Articles

Buying a Company in Kazakhstan: Legal Due Diligence and Deal Structure

November 5, 2026

By Alexandr Satidi — Partner, Head of M&A, Commercial Law and Antitrust, Bond Stone International Law Firm, Almaty

Foreign buyers often treat a Kazakhstani acquisition as a standard share deal. Much of it is. The problems usually come from a few local rules that can delay or block closing: existing participants' pre-emptive rights, merger clearance, and state rights over strategic and subsoil assets. These should be identified before the price is agreed, not after signing.

Start with the structure

A buyer can acquire the shares of the target or buy its assets. A share deal keeps contracts, licences and employees in place, but the buyer takes on the company's history, including its liabilities. An asset deal lets the buyer choose what it takes, but contracts and permits may need to be transferred or obtained again.

Most operating businesses in Kazakhstan are limited liability partnerships (LLPs). Others are joint stock companies (JSCs). The form matters, because each has its own rules on transferring ownership. The first task is to read the charter and any participants' agreement.

Pre-emptive rights in an LLP

Under Article 31 of the Law on Limited and Additional Liability Partnerships No. 220-I, existing participants have a preferential right to buy a share that is being sold to a third party. If several participants want to buy, they do so in proportion to their shares, unless the constituent documents or another agreement say otherwise.

The seller must notify the partnership's executive body in writing and state the proposed price. The executive body has seven days to inform all participants, and each participant then has seven days to respond. The law also sets a one-month period that affects when a sale to a third party can go ahead.

The practical answer is simple. Obtain written waivers from every other participant and from the partnership before signing, and make them a condition of the deal. The partnership can use the right itself if the participants do not (Article 31(12)). Skipping this step exposes the transaction to challenge.

Under Article 31(7), any participant may ask the court within three months to transfer the buyer’s rights and obligations to them. Paragraph 8 of Supreme Court Normative Resolution No. 2 of 10 July 2008 counts that period from when the participant knew or should have known of the sale, and says a claim to invalidate the sale on this ground should not be granted. Lower courts have still gone further. In Case No. 6001-19-00-3gp/293 (Supreme Court, 25 June 2019), the courts of Akmola Region had set aside a 2015 sale of about 87% of an LLP at the suit of a participant holding 0.0051%. The Supreme Court reversed. His proxy had attended the meeting at which the participants declined to buy, and the six-month period for challenging meeting decisions had passed. The sale stood, but the dispute ran until 2019.

Merger control

Under Article 201 of the Entrepreneurial Code of 29 October 2015 No. 375-V, acquiring control of more than 50% of the voting shares of a market entity is an economic concentration, if the buyer did not already hold that level of control. Mergers and accessions are also covered.

Prior consent of the anti-monopoly authority is required where the combined book value of assets, or total sales for the last financial year, exceeds ten million monthly calculation indices. The buyer with its group and the target are counted together, and the index applicable on the filing date is used.

Foreign-to-foreign deals with a Kazakhstani subsidiary should be checked too. Clearance should be built into the timetable as a condition precedent. Our article on antitrust and merger control covers the process in more detail.

Strategic objects

Article 193-1 of the Civil Code protects strategic objects: property that matters for national security and sustainable development. Objects that can be designated as strategic include main railway networks, main pipelines, the national power grid and main communication networks, among others. The Government lists the designated objects in Resolution No. 651 of 30 June 2008.

Alienating or encumbering a strategic object requires a decision of the Government. The State also has a priority right to buy the object when a private owner intends to sell it. If the target owns such an object, the timetable and the structure will depend on this process.

Subsoil use rights

Mining and oil and gas deals carry a further layer. Under Article 44 of the Subsoil Code of 27 December 2017 No. 125-VI, a transfer of a subsoil use right requires a permit from the competent authority. The same applies to the transfer of objects linked to that right.

This is what catches share deals. Objects linked to a subsoil use right include participating interests, shares and other forms of equity in a legal entity holding the right. Buying the company, not only the licence, can therefore trigger the permit. The Code provides exceptions, including certain intra-group transfers.

For strategic subsoil areas, Article 43 gives the State a priority right over anyone else to acquire the rights and linked objects. For example, an area with geological oil reserves above fifty million tonnes is treated as strategic.

The State does use this right. ConocoPhillips proposed to sell its 8.4% interest in Kashagan to ONGC Videsh. On 2 July 2013 the Government told it that it would pre-empt the sale under the subsoil law then in force, and named KazMunayGas as the buyer. ConocoPhillips’ annual report records that the sale to KazMunayGas closed on 31 October 2013.

What due diligence should cover

The findings should feed into the contract. A risk found in due diligence can be priced, covered by a specific indemnity, fixed before closing, or treated as a reason to walk away.

The purchase agreement

Typical conditions precedent include participants' waivers, merger clearance, any subsoil permit or Government decision, and third-party consents. Warranties, indemnities and any escrow or deferred payment give the buyer practical recourse after closing.

The choice of governing law and forum deserves care. An enforceable result in Kazakhstan matters more than a familiar law on paper. Arbitration usually gives a clearer route to enforcement than a foreign court judgment, as our article on enforcing foreign awards and judgments explains.

Practical steps

  1. Screen early. Check the target for subsoil rights, strategic objects and merger thresholds before the term sheet.
  2. Read the charter. It may vary the rules on share transfers.
  3. Collect waivers. Get them from all participants and the partnership before signing.
  4. Build regulatory steps into the timetable. They run on the authorities' schedule, not on the parties'.
  5. Tie findings to the contract. Every material risk should have a contractual answer.

Legal basis

Related: Antitrust in Kazakhstan · Corporate Governance · Company Registration in Kazakhstan

This article is general information and not legal advice. To discuss a transaction, please contact the firm.