NEW OPPORTUNITIES FOR INVESTMENTS Kazakhstan : NEW OPPORTUNITIES FOR INVESTMENTS April 14, 2011 Zurich, Swiss Confederation

Agenda Why Kazakhstan is attractive for investors? II. Investing in Kazakhstan Contact details

Why Kazakhstan is attractive for investors 1. Natural Resources Kazakhstan has the 6th largest reserve of natural resources in the world

Why Kazakhstan is attractive for investors 2. Stable Macroeconomic Environment Source: National Bank of RK

Why Kazakhstan is attractive for investors 2. Stable Macroeconomic Environment

Why Kazakhstan is attractive for investors Favorable business climate FDI records serve as an evidence of a favorable investment climate. Kazakhstan attracted more than 118 bln. US dollars if FDI since 1993.

Why Kazakhstan is attractive for investors? Investor Protection Country Strength of investor protection index (0-10) New Zealand 9.7 Kazakhstan 5.7 Russia 5.3 Tajikistan Ukraine 4.7 Moldova Source: National Bank of RK

Why Kazakhstan is attractive for investors? Favorable business climate International ratings also serve as an evidence of a favorable investment climate Source: National Bank of RK

Why Kazakhstan is attractive for investors? Proximity to Largest Regional Markets Kazakhstan is the continental bridge for goods that move from East and West, South to North. 3 out of 4 BRIC countries are located near Kazakhstan: Russia, China and India. Strategically located between European and Asian business centers Serves as a main transit zone in the region Provides 3 out of 4 Eurasian railways

Why Kazakhstan is attractive for investors? Proximity to Largest Regional Markets

Why Kazakhstan is attractive for investors Proximity to Largest Regional Markets West Europe – West China – 8 445 км 10 days 30-35 days Sea route – 24 000 км

Why Kazakhstan is attractive for investors? Market capacity By entering the Customs Union, Kazakhstan creates for investors a more attractive market of 170 million people and opens up additional possibilities for effective investment projects Unified customs territory Uniform trade policy Uniforms customs code Free trade of goods within the customs area Free movement of goods, services, labor and capital Dear participants of the Forum, Ladies and gentlemen! Thank you for participating in today’s event! My presentation is about NEW OPPORTUNITIES FOR INVESTMENTS in Kazakhstan.

Kazakhstan, Russia and Belarus Customs Union from 2010 Market capacity – around 170 mln. people Total GDP of almost $ 2 trillion U.S

Why Kazakhstan is attractive for investors? Kazakhstan is reducing the negative impact of current deficiencies In 2010, the State program of accelerated industrial-innovative development for 2010-2014 was adopted, which aims Infrastructure development Creation of new export-oriented high-tech manufacturing Strengthening of the national innovative system Improvement of professional skills of local labor State support (preference, privilege, co-financing etc) is granted to projects in priority sectors (non raw materials sector) in order to decrease the investors' expenses International Economic Cooperation Committee Ministry of Foreign Affairs of the Republic of Kazakhstan

State program of accelerated industrial-innovative development for 2010-2014 GOAL INDICATORS GDP grown up to 50% than in 2008 Increasing of labor productivity in manufacturing industry up to 50% and in some sectors up to 100% Ensure sustainable and balanced economic growth through diversification and competitive recovery. Increasing the share of non resource export up to 40% Decreasing energy intensity of GDP no less than 10% Increasing the share of innovative enterprises up to10% of active enterprises

Based on domestic demand Sectors of «the future economy» Priority sectors of economy Traditional Mining and Metallurgical Complex Nuclear industry Chemical industry Petrochemicals Based on domestic demand Machinery Construction industry Pharmaceuticals Export-oriented Agro-industrial complex Light industry Tourism Sectors of «the future economy» Biotechnology Alternative Energy Information and Communication Technology Space activities

Investing in Kazakhstan – State Support Foreign Investment Protection Guarantees Kazakhstan has signed agreements on mutual investment protection with 44 countries

Investing in Kazakhstan – State Support Foreign Investment Protection Guarantees In order to reduce investment risk and guarantee protection to foreign investments, foreign investors are given national status (foreign and domestic companies work under equal conditions) The Foreign investors’ Council chaired by the President of the Republic of Kazakhstan was established in 1998, 30th of June Purpose: promotion of direct dialogue between the Government of Kazakhstan and foreign investors in order to efficiently address key issues related to their investment activities in the country Council meetings address issues critical to the development of the country’s economy, investor protection and investment climate. The Council consists of 29 foreign companies.

Main instruments of investor support Special Economic Zones Investment Preferences Economic incentives for investors Special Permanent Commission on Foreign Investment headed by Prime Minister of Kazakhstan: «OMBUDSMEN» for Investors Institutional Support National Export and Investments Promotion Agency: “ONE STOP-SHOP” for Investors Service support for investors 19

Investment preferences Recipients of preferences: Potential and current investors Types of preferences: Exemption from customs duties of imported equipment and its components for investment project implementation Tax incentives for investors Granting of the state natural grants value of the objects of preferences and (or) the following costs for the modernization and reconstruction can relate to deductions. Terms of preferences: Priority sectors of the economy

Investing in Kazakhstan – State Support Privileges for Members of Special Economic Zones Today, there are 6 Special Economic Zones (SEZ) in Kazakhstan SEZ «Burabay» SEZ «Astana - New city» SEZ «Ontystik» SEZ «Marine Port Aqtau» SEZ «Petrochemical park» SEZ «IT Park»

Investing in Kazakhstan – State Support Privileges for Members of Special Economic Zones The members of SEZ enjoy the following privileges: Corporate income tax exemption Customs-free policy VAT exemption on goods and services given on SEZ territories, made or consumed in activities related to SEZ creation 0% to the mid-year cost of taxable objects when calculating property tax 40% in the marginal rate of depreciation used for IT software

Institutional Support for Investors KAZNEXINVEST www.kaznexinvest.kz Government of Kazakhstan (ministries, agencies etc. International Economic Cooperation Committee IECC.pptx Embassy of Kazakhstan in Switzerland http://www.kazakhstan-bern.ch/ Investor www.invest.gov.kz

“ONE STOP-SHOP” SERVICES FOR FOREIGN INVESTORS Information on investment opportunities and business conditions Information on investment projects http://www.sendspace.com/file/h57oaq Assistance in a choice of projects and partners Assistance in reception of measures for state support Organization of meetings with official representatives Assistance in making decisions on administrative questions

National investment interactive website www.invest.gov.kz Niche investment projects_eng.doc Website will be available in 12 languages: English, German, French, Italian, Spanish, Arabic, Korean, Japanese, Turkish, Kazakh and Russian.

More information Website includes information on : Processing of requests and inquiries of investors and initiators of the projects online Provision of quality and daily updated information on all aspects of investing in Kazakhstan, including: Investment legislation of the Republic of Kazakhstan; Business conditions in Kazakhstan; Infrastructure conditions; Government programs; Government support for investors and others. The list of investment projects

For further information: Contact the Embassy of the Republic of Kazakhstan Visit our website www.mfa.kz Necessary information for investing in Kazakhstan visit www.invest.gov.kz Thank you for attention!