Business Models
There are different ways to form a business in Kazakhstan, each with own advantages and disadvantages. The most common form of business vehicle used by foreign companies is a limited liability partnership. The legal regime for a limited liability partnership, including corporate governance, is well developed. It provides a flexible governance structure. Other forms available to conduct business include (not limited) joint stock companies and joint ventures. This document provides brief information regarding establishment of limited liability partnerships.
Registration and Formation
An application accompanied with list of documents must be submitted to the State Register containing all of the following:
- The minutes of the founders' meeting (apostilled and translated).
- The extractions from trade registry of home country of founders or in case individual – copy of passport (apostilled and translated).
Furthermore, the following documents shall be developed by Founders:
- Articles of association (articles).
- Memorandum of Association.
- A resolution confirming the appointment of the board of directors (board) and the auditors (if any).
The registration process takes one to two business days.
The State commercial register provides general information on all registered legal entities. It is accessible at www.egov.kz.
Share Capital
An authorized capital must have a minimum capital of $ 700.00, could be paid up in cash or in kind. There is no maximum amount, but at least 50% must be paid up on the date of registration.
Rights Attaching to Shares
Restrictions on rights attaching to shares. The articles can provide for restrictions on the transfer/pledge of shares. It is worth to note that the Memorandum of association may determine the size of shares different from the size of the contribution. So, the founders may independently assess the value of the share, regardless of the size of the contribution. The size of the share determines number of votes at the Founders’ meeting, dividends distributed, liquidation quota part, etc.
Automatic rights attaching to shares. The following rights are automatically attached to shares:
- Financial rights (in particular, the right to receive a dividend, proceeds on liquidation and pre-emption rights).
- Personal membership rights (in particular, the right to attend shareholders' meetings, voting rights and information rights).
A Business Name
Companies must comply with statutory name requirements. Businesses that involve activities that require professional or vocational licenses may have additional requirements. A business name may be in use by someone else or it may have trademark or trade name ramifications. You should review any statutory or regulatory requirements and restrictions when choosing a business name. You can conduct a preliminary search of names in use in Kazakhstan for companies through online State tool (https://egov.kz/cms/en/services/pass3010_mu). Please note: The mentioned EGOV portal tool is only a preliminary search and not intended to serve as a formal name availability search which is completed by the State registration Authority upon registration of company.
Legal address
If you intend to lease a building, lease space in someone else’s building, or some other location, please make sure that you have dully signed by the owner lease agreement and consent of owner to use the address of premises as a legal address of a company. In case of location of company in your own premises or you would like operate your business from your home (note: your business address is a public record) you need just notarize consent of your spouse / relative / parents (if common property).
So far as provision of legal address is constituent part of company formation in Kazakhstan, we also provide such service until the client has found suitable office.
Management Structure
The board must have at least one member. The board can delegate corporate duties and powers to individual directors or third parties. There are no restrictions on foreign managers. The expat manager could be appointed without obtaining of work permit in case partnership owned by foreign company (100%).
Kindly note that the constitutional documents may contain limitation of powers of the board (on specific business issues or limitation of the amount of transactions, etc.).
Foreign companies that are intending to form a Kazakh entity could experience some problems related to appointment of their directors – foreigners to Kazakhstan what eventually delay the process of company registration and commencement of business. Thus, we provide interim director services for such clients in the cities of Almaty and Astana ensuring transparency and complete protection of the client’s business. Every decision of such director will require authorization by the client. The duration and power of our directors will be limited by the constituent documents of the company.
Directors' Liability. Board members are personally responsible to the company, individual shareholders and the companies' creditors for damages caused intentionally or negligently by default of their duties.
Parent Company Liability. A parent company is not liable for the debts of its subsidiaries unless it has given a guarantee.
License or Permit
Many businesses require a license or permit to conduct business.
Some common licenses and permits include (not limited):
- television and radio broadcasting;
- education;
- architecture, urban planning and construction;
- healthcare;
- circulation of toxic substances;
- production and circulation of ethyl alcohol and alcoholic products, production of tobacco products;
- export and import;
- financial sector and activities related to the concentration of financial resources;
- gambling business;
- transport;
- services to individuals and legal entities as a lawyer, notary, auditor, provision of services in the field of environmental protection or processing, neutralization, disposal and (or) destruction of hazardous waste, implementation of security activities by legal entities, provision of services in the field of tourist operator activities;
- digital assets.
If your business requires a license or permit, you must procure business licenses and other permits from appropriate Authority.
It is also possible to consider registering in special economic zones with various tax and other benefits.
Our consultants may provide a wealth of information on starting up or expanding a business in Kazakhstan.
For consultation, please contact saule.kassymkhanova@moore.kz