JURISDICTION GUIDE \u00a0\u00b7\u00a0 2026 EDITION<\/p>\n
Foreign Investor Edition \u2014 2026<\/p>\n
Kazakhstan is the largest economy in Central Asia \u2014 GDP USD 260B+, population 20 million, 100% foreign ownership permitted in most sectors, EAEU member, AIFC English common law jurisdiction in Astana. It is also a jurisdiction where the gap between what the law says and what happens in practice is wide enough to end investments that looked sound on paper.<\/p>\n
This guide is written for foreign investors, GCs, and CFOs making real decisions about Kazakhstan \u2014 not for readers who want a balanced academic overview. It tells you what matters, what changed in 2026, and what has gone wrong for investors who did not take it seriously.<\/p>\n
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The five decisions every Kazakhstan investor faces<\/p>\n
1. Civil law or AIFC?<\/p>\n
Kazakhstan operates a civil law system descended from Soviet law. The AIFC operates on English common law. The choice of legal framework \u2014 and therefore vehicle \u2014 determines your dispute resolution options, governance standards, and tax exposure. Most international investors benefit from at least an AIFC holding layer.<\/p>\n<\/div>\n
2. LLP, JSC, or AIFC company?<\/p>\n
The LLP (\u0422\u041e\u041e) is the standard foreign investment vehicle \u2014 flexible, no minimum capital for most sectors, 100% foreign ownership. The JSC (\u0410\u041e) is required for regulated financial services and public companies. An AIFC private company combines English company law with Kazakhstan market access. Structure determines everything downstream.<\/p>\n<\/div>\n
3. Strategic sector or ordinary commercial?<\/p>\n
Kazakhstan permits 100% foreign ownership in ordinary commercial sectors. The moment your investment touches natural resources, strategic infrastructure, aviation, media, border territories, or financial services, a different regulatory regime applies \u2014 with state pre-emption rights, local content obligations, and government approval requirements. Know which regime you are in before you sign.<\/p>\n<\/div>\n
4. Which investment contract?<\/p>\n
As of 1 January 2026, Kazakhstan abolished the Priority Investment Project and Special Investment Project mechanisms and introduced new contractual forms under the Entrepreneurial Code. The new system offers tax incentives, customs exemptions, and legislative stability for qualifying projects. Understanding the threshold and obligation structure is essential before committing capital.<\/p>\n<\/div>\n
5. How will you resolve disputes?<\/p>\n
Kazakhstan courts have improved but remain an uncertain environment for foreign investors in high-value commercial disputes. The AIFC Court \u2014 staffed by former UK Supreme Court and Court of Appeal judges \u2014 provides a reliable English common law forum with judgments enforceable across Kazakhstan. The IAC provides institutional arbitration. US investors have investor-state arbitration protection under the Kazakhstan-US BIT (1994). Choosing your dispute resolution mechanism at the contract stage is not optional.<\/p>\n<\/div>\n<\/div>\n<\/div>\n
New investment incentive framework \u2014 1 January 2026<\/p>\n
The Priority Investment Project (IPP) and Special Investment Project (SIP) mechanisms were abolished and replaced with new contractual forms under the Entrepreneurial Code. The new system introduces simplified investment contracts, a green corridor fast-track for qualifying projects, regional and national investment pools, and a legislative stability guarantee for investments exceeding approximately USD 500 million. The evaluation of investment incentive effectiveness becomes mandatory from 1 July 2026. Investors who structured around the old IPP\/SIP framework need to review their positions.<\/p>\n<\/div>\n
New Tax Code \u2014 2026 Parliament review<\/p>\n
Kazakhstan is enacting a new Tax Code in 2026. The draft currently before Parliament contains provisions that have raised concerns among foreign investors \u2014 abolition of VAT exemptions on pharmaceutical goods, broad interpretation of “royalties” that could affect IP and technology transfer arrangements, and elimination of penalties for delayed VAT refunds. The new Code may also affect AIFC tax residency structuring. Bond Stone is tracking the parliamentary process and advising clients on transition planning.<\/p>\n<\/div>\n
Sanctions exposure \u2014 elevated in 2025\u20132026<\/p>\n
Multiple Kazakhstani entities have been listed on US OFAC sanctions lists since 2022 under Executive Order 14024 (April 2021) for alleged Russia-related sanctions evasion. The EU 19th package (October 2025) specifically targeted VTB Bank Kazakhstan. Kazakhstan has been explicitly identified by OFAC, the EU, and the UK as a jurisdiction of concern for secondary sanctions risk. Any foreign investor with US, EU, or UK exposure must conduct sanctions due diligence on Kazakhstan counterparties as a non-negotiable component of investment structuring.<\/p>\n<\/div>\n
Agency for Atomic Energy \u2014 2025<\/p>\n
A dedicated Agency for Atomic Energy was established in 2025, consolidating oversight of uranium exploration and mining under direct presidential control. This significantly tightens the regulatory framework for uranium sector investors and reinforces state control over Kazatomprom’s dominance. Investors in the uranium and rare earth sectors need to reassess their regulatory position under the new Agency.<\/p>\n<\/div>\n
National Privatisation Programme \u2014 461 SOEs<\/p>\n
A newly established National Privatisation Office has identified 461 public entities for inclusion in the government’s comprehensive privatisation programme. This represents a significant pipeline of M&A opportunities across manufacturing, energy, services, and infrastructure. Foreign investors may participate equally with domestic entities in privatisation tenders.<\/p>\n<\/div>\n<\/div>\n
Legal system<\/p>\n
Civil law system \u2014 Soviet\/Continental tradition. The AIFC operates as a separate English common law jurisdiction within Kazakhstan with its own court and corporate law framework.<\/p>\n
AIFC legal framework \u2192<\/a><\/p>\n<\/div>\n Foreign ownership<\/p>\n 100% foreign ownership permitted in most sectors. Restrictions apply in subsoil use, media, banking, agricultural land, and strategic infrastructure. On-the-ground presence required for meaningful operations since 2026.<\/p>\n Foreign investment advisory \u2192<\/a><\/p>\n<\/div>\n Tax environment<\/p>\n CIT 20%, VAT 16%, WHT on dividends 15% (5% for qualifying holdings). 55+ DTTs. AIFC participants tax-exempt to 2066. New Tax Code before Parliament \u2014 changes expected 2026.<\/p>\n Tax advisory \u2014 Kazakhstan \u2192<\/a><\/p>\n<\/div>\n Dispute resolution<\/p>\n Kazakhstan courts, AIFC Court (English common law, former UK Supreme Court judges \u2014 strongly preferred), IAC arbitration, and investor-state arbitration under 40+ BITs including US, UK, China, and Korea.<\/p>\n Dispute resolution advisory \u2192<\/a><\/p>\n<\/div>\n Currency & repatriation<\/p>\n Tenge (KZT) freely convertible. No restrictions on profit or capital repatriation in most sectors. Currency transactions above threshold require NBK registration. AIFC participants have full capital mobility.<\/p>\n Profit repatriation \u2014 full guide \u2192<\/a><\/p>\n<\/div>\n Key risks<\/p>\n Regulatory enforcement inconsistency \u2014 penalties applied retroactively. Corruption risk in certain sectors. Secondary sanctions exposure elevated since 2022. Local content obligations in subsoil and construction. New Tax Code uncertainty.<\/p>\n