CORPORATE & COMMERCIAL LAW · KAZAKHSTAN
Joint Ventures in Kazakhstan
Bond Stone advises international investors on structuring, negotiating, and documenting joint ventures in Kazakhstan — from initial feasibility and partner selection through JV agreement drafting, shareholders agreement, constitutional documents, and post-formation governance.
Joint ventures are a common route for foreign investors entering Kazakhstan in sectors where a local partner brings regulatory approvals, existing relationships, land rights, or subsoil licences. The interaction between the JV agreement, the Kazakhstani company law requirements, and the subsoil or sector-specific rules needs careful structuring from the outset.
Primary authority: Civil Code of the Republic of Kazakhstan No. 268-XIII dated 27 December 1994; Law "On Limited and Additional Liability Partnerships" No. 220-I dated 22 April 1998 (as amended); Law "On Joint-Stock Companies" No. 415-II dated 13 May 2003 (as amended). Authority: adilet.zan.kz
JV Structuring — Key Considerations
Entity selection — LLP or JSC
Most JVs in Kazakhstan are structured as an LLP — simpler governance, lower compliance burden, no mandatory audit for smaller entities. A JSC is needed where a sector law requires that form, as for banks and insurers, and is the usual form where the JV intends to offer shares publicly. Bond Stone advises on entity selection based on the JV's activity, size, governance requirements, and exit strategy.
Governing law — Kazakhstani law or AIFC
The JV agreement and shareholders agreement can be governed by Kazakhstani civil law or, where the holding entity is AIFC-incorporated, by AIFC Contract Regulations based on English common law. Bond Stone advises on governing law selection — Kazakhstani law for operational JVs with strong local elements; AIFC law for international holding structures where English law provides greater familiarity and enforceability.
Subsoil & sector-specific requirements
A transfer of subsoil use rights, or of interests in a subsoil user, generally needs a permit from the competent authority unless an exemption applies (Subsoil Code, Art. 44), and on strategic plots the state has a priority right (Art. 43). The authority is the Ministry of Industry and Construction for solid minerals and the Ministry of Energy for hydrocarbons.
Competition law notification
JV formations that meet the thresholds under Kazakhstani competition law need the prior consent of the Agency for Protection and Development of Competition (APDC). Bond Stone advises on competition law filing requirements and coordinates multi-jurisdictional filings where the JV involves parties from other EAEU member states.
Key JV Documents
| Document | Purpose | Key Provisions |
|---|---|---|
| JV Agreement | Framework agreement between JV partners — sets out the overall commercial terms, contributions, and objectives | Contributions, governance structure, business plan, exclusivity, non-compete, confidentiality |
| Shareholders Agreement | Governs the ongoing relationship between shareholders in the JV entity | Voting rights, reserved matters, pre-emption, drag-along, tag-along, deadlock, exit provisions |
| Articles of Association | Constitutional document filed with the state registrar — mandatory under Kazakhstani company law | Shareholder rights, management structure, profit distribution, share transfer restrictions |
| Contribution Agreement | Documents each party's contribution to the JV — cash, assets, IP, licences, or services | Contribution timeline, valuation methodology, warranties on contributed assets |
| Management Agreement | Where one party manages the JV on behalf of both — service fees, performance standards, termination | Management fees, reporting obligations, performance KPIs, termination triggers |
Protecting the Foreign Investor — Key Provisions
Reserved matters & veto rights
Bond Stone drafts reserved matters lists requiring unanimous or supermajority approval — covering changes to the business plan, incurrence of significant debt, related party transactions, changes to constitutional documents, and appointment of senior management. These protect the minority foreign investor from being outvoted on fundamental decisions.
Deadlock resolution
Deadlock provisions matter most in 50/50 JVs. Bond Stone advises on and drafts Russian roulette, Texas shoot-out, and put/call option mechanisms — and on the appropriate triggering events, valuation methodology, and cooling-off periods before deadlock mechanisms activate.
Exit provisions
Pre-emption rights, drag-along rights, and tag-along rights must be drafted around Article 31 of the LLP Law, which gives participants a statutory pre-emptive right on a sale to a third party; the founding documents can vary only how the interest is shared among participants who exercise it. Bond Stone advises on structuring exit provisions that achieve commercial objectives within the constraints of Kazakhstani law.
Dispute resolution
Bond Stone recommends AIFC Court or international arbitration (IAC, LCIA, ICC) as the dispute resolution forum for JV agreements — rather than Kazakhstani courts. This provides international investors with a neutral, English-language forum and, in arbitration, awards enforceable under the New York Convention.
Experience
Bond Stone has advised on joint venture structuring mandates in Kazakhstan since 2007 across mining, energy, real estate, manufacturing, and financial services sectors. Client confidentiality is maintained across all matters.
JV · Kazakhstan · Mining
Mining JV — Subsoil Sector
Structuring a joint venture between an international mining company and a Kazakhstani subsoil licence holder — JV agreement, shareholders agreement, and subsoil use transfer provisions. Transfer permit analysis conducted.
JV · Kazakhstan · Energy
Energy Sector JV — 50/50 Structure
Advising a foreign energy company on a 50/50 joint venture with a Kazakhstani state-connected partner — deadlock resolution mechanism, reserved matters, and AIFC Court dispute resolution clause.
JV · Kazakhstan · Real Estate
Real Estate JV — Development Project
Structuring a real estate development joint venture — contribution of land use rights by local partner and capital contribution by foreign investor. Exit provisions and mandatory pre-emption right analysis under Kazakhstani company law.
JV · Kazakhstan · Turkey
Manufacturing JV — Turkish Investor
Structuring a joint venture between a Turkish manufacturer and a Kazakhstani partner for production of construction materials — shareholders agreement, Articles of Association, contribution of industrial land use right, and ISTAC dispute resolution clause.
JV · AIFC · Kazakhstan
Financial Services JV — AIFC Structure
Advising on a joint venture structured through an AIFC holding company — AIFC entity formation above the Kazakhstani operating subsidiary, shareholders agreement under AIFC Contract Regulations, and dividend repatriation mechanism.
JV · Kazakhstan · Pharmaceuticals
Pharmaceutical Distribution JV
Advising a foreign pharmaceutical company on a JV with a Kazakhstani distributor — exclusivity territory, regulatory licence transfer conditions, minimum sales obligations, and exit mechanics under Kazakhstani company law.
Why Bond Stone
- 18+ years advising on JVs in Kazakhstan — mining, energy, real estate, manufacturing, and financial services sectors
- AIFC Registered Legal Adviser — JV agreements governed by AIFC Contract Regulations (English law) available alongside Kazakhstani law structures
- Subsoil sector experience — JV structuring in mining and oil & gas with subsoil use transfer provisions and state pre-emption right analysis
- Ranked Legal 500 EMEA and IFLR1000 — Almaty and Astana offices
Primary authority: adilet.zan.kz
Discuss your Kazakhstan joint venture
Contact Bond Stone for a confidential discussion about joint venture structuring, negotiation, and documentation in Kazakhstan.
[email protected]
+7 (701) 729 76 72 — Almaty
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