Company Registration in Kazakhstan

Kazakhstan is rapidly becoming an attractive destination for domestic and international investors. Businesses can benefit from Kazakhstan's strategic location, resource richness, and business-friendly policies. World Bank Business 2019 Report places Kazakhstan in 28th position for ease of doing business.

In addition, Kazakhstan ranks 55th in the Global Competitiveness Report and 64th in the Index of Economic Freedom. A few strengths of Kazakhstan include economic stability, ease of setting up a business, robust regulatory framework, and low tax rates. In addition, Kazakhstan provides preference to companies intending to invest there.

Company registration in Kazakhstan is much simpler than in other countries in the same region. However, it's crucial to understand the nuances of setting up a business in Kazakhstan beforehand. Ensuring legal compliance for smooth business operations helps you set up your business successfully. In addition, understanding the required documentation and maintaining compliance with tax regulations simplify your process further.

Legal Entities and Business Forms in Kazakhstan

Businesses in Kazakhstan are broadly categorised into small, medium, and large enterprises. The business entity depends on the number of employees, annual turnover, and investment capital. Let's understand these entities in brief.

1. Small Businesses: These companies are mostly owned and operated by individuals. They have a small employee count with a low level of annual turnover.
2. Medium Businesses: The organisations may have an organisational body to operate the business. These businesses have a larger count of employees than small businesses with a higher annual turnover.
3. Large Businesses: These businesses have offices at multiple locations with complex organisational structures. They have the highest number of employees with the highest annual turnover.

Understanding these categories is crucial as they specify the regulatory requirements a business must comply with, as well as the tax structure and the investment assistance it can access. 

Consult a company registration consultant to check specific regulations and compliances in Kazakhstan.

For Kazakhstan company registration, apply for the business type you wish to establish. For that, different legal business forms are available. Let's have a look at those.

1. Limited Liability Partnership (LLP): About 95% of all legal entities in Kazakhstan are LLPs. An LLP is a commercial establishment with a minimum of 2 partners.
2. Joint-Stock Company (JSC): JSC is a legal entity that issues shares to raise funds for business operations. JSCs can raise an authorised capital requirement of USD 350,000.
3. Production Cooperative: Legal entities derived from the former collective farm system. These are similar to cooperative societies in most countries. The law in Kazakhstan anticipates the distribution of profits among its members.
4. Branch and Representative Offices: These aren't considered legal entities. The authorities define them as 'structural subdivisions' of a legal entity located at another location. 
5. Subsidiary: These are deemed as legal entities. A subsidiary is a company under the check of its parent company.

It's crucial to consult with a company registration consultant to understand which entity is most suitable for your business.

Regulatory acts governing the establishment and operation of the Limited liability Partnerships, its Branches and Representative

1. Limited Liability Partnership (LLP)

Regulations and Requirements

CCK

https://adilet.zan.kz/eng/docs/K940001000_

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The Law of the Republic of Kazakhstan No. 220-1 dated 22 April, 1998 (About limited and additional liability partnerships)

https://adilet.zan.kz/eng/docs/Z980000220_

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The Law of the Republic of Kazakhstan No. 2198 of April 17, 1995 « On state registration of legal entities and registration of branches and representative offices»

https://online.zakon.kz/Document/?doc_id=1003592&pos=5;-118#pos=5;-118

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Order of the acting Of the Minister of Justice of the Republic of Kazakhstan dated May 29, 2020 No. 66. «On approval of the rules for the provision of public services in the field of state registration of legal entities and record registration of branches and representative offices»

https://adilet.zan.kz/eng/docs/V2000020771

General Provisions

Limited Liability Partnership (hereinafter – “Partnership”) is a legal entity.

The Participant (Founder) of Partnership shall not be liable for the obligations of the Partnership and shall bear risk of losses associated with the Partnership’s activities to the extent of the value of its contribution to the charter capital of the Company.

Participants have the right to:

• participate in the management of the affairs of the partnership in the manner provided for by the legislation of Kazakhstan.  and the charter of the Partnership;
  
  
• receive information about the activities of the partnership and get acquainted with its accounting and other documentation in accordance with the procedure provided for by the charter of the partnership;
  
  
• receive income from the activities of the partnership in accordance with the legislation of Kazakhstan, the founding documents of the partnership and the decisions of its general meeting;
  
  
• in case of liquidation of the partnership, receive the value of a part of the property remaining after settlements with creditors, or, by agreement of all participants of the partnership, a part of this property in kind;
  
  
• terminate participation in the partnership by alienating its share in the manner provided by the legislation of Kazakhstan;
  
  
• to challenge in court the decisions of the bodies of the partnership that violate their rights provided for by Law and (or) the charter of the partnership.

Management bodies:

• The general meeting of the partnership participants (if there are several of them) – the supreme  management body of the Company.
• The Director – the executive body of the Company.

Needed documents/Time frame:

Submission of the following documents to the (Non-commercial joint-stock company "Government for Citizens") for registration:

If a founder is a legal entity:

• Statement;
• a copy of a legalized extract from the commercial register or other legalized document certifying that the founder is a foreign legal entity is a legal entity under the legislation of a foreign state, with a notarized translation into Kazakh and Russian;
• Charter, Foundation Agreement, Minutes of the General Meeting/Decision on establishment of the LLP.

If a founder is a natural person:

• Statement;
• a copy of the passport or other identity document of the founder-foreigner, with a notarized translation into Kazakh and Russian;
• Charter, Foundation Agreement, Minutes of the General Meeting/Decision on establishment of the LLP.

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Time: 3 working days from the date of submission. 

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NB! Non-resident founders of Kazakhstan shall have business visa C5 (with the exception of citizens of the Eurasian Economic Union (hereinafter referred to as the "EAEU") and Individual identification number (hereinafter referred to as the "IIN")

2. Branch office

Regulations and Requirements

Civil Code of the Republic of 

Kazakhstan (hereinafter – “CCK”) 

https://adilet.zan.kz/eng/docs/K94000100.

The Law of the Republic of Kazakhstan No. 2198 of April 17, 1995 «On state registration of legal entities and registration of branches and representative offices»

https://online.zakon.kz/Document/?doc_id=1003592&pos=5;-118#pos=5;-118

Order of the acting Of the Minister of Justice of the Republic of Kazakhstan dated May 29, 2020 No. 66. «On approval of the rules for the provision of public services in the field of state registration of legal entities and record registration of branches and representative offices»

https://adilet.zan.kz/eng/docs/V2000020771

General Provisions

A branch is not a separate legal entity.

Branches are vested with the property by the legal entity that created them and act on the basis of regulations approved by it.

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Branch’s activity:

A branch can perform  all or part of a parent company’s functions, including the representative one.

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Rights and Obligations of the Branch:

In order to carry out any of activities, a branch shall  have the following legal rights 

which it shall exercise on behalf of  the parent company and in  accordance with applicable  legislation of Kazakhstan:

• To open, maintain and utilize bank account in Kazakhstan.
  
  
• To import and export goods and services for its own needs.
  
  
• To conclude for its own needs on behalf of a parent company all kind of contacts and perform transactions.

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A branch shall file report on its activities, tax declaration and other necessary documents as required by the legislation of Kazakhstan.

Management of a branch

A branch shall be managed pursuant to the decisions and directions of the parent company. 

The day-to-day activities of a branch shall be carried out by the director of the branch appointed by the parent company.

The competence of the director to manage the branch, as well as limitations of such competence, shall be set out in the power of attorney issued to him by the parent company.

Needed documents/Time frame

Submission of the following documents to the (Non-commercial joint-stock company "Government for Citizens") for registration: 

• statement with a seal of a parent company;
• regulations on the branch approved by the body of the legal entity;
• power of attorney issued by the body of a legal entity to the head of a branch or representative office, with a notarized translation into Kazakh and Russian;
• the decision of a legal entity to establish a branch with a notarized translation into Kazakh and Russian;
• a copy of legalized extract from the commercial register or other legalized document certifying that this entity opening a branch in the Kazakhstan is a legal entity under the legislation of its country, with a notarized translation into Kazakh and Russian;
• a copy of the constituent documents of a legal entity with a notarized translation into Kazakh and Russian;

Time: 3 working days from the date of submission.

Representative office

Regulations and Requirements

CCK

https://adilet.zan.kz/eng/docs/K940001000_

The Law of the Republic of Kazakhstan No. 2198 of April 17, 1995 (On state registration of legal entities and registration of branches and representative offices) →

https://online.zakon.kz/Document/?doc_id=1003592&pos=5;-118#pos=5;-118

Order of the acting Of the Minister of Justice of the Republic of Kazakhstan dated May 29, 2020 No. 66. (On approval of the rules for the provision of public services in the field of state registration of legal entities and record registration of branches and representative offices) →

https://adilet.zan.kz/eng/docs/V2000020771

General Provisions

A representative office is not a separate legal entity.

A representative office is a separate subdivision of a legal entity located outside the place of its location and carrying out defense and representation of interests of the legal entity, making transactions and other legal actions on its behalf, except for cases stipulated by legislative acts of the Republic of Kazakhstan.

As well as a branch a representative office is vested with the property by the legal entity that created it and acts on the basis of regulations approved by it.

Purpose and the Subject:

Representative office only carry outs representative functions of the parent company and protects its interests. Representative office has no right to engage in any other commercial activities.

The technical, financial and administrative support of the representative office is carried out through the funds allocated by the parent company.

Management of a representative office

A head/director of a representative office is appointed by an authorized body of the parent company. The competence of the director to manage the representative office, as well as the limitations of such competence, shall be set out in the power of attorney issued to him by the parent company.

Needed documents/Time frame

Submission of the following documents to the (Non-commercial joint-stock company "Government for Citizens") for registration: 

• statement with a seal of a parent company;
• regulations on the representative office approved by the body of the legal entity;
• power of attorney issued by the body of a legal entity to the head of a representative office, with a notarized translation into Kazakh and Russian;
• the decision of a legal entity to establish a representative office with a notarized translation into Kazakh and Russian;
• a copy of a legalized extract from the commercial register or other legalized document certifying that this entity opening representative office in the Kazakhstan is a legal entity under the legislation of its country, with a notarized translation into Kazakh and Russian;
• a copy of the foundation documents of a legal entity with a notarized translation into Kazakh and Russian;

Time: 3 working days from the date of submission.

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Action Plan

Before setting up a company in Kazakhstan, please note:

1. Check if your business area requires you to get a business license, permit, and/or approval;
2. Be aware that a limited liability partnership may not have as its sole member another business partnership consisting of one person;
3. A business visa would be required for a foreign director(with the exception of citizens of the "EAEU” and remote work outside Kazakhstan) and a foreign founder priory company incorporation.

Step 1. Incorporation Process

Choose the right organisational business structure (Limited Liability Partnership, Branch, Representative Office).

Note! Limited Liability Partnership is the most popular business structure of a legal entity in Kazakhstan.

Step  2. Choose a company name

Be aware that in accordance with the legislation of Kazakhstan, foreign names of legal entities shall be indicated in Kazakh or Russian transliteration. 

“Wildwall (Bайлдволл)” LLP

Step 3. Choose the category of business

Small businesses - no more than 100 employees. Turnover Not exceeding 300,000 Monthly calculation index (MCI).

 MCI for calculation of benefits and other social payments, as well as for the penalties, taxes and other charges in accordance with the Republic of Kazakhstan legislation - 3 692 KZT.

Medium businesses - from 101 to 250 employees. Turnover above 300,000 MCI and not exceeding 3,000,000 MCI.

Large businesses -  more than 250 employees. Turnover above 3,000,000 MCI. 

The following types of activity cannot be registered as a Small business:

• activities related to the turnover of narcotic drugs, psychotropic substances, and precursors;
• production and (or) wholesale sale of excisable products;
• activities related to the storage of grain at bread receiving points;
• conducting lotteries;
• activities in the sphere of gambling business;
• activities related to the turnover of radioactive materials;
• banking activities (or certain types of banking operations) and activities in the insurance market (except for insurance agent activities);
• auditing activity;
• professional activity in the securities market;
• activity of credit bureaus;
• security activities;
• activities related to the turnover of civilian and service weapons and ammunition;
• digital mining activities.

The right category of business will influence the amount of registered capital. 

Register capital for Small businesses  can be zero (0)

Register capital for medium-sized businesses -  minimum 100 MCI

Register capital for Large businesses - minimum 100 MCI

Step 4.  Individual Identification Number (IIN) obtained for foreign directors and founder

IIN can be obtained: 

• at the embassy of Kazakhstan;
• state authority in Kazakhstan (physical presence is required).

Step 5. Obtaining Business - Identification Number BIN (in case of  incorporation of a subsidiary)

Before incorporation of a subsidiary a head company shall obtain BIN in Kazakhstan. 

Step 6. Application for incorporation

Incorporation (registration) shall take place no later than three (3) working days following the day on which the application is submitted.

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Post-Registration Considerations

Adhering to legal compliance is paramount for any business. It helps you run your business operations seamlessly. Below are a few activities to maintain compliance with local laws.

1. Annual Filings: It involves submitting financial statements and reports to the relevant authorities. Your company's financial status helps the government assess your organisation's tax obligations.
2. Tax Payments: Ensure you pay your corporate income tax or any other applicable taxes on time. This will prevent you from paying late fees or penalties and help you maintain a good record with government authorities and financial institutions.

In addition, maintaining proper documentation is crucial for any registered establishment. Here's how it helps.

1. Legal Compliance: Proper documentation ensures your business complies with all laws and regulations.
2. Financial Management: Up-to-date records help you manage your company's finances efficiently. Tracking income and expenditure, and preparing financial statements and tax returns becomes easy with proper documentation.
3. Audit Preparation: Updated records keep you ready for audits at any given point in time.
4. Dispute Resolution: Whenever a dispute arises, your up-to-date records can help resolve the issue quickly.

Professional Assistance and Support

Seeking professional assistance and support from a company registration consultant offers several benefits.

1. Expert guidance: The team comprises lawyers and accountants with extensive knowledge and expertise in business laws and accounting. They can help you steer clear of the complexities of company registration, ensuring that all legal compliances are met.
2. Save time and effort: Company registration in Kazakhstan involves several steps and documentation. Company registration consultant manages these lengthy processes efficiently, saving your time, and effort and allowing you to focus on your core activities.
3. Error-free application: You may err while filling out the registration papers. However, the company registration consultant has undergone the process several times and can process the application without mistakes.
4. Legal Compliance: A professional company registration consultant acknowledges the latest compliance and regulation updates. It ensures that your business complies with all applicable laws.

Esplora Legal, an international law firm, offers company registration services in Kazakhstan. Our team of experienced business consultants assists you with registering your company in Kazakhstan and obtaining the required licenses and permits. In addition, we also help you set up your bank accounts.

As an internationally acclaimed law firm, Esplora Legal offers legal support and accounting services. In other words, Esplora Legal is your one-stop solution for setting up your business, accounting services, and legal support.

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