Kazakhstan Info
Joined: 20 Apr 2007
Posts: 14
Home Country: kazakhstan
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 Posted: Wed May 09, 2007 8:27 am Post subject: DOING BUSINESS IN KAZAKHSTAN / KAZAKHSTAN BUSINESS GUIDE |
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DOING BUSINESS IN KAZAKHSTAN
STARTING A BUSINESS
STANDARDIZED COMPANY
Legal Form: Private Limited Liability Company
Minimum Capital Requirement: 103,000
City: Almaty
Registration Requirements:
Procedure 1. Notarise the company deed.
Time to complete: 1 day
Cost to complete: KZT 103 for Charter and KZT 5,150 for Foundation Agreement
Comment: Company documents to be prepared are: a Charter (Articles of Incorporation, need 3 copies to be submitted to the Justice Department) and a Foundation Agreement if there is more than one founder. If there is one founder the Foundation Agreement is not required. There is no requirement to submit this agreement to the Justice Department.
Procedure 2. Open bank account and deposit initial capital; Pay registration fee into the account of the Ministry of Justice.
Time to complete: 1 day
Cost to complete: no charge or bank fee; KZT 5 for a receipt or 1% of fee payment for service of a bank
Comment: Founders shall pay at least 25% of charter capital prior to state registration with the local Department of Justice; however this pre-registration contribution shall not be less the minimal amount of charter capital. The minimal amount of capital is 100 times the MCI (KZT 105,000). Minimal initial capital must be paid prior to the date of a state registration. The whole charter capital shall be paid within the term established by the general meeting of founders, but no later 1 (one) year since state registration of a company. Although the law requires this procedure, the local department of justice does not require a confirmation of payment of the initial charter capital.
Procedure 3. State registration of legal entity, statistical and tax registration with the local department of Ministry of Justice.
Time to complete: 14 days
Cost to complete: KTZ 20 times the MCI
Comment: Important changes were introduced by the Law of 18 March 2004 on Amendment of certain RK Laws on Registration of Legal Entities. The start-up formalities including registration of legal entities (branches and representation offices) with the local justice authorities, statistical and tax bodies take place in the local department of the Ministry of Justice and must be completed within 10 business days.
The registration of a legal entity is realised in the following way: applicant submits a new set of application forms (downloadable) and documents as prescribed by law. The local department of justice is prohibited to demand any documentation other than stipulated by law; the local department of justice incorporates a new entity and within one business day from the date of registration informs a local statistical body; the statistical body within two business days confers the identification and other systematic-accounting codes on a new legal entity, includes the data on the registered legal entity into the State Statistical Register, issues a statistical card, which within one business day is handed over to the department of justice and simultaneously to the local tax authority; in turn the tax authority based on the notification confers a registration number of taxpayer on the new legal entity within two business days from the date of receiving of the notification, issues a certificate of taxpayer and within one business day from the date of tax registration hands it over to the Department of Justice to give it to the registered new legal entity. After ten days the department of justice must give the new entity a state registration certificate, statistical card and certificate of taxpayer. Due to some ambiguity of interpretation of legal term for registration in the Law on State Registration of Legal Entities and Accounting Registration of Branches and Representative Offices in action, this term may be extended by the justice bodies up to 15-16 days.
Procedure 4. Make a company seal.
Time to complete: 1 day
Cost to complete: KTZ 1,390-2,760
Comment: File 1) copy of certificate of state registration of the company; and 2) power of attorney if the person is not the director.
Procedure 5. Notarise certificate of state registration and other post-registration documents.
Time to complete: 1 day
Cost to complete: KTZ 103 per page
Procedure 6. Open the current account in the bank.
Time to complete: 1 day
Cost to complete: KTZ 0 up to roughly KZT 10,000
Comment: It is necessary to provide the bank with the following documents:
1) Cards with sample signatures and an imprint of seal;
2) Copy of a document, distributed by the tax authority, confirming the fact of registration in the Tax authority;
3) Copy of the state registration certificate of legal entity from the registration body of the Ministry of Justice of the Republic of Kazakhstan;
4) Copy of the statistical card of legal entity;
5) Notarised copy of the charter, or other document confirming the fact of activity of legal entity on the basis of Standard Charter;
6) Copies of the orders on appointment of persons indicated in the Document with signature cards and an imprint of seal;
7) Application for open of bank account (form is obtained in the bank);
8) Bank Account Agreement; and 9) document appointing chief accountant.
Procedure 7. Register for the obligatory insurance of life and health for employees.
Time to complete: 1 day
Cost to complete: no charge
Comment: Each employee should have an insurance paid by the employer according to the Law On Obligatory Insurance of the liability of the employer for life and health tort to the employee in discharge of labour and (official) duties dated February 7, 2005 that will come into effect on July 1, 2005.
FORMS OF BUSINESS ORGANISATION
1. Limited-liability partnerships
2. Joint-stock companies
3. Branches
The limited-liability partnership is the most popular company form. Under the Civil Code adopted in 1995, additional organisational forms include full partnerships, limited/mixed partnerships and joint-stock companies. Foreign firms not wishing to establish a Kazakhstan legal entity may choose between a representative office and a branch office. Representative offices may not conduct income-generating business; branches may do so.
Foreign investors tend to borrow from their home countries, and oil company subsidiaries usually borrow from their parent companies. Kazakh companies are increasingly raising money through bond issues.
TAXATION
Corporate tax
Main rate: 30%
Resident companies pay tax on their worldwide income; non-resident companies pay tax only on income sourced in Kazakhstan. A company is resident if it is established under the laws of Kazakhstan, or has its governing bodies or place of actual management there. The main corporate tax rate is 30%, but companies whose main productive asset is land are taxed at 10% on income from use of the land. A 0% rate applies to enterprises operating in special economic zones. In addition to corporate tax, branches of non-resident companies pay branch profits tax of 15% of net after-tax income.
Individual tax
Progressive rates to 20%
Resident individuals are taxed on their worldwide income; non-residents are taxed only on income sourced in Kazakhstan. An individual is considered resident if present in Kazakhstan for 183 days in a 12-month period ending in the relevant tax year. Income tax is charged at progressive rates to 20%. Dividends are subject to a final 15% withholding tax.
Capital gains
Generally taxed as income
Capital gains of companies are included in business profits. Capital gains of individuals derived from real property, other tangible assets, foreign currency and jewellery are taxed at the normal income tax rate. Gains derived by individuals on securities are not included in taxable income but are subject to tax at a 15% rate.
Indirect tax
VAT standard rate: 15%
The standard rate of value-added tax (VAT) is 15%. Exports are zero-rated. Exemptions include the lease and sale of land and residential buildings, financial services, infrastructure projects for the Kazakh government and international transport. A reverse-charge mechanism applies for certain payments to non-residents. Registration for VAT is compulsory for businesses.
Tax administration and compliance
Tax year: Corporations: calendar year; Individuals: calendar year
Legal entities are required to make monthly advance payments of tax amounting to one-twelfth of the expected tax liability for the year. An estimate of income tax for the current tax year must be submitted by January 20th. Tax returns are due by March 31st following the tax year-end. A revised estimate of tax payable must be submitted within 20 days after filing the tax return and no later than April 20th. Employment income is taxed by withholding. Individuals who have income not taxed by withholding must file a self-assessment tax return by March 31st and submit the tax due within ten days of filing the return.
Additional tax information
Withholding taxes: Dividends and interest 15%, Royalties and most other income 20%.
Tax treaties: Kazakhstan has concluded more than 30 double-tax treaties.
Dividends: Dividends are subject to a 15% final withholding tax.
Revenue protection: There are transfer-pricing and thin-capitalisation rules.
Groups: There is no provision for group taxation.
Incentives: Law on Investments; special economic zones.
Other taxes: Customs duties, excise duties, rent tax on the export of crude oil and gas condensate, property tax, registration fees, social tax, stamp duty, fees for the state registration of rights to intellectual property, land tax, vehicle tax. |
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