Almaty
EY
Esentai Tower
77/7 Al-Farabi Avenue 050060 Almaty Kazakhstan
Executive contacts
Vladimir Fesenko
Almira Abraimova
Immigration contacts
Vladimir Fesenko
Almira Abraimova
+7 (727) 258-59-60
Fax: +7 (727) 258-59-61 Email: vladimir.fesenko@kz.ey.com
+7 (727) 258-59-60
Fax: +7 (727) 258-59-61 Email: almira.abraimova@kz.ey.com
+7 (727) 258-59-60
Fax: +7 (727) 258-59-61 Email: vladimir.fesenko@kz.ey.com
+7 (727) 258-59-60
Fax: +7 (727) 258-59-61 Email: almira.abraimova@kz.ey.com
Because the legislative system of Kazakhstan is in a state of development and is subject to frequent and not always predictable changes, readers should obtain updated information before engaging in transactions.
The average exchange rate for the first half of the 2021 calendar year was KZT427 = USD1.
A. Income tax
Who is liable. Residents are taxed on their worldwide income. Nonresidents are taxed on Kazakhstan-source income only, regard less of where it is paid. Income is deemed to be from a Kazakh stan source if it is derived from work performed in Kazakhstan. Kazakhstan-source income also includes, but is not limited to, interest income from residents and nonresidents having a perma nent establishment in Kazakhstan and dividends from resident legal entities.
For tax purposes, individuals are considered residents if they are present in the country not less than 183 days in any consecutive 12-month period ending in the current tax year.
There is a separate investment residency program offered by the Astana International Financial Centre (AIFC; a hub for foreign and local investors and various financial, market and ancillary service providers that establishes a common law as the governing law within the AIFC as well as a legal framework similar to those of well-known international financial centers, such as the Dubai International Financial Centre) whereby individuals may qualify as AIFC investment residents if they meet the program require ments and if they are present in Kazakhstan for not less than 90
calendar days (including the days of arrival and departure) in any consecutive 12-month period ending in the current tax period.
Kazakhstan citizens or residence permit holders are always consid ered residents of Kazakhstan if their center of vital interests is located in Kazakhstan. The center of vital interests is deemed to be located in Kazakhstan if all of the following conditions are fulfilled simultaneously:
• The individual is a Kazakhstan citizen or has permission to live in Kazakhstan on a permanent basis (residence permit).
• The spouse and/or close relatives of the individual reside in Kazakhstan.
• The individual and/or his or her spouse and/or his or her close relatives own, or otherwise have at their disposal, immovable property in Kazakhstan permanently available for residence.
Double tax treaties may provide different rules to determine tax residency.
Income subject to tax. The taxation of various types of income is described below.
Employment income. Income from employment consists of all compensation, whether received in cash or in kind (including shares), subject to minor exceptions, regardless of the place of payment of such income.
Self-employment and business income. The income of Kazakh citizens engaged in self-employment activities (individual entre preneurs) is subject to income tax.
Tax is levied on an individual’s annual business income, which consists of gross income (less adjustments and deductions) less expenses incurred in earning such income. However, to deduct expenses, individual entrepreneurs must be specially registered with the tax authorities and provide supporting documentation for such expenses. The tax rates for self-employment income are the same as those applicable to employment income as set forth in Rates, except for individual entrepreneurs using a special taxa tion regime.
Investment income. In general, investment income is included in taxable income. The tax rates are set forth in Rates.
Certain investment income is exempt from tax (see Exempt income).
Exempt income. Certain items are exempt from tax, including but not limited to, the following:
• Business trip per diems within established norms and reim bursement of certain business trip expenses.
• Accommodation and meal expenses within established norms for rotators while they are at the work site.
• Transportation expenses incurred by the employer connected with the delivery of employees from their residing place (place of stay) in Kazakhstan to their workplace.
• Employee-related expenses (including reimbursement of employees’ expenses) aimed at laboratory examination, provision of personal protective equipment, medical examinations, preventive vaccinations, medical supervision,
treatment, isolation and hospitalization as a result of the introduction of restrictive measures and recognition of the disease as a pandemic by the decision of the Emergency Committee of the World Health Organization.
• The excess of the market value of the underlying shares covered by a stock option at the time of exercise over the exercise price of the option.
• Alimony.
• Medical expenses within established norms.
• Dividends and interest on securities if, at the time of the accrual of such dividends and interest, the securities are on the official list of a stock exchange operating in Kazakhstan (that is, the Kazakhstan Stock Exchange [KASE] and the Astana International Exchange [AIX]).
• Dividends received from a resident legal entity if all of the fol lowing conditions are satisfied simultaneously: The shares or participating interests have been held for more than three years.
The resident legal entity is not a subsurface user for the period for which the dividends are paid.
At the date of payment of the dividends, not more than 50% of assets of the legal entity paying the dividends is attribut able to the assets of a company that is not a subsurface user. If a resident legal entity paying dividends reduces its corporate income tax by 100% for activities, including those carried out under an investment contract, for which such reduction is pro vided, the exemption shall apply in the following order:
— If the share of corporate income tax reduced by 100% in the total amount of calculated corporate income tax in general for a resident legal entity paying dividends is 50% or more, the exemption does not apply.
— If the share of corporate income tax reduced by 100% in the total amount of calculated corporate income tax in general for a resident legal entity paying dividends is less than 50%, the exemption of dividends paid by such legal entity applies to the entire amount of dividends.
• Capital gains derived through the open-bidding method from the sale of securities or participating interests in resident legal entities or consortiums if all of the following conditions are met simultaneously:
At the date of disposal, the shares or participating interests have been held for more than three years. The legal entity or consortium that is the issuer of the shares or participating interests sold is not a subsurface user.
At the date of disposal, no more than 50% of the value of assets of the legal entity or consortium that is the issuer of the shares or participating interests sold is attributable to the assets of a subsurface user entity (entities).
• Capital gains derived from the securities that are listed on a stock exchange operating in Kazakhstan (the KASE or the AIX) at the date of realization.
• Interest income on deposits paid to tax resident individuals by licensed organizations in Kazakhstan.
• Income from Kazakhstan state securities.
• Ninety percent of the taxable income of the employee, if the income is less than 25 Monthly Calculation Index (MCI [KZT72,925 or approximately USD172]) per month.
Taxation of stock options. In general, income received in connec tion with employment (including stock received for free or at a discount) is taxable. However, there is a general tax code provision stating that the positive difference between the fair market value of share and option cost at the date of stock option execu tion is not considered taxable income (see Exempt income). Therefore, employer stock option plans require detailed analysis.
Capital gains. According to the Kazakhstan Tax Code, a capital gain is the difference between the sale price (disposal value) and the acquisition price (base cost) supported by documents.
Income derived from the disposal of shares acquired through the exercise of a stock option equals the positive difference between the sale price and the acquisition price. The acquisition price includes the exercise price of the option and the option premium.
In the case of sales of property located in blacklisted low-tax jurisdictions, the taxable amount is determined to be the full sale price (that is, the acquisition cost is nondeductible).
Capital gains are subject to tax at the rates set forth in Rates.
Capital transactions of individuals are not currently sufficiently addressed by Kazakhstan tax legislation. Consequently, it is not possible to deduct capital losses from capital gains for tax pur poses, and capital losses may not be carried backward or forward to other tax periods. Also, modern financial instruments or digi tal assets, such as cryptocurrencies, are not envisaged by the current Tax Code, leading to the tax authorities’ position that taxable income equals gross proceeds not allowing to deduct even proven cost basis. Further, no expenses are allowed for cal culating taxable income even for basic financial instruments as shares or bonds. Therefore, income for tax purposes may signifi cantly exceed income shown in financial statements prepared by a financial institution.
Controlled foreign companies. Individual tax residents who direct ly, indirectly or constructively control nonresident legal entities and/or other types of organizations subject to certain conditions have a 10% personal income tax obligation regarding the con trolled foreign companies’ retained earnings and separate tax reporting obligations.
Deductions. The minimum monthly salary (MMS), which amounts to KZT42,500 (approximately USD100) per month for 2021 for an employee who is tax resident, is deductible from an employee’s monthly salary. If an employee’s taxable income for a particular month is below the minimum monthly wage, the unused part of the deduction may be carried over to later months within the year. This does not apply when an individual changes his or her workplace during a tax period; that is, the individual may not offset an excess arising at the previous workplace against income earned at the new workplace except in cases of reorgani zations.
The total amount of the standard deduction of 1 MMS for a calendar year may not exceed 12 times MMS (KZT510,000 or approximately USD1,200).
Other deductions include, but are not limited to, the following:
• Obligatory pension fund contributions
• Obligatory employee social medical insurance contributions
• Voluntary pension fund contributions made by the individual for his or her own benefit or by a tax agent under the Kazakhstan legislation on pension coverage
• Medical expenses supported by documents within the set limits
• Premiums on mortgage loans in specified banks
Rates. The following withholding tax rates apply to resident and nonresident individuals for various types of income.
Type of income Rate (%)
Employment income of residents and nonresidents taxed by the local employer or host company 10 Income of residents who receive income under a service agreement 10 Income of advocates and private notaries 10 Capital gains, interest and winnings of residents 10 Dividends received by residents from Kazakhstan companies 5 Capital gains, dividends, interest and royalties paid to nonresidents by Kazakhstan legal entities 15
Any other Kazakhstan-source income paid to nonresidents that is not received from a tax agent (local legal entity) 20
Income received in foreign currency is converted into tenge at the market exchange rate determined on the last business day preced ing the date of payment.
B. Other taxes
Property tax. Individuals are subject to property tax at rates ranging from 0.05% to 2% of the residual value of the property owned by them.
Vehicle tax. Individuals are subject to vehicle tax on vehicles owned by them, either up to a maximum annual tax of 200 MCI (KZT583,400 or approximately USD1,370), or 1% to 4% of MCI for each kilowatt of power for specific types of vehicles (aircraft and railway vehicles).
C. Social security
Social tax. A social tax is payable by employers. This tax is an additional direct tax imposed on employers that is not reserved for the payment of social benefits to employees.
The tax base for social tax equals the employer’s expenses related to employees’ income.
Exemptions from social tax include, but are not limited to, the following:
• Payments made through grants
• Obligatory employee contributions to the Social Medical Insurance Fund
• Obligatory pension fund contributions
Employers must pay social tax at a flat rate of 9.5% of gross income, less allowed exemptions. The minimum tax base for social tax per employee is 1 MMS.
Monthly social tax liability is reduced by the monthly amount of obligatory social insurance contributions (see Obligatory social insurance contributions).
Social tax must be remitted to the state budget on a monthly basis by the 25th of the month following the tax period.
Obligatory pension fund contributions. Obligatory pension fund contributions of 10% of the gross salaries of employees (Kazakhstan citizens, citizens of the Eurasian Economic Union and foreign citizens holding a Kazakhstan residence permit) must be withheld and remitted to the Unified Accumulative Pension Fund by the employer on a monthly basis. For 2021, income received in excess of 50 MMS (KZT2,125,000 or approximately USD5,000) per month is not subject to obligatory pension fund contributions. Obligatory pension fund contribu tions are deductible for personal income tax and social tax pur poses.
Under the Kazakhstan Law on Pension Coverage, employers must also make at their own expense professional pension fund contributions at a rate of 5% of the gross salaries of employees of certain professions in 17 industry sectors, including, but not limited to, mining, oil and gas, pharmacy, and consumer good manufacturing.
Tax agents who pay income to individuals under civil contracts must, in addition to 10% personal income tax, withhold and pay 10% pension fund contributions on the gross amount of that income.
Obligatory social insurance contributions. Employers must make social insurance contributions, which is a part of the social tax, at a rate of 3.5% on income paid to employees (Kazakhstan citi zens, repatriated ethnic Kazakhs, citizens of the Eurasian Economic Union and foreign citizens holding a Kazakhstan resi dence permit).
In 2021, social insurance contributions are not charged on monthly income in excess of 7 MMS (KZT297,500 or approxi mately USD700). The minimum monthly tax base for social insurance contributions per employee is the MMS. Social insur ance contributions are expected to be charged at a flat rate of 5% starting from 2025.
Obligatory social medical insurance contributions
Employers. Employers must make, at their own expense, employ er contributions to the Fund of Social Medical Insurance on a monthly basis (applicable to Kazakhstan citizens, repatriated Kazakhs, citizens of the Eurasian Economic Union and foreign citizens holding a residence permit) in the following amounts:
• From 1 January 2020: 2% of the income paid by the employer to its employees
• From 1 January 2022: 3% of the income paid by the employer to its employees
Employees. Employers must withhold employee contributions to the Fund of Social Medical Insurance from income paid to employees (Kazakhstan citizens, repatriated ethnic Kazakhs, citi zens of the Eurasian Economic Union and foreign citizens hold ing a Kazakhstan residence permit) and individuals receiving income under civil contracts at the rate of 2% of the employee’s income.
These employee contributions are deductible for personal income tax and social tax purposes.
In 2021, income subject to employer and employee contributions to the Fund of Social Medical Insurance is capped at 10 MMS (KZT425,000 or approximately USD1,000) per month.
“Independent payers,” including Kazakhstan citizens who left Kazakhstan, will also be liable to pay contributions in the amount of 5% of 1 MMS, starting from 1 January 2020. According to the legislation, “independent payers” are individuals who pay obliga tory social medical insurance contributions by themselves (that is, in cases in which the contributions are not administered by an employer), including Kazakhstan citizens who left Kazakhstan.
D. Tax filing and payment procedures
The tax year in Kazakhstan is the calendar year.
Tax filing by a tax agent. A tax agent is responsible for withhold ing and remitting income tax from payments made to resident and nonresident individuals.
If employment-related, Kazakhstan-source income is paid out side Kazakhstan, the local tax agent is generally still required to run a shadow payroll. Income is generally considered to be from a Kazakhstan source if it is paid for work performed in Kazakhstan and, accordingly, regardless of where it is paid, it is subject to tax in Kazakhstan.
Under the withholding mechanism, a tax agent withholds actual personal income tax on a monthly basis no later than the date on which the income is paid and remits the tax to the Kazakhstan state budget not later than 25 calendar days after the end of the month in which income was paid. The tax agent must file a per sonal income tax and social tax report, which includes pension fund contributions, professional pension fund contributions and social and medical insurance contributions, on a quarterly basis by the 15th of the second month following the reporting quarter.
There is also a special set of rules regulating the taxation of for eign travelers when the foreign service provider sends its employ ee to a Kazakhstan customer for a short period of time. The local legislation states that, for up to 183 calendar days, each foreign individual must report the salary attributed to the working days in Kazakhstan, even for several days. For this purpose, the indi vidual is required to get an Individual Identification Number in Kazakhstan and file a personal income tax return with the pos sibility of treaty exemption (if a double tax treaty with Kazakhstan is available). If that threshold is met (that is, the foreign individ ual spent 183 or more calendar days in Kazakhstan), the local customer would become liable for taxation of the foreign employee’s salary and run shadow payroll (that is, the local
company takes the salary payment outside Kazakhstan and pro cesses it via local payroll for Kazakhstan tax purposes). In this case, the local customer would need to get all the supporting documents. If the local customer fails to get these documents, the local customer would be required to apply personal income tax to 80% of the service fee charged by the foreign service provider whose employees are coming to Kazakhstan.
Tax filing by individuals. If there is no tax agent in Kazakhstan, or if specifically provided by law, resident and nonresident individu als are responsible for the calculation of personal income tax lia bilities and filing a Kazakhstan tax return. The filing deadline for a Kazakhstan tax return is 31 March of the year following the reporting year, and the income tax liability, if any, must be settled within 10 calendar days after the filing deadline.
Kazakhstan tax returns must be filed by tax resident individuals, including but not limited to, the following:
• Individual entrepreneurs
• Individuals engaged in private practice, such as notaries, law yers and enforcement officers
• Individuals who receive property income
• Individuals who receive income not taxed at the source of pay ment in Kazakhstan, including income outside Kazakhstan
• Kazakhstan citizens, repatriated Kazakhs and individuals with a residence permit having the following types of property:
— Real estate, which is subject (or the rights to which are sub ject or the transaction of which is subject) to state or other registration (reporting) with the competent authority of a foreign state in accordance with the laws of that foreign state
— Securities whose issuers are registered outside Kazakhstan
— Shares in the authorized capital of legal entities registered outside Kazakhstan
Individuals who are tax nonresidents of Kazakhstan are not required to file a Kazakhstan tax return if their Kazakhstansource income is subject to withholding in Kazakhstan.
The law provides for late payment interest for the late payment or nonpayment of tax due on taxable income.
Administrative sanctions for individuals. Administrative sanctions for individuals are discussed below.
The following are the sanctions for a failure to submit personal income tax returns by the deadline:
• First time: warning
• Repeated violation within a year: a fine of 15 MCI (KZT43,755 or approximately USD105)
The following are the sanctions for the concealment of taxable items:
• First time: a fine of 200% of tax payable for each concealed taxable item
• Repeated violation within a year: a fine of 300% of the tax pay able for each concealed item
The following are the sanctions for the concealment of informa tion about property outside Kazakhstan:
• First time: a fine of 100 MCI (KZT291,700 or approximately USD685)
• Repeated violation within a year: a fine of 200 MCI (KZT83,400 or approximately USD1,370)
Administrative responsibility for the abovementioned violations is imposed separately for each item of property. Failure to submit the personal income tax return in accordance with the Tax Code equals the concealment of the information about property outside Kazakhstan.
Depending on the amount of tax underpayment, certain violations may lead to criminal liability.
Administrative sanctions for payroll violations. The sanction for the understatement of taxes in tax returns is up to 80% of the understated amount of personal income tax and social tax.
The sanction for the non-withholding or underwithholding of taxes is up to 50% of the personal income tax that was not with held.
The sanction for the non-remittance or underremittance of with held taxes is up to 20 MCI (KZT58,340 or approximately USD140).
The following are the sanctions for a failure to submit personal income tax returns by the deadline:
• First time: warning
• Repeated violation within a year: fine of up to 70 MCI (KZT204,190 or approximately USD480)
The following are the sanctions for a failure to remit, untimely calculation and/or undercalculation, underwithholding and/or underpayment (underremittance) of obligatory pension contribu tions and obligatory professional pension contributions to the Unified Accumulative Pension Fund:
• First time: warning
• Repeated violation: up to 50% of the amount of non-remitted, untimely calculated and/or undercalculated, underwithheld and/ or underpaid (underremitted) obligatory pension contributions and obligatory professional pension contributions
The following are the sanctions for the nonpayment (non-remittance) and untimely and/or underpayment (underremittance) of social contributions:
• First time: warning
• Repeated violation: up to 50% of the unpaid (non-remitted) and untimely and/or underpaid (underremitted) social contributions
The following are the sanctions for concealing taxable items:
• First time: a fine of 200% of tax payable for each concealed taxable item
• Repeated violation within a year: a fine of 300% of tax payable for each concealed item
Tax registration of foreign nationals in Kazakhstan. The following are the most common cases in which a foreign national must be registered as a taxpayer in Kazakhstan:
• When opening accounts with local banks
• On receiving Kazakh-source income not taxed at source in Kazakhstan
• On acquiring Kazakh tax resident status
• When appointed as the head of a resident legal entity in Kazakhstan or the head of a branch of a nonresident legal entity
Tax registration must take place at the foreigner’s location of residence. By law, tax registration should take three business days. Tax registration can also be done online.
Universal declaring. Starting from 2021, Kazakhstan is gradually introducing universal declaring (UD) for certain categories offered to all Kazakhstan citizens, gradually adding different groups of people, starting with public officials. A major part of the population will participate in the UD starting in 2025. Declaration on assets and liabilities should be submitted by Kazakhstan citizens by the established deadline indicating, among other items, the following information:
• Immovable property (land, house and apartment)
• Vehicles (car, air transport and sea transport)
• Participation interest in the authorized capital of a legal entity
• Money on foreign bank accounts registered outside of Kazakhstan exceeding approximately EUR5,800 in total
• Participation in agreement on equity participation in the con struction of real estate (mostly applicable within Kazakhstan)
• Investment gold
• Securities or derivative financial instruments
• Shares in open-end funds
• Objects of intellectual property and copyrights
• Accounts receivable or accounts payable (amounts due to the individual and/or financial institution specified in the respec tive document and that have not been paid yet)
• Property transferred to trust management
• Cash up to approximately EUR58,100
• Other property
On submission of declaration of assets and liabilities, income tax returns will have to be filed on an annual basis justifying chang es in net wealth of the declarant.
E. Double tax relief and tax treaties
Under the Tax Code, income tax paid outside Kazakhstan by tax residents may be credited against the income tax payable in Kazakhstan on the same income, but may not exceed the amount of Kazakhstan tax accrued. To apply for a foreign tax credit, a document confirming income received and income tax paid or withheld must be enclosed with the Kazakhstan tax return. The document must be issued and/or verified by the foreign tax authorities.
An individual receiving Kazakhstan-source income who meets the conditions of a double tax treaty may apply a treaty exemption if the individual provides one of the following types of documents confirming the residency status of an individual in a double tax treaty country issued by the competent tax authority:
• Original of the document verified by the competent state authority and legalized as per Kazakhstan legislation.
• Duly notarized copy of the document mentioned in the first bullet above. The notary signature and stamp should be legal ized as per Kazakhstan legislation.
• Paper copy of the electronic document confirming the resi dency status published on the internet resource of the competent state authority.
Kazakhstan has entered into double tax treaties with the follow ing jurisdictions.
Armenia Ireland
Saudi Arabia
Austria Italy Serbia
Azerbaijan Japan Singapore
Belarus Korea (South)
Slovak
Belgium Kyrgyzstan Republic
Bulgaria Latvia Slovenia
Canada Lithuania Spain
China Mainland Luxembourg Sweden
Croatia Malaysia Switzerland
Cyprus Moldova
Tajikistan
Czech Republic Mongolia Turkey
Estonia Netherlands Turkmenistan
Finland North Macedonia Ukraine
France Norway United Arab
Georgia Pakistan Emirates
Germany Poland United Kingdom
Hungary Qatar United States
India Romania Uzbekistan
Iran Russian Federation Vietnam
F. Visas
Kazakhstan authorities issue the following categories of visas:
• Category A: diplomatic, official and investor
• Category B (for short-term stay): visa for business trips; visa for international road trips; visa for crew members of air, sea, and river vessels, and for train crews; visa for religious activi ties; visa for practical training or internships; visa for permanent residence in Kazakhstan; visa for private trips; visa for adoption of Kazakhstan citizens; tourist visa; transit visa and exit visa to leave Kazakhstan
• Category C (for long-term stay): visa for permanent residence in Kazakhstan of ethnic Kazakhs, visa for reuniting family, work visa, visa for missionary activity, visa for humanitarian reasons, education visa, visa for private trips (ethnic Kazakhs), visa for minors and visa for treatment
The visas under the categories listed above may be issued for a single or multiple entry, depending on the category and the type of visa. Exit visas may be issued only as a single visa.
Work visas (Category C) are issued to foreign individuals enter ing or located in Kazakhstan to perform work duties, as well as members of their families. In general, a work visa is issued based on a work permit. See Section G.
Business visas (Category B) are issued to foreign individuals arriving in Kazakhstan for business purposes (for example, nego tiations, concluding contracts, provision of consultancy or audit services, provision of installation, repair or maintenance services and attending conferences, symposiums, forums, exhibitions and concerts).
In Kazakhstan, visas are issued by the Ministry of Internal Affairs (MIA) in Kazakhstan and, abroad, by Kazakhstan consulates (for example, the Consular Department of the Embassy of Kazakhstan). Business and work visas are issued based on a letter of invitation issued by a local host entity. The state duty for the execution of invitations is 0.5 of the MCI (KZT1,458.5 for 2021).
The fee for issuing a visa ranges between USD20 to USD1,000, depending on the country of residence of the invited party and the type of visa sought. A visa should be issued within five business days.
An individual may obtain certain types of official business and private trip visas allowing single entry without a letter of invita tion by submitting a written application to the Kazakhstan consular establishment in the respective country if he or she is a citizen of one of the following countries.
Australia Ireland Oman
Austria Israel Poland Belgium Italy Portugal Brazil Japan Qatar Bulgaria Jordan Romania Canada Korea (South) Saudi Arabia
Croatia Latvia Singapore Cyprus Liechtenstein Slovak Republic Czech Republic Lithuania Slovenia Denmark Luxembourg Spain Estonia Malaysia Sweden Finland Malta Switzerland France Monaco United Arab Germany Netherlands Emirates Greece New Zealand United Kingdom Hungary Norway United States Iceland
Kazakhstan has a visa-free regime with certain countries based on international treaties (for example, Belarus and the Russian Federation). Under the Kazakhstan migration legislation, citizens of the following countries can enter and exit Kazakhstan without visas.
Australia Ireland Poland Austria Israel Portugal Bahrain Italy Qatar Belgium Japan Romania Bulgaria Korea (South) Saudi Arabia Canada Kuwait Singapore Chile Latvia Slovak Republic Colombia Liechtenstein Slovenia Croatia Lithuania Spain Cyprus Luxembourg Sweden Czech Republic Malaysia Switzerland Denmark Malta Thailand Estonia Mexico Turkey Finland Monaco United Arab France Netherlands Emirates Germany New Zealand United Kingdom Greece Norway United States Hungary Oman Vatican City
Iceland Philippines Vietnam Indonesia
Under this visa-free regime, citizens of the above countries may enter and transfer in Kazakhstan without a visa for a period not exceeding 30 calendar days from the date of crossing Kazakhstan’s border. If a foreign individual needs to stay in Kazakhstan for a longer period for business purposes, he or she should apply for a business or an investor visa. The investor visa is issued to certain categories of business immigration applicants and provides cer tain privileges.
Starting from 2020, temporary stay of foreign individuals arriv ing in Kazakhstan under the visa-free regime (including the above 57 jurisdictions) should not exceed 30 calendar days from the day of crossing the border of Kazakhstan and in total not more than 90 calendar days in each 180-calendar day period if other rules are not envisaged by the agreement concluded by Kazakhstan with the foreign country or the Government of Kazakhstan. This rule does not apply to those individuals who have a permit for temporary stay in Kazakhstan as described above. As a result of the COVID-19 pandemic, the visa-free regime with the above listed 57 jurisdictions is suspended until 31 December 2021.
Currently, as a result of pandemic and quarantine measures, the entry into Kazakhstan for foreigners is more challenging and complex, and a separate written approval from the Interdepartmental Commission (IC) chaired by the Deputy Prime Minister of Kazakhstan is required for foreign individuals who enter Kazakhstan for work purposes. Therefore, if the foreign individuals enter Kazakhstan for work or business or other pur poses, the inviting company should first prepare an official request to the attention of the head of the administration of the respective city (city governor). Such request must contain a jus tification as to why the company needs the foreign employee. The letter will then be forwarded to the special IC for further consid eration. Each request will be considered on a case-by-case basis by the special IC within five working days (in practice, it may take more time). If it is a positive decision, the IC issues the protocol containing the name of the company and foreign indi vidual, and he or she will be able to enter Kazakhstan based on this protocol, provided all other visas and work permits are in place.
Post-arrival registration. Before 10 January 2020, as a general rule, foreign individuals arriving in Kazakhstan for more than five calendar days had to register at the MIA. However, this requirement has been replaced by the requirement of the inviting party obtaining a permit for temporary stay of a foreign citizen.
In addition, the inviting party must notify the MIA within three working days of arrival of the foreign individual in Kazakhstan and notify the MIA if the foreigner changes his or her temporary place of residence in Kazakhstan.
The records of immigrants are currently kept by the MIA based on the information provided by the inviting parties and the National Security Committee of Kazakhstan, and information from the border control of Kazakhstan.
A permit for temporary stay will allow the foreign individuals to stay for the certain period (for example, the length of the labor agreement), and it should be obtained by the inviting party. The permit for temporary stay is formalized based on the applications from the following:
• Individuals inviting foreign individuals for family reunion
• Individuals or legal entities having concluded labor agreements with the foreign individuals
• Education organizations
• Medical organizations
• Religious organizations
• Local authorities inviting individuals (business immigrants) for the performance of entrepreneurship activities
However, foreign individuals in possession of a visa issued after 1 July 2018 do not need to obtain a permit for temporary stay in Kazakhstan. Separately, the relevant data should be automatically recorded in the Berkut electronic database, based on the informa tion provided in the letter of invitation. If foreign individuals enter Kazakhstan under a visa-free regime, the above described new rule should apply. The period of stay in Kazakhstan ends upon the expiration of the visa, after 30 calendar days under the visa-free regime or upon the end of the period indicated in the permit for temporary stay in Kazakhstan. Kazakhstan legislation provides for several sanctions for noncompliance with the immi gration requirements. For further details, see Section H.
G. Work permits
Types of work permits. The following are the two types of permits allowing foreign individuals to work in Kazakhstan:
• A work permit for attraction of foreign labor force (the Work Permit).
• A permit issued to a foreign individual who independently arrived in Kazakhstan to work in a particular specialty (the Permit for Employment). The government approves the list of such specialties.
The employer obtains the Work Permit through the submission of the documents to the local authorities under two main proce dures, which are the general regime and intra-corporate transfer.
General regime
Work Permit quota. Work Permits are issued by the local authori ties within the quota allocated by the Ministry of Labor and Social Protection on an annual basis. The quota is the maximum number of foreign individuals who can be hired to work in Kazakhstan for different regions. The quota is mainly formed based on the annual applications of employers due by 1 October.
Ratio requirement. For the purpose of obtaining a Work Permit under the general regime, all foreign individuals are classified into the following categories:
• Category 1: Chief-executive officers (CEOs) and deputy CEOs of companies
• Category 2: Leaders of business divisions/departments
• Category 3: Professionals
• Category 4: Qualified workers
There is a restriction on the number of foreign employees that can be hired by a Kazakhstan employer/local host entity, which is the so-called “ratio requirement.” Currently, the total number of foreign employees of a Kazakhstan employer/local host entity should not exceed the following:
• 30% of the total number of the Category 1 and Category 2 employees.
• 10% of the total number of Category 3 and Category 4 employees.
An exemption from the ratio requirement applies to small busi ness enterprises, government enterprises and agencies, selfemployed foreign individuals, work permits issued within the limits of a quota by countries of origin if international agreements on cooperation in labor migration and social protection of working migrants ratified by Kazakhstan are in place, and representative offices and branches of foreign legal entities with at most 30 employees.
State duty. When obtaining or extending work permits, an employer is charged a state duty for the issuance or extension of the work permit. The amount of the duty is established by the government of Kazakhstan and depends on the type of business of the employer and the category of the foreign employee. The amount of state duty ranges from approximately USD950 to USD3,600, depending on the sector of the economy, category of the employee and validity period of the Work Permit.
Other conditions. To obtain a work permit, each foreign individ ual must meet the qualification requirements set by the rules.
A Work Permit under the general regime is issued for the follow ing durations:
• Category 1: for one, two and three years with an annual exten sion for one, two or three years
• Category 2: for 12 months, with an annual extension for 12 months, but no more than 3 times
• Category 3: for 12 months, with an annual extension for 12 months, but no more than 3 times
• Category 4: for 12 months with no extension
Intra-corporate transfer. An intra-corporate transfer (ICT) is a temporary transfer of a foreign individual from a legal entity established in the territory of a member state of the World Trade Organization (WTO) other than Kazakhstan to its Kazakhstan branches, subsidiaries or representative offices.
A foreign individual engaged under an ICT remains employed by the home company, but should comply with the requirements of the host employer in terms of work schedule and health and safety requirements. The foreign individual should meet the respective qualification requirements and should have at least one year of work history in the entity established in a member state of the WTO.
Work Permits under ICT are issued free of state duties and sepa rately from the quota for foreign labor.
Ratio requirement. For the purpose of obtaining a Work Permit under ICT, all foreign individuals are classified into the follow ing:
Specialists
Managers
Executives
Under the ratio requirement for ICT, the number of foreign employees should not exceed 50% of the total number of manag ers and specialists. No ratio requirement applies with respect to executives.
Other conditions. The local authorities issue the work permit under ICT for the transfer period, but for no more than 3 years (36 months) with a right of a one-time extension for 1 year (12 months).
However, before hiring a foreign specialist to Kazakhstan under ICT, the local host entity should complete a search for suitable candidates on the Kazakhstan labor market and obtain a work permit only if no candidates are found.
For each work permit for a manager or specialist received under ICT, the employer should fulfill one of the relevant special condi tions (for example, creation of a new job for Kazakhstan citizens and retraining of Kazakhstan citizens). When hiring executives, no special conditions are imposed on the host company.
Work Permit exemptions. Certain categories of individuals are not required to obtain Work Permits. These include, among others, the following:
• Nationals of member countries of the Eurasian Economic Union, regardless of their position or the duration of their employment in Kazakhstan
• Individuals arriving in Kazakhstan on a business trip for a cumulative period not exceeding 120 calendar days per calen dar year
• Business immigrants arriving in Kazakhstan to do business
• CEOs of local branch offices or representative offices of for eign companies as well as CEOs and deputy CEOs of local wholly foreign-owned companies
• CEOs of companies that have entered into agreements with the government of Kazakhstan to invest more than USD50 million in the country and CEOs of local companies running investment projects in key industries under agreements with the local state authority on investment
• Crew members of sea and river vessels, aircraft and railroads, and automobile transport
• Artists, film directors, conductors, choir masters, choreogra phers, sportspersons and coaches
• Foreign nationals engaged by participants or bodies of the International Finance Center of Astana
• Individuals working in the Astana Hub International technology park or hired by its participants in the positions of managers and specialists with higher education
• Managers and professionals with higher education working with either local companies that have entered into contracts to implement investment projects in priority areas or companies in the architecture, city planning and construction industry con tracted by such investors, for a period until the end of the first year after the commissioning date of the project’s facility, or as qualified workers in accordance with the list of occupations and employee numbers approved as part of investment contracts
• Employees of companies registered in one of Kazakhstan’s 10 Free Economic Zones (FEZs) to implement projects worth more than KZT2,917,000 (in 2021) or companies contracted by a FEZ resident, for the period of construction and installation work in the FEZ and during the first year after the commission ing date of the project facility, in accordance with the list of employee categories and numbers adopted by a special commit tee of competent authorities
• Individuals working for a national managing holding (state-owned company) in positions not lower than the heads of structural units, having completed higher education and with supporting documents as required by legislation of Kazakhstan, and individuals hired by a national managing holding in the capacity of members of the board of directors
H. Sanctions for noncompliance with the immigration legislation
Kazakhstan legislation provides severe sanctions for inviting par ties and foreign citizens for noncompliance with the migration legislation. The upper end of administrative sanctions applied to a company can reach USD6,900 (per foreign individual per violation). The worst-case scenario can include administrative custody for up to 15 days or administrative deportation of the individual from the country and a company being banned from engaging any foreigners for up to one year (that is, no issuance of a Work Permit and no acceptance of a letter of invitation from the company for a visa application). Foreign individuals are not allowed to enter Kazakhstan for five years after the administra tive deportation from Kazakhstan.
I. Residence permits
Kazakhstan issues residence permits. No quota system is in effect for immigration into Kazakhstan under residency permits.
J. Family and personal considerations
Family members. The spouse of a holder of a Kazakhstan Work Permit does not automatically receive the same type of Work Permit. If he or she wishes to undertake employment, a Work Permit application must be filed independently.
Driver’s permits. Foreign nationals may drive legally in Kazakhstan with their international driver’s licenses. Foreign country driver’s licenses are valid in Kazakhstan if they comply with 1968 Vienna Convention on road traffic. However, an official Russian or Kazakh translation of the foreign driver’s license by a confirmed translator is required; therefore, it is advisable to have an interna tional driver’s license.
Kazakhstan has driver’s license reciprocity with some of the Commonwealth of Independent States (CIS) countries, including, but not limited to, Belarus, Kyrgyzstan, the Russian Federation, Ukraine and Uzbekistan.
A foreign individual may obtain a Kazakhstan driver’s license after passing written, practical and medical examinations.