The public investment policy of the Republic of Kazakhstan is facilitated by consideration and ratification of laws and state programs with the purpose to stimulate investments into the key industries of the Republic of Kazakhstan.

The important event in the investment policy is an enactment of a Law «On Investments». The Law of the Republic of Kazakhstan «On Investments» (hereinafter «the Law») dated 08.01.2003 includes 4 Chapter, 23 articles and has a range of particularities:

1. The legislator does not use a term «foreign investments», consequently the Law has no definition of foreign and domestic investments.
2. The Law «On investments» has no definition of direct and portfolio investments. So investments preferences may be given on all investments.
3. In accordance with provisions of the Law, investment preferences will be determined individually in each investment project. The duration of investment preferences should not exceed 5 years from the moment of coming into effect of the investment project.
4. To settle disputes in the court, it is necessary to have agreement of the parties (the State and the Investor) to determine the competent court, when the Law of the Republic of Kazakhstan «On foreign investments» dated 27.12.1994 granted such right to the investor.
5. Reduced the list of guarantees to investors within territory of Republic of Kazakhstan.

In essence, the Law «On Investments» dated 08.01.2003 formed from two legal parts: legal regime of investments, and state support of investments.

According to art.1 of the Law, investments recognized as all types of assets (except goods designed for personal consumption), including subject of leasing from the date of conclusion of leasing contract, and rights to such assets invested by the investor to charter capital of the legal entity, or to increase in assets usable in business activity.

Investors have the right to invest in all objects and types of business activity with the exception of cases established by the current legislation of the Republic of Kazakhstan.

There is List of priority kinds of activity on which investment preferences may be given (approves by Decree of the Government of the Republic of Kazakhstan # 436 from May 8, 2003). Processing industries has priority in this List.

Investment guarantees

Investors have the following guarantees within the territory of the Republic of Kazakhstan:

1. The guarantee of legal defense of investors' activity within the territory of Republic of Kazakhstan.
2. The guarantee of using a revenue earned by the investor.
3. Publicity of activity of state authorities in respect to investors.
4. The guarantee of investors' rights in case of nationalization and requisition.

Investment preferences

The Law «On Investments» stipulates that the below investment preferences obtained by investors at the moment of concluding the Contract with the Competent state authority of the Republic of Kazakhstan (in present — the Investment Committee of the Republic of Kazakhstan):

1) Tax preferences. Investment-related tax preferences may be given for the term of till 5 years depending on volume of investments. They are given as:

i. Presenting the taxpayer with the right to make additional deductions from the aggregate annual income that reduces the size of the corporate income tax subject to payment in the budget;

ii. Exempting the taxpayer from payment of the property tax. Such preferences are given only on basic newly-put into operation fixed assets within the framework of an investment project;

iii. Exempting the taxpayer from payment of land tax on land plots purchased and used for the implementation of the investment project.

2) Exempting from the taxation by the customs duties. It is given on import of the equipment and accessories to it, intended for realization of the investment project, according to the Investment contract. Exempting from the taxation by the customs duties is given for 1 year with possible prolongation of this term. The maximal term on which these preferences can be given, makes 5 years from the moment of registration of the Investment contract.

3) The State natural grants. State natural grants may be transferred in the following forms: the ground areas, buildings, constructions, machines and the equipment, vehicles (except for automobile motor transport), computer facilities, measuring both regulating devices and devices, manufacturing and household equipment. The maximal size of the Natural grant makes may be no more than 30 % from volume of investments into the fixed actives of the legal entity registered according to the legislation of the Republic of Kazakhstan. The estimation of the size of the State natural grant is made at its market cost.

Conditions to provide these investment preferences are the following:

1. Concordance of specified investment activity to the list of priority types of activity alleged by the Government of the Republic of Kazakhstan;
2. Investment of capital to fixed assets of the legal entity of the Republic of Kazakhstan to establish new production, extend and/or update operating enterprises by using higher technologies;
3. Submitting necessary documents sustaining presence of finance, technical and managerial resources of the investor to realize investment project.

Application on receiving investment preferences should be submitted to the Committee on investments of Ministry of Industry and Trade of the Republic of Kazakhstan (further — Committee on investments). The Committee on investments makes decision on providing investment preferences and notifies the investor on this, in writing within 30 days from the date of registration of the application.

In general, investment preferences remain in force till the validity term of the appropriate investment contract.

Conclusion and termination of the Investment contract

The Committee on investments prepares the Investment contract, on the basis of provisions of the Model contract, for signing within 10 days after making decision to provide by the investment preferences. Model Contract on investments proposing the investment preferences are approved by Decree of the Government of the Republic of Kazakhstan # 436 from May 8, 2003 The Investment contract becomes effective from the moment of it's state registration, which takes place within 5 days from the moment of signing the Contract by the parties.

In compliance with article 22 of the Law «On Investments» the Investment contract may be terminated at any time upon:

1. Under mutual agreement of the parties.
2. In one-sided order.

A basis to terminate the Investment contract, in one-sided order by the Republic of Kazakhstan, is falsification or suppression of information submitted by the applicant, and also non-performance it's obligations under the contract by the investor.