstan will introduce new visas for highly desirable skills, plus educational and scientific visas through the Ministry of Labour and Social Protection. This is to encourage foreign professionals and specialists into the country to augment the knowledge and skill set of the local workforce. The visas will include a residence permit.  Foreign investors will also have the option of a 10-year residence permit with an investment of US$300,000.

Applying for the Work Visas and Work Permits for Kazakhstan

Companies wanting to expand into Kazakhstan and onboard employees, need the experts to help with making the right choices. The options are varied and the processes complex. Immigration documentation and eligibility regulations are changing routinely as the government tries to open up the economy to business as well as specialist employees. Bradford Jacobs as a Professional Employer Organisation have the expertise to navigate the process using their local knowledge and global experience. So, from your first step take the shortest route and contact us now.

Visas and permits required

  • A Work Permit is required by most foreigners wanting to work in Kazakhstan (although there are exceptions) and the work permit gives permission. It is generally applied for by the employer, who requires a work permit quota to hire foreigners. They must not employ more foreign workers than is allowed by the government and stay within the ratio guidelines which depends on the category of employee they require. There are four categories
  1. Company directors (CEOs) or their deputies.
  2. Head of departments, supervisors, or managers.
  3. Highly qualified professionals or specialists.
  4. Qualified skilled personnel.

Plus, the Intra-company Transfer. ICT-based work permits as of 2022 are exempt from state duties but introducing charges was being considered. They are also NOT subject to the foreign labour work permit quota.

  • Work Visa is the permission to enter the country and stay for employment. This is usually applied for from a diplomatic mission abroad by the employee before entering Kazakhstan. If there is no embassy or consulate, an ‘on arrival’ visa can be organised for the C3 Visa
  • Temporary Residence Permit is issued by the government for employment, study, medical treatment, and business as well to missionaries and for family reunions, when people are in the country and need to stay longer than 30 days

Overview of Taxes in Kazakhstan

Personal Income Tax: As of January 1 2023, the flat rate is 10%, with 20% applying under some circumstances.

Value Added Tax (VAT): 12% applies to goods, services and imports. Exports attract 0%, while such as medicines, financial and leasing services are among exempt categories.

Corporate Income Tax (CIT): 20% applies to profits minus allowable deductions. Resident companies are taxed on worldwide profits. Where a subsidiary becomes a Permanent Establishment (PE) of a parent company it is liable for branch profit tax of 15% of its net post-tax income, effectively creating a CIT rate of 35%. Qualifying companies in the agricultural sector are liable for 6% CIT.

Mineral Extraction Tax (MET): Rates vary between 5% and 18% for crude oil and gas condensate depending on annual production volumes. The MET rate for natural gas is 10%.

Withholding Tax (WHT): Non-residents’ Kazakh-sourced income is subject to WHT at 20% on services such as management, financial, consulting, engineering. Since January 2023, dividends paid to non-residents are generally taxed at 10% if various conditions apply. Other WHT rates apply from 5%-20% depending on the category and agreements with other countries.

Capital Gains Tax (CGT): A rate of 10% applies, with exemptions in some circumstances, and is generally added to personal income for taxation purposes.

Customs and Excise Duties: The Kazakh Customs Code and the Eurasian Economic Union (EEU) Customs Code decree that tariffs apply to goods imported from other countries at rates up to 40%. Goods imported from EEU nations are generally exempt. Excise taxes apply at various rates to such as crude oil, petrol and gasoline (excluding aviation fuel), alcohol and tobacco.

Property Tax: Applies at 1.5% on the annual value of immovable buildings.

Dividend Income: Taxed at 5%.

Personal income tax

A flat rate of 10% applies to taxable income, with 20% in certain circumstances. This applies to the worldwide income of Kazakh residents, with non-residents taxed only on locally-sourced income.

Individual Tax Rules in Kazakhstan

  • The tax assessment period for individual income not taxed at source is the calendar year
  • The tax assessment period for individual income taxed at source is a calendar month
  • Due taxes must be remitted to the authorities before the 25th of the month following payment
  • Individuals self-assessing their liability must pay due taxes within 10 days of filing their return, which is due by April 10
  • Taxable income for residents comprises all remuneration, plus cash in kind such as accommodation, personal use of company cars, reimbursed expenses above allowable limits
  • Joint returns are not allowed for spouses
  • Tax residents are those who permanently reside in the country, or those who have their centre of interests there even if they don’t permanently reside in Kazakhstan, and must file returns on worldwide income. Non-residents are liable for tax on income earned in Kazakhstan

Employers’ and Employees’ Social Security and Statutory Contributions in Kazakhstan

As of January 2023. Social Tax applies to local and expat employees on gross income and cash equivalents of fringe benefits. Foreign nationals without a permanent residence permit do not contribute to the other social insurance categories, OPC and OMIC.

Expanding your company’s operations across the globe represents a major move and often the first step is to open a subsidiary in the new territory. If the Republic of Kazakhstan is the targeted economy, opening a subsidiary is essential in order to legally hire staff and put them on your payroll.

Kazakhstan – the world’s largest landlocked nation and the size of Western Europe – is Central Asia’s strongest economy and has developed into an upper middle-income economy since becoming independent from the Soviet Union in 1991. Kazakhstan is ‘resource rich’ and its economic strength is built on reserves of oil, natural gas, gold, manganese and other minerals. Additionally, it holds the world’s second-largest reserves of uranium, behind Australia, and is the largest producer and exporter of uranium globally.

Incoming companies typically choose a limited liability partnership (LLP) as the business structure for a subsidiary, although in some sectors a subsidiary must be established as a joint stock company. However, more than 90% of all entities and companies are LLPs, operating under the Civil Code and complying with the Private Entrepreneurship Law and the Law on Partnerships with Limited or Additional Liabilities.

Having made the move, incoming businesses face issues involving hiring and onboarding employees, running payroll and complying with Kazakhstan’s tax laws and employment legislation. Coping with this long list is time consuming and risks diverting the focus away from building your business in the new territory.

There is a better choice … you could take a faster route into the Kazakh economy without opening a subsidiary. Bradford Jacobs has the expertise to remove these potential obstacles. Our Professional Employer Organisation (PEO) specialists and Employer of Record (EOR) consultants will point you in the right direction – from recruiting the staff to managing every legal aspect of compliance. Instead of waiting weeks or months, you can be up-and-running in days … and your staff are always under your day-to-day control.

How to set up a Kazakhstan Subsidiary

These apply to a foreign parent company opening a limited liability partnership. Incorporation procedures include:

  • The Company Charter, in effect Articles of Association, are submitted to the Public Service Centre
  • There is a minimum charter share capital requirement of KZT 173,100 (€362, US$385) for medium and large businesses, but this can vary according to the Monthly Calculated Index (MCI)
  • Companies classified as small businesses register via the ‘Electronic Government’ website after obtaining an electronic digital signature (EDS) and an individual identification number (IIN) from the National Certification Authority (NCA). The business then completes an electronic ‘notice about commencing business activity’ via the government site
  • A nominal KTZ 100 share capital applies for small companies employing fewer than 100 over a calendar year
  • Legal documents must be created in Kazakh or Russian and notarised, with any translations into other languages also notarised
  • Where the parent company is foreign, it must provide an extract from the home nation’s trade register confirming it is a legal entity, notarised and translated into Kazakh and Russian
  • Foreigners in the company must provide their passport, and other ID documents must be with a notarised translation
  • The Ministry of Justice issues the Certificate of State Registration of a Legal Entity once registration is completed, and issues the business identification number (BIN)

What are the Benefits of setting up a Subsidiary in Kazakhstan?

The subsidiary operates in Kazakhstan as a separate and independent legal entity from the parent company, which is generally protected from responsibility for debts or liabilities, including legal issues. The same protection applies to shareholders and members who are generally liable only to the extent of their contribution to the subsidiary’s capital.

Through its subsidiary the parent company has the chance to test the market by exploring potential opportunities outside its usual orbit and entering into agreements with other registered companies in Kazakhstan and other Central Asian nations. Also, the permanency of a subsidiary has greater credibility with clients and suppliers, compared with branches.

However, taking the step of setting up a subsidiary is still a long way from finding the most efficient and financially sensible route to setting up operations in Kazakhstan.

Consider this option … Bradford Jacobs will find the brightest talent and perfect fit for your company in Kazakhstan through our in-country Professional Employer Organisation (PEO) specialists. Employees can be working at their desk in days … not weeks, or even longer. All concerns regarding employment laws and compliance will be removed by our Employer of Record (EOR) teams. We handle the hassle … while you have day-to-day operational control over your workforce.

Subsidiary Regulations in Kazakhstan

As applying to a limited liability partnership (LLP), which incorporates through the Public Service Centre in accordance with the Civil Code, and complies with the Private Entrepreneurship Law and the Law on Partnerships with Limited or Additional Liabilities.

Registration and Documentation:

  • Submit the Company Charter, in effect the Articles of Association, to the Public Service Centre
  • Designated small businesses register by completing an electronic ‘commencing business activity notice’ via the ‘Electronic Government’ website after obtaining an electronic digital signature (EDS) and an individual identification number (IIN) for each participant. These are obtained from the National Certification Authority (NCA)
  • All legal documents must be notarised and created either in Kazakh or Russian. Any translations must also be notarised before being submitted for incorporation
  • Subsidiaries established by foreign parent companies must provide an extract from the home country’s trade register confirming it is a legal entity. Verification documents must be notarised in Kazakh and Russian
  • Provide the tax ID of the company’s CEO

Accounts and Taxation:

  • The corporate tax year is the calendar year
  • The subsidiary must register with the State Revenue Committee of the Ministry of Finance
  • Annual Corporate Income Tax (CIT) declarations are due by March 31 of the following year, but 30-day extensions can be applied for
  • During the tax year, most returns must be by the 15th calendar day of the second month after the reporting period; companies can apply for 15-day extensions
  • Where applicable, advance CIT payments are due by the 25th day of the month
  • There is no requirement to publish accounts or audits
  • The subsidiary will be liable for corporation tax, generally at 20% on its taxable profits, from its activities in Kazakhstan
  • Where a subsidiary becomes a Permanent Establishment (PE) of a parent company it is liable for branch profit tax of 15% of its net post-tax income, effectively creating a CIT rate of 35%
  • The tax authorities have the right to carry out selective and random audits

https://taxsummaries.pwc.com/kazakhstan/corporate/tax-administration

Management:

  • Shareholders have the right to participate in the company’s affairs as allowed by company law and the subsidiary’s Charter or Articles of Association
  • A supervisory board, board of directors or a single director oversees the LLP’s day-to-day governance of operations
  • There can be an unlimited number of shareholders and the subsidiary can be established by one or several individuals and/or other legal entities

The Republic of Kazakhstan’s vast size and the huge potential of its economy pose challenges and rewards for foreign companies entering the market. Kazakhstan is the size of Western Europe, but with a population of just 19 million compared with Western Europe’s 200 million. The Central Asian nation has one of the lowest population densities in the world at just seven people per square kilometre and 18 per square mile.

Kazakhstan is the world’s largest landlocked nation and has land borders with Turkmenistan, Uzbekistan, Kyrgyzstan, China and Russia. Kazakhstan has a western coastline on the Caspian Sea but is still considered landlocked, as the Caspian itself is landlocked and, in geographic terms, a lake.

This sparsely populated and largely barren landmass, holds the key to Kazakhstan’s economic wealth with significant reserves of oil, natural gas and gold. In addition to other natural resources of titanium, zinc, coal, copper and manganese, Kazakhstan is also the world’s largest producer and exporter of uranium.

Kazakhstan’s highest point is the mountain Khan Tengri at 23,000 feet in the southern Tian Shan range, which provides the run-off for most of the freshwater rivers and lakes, including the Balkhash and Almaty lakes and the Aral Sea, which is also landlocked. The lowest area is the Karagiye depression in the west near the Caspian at around 400 feet below sea level. Aside from the mountain ranges, close to 80% of the country is desert or semi-desert, with the balance forest or prairie.

Kazakhstan’s urban population is slowly but steadily becoming a larger percentage of the population as a whole, and was estimated at close to 11 million in 2021, with over four million of those living in Almaty, Astana and Shymkent.

Starting your business in Kazakhstan

Foreign companies intending to start business operations in Kazakhstan must establish a subsidiary before they can hire staff and operate their payroll, in order to deal with tax and social insurance regulations and to comply with employment legislation.

The first decision is to select the company type that is the best option for advancing international expansion into Kazakhstan. Other considerations include: where to locate to find staff with the right skills. Do different regions in Kazakhstan offer incentives for foreign investors? Then … how long will it actually take to incorporate a subsidiary?

The main types of business structures in Kazakhstan are branches and representative offices; a limited liability partnership (LLP); a joint stock company (JSC) and sole traders. Subsidiaries are generally set up as LLPs or JSCs, with the preference towards the limited liability partnerships. In some sectors it is mandatory to set up a JSC, such as in banking. LLPs comprise over 90% of all entities and companies in the country, operating under the Civil Code and the Private Entrepreneurship Law and the Law on Partnerships with Limited or Additional Liabilities. The LLP generally provides protection from liability for the parent company. The subsidiary’s shareholders/members are liable only to the equivalent of their share contribution to the company’s charter (share) capital.

Procedures, documents and requirements for setting up a limited liability partnership include:

  • Create the Company Charter (Articles of Association) and submit to the Public Service Centre
  • There is a minimum charter share capital requirement of KZT 173,100 (€362, US$385) for medium and large businesses, but this can vary according to the Monthly Calculated Index (MCI)
  • A nominal KTZ 100 applies for small companies employing fewer than 100 over a calendar year
  • Such small businesses register by completing an electronic ‘notice about commencing business activity’ via the ‘Electronic Government’ website. This is after obtaining an electronic digital signature (EDS) and an individual identification number (IIN) for each participant, obtained from the National Certification Authority (NCA)
  • All legal documents must be notarised and created either in Kazakh or Russian. Any translations must also be notarised before being submitted for incorporation
  • Where the parent company is foreign, it must provide an extract from the home nation’s trade register confirming it is a legal entity, notarised and translated into Kazakh and Russian
  • All individual foreign participants must provide a passport or suitable ID document, notarised and translated into Kazakh or Russian
  • The subsidiary becomes a legal entity once registration is implemented by the Ministry of Justice, which issues the Certificate of State Registration of a Legal Entity. This contains full details of the business and its Business Identification Number (BIN)
  • The bank account can be opened to deposit share capital
  • The LLP must have a supervisory board or directors, or collective authority, or single director to oversee its daily operations
  • There can be an unlimited number of shareholders and the subsidiary can be established by one or several individuals and/or other legal entities
  • Accounts and audits do not have to be published

Expanding your business into Kazakhstan

The Republic of Kazakhstan sits on the historic trade routes of the ‘Silk Roads’ from the second and third centuries BCE, making it one of the first regions in Central Asia to experience commercial and cultural contact with civilisations and societies from thousands of miles away. Today, the core of Kazakhstan’s international trade is based on impressive reserves of natural resources that include oil, natural gas, gold, iron ore and zinc, in addition to Kazakhstan being the world’s largest producer and exporter of uranium.

Companies expanding their business into Central Asia’s most powerful economy can tap into this potential, but must also be prepared to face the logistical issues of operating in a country that is the size of Western Europe. Kazakhstan has made huge strides since breaking from the former Soviet Union in 1991, but needs foreign investment to support a programme of upgrading the industrial and manufacturing processes that revolve around mining its natural resources for export.

There is another element to attract a foreign business expanding into Kazakhstan. The rapidly-expanding Micro and Small, Medium Enterprises sector accounted for 31.6% of GDP in 2021, while a 20% increase in the year took the number of enterprises to 1.7 million businesses providing work for 38% of the labour force. In 2022, the government relaxed regulatory processes in the key sectors comprising 60% of MSMEs in Kazakhstan – transport and logistics, wholesale and retail trade, food and agriculture, accommodation and hospitality.

Advantages and Challenges when entering the Kazakhstan Market

Some Advantages:

  • International trade is based on significant reserves of hydrocarbons and minerals including gold, uranium, zinc, lithium, manganese and phosphates
  • Substantial base of Foreign Direct Investment, aided by floating exchange rate
  • Strategically placed between Europe and China
  • Sustained economic growth since 2000, nine years after breaking from the former Soviet Union, is creating an upper middle-income economy

Some Challenges:

  • Uneven growth in incomes, leading to social inequalities
  • Economy based on export of minerals and hydrocarbons is susceptible to global demand and prices
  • Talent gap in key sectors through lack of investment in human capital
  • High state presence in business, poor governance, perception of corruption and interference
  • Comparatively small consumer market and low density of population
  • Landlocked position in Central Asia makes Kazakhstan remote from global markets

The Labour Code includes provisions for employment contracts, which must be in written form.

Different types of Employment Contracts in Kazakhstan

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.

Laws that regulate the Labour Relationship in Kazakhstan

The Labour Code is the main factor governing employment legislation in Kazakhstan. Other legislation relevant to employment, which can overlap or be contradictory, includes:

  • The Constitution of Kazakhstan
  • The Law on Trade Unions
  • The Law on the Occupations of the Population
  • The Law on the State Service
  • The Law on Collective Labour Disputes and Strikes
  • The Law on Employment of the Population

General Requirements for Contracts

Written contracts are mandatory.  Employment agreements can be registered digitally through the Single Accounting System for Employment Agreements (SASEA), via the website. Employers must register with the Electronic Labour Exchange Portal via the same website. Agreements have to be in Kazakh or Russian.

The written contract should include full names and addresses of both parties; verification of employee’s ID; job description and workplace location; the contract type and start date, with serial number; working hours and breaks; rights, obligations and liabilities of both parties; procedures for amending or terminating the contract.

Kazakhstan’s Labour Code is the main legislation covering the employment relationship between employers and employees, comprising various specific Articles. In general, it applies to all employees, Kazakhs, residents and foreigners and lays down minimum terms for entitlements and benefits. Collective Bargaining Agreements (CBAs) and individual employment contracts can improve these minimums, but not reduce them.

What are the Compensation Laws?

National Minimum Wage (NMW): The national monthly minimum wage as of January 1 2023 is KZT 70,000, equating approximately to €148 or US$158. The minimum wage is assessed according to normal working conditions, which under Article 77 of the Labour Code should not exceed 40 hours a week.

Working Hours and Breaks: Those aged over 18 years should not work more than 40 hours a week, with 16 to 18 year-olds restricted to 36 hours and 14 to 16 year-olds working no more than 24 hours weekly, as set by Article 77 of the  Labour Code. The maximum hours for those engaged in hazardous or potentially harmful work is 36 hours a week. Daily hours in a regular five-day week Monday to Friday, or an extended working week of Monday to Saturday, should not exceed eight. Under 18s or pregnant employees are barred from night work. The employee should receive at least a 30-minute unpaid break from work.

Overtime: This should not exceed two hours a day for regular work, or one hour for hazardous work. Overall, overtime should not exceed 12 hours a month or 120 a year. Pregnant and disabled employees and under-18s cannot work overtime. Minimum overtime pay is 50% above the normal hourly rate, or can be paid as a lump sum if the employee is not paid monthly. Compensatory time off is permitted.

Sick Leave and Benefits: A registered doctor must confirm the need for sick leave. Employers pay sick leave for a maximum of two months, based on a formula of the employee’s daily income and the number of days of sick leave.

Paid Vacations: Minimum paid vacation is 24 calendar days, unless more is provided by contract or CBAs. Those working in hazardous or potentially harmful work receive an extra six days, as do disabled persons of the first or second category of disablement, as set by the Labour Code.

Public Holidays: Kazakhstan has a number of paid statutory pubic holidays. The dates for the Islamic holidays of Eid-al-Fitr and Eid-al-Adha vary each year.

Probation Periods: Included in the employment contract and generally for three months, although can be extended to six months for executive and managerial personnel, and their deputies.

Notice Periods: A minimum of one month applies if an employer is downsizing or going out of business, or 15 days where reducing production. Termination without notice is allowed in situations specified by the Code, including failure to perform duties due to a certified medical condition; failure to pass health and safety tests where relevant to the work; intoxication through drugs or alcohol, among others.

Termination, Severance and Redundancies: The Labour Code provides exhaustive examples of where an employer can have just cause for dismissing employees. There should be a minimum of one month’s notice under the Code, unless contracts or CBAs set longer periods. Employees have the right to cancel their contract with one month’s notice.  Severance pay is a minimum one month’s salary, or can be two months if the redundancy is due to the company downsizing. In the case of collective redundancies the relevant labour authority must be informed of timescale, numbers and reasons for the dismissals at least one month ahead of the planned redundancies.

Maternity / Paternity Leave: Maternity leave is 70 days before the due date and 56 days after birth, or 70 days before and after where there is a difficult birth or two or more children are born. Employees in areas that have been exposed to nuclear testing and radiation are entitled to 91 days pre-natal and 79 post-natal, or 93 days before and after in the case of two or more births or a difficult pregnancy. Optional leave without pay can be granted for three years. Benefit is funded through the social security system. Mothers also receive a one-off birth grant. There is no statutory paternity leave.

13th Month Salary and Bonuses: There is no statutory requirement for a 13th month salary. Any bonuses are discretionary.

Pensions: Kazakhstan has a multi-level pension system. The basic first level is funded by the state budget. The second level is funded from the state budget and mandatory contributions from the employment sector. The third level is funded from voluntary pension contributions. Where individuals have paid sufficient funds under level two into the Unified Accumulative Pension Fund, they can access the state pension at 63 years for men and 60 for women, although it is planned their retirement age will be increased by six months every year until 2027.

Health Insurance:  In 2020, Kazakhstan implemented a mandatory health insurance system when the Social Health Insurance Fund began purchasing publicly-funded health services with the aim of making the health service efficient and accessible for all Kazakhstan residents. The state-guaranteed system is supplemented by compulsory contributions from employers’ payroll. The sector remains underfunded and quality of care is uneven, with shortages affecting medicines and treatment. This leads most expats to pay for private healthcare, but the quality here can also be difficult to predict, particularly in rural areas.

Foreign companies expanding into new territories overseas usually need to find and recruit staff there. Inevitably this brings problems surrounding bureaucracy, red tape and possible restrictions on who you are allowed recruit. Incoming employers to Kazakhstan may have to comply with Labour Market Tests to ensure the relevant position cannot be filled by a Kazakh.

The recruitment ‘to do’ list for companies expanding into a new country is long and complex. Locating new talent will be the No. 1 requirement on this list and it is certain to raise major issues. As well as Labour Market Tests, the government sets quotas on number of expats that can be hired, depending on the company’s level of investment, and also the sectors in which they are allowed to work.

Once recruited and onboarded, employers face strictly-applied employment legislation laid down by the Labour Code that spells out their responsibilities and obligations to employees, in addition to the legal rights of their staff. Legislation also includes drawing up contracts, which is an essential part of the recruitment process.

These demands add up to a considerable workload. There is a better option … a straightforward, fast and cost-effective alternative that will have your new staff operational in a matter of days, without having to unravel the red tape.

Bradford Jacobs has the essential expertise you need to provide the smoothest route for your journey into the Kazakhstan economy. Our Professional Employer Organisation (PEO) networks have global reach to find the right staff. Then, through our Employer of Record (EOR) platforms we will have your new employees at their desks and screens in the shortest time. This guide highlights the essentials of recruitment and onboarding in Kazakhstan. You can trust Bradford Jacobs to put the brightest talent in position for your company – right now!

Recruiting in Kazakhstan

Foreign companies recruiting in Kazakhstan for their international expansion will be entering a huge country, but one with a sparse population of 19 million and an estimated workforce of roughly half that number concentrated in the major cities.

While a possible alternative is to import non-Kazakh staff into the country, there are other complications. In addition to all expats requiring work permits – which are subject to change at extremely short notice – other restrictions apply, as the government imposes quotas on the numbers of expats that can work in the country.

Incoming companies may also find it hard to recruit staff with the key skills they need to fit their business model. The oil, natural gas and mining sectors in particular lack engineers, scientists and technicians. Experienced management can also be hard to find, while the government’s programme of boosting degree courses builds towards bridging the talent gap.

These potential barriers highlight where the global experience and local know-how of Bradford Jacobs is essential in Kazakhstan. Our Professional Employer Organisation (PEO) platforms will bridge the gap between the skills you need and finding the right fit for your company in this challenging employment market.

Employees’ pre-hire checks in Kazakhstan

General:  Employers are allowed to obtain information relevant to the position from the candidate or prospective employee. Obtaining checks via third parties is neither prohibited nor regulated, but the agent has to act within the law.

Specifics include:

Discrimination:  There is no legislation prohibiting employers giving preference to employing individuals needing social or legal support, for example. In general, Kazakhstan has no anti-discrimination legislation, although the Constitution rules against discrimination on grounds of social, property or occupational status; gender, race or nationality; language or beliefs.

Criminal, Security and Credit Checks:  These cannot be taken directly from publicly available sources to be made use of without the individual’s permission.

Health Checks:  There is no legislation prohibiting health checks and they are obligatory in sectors involving heavy lifting or hazardous operations, working with food or in children’s healthcare, as covered by the Health and Healthcare System Code. Employers are legally entitled not to hire people who fail or refuse to undergo medical checks, including those to ascertain use of alcohol, drugs or other intoxicants during their contracted employment.

Education and References Checks:  Employers are permitted to ask for verification.

https://www.lexology.com/library/detail.aspx?g=6e55faef-e2b6-47e6-af78-02cd315770a9

Basic requirements when recruiting in Kazakhstan

The basis for Kazakhstan’s employment legislation is the Labour Code, which covers the rights, entitlements and benefits of employees as well as the legal obligations and responsibilities of employers. The Code also covers employment contracts and stipulates that written contracts are mandatory.

Employment agreements can be registered digitally through the Single Accounting System for Employment Agreements (SASEA), via the website https://www.enbek.kz. To take this option, employers must register with the Electronic Labour Exchange Portal via the same website. Agreements have to be in Kazakh or Russian. Amendments or termination of contracts must be registered with SASEA.

The basic requirements of a written contract include the following:

  • Full names and addresses of both parties
  • Verification of employee’s ID
  • Job description and workplace location
  • The type of contract and start date, with serial number
  • Working hours and breaks
  • Acknowledgement if work is heavy or hazardous, and any resulting privileges or benefits
  • Rights, obligations and liabilities of both parties
  • Procedure for amending or terminating the contract

The Basics of Kazakh Culture

The Kazakhs’ cultural and historical roots were as pastoral nomads, roaming the land with portable dome-shaped tents called yurts to find pastures for horses, sheep, goats and cattle. Kazakhs, a Turkic-speaking people, arrived in the region in the 15th century and merged with the earlier-arriving Mongols.

Today, their religion is predominantly Sunni Muslim and celebrating Islamic New Year, ‘Nauryz’, is one of the major festivals throughout Central Asia, when villages boast spectacularly-decorated yurts, the locals eat specially-created cuisine and individuals generously forgive each other’s debts and offences. This fits with an outlook which emphasises kindness, tolerance and a love of life.

Kazakhstan is rich in traditions, with many aspects of heritage being ‘rediscovered’ by their people after the break-up of the Soviet Union brought independence in 1991. National sports are usually played out on horseback, giving male and female Kazakhs the chance to display their breath-taking riding skills. Lavishly-adorned handicrafts, music and literature are key elements of festivals, which often feature poetry competitions.

Kazakhstan Work Culture

Hierarchy: Decisions come down from the top and the business environment still tends to be dominated by men. Respect for age and experience throughout society is reflected in the business setting.

Introductions/Greetings:  First names and family names are used. Handshakes are exchanged between men, although a man should always wait for women on the other team to extend their hand first. Maintain eye contact during introductions.

Language:  Russian is the usual business language, although English is used in multinationals.

Gift Giving: Giving and receiving small introductory gifts – avoid alcohol – is quite normal, and they are likely to be opened immediately.

Business Cards:  These are always exchanged and should make status and position clear. Use both hands to exchange. One side should be in English and one in the ‘Russian’ Cyrillic script, although the declining numbers of ethnic Russians in Kazakhstan has led the government to revisit replacing Cyrillic characters with the Latin alphabet.

Dress Code: Smart and conservative for men; smart and often very fashionable for women in the business environment.

Punctuality: Attitudes can be fairly relaxed towards being on time for meetings, but visitors should certainly create the right impression by being punctual.

Negotiations and Meetings:  Begin by making time to establish relationships and get to know your opposite number with some ‘small talk’. However, be ready for a hard edge to the negotiations as Kazakhs are tough negotiators and raised voices are not uncommon.

Out of Hours:  After a successful conclusion to the deal expect an evening meal and socialising, either in a restaurant or a Kazakh home … and be ready to make and receive toasts, which Kazaks love.

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