Business Reforms in Kazakhstan
= Doing Business reform making it easier to do business. = Change making it more difficult to do business.
Starting a Business: Kazakhstan simplified the process of starting a business by abolishing the requirement to notarize company documents and founders’ signatures.
Dealing with Construction Permits: Kazakhstan made dealing with construction permits easier by introducing a single window and streamlining procedures.
Getting Electricity: Kazakhstan streamlined the process of obtaining an electricity connection by eliminating the need for an official excavation permit and an inspection by the State Energy Supervision Committee. Kazakhstan also reduced the time needed to fulfill utility technical requirements and to sign supply contracts. The reliability of the power supply in Kazakhstan was also improved following the establishment of normative levels for the annual system average interruption duration index (SAIDI) and system average interruption frequency index (SAIFI).
Protecting Minority Investors: Kazakhstan strengthened minority investor protections by introducing greater requirements for immediate disclosure of related-party transactions to the public, increasing shareholder rights and role in major corporate decisions, clarifying ownership and control structures and requiring greater corporate transparency.
Trading across Borders: Kazakhstan made exporting less costly by removing two export documents required for customs clearance.
Enforcing Contracts: Kazakhstan made enforcing contracts easier by adopting a new code of civil procedure and by regulating the maximum number of adjournments that can be granted by a judge in a given case.
Resolving Insolvency: Kazakhstan made resolving insolvency easier by changing voting procedures for reorganization plans and providing protections to creditors who vote against such plans. Additionally, creditors were granted greater access to information about the debtor during insolvency proceedings and allowed to challenge decisions affecting their rights.
Labor Market Regulation: Kazakhstan adopted a new labor code that decreased the wage premium for work on weekly holidays, eliminated the requirement to reassign employees before making them redundant, extended the maximum duration of probationary periods and introduced mandatory out-of-court mediation procedures before parties can file claims in court.
Starting a Business: Kazakhstan made starting a business simpler by eliminating registration fees for small and medium-size firms, shortening registration times and eliminating the legal requirement to use a company seal.
Dealing with Construction Permits: Kazakhstan made dealing with construction permits easier by eliminating the requirement to obtain a topographic survey of the land plot.
Registering Property: Kazakhstan made transferring property easier by eliminating the requirement to obtain a technical passport for the transfer and to have the seller’s and buyer’s incorporation documents notarized.
Getting Credit: Kazakhstan improved access to credit by adopting a new law on secured transactions allowing a general description of a combined category of assets granted as collateral.
Protecting Minority Investors: Kazakhstan strengthened minority investor protections through new provisions requiring both immediate disclosure of related-party transactions and detailed disclosure in annual financial statements; expanding the way evidence can be obtained at trial; requiring that a change in the rights associated with shares be subject to approval by a vote of two-thirds of the affected shares; prohibiting subsidiaries from acquiring shares issued by their parent company; and requiring disclosure of information about board members’ other directorships as well as their primary employment.
Enforcing Contracts: Kazakhstan made enforcing contracts easier by introducing a simplified fast-track procedure for small claims and by streamlining the rules for enforcement proceedings.
Resolving Insolvency: Kazakhstan made resolving insolvency easier by allowing creditors to initiate reorganization proceedings and encouraging sales of assets as a going concern. Kazakhstan also improved its bankruptcy regime, by explicitly authorizing post-commencement finance and granting it priority over existing unsecured claims.
Registering Property: Kazakhstan made registering property easier by introducing effective time limits and an expedited procedure.
Paying Taxes: Kazakhstan made paying taxes more complicated for companies by introducing a mandatory contribution to the National Chamber of Entrepreneurs and by increasing the vehicle and environmental taxes.
Trading across Borders: Kazakhstan made trading across borders easier by opening a new border station and railway link that helped reduce congestion at the border with China.
Enforcing Contracts: Kazakhstan made enforcing contracts easier by introducing an electronic filing system for court users.
Resolving Insolvency: Kazakhstan made resolving insolvency easier by clarifying and simplifying provisions on liquidation and reorganization, introducing the concept of creditors’ meetings, expanding the rights of creditors during insolvency proceedings, authorizing payment in kind to secured creditors and clarifying the process for submitting creditors’ claims.
Starting a Business: Kazakhstan made starting a business easier by reducing the time it takes to register a company at the Public Registration Center.
Registering Property: Kazakhstan made it easier to transfer property by introducing a fast-track procedure for property registration.
Starting a Business: Kazakhstan made starting a business easier by eliminating the requirement to pay in minimum capital within 3 months after incorporation.
Getting Credit: Kazakhstan strengthened secured creditor rights by introducing new grounds for relief from an automatic stay during rehabilitation proceedings.
Resolving Insolvency: Kazakhstan strengthened its insolvency process by introducing an accelerated rehabilitation proceeding, extending the period for rehabilitation, expanding the powers of and improving qualification requirements for insolvency administrators, changing requirements for bankruptcy filings, extending the rights of creditors, changing regulations related to the continuation of operations, introducing a time limit for adopting a rehabilitation plan and adding court supervision requirements.
Protecting Minority Investors: Kazakhstan strengthened investor protections by regulating the approval of transactions between interested parties and making it easier to sue directors in cases of prejudicial transactions between interested parties.
Starting a Business: Kazakhstan eased business start-up by reducing the minimum capital requirement to 100 tenge ($0.70) and eliminating the need to have the memorandum of association and company charter notarized.
Dealing with Construction Permits: Kazakhstan made dealing with construction permits easier by implementing a one-stop shop related to technical conditions for utilities.
Protecting Minority Investors: Kazakhstan strengthened investor protections by requiring greater corporate disclosure in company annual reports.
Trading across Borders: Kazakhstan speeded up trade through efforts to modernize customs, including implementation of a risk management system and improvements in customs automation.
Starting a Business: Kazakhstan made starting a business easier by simplifying documentation requirements and eliminating the requirement to register at the local tax office.
Dealing with Construction Permits: Kazakhstan made dealing with construction permits easier by eliminating the requirement to pay for a new electrical connection, tightening time limits for the issuance of building permits and reducing the cost of topographic surveys.
Paying Taxes: Kazakhstan made paying taxes less costly for companies by reducing social tax rates and the corporate income tax rate.
Registering Property: Kazakhstan made transferring property easier and less time consuming through a new law creating a unified registry for all land and buildings and introducing public service centers as competent authorities for property transactions.
Getting Credit: Kazakhstan’s private credit bureau increased its sources of credit information by adding retailers such as furniture companies and utilities such as the gas company.
Labor Market Regulation: Kazakhstan increased paid annual leave and also introduced a reassignment obligation applicable in cases of redundancy dismissals.
Paying Taxes: Kazakhstan lowered the sanctions imposed on companies for late payment of taxes.