We talked with a representative of Unicase law firm about how foreign investors and companies can enter the markets of Kazakhstan and Uzbekistan, and found out why they need it.
Sania Perzadayeva, Managing Partner of Unicase Law Firm
I am a qualified lawyer of the Republic of Kazakhstan, a member of the Supervisory Board of the Kazakhstan Bar Association and a managing partner of the Unicase law Firm.
Our company has been operating in the market of Kazakhstan for 12 years, and in Uzbekistan for more than two years. We provide services in the field of legal and tax support, advise clients.
We have extensive experience in supporting complex infrastructure companies, so we provide legal support at all stages of the project and after its completion.
We support foreign and national business structures in the field of subsoil use, traditional and renewable energy.
Why do you need legal support
Support of foreign companies includes: opening a turnkey legal entity, obtaining the necessary permits, opening bank accounts, daily legal advice and other services.
The commercial and entrepreneurial climate of Kazakhstan and Uzbekistan contributes to the creation and development of business. Our countries attract foreign investors by the fact that there is a large amount of undeveloped land here, and we also have low tax rates and preferences.
But many foreign companies face the problem of ignorance of the procedures and subtleties of creating a business in another country. Then they can turn to firms that specialize in accompanying foreign companies.
Why choose Kazakhstan or Uzbekistan
There are many undeveloped territories with mineral deposits in Kazakhstan. Therefore, investors often choose mining and agricultural development activities to create a business.
Also, many activities are supported at the state level. Priority sectors: small and medium-sized entrepreneurship, innovation and investment activities, agro-industrial complex, non-agricultural types of entrepreneurship in rural areas, tourism activities.
The commercial and entrepreneurial climate of Kazakhstan and Uzbekistan is conducive to business creation and development
Uzbekistan attracts foreign investors by its geographical location, climatic conditions and preferences.
Also, both countries provide ample opportunities for the use of renewable energy sources — solar, wind and water. For example, the average number of sunny days per year in the south of Kazakhstan and Uzbekistan is about 300.
What documents and permits are needed
Conducting a private business in Kazakhstan and Uzbekistan is possible in two ways:
— for individuals by registering as an individual entrepreneur
— for legal entities — by creating in the registration and legal form provided for by the laws of the countries.
The first step is choosing a company form and registering it. For example, a Limited Liability Partnership.
The list of documents includes: the decision of the founder on the establishment of an LLP, the founding agreement, the charter.
For foreign founders-legal entities are also required: documents confirming state and tax registration in the country of incorporation or residence. For a foreign individual, only a passport is required.
There are also legal requirements for obtaining permits to attract foreign workers. For example, foreign employees need to get a permit and a work visa. Citizens of Russia and Belarus do not need them. This is regulated by the EAEU Treaty.
If the company plans to carry out licensed activities, it is required to obtain the appropriate document.
About frequent errors
The main mistake in doing business is breaking the laws: unknowingly or intentionally. It is necessary to take into account the norms of different types of legislation: tax, customs, administrative, criminal and so on.
Examples of common mistakes: carrying out activities without obtaining a license, tax evasion, incorrect indication of the legal address, incorrect choice of tax regime. To avoid them, I advise you to contact local experts who provide business support services in the country you need.
On measures to stimulate business
The development of small and medium-sized businesses is the basis of the economy of any country. In Kazakhstan, from January 1, 2020, micro and small business entities were exempted from income taxes and imposed a moratorium on inspections for three years.
In the program Business Roadmap-2025, industry restrictions have been lifted, the loan amount has been increased to seven billion tenge with a subsidy period of five years. They also launched a new direction — lending to micro and small businesses through subsidies at a rate of 6% with an extended refinancing period.
Kazakhstan's high investment attractiveness is confirmed by its position in the international Doing Business rating. In 2020, the country entered the top 25.
Uzbekistan also supports business. Over the past five years, procedures for obtaining permits have been simplified at the administrative level, 114 licenses and permits have been canceled, a notification procedure has been introduced for 33 types of activities. The terms of their issuance have been halved, unnecessary checks have been canceled, and restrictions related to cash turnover have been lifted.
As a result of these measures, the business climate in the country has improved. In the latest Doing Business report, Uzbekistan's rating has risen by seven positions — 69th place.
The processes of interaction between investors and the state through digitalization and contactless provision of services are also being optimized.