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

Basic Facts National Flag National Emblem Area: 2,724,000 km2 (1,051,742 sq.miles), 9th 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

Protecting minority investors Economy DOING BUSINESS 2016 Protecting minority investors Kazakhstan ranked 41st Rank Country 1 Singapore 8 South Korea 20 Turkey 25 Kazakhstan 36 Azerbaijan 49 Armenia 57 Belgium 66 Russia 81 Hungary 134 China Paying taxes Rank Country 1 UAE 5 Singapore 18 Kazakhstan 34 Azerbaijan 41 Armenia 47 Russia 61 Turkey 90 Belgium 95 Hungary 132 China Source: World Bank, Doing Business 2016

GLOBAL COMPETITIVENESS INDEX RANKINGS Economy GLOBAL COMPETITIVENESS INDEX RANKINGS Rank Country Score 1 Switzerland 5,76 2 Singapore 5,68 3 USA 5,61 4 Germany 5,53 5 Netherlands 5, 50 6 Japan 5,47 … 42 Kazakhstan 4,49 45 Russia 4,44 51 Turkey 4,37 80 Tajikistan 4,03 102 Kyrgyz Republic 3,83 Source: World Economic Forum, Global Competitiveness Report 2015-2016

from 0.03 to 0.16 USD per 1 sq.m (10.8 sq.ft); Economy TAXATION: COMPARISON WITH CHINA AND RUSSIA TAXES Kazakhstan Russia China 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

Economy FDI ATTRACTION Top 5 host economies, FDI inflows Transition economies, 2014, $ bln. (change) Top 5 host economies, FDI inflows Landlocked developing countries, 2014, $ bln. (change) According to the UNCTAD, 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. Among all countries Kazakhstan was ranked the 28th. Source: UNCTAD, World Investment Report 2015

Priority sectors 1 2 3 Metallurgy Chemical Industry Petrochemical Industry 1. Ferrous metallurgy 2. Non-ferrous metallurgy 3. Agricultural chemistry 4. Production of chemicals for industry 5. Oil refining 6. Petrochemical industry 4 5 6 Machinery Production of construction materials Food Industry 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 13. Production of construction materials 14. Food production

Investment INCENTIVES EXEMPTION FROM CUSTOMS DUTIES IN-KIND GRANTS 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. In-kind grants of not more than 30%  of the total investment in fixed assets. Free land

Investment NEW INCENTIVES (since 2014) FREE ENTRY FREE WORK PERMITS Visa-free entrance Foreign labor Visa-free entrance for citizens of Australia, Hungary, Italy, Monaco, Belgium, Spain, the Netherlands, Norway, Sweden, Malaysia, the United Arab Emirates, Singapore, the United Kingdom, the United States of America, Germany, Finland, France, Switzerland, and Japan for the period from 16 July 2015 till 31 December 2017 if the stay does not exceed 15 days (general application). Without permit for the duration of construction + 1 year after commissioning of the investment project for those with investment contracts In 2017, Kazakhstan plans to abolish visa requirements for citizens of the 34 member states of the OECD,

30 % 0 % Investment NEW INCENTIVES (since 2014) Incentives for priority investment projects* TAX EXEMPTIONS: CASHBACK ON INVESTMENTS Reimbursement up to Corporate income tax (10 years) 30 % 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. Land tax (10 years) 0 % Property tax (8 years) *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)

Investment NEW INCENTIVES (since 2014) Incentives for priority investment projects* STABLE LEGISLATION STRONG 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. *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)

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

0 % Investment INVESTMENT INCENTIVES IN SEZs FISCAL INCENTIVES Corporate income tax 0 % Land tax until 2020-2025 with possibility for extension Property tax Exemption from VAT (for products consumed in SEZ) 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 % NON-FISCAL INCENTIVES 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

Infrastructure 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. RUSSIAN FEDERATION 143.5 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 182.1 mln. TURKEY 74.9 mln. Lianyungang St. Petersburg Aktobe Shymkent KYRGYZSTAN 5.7 mln. Western Europe – Western China corridor (8,445 km=5,247 miles) Western Europe – Western China corridor on the territory of Kazakhstan (2,787 km=1,732 miles)

Investment SUCCESS STORIES

Useful Links Ministry of Investment and Development of the RK www.mir.gov.kz Electronic Government www.egov.kz National Export and Investment Agency «KAZNEX INVEST» www.kaznexinvest.kz www.facebook.com/KaznexInvest National Investment Internet Resource www.invest.gov.kz

Thank you for your attention National Export & Investment Agency “KAZNEX INVEST” Ministry of Investment and Development Thank you for your attention