Kazakhstan - An Emerging Business Hub

Kazakhstan is a country in Central Asia which is the world's largest landlocked country by land area and the ninth largest country in the world. The last Soviet republic declared its independence on 16th December 1991 and now it is considered as an Emerging Business Hub acting as a route between China and major parts of Europe. Also, the country is rich in mineral resources having wide range of metallic ores, industrial minerals and fuels. Kazakhstan has therefore become strategically and economically a region to watch for doing business for multinational companies.

Astana City - Capital of Kazakhstan

The country has one of the strongest economy in Central Asia. The major area of business which has been responsible for Kazakhstan's strong economic expansion over the last decade is oil and gas sector. Opening itself to the international business and increase in the inflow of foreign investments in oil and mining industry in Kazakhstan has certainly made it more stronger and economically stable than other central asian countries, but where does it stand in the global ranking for doing business.

According to the report from "The World Bank for Doing Business in Kazakhstan", the country is ranked 77 out of 189 nations which are part of the research which is carried out by the world bank.

In 2014, the global foreign direct investment decreased by 8%, however Kazakhstan saw an increase in FDI.


Although there is continuous flow of foreign direct investment in the country mainly in the oil and mining sectors, the overall ranking for the ease of doing business in Kazakhstan has not improved.

So lets see some of the main factors considered by the world bank for the purpose of ease of doing business ranking and their movement from year 2014 to 2015.

For registering a property to carry out business in Kazakhstan, doing business ranks Kazakhstan at 14 for year 2015 which was increased by 4 points from 2014. Registration of property in Kazakhstan was made easy by the government, by introducing effective time limits and an expedited procedure which thus has resulted in the improvement in the rank for registering the property in Kazakhstan.

However at the same time, paying taxes which is another factor considered by the world bank for Doing Business report shows that it has become more complicated for companies to pay taxes in Kazakhstan as they have introduced a mandatory contribution to the National Chamber of Entrepreneurs and also increased the vehicle and environmental taxes.

But, Kazakhstan is still far better than Europe, Central Asia and OECD nations regarding the tax to be paid as the total tax to be paid in Kazakhstan by a company is 28.6% whereas for Europe and Central Asia its 34.9% and for OECD nations, its 41.3%. And with the further reduction in duty and taxes in Kazakhstan, it is sure that the ranking will improve in the years to come.

Another important factor generally taken into consideration by the multinational companies during setup of the business is trading across borders. Out of 189 countries in the list, Kazakhstan ranks at 185. Although the ranking has improved by a point, it still is hard for trading across border in Kazakhstan. According to the data from Doing Business report, it takes around 79 days to export the goods and 67 days to import the goods. With new changes and developments coming up in Kazakhstan, like decrease in the export rates, opening up of new border station and railway link to help reduce the congestion at the border with China, this ranking is surely believed to improve.

Kazakhstan government made is easy to resolve the insolvency by clarifying and simplifying provisions on liquidation and reorganization, introducing the concept of creditors' meetings, expanding the rights of creditors during the settlement works, Due to this, it has moved up in the ranking from 82 to 63.

Some of the other factors considered by doing business report with the ranking comparison for year 2014 and 2015 have been shown in the figure below.

The ranking changes on the basis of continuous evaluation and analysis from the world bank. With continuous improvements and new developments in the plans, policies and market reforms, the ranking for Kazakhstan is certain to go up. Although there are some challenges to Kazakhstan's development like currency devaluation, cross border conflicts, falling oil prices, the mineral and oil rich country is opening up and attracting more investments into the country.

Expo 2017 in Astana is one of the example where lot of international businesses are expected to participate. This will also boost the investment climate in Kazakhstan. With Kazakhstan's 2030 strategy for development, many reforms are expected in the country regarding security, economic growth based on open market economy with high level of foreign direct investments, utilization of mineral resources and development of infrastructure.

So, the direction on which Kazakhstan is moving, it definitely is one of the "Emerging Business hub" in the region and an area of interest of the international companies wanting to invest in Kazakhstan.

Full report available in www.doingbusiness.org