11.08.2016

Licensing of construction activities in Kazakhstan

This Article is intended to bring attention of construction companies considering entering the construction market in Kazakhstan to general provisions of Kazakh law regulating licensing of construction and design activities.

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Architectural, construction and design activities are subject to licensing in Kazakhstan. The Law on Permissions and Notices dated 16 May 2014 (hereinafter – the “Law on Permits”) establishes the list of activities to be licensed in the area of construction and design works. All licenses in Kazakhstan are inalienable and cannot be transferred to third parties.
The Law on Architectural, Urban-planning and Construction activities dated 16 July 2001 and the Law on Permits has divided construction and design licenses into three main categories based on the different levels of responsibility for facilities to be built.
The license of Category III is issued for simple types of works and facilities in the area of construction and design. To obtain this license no construction experience is required. At the same time, the applicant shall comply with certain qualification requirements established by law. According to these requirements the applicant must own or lease operational site in Kazakhstan with the buildings/facilities necessary to perform the works under the license. The Law is silent about the measure of operational site; however, it should be sufficient to perform the works under the license.
In addition to the operational site it is required to have a minimum set of equipment, machinery and instruments to perform the works under the license, and also have the internal quality control policy, safety rules and conditions, etc. Among other requirements, the applicant is required to have in Kazakhstan not less than one qualified engineer, who must obtain a certificate to perform the works under the license.
The license of Category II is issued for more complicated design and construction activities at the facilities of higher complexity. These facilities include, for example, production facilities of machine-building, transport and processing industries, and thermal power facilities with a capacity of less than 150 megawatt, agro-industrial facilities and others. To obtain this type of license, not less than 5 years of proven design or construction experience in Kazakhstan or outside the country is required. To prove the experience, the applicant must provide to the state authorities documents confirming completion of the projects and positive references from the clients in a written form.
The applicant shall also comply with the qualification requirements. According to these requirements the applicant must own or lease operational site in Kazakhstan with the buildings/facilities sufficient to perform the works under the license. In addition to the operational site, it is required to have a minimum set of equipment, machinery and instruments to perform the works under the license, and to have the internal quality control policy, safety rules and conditions etc. Among other requirements, the applicant shall engage not less than one qualified engineer in Kazakhstan for each of the types of works to be performed under the license. All engineers must obtain a certificate confirming their qualification in Kazakhstan.
The license of Category I is issued for complicated design and construction activities at the facilities of high complexity (e.g. industrial facilities, dangerous production facilities of oil, gas, chemical and mining industries, mainline trunk- and railroads, thermal power facilities with a capacity of more than 150 megawatt, the airports, multiplicity housing and public utilities, etc.). To obtain this type of license, not less than 10 years of proven design or construction experience in Kazakhstan or outside the country is required. This requirement does not apply if the applicant is a local company, there 50% of shares are owned by the Kazakh company operating having an effective license of category I, and the rest of the shares are owned by a foreign company.
To prove 10 years of experience the applicant must provide to the state authorities with documents confirming completion of the projects and references from the clients in a written form. The applicant shall also comply with the qualification requirements. According to these requirements the applicant must own operational site in Kazakhstan with the buildings/facilities necessary to perform the works under the license.
In addition to the operational site it is required to have a minimum set of equipment, machinery and instruments to perform the works under the license, and to have the internal quality control policy, safety rules and conditions. Among other requirements, the applicant shall engage not less than one qualified engineer in Kazakhstan for each of the types of works to be performed under the license. All engineers must obtain a certificate confirming their qualification in Kazakhstan.
The licenses are issued at the place of registration of the applicants. As regards to foreign companies, the licenses can be issued either at the address of legal registration of their Kazakh branch or at the place (site) of performance of construction and design activities. In practice issuing of the licenses to the foreign companies at the place of registration of their branch is more common.

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In case of any questions, you may contact the following lawyers:

Yerzhan Yessimkhanov,
Partner, Head of Construction and Infrastructure Group
YYessimkhanov@gratanet.com

Asem Tnalina,
Senior Lawyer, Construction and Infrastructure Group
ATnalina@gratanet.com

Yerzhan Yessimkhanov

Partner, Head of Telecommunication & Transport, Construction & Infrastructure Department