Profit Repatriation & Currency Control in Kazakhstan

Use of income — Entrepreneurial Code Chapter 25

Under Article 277 of the Entrepreneurial Code, investors may use income from their activities at their own discretion after paying Kazakhstani taxes and mandatory contributions, and may open accounts in national and foreign currency with banks in Kazakhstan. Transfers abroad follow banking and currency legislation. A free transfer guarantee may also come from the applicable BIT: Kazakhstan has signed BITs with many states, not all of them in force, and treaties in force commonly contain a free transfer clause.

Dividend repatriation procedure

The dividend repatriation procedure in Kazakhstan requires: a general meeting of participants resolving to distribute profits; calculation and withholding of dividend withholding tax (15%, or 5% on dividends up to 230,000 MCI for a shareholder holding at least 25%, and possibly lower under an applicable DTT); and transfer of the net dividend to the foreign shareholder's bank account abroad through a Kazakhstani bank. The Kazakhstani bank is required to verify the lawfulness of the transaction before processing. Bond Stone advises on the full dividend repatriation procedure and tax optimisation.

Currency control — Law No. 167-VI (2018)

The Law on Currency Regulation and Currency Control No. 167-VI dated 2 July 2018 governs currency transactions in Kazakhstan. Key requirements: a resident must obtain an account number from the National Bank for capital movement contracts above USD 500,000 or with no stated amount, before performance starts (Art. 14; National Bank guidance); residents must repatriate export proceeds, and funds paid for imports that are not delivered, within the time set by the contract (Art. 9); and banks report currency operations above the threshold (Art. 15). Currency operations between residents are prohibited unless an exception applies, while those between residents and non-residents are free unless the Law sets a requirement (Art. 6). Bond Stone advises on currency control compliance for foreign-invested Kazakhstani entities.

Shareholder loans — thin capitalisation

A loan from the foreign parent to its Kazakhstani subsidiary lets cash return as interest and principal, but transfer pricing and thin capitalisation rules apply. The deductible amount of interest to related parties is capped by a formula based on average equity, average liabilities and a coefficient of 4, or 7 for financial organisations (Tax Code, Article 263). A loan from the subsidiary up to the parent is not a distribution and needs its own transfer pricing and currency control review. Bond Stone advises on structuring intercompany financing arrangements to optimise tax efficiency while complying with Kazakhstani transfer pricing rules.

Withholding tax — DTT optimisation

Dividend payments from a Kazakhstani entity to a foreign shareholder are subject to withholding tax under the Tax Code at 15%, or 5% on dividends up to 230,000 MCI for a shareholder holding at least 25% directly or indirectly (Article 682). Many of Kazakhstan's DTTs also allow 5% for qualifying corporate shareholders, on conditions that vary by treaty. Bond Stone advises on DTT eligibility and the documentation required to apply a reduced treaty rate.