Invest in Kazakhstan National Export & Investment Agency “KAZNEX INVEST” Ministry of Investment and Development

Basic Facts ● Area: 2,724,000 km 2 (1,051,742 sq.miles), 9 th largest ● Population: 17,476,141 ● Official language: Kazakh, Russian ● Currency: Tenge (KZT) ● Capital: Astana ● Administrative division: 14 regions + 2 cities ​ of republican significance ● Member of organizations:UN, IMF, WB, OSCE, OIC National Flag National Emblem

DOING BUSINESS 2015 Kazakhstan ranked 77th Economy Source: World Bank, Doing Business 2015 RankCountry 1New Zealand 2Hong Kong 3Singapore 4United Kingdom …… 25Kazakhstan 35Japan 100Russia 132China Protecting minority investors

GLOBAL COMPETITIVENESS INDEX RANKINGS Economy Source: World Economic Forum, Global Competitiveness Report RankCountryScore 1Switzerland5.70 2Singapore5.65 3USA5.54 4Finland5.50 5Germany5.49 6Japan5.47 ……… 50Kazakhstan Russia India Ukraine Kyrgyz Republic3.73

Kazakhstan in the world ranking for reserves Economy NATURAL RESOURCES Kazakhstan in the world ranking for production Source: U.S. Geological Survey, Mineral Commodity Summaries 2014; BP Statistical Review of World Energy, June 2014; U.S. Energy Information Administration, Independent Statistics and Analysis; The Global Source, The Silver Institute; Thomson Reuters GFMS, Gold Survey 2013 Update 1.

Economy TAXATION: COMPARISON WITH CHINA AND RUSSIA KazakhstanRussiaChina Corporate income tax (CIT) 20% 25% Value-added tax (VAT) 12%18%17% Land tax from 0.03 to 0.16 USD per 1 sq.m (10.8 sq.ft); 0.3%, 1.5%- Property tax 1.5% 2.2% 1.2% assessed value; 12% rental property. Source: Ministry of Finance of the RK; Federal Tax Service of Russia; State Administration of Taxation of the People’s Republic of China TAXES

Source: National Bank of the RK FDI in the manufacturing sector 17.6 $ bln. 74% FDI in the manufacturing sector 6.1 $ bln. 26 % Since 2005, gross inflows of FDI in the manufacturing sector amounted to $ 23.7 billion, of which: From 2010 to 2014 gross inflow of FDI in the manufacturing industry was 17.6 billion USD, which corresponds to 74% of total FDI inflows in the manufacturing industry since Economy FDI ATTRACTION

Germany (74) Norway (32) Czech Republic (40) South Africa (41) Japan (70) 8,7 5,9 5,7 2,1 Developed economies Developing economies 1,8 Source: UNCTAD, World Investment Report 2015 FDI inflows: top 30 host economies, 2014, $ bln. According to the UNCTAD, Kazakhstan has joined 30 countries with the highest volume of foreign direct investments. It was ranked the 28th in Economy FDI ATTRACTION

Source: UNCTAD, World Investment Report 2015 Top 5 host economies, FDI inflows Transition economies, 2014, $ bln. (change) Top 5 host economies, FDI inflows Landlocked developing countries, 2014, $ bln. (change) In 2014 Kazakhstan has entered top 5 host economies for FDI inflow among transition economies and became the largest FDI recipient in the landlocked developing countries group. Economy FDI ATTRACTION

Source: fDi Markets, includes estimates Top 10 economies for FDI, developing countries, $ bln. Top 10 economies for FDI growth, developing countries, 1 H 2015 to 1 H 2014 Based on FDI Markets data, FDI inflow to developing countries dropped by 25% in the first half of 2015 comparing to the same period of Inflows to Kazakhstan reached $2.5 bln. positioning the country on the 23d place in the same group of countries and increased by 2.6 times for which it gives Kazakhstan the 1st place. Economy FDI ATTRACTION

Metallurgy 1 1. Ferrous metallurgy 2. Non-ferrous metallurgy 3. Agricultural chemistry 4. Production of chemicals for industry 5. Oil refining 6. Petrochemical industry 13. Production of construction materials 7. Manufacture of motor vehicles 8. Electrical equipment 9. Agricultural machinery engineering 10. Railway machinery engineering 11. Mining equipment 12. Oil producing equipment; oil and gas refining equipment 14. Food production Chemical Industry 2 Petrochemical Industry 3 Machinery 4 Production of construction materials 5 Food Industry 6 Priority sectors

INCENTIVES IN-KIND GRANTS In-kind grants of not more than 30% of the total investment in fixed assets. Free land EXEMPTION FROM CUSTOMS DUTIES 1) When transporting manufacturing equipment and components for it the exemption from customs taxation is granted for the term of investment contract but not later than 5 years after the investment contract registration. 2) When importing spare parts for the manufacturing equipment, raw stock and (or) materials for term up to 5 years the exemption from customs taxation is granted to the legal companies depending on the volume of investment in the fixed assets. Investment

FREE ENTRYFREE WORK PERMITS Visa-free entrance Visa-free entrance for citizens of USA, Great Britain, Germany, France, Italy, Malaysia, Netherlands, UAE, South Korea, Japan for the period from 15 July 2014 till 15 July 2015 if the stay does not exceed 15 days (general application). Foreign labor Without permit for the duration of construction + 1 year after commissioning of the investment project for those with investment contracts NEW INCENTIVES (since 2014) Investment + 10 new countries

*Criteria for priority investment projects: - matching the List of Priority Activities (approved by the Government) - newly created legal entity with investments of more than 2 million MCI (MCI – monthly calculated index, approved by the Law on the national budget) CASHBACK ON INVESTMENTS Reimbursement up to of the actual expenses for installation and construction works and equipment acquisition without value added tax and excises on the basis of supporting documents, but not exceeding the cost of expenses provided by preproject documentation having the conclusion of state expertise. Corporate income tax (10 years) TAX EXEMPTIONS: Land tax (10 years) Property tax (8 years) Incentives for priority investment projects* NEW INCENTIVES (since 2014) Investment 30 % 0 %

STABLE LEGISLATIONSTRONG PROTECTION OF INVESTOR’S RIGHTS Stability of tax legislation for all taxes except VAT and excise (subject to investment contract) Ombudsman’s Office For ensuring protection of the rights and legitimate interests of the investors, the investment ombudsman: 1) considers addresses of investors on issues arising during the implementation of investment activity and gives recommendations for their solution, including interacting with government bodies; 2) assists to investors in solution of arising issues in extrajudicial and pre-judicial procedures. Investment Incentives for priority investment projects* NEW INCENTIVES (since 2014) *Criteria for priority investment projects: - matching the List of Priority Activities (approved by the Government) - newly created legal entity with investments of more than 2 million MCI (MCI – monthly calculated index, approved by the Law on the national budget)

SPECIAL ECONOMIC ZONES «Pavlodar» SEZ Petrochemical industry «NIPT» SEZ Petrochemical industry SEZ «Saryarka» Metallurgy «Seaport Aktau» SEZ Mixed «Burabai» SEZ Tourism «Ontystik» SEZ Textile industry «Astana - new city» SEZ Mixed «Chemical Park Taraz» SEZ Chemical industry «Khorgos – Eastern Gate» SEZ Logistics Investment «Park of Innovative Technologies» SEZ IT - Innovations

Increase of marginal rate of depreciation for tax on the production of software to 40% For «Park of Innovative Technologies» SEZ – social tax is 0% for 5 years, under certain conditions and depreciation rate for software increased to 40 % Provision of free land in SEZ for a period of up to 10 years from registration time as SEZ resident Simplified procedure for the recruitment of foreign labor NON-FISCAL INCENTIVES FISCAL INCENTIVES INVESTMENT INCENTIVES IN SEZs Investment Corporate income tax Land tax Property tax until with possibility for extension 0 % Exemption from VAT (for products consumed in SEZ)

LOCATION AND INFRASTRUCTURE ● The Kazakhstan’s geographical position makes it a natural crossroads for major transit corridors from East to West, from North to South. ● The transcontinental automobile road corridor “Western Europe – Western China” passes through the territory of Kazakhstan. The corridor will allow to deliver freights from China to Europe in 10 days. ● There is a territory with population of more than 3.3 bln. people within a radius of 2 thsd. km (1,243 miles) from Kazakhstan. ● The flight time from most European destinations is five hours. Infrastructure RUSSIAN FEDERATION mln. UZBEKISTAN 30.2 mln. TURKMENISTAN 5.2 mln. KAZAKHSTAN 17 mln. PEOPLE’S REPUBLIC OF CHINA 1.4 bln. MONGOLIA 2.8 mln. INDIA 1.3 bln. BELARUS 9.5 mln. IRAN 77.4 mln. PAKISTAN mln. TURKEY 74.9 mln. Lianyungang St. Petersburg Aktobe Shymkent KYRGYZSTAN 5.7 mln. Western Europe – Western China corridor on the territory of Kazakhstan (2,787 km=1,732 miles) Western Europe – Western China corridor (8,445 km=5,247 miles)

SUCCESS STORIES Investment

Ministry of Investment and Development of the RK Electronic Government National Export and Investment Agency «KAZNEX INVEST» National Investment Internet Resource Useful Links

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