Marcus Booth and Henry Kirby in London -
The government of Kazakhstan has confirmed plans to provide generous financial incentives to foreign investors in newly-formed firms, while pledging to reduce state involvement in the broader economy.
Cash-backs of up to 30% will be available for firms investing in entities less than a year old in 14 core sectors – including mining/metallurgy, construction, agriculture and pharmaceuticals – according to Kazakh officials speaking at an investment conference in London.
“We aim to make Kazakhstan one of the top 30 investment destinations in the world,” said Yerlan Sagadiyev, deputy minister of investments and development. “Our ministry’s job is to deliver a package of measures that will take us there.”
Sagadiyev and his colleagues outlined new legislation to encourage both domestic and foreign investors in Kazakhstan over an 8-10 year period – including up to 30% investment cash-backs, corporation and property tax exemptions and visa-free entry for foreign workers.
To qualify, investments must exceed $20mn with recipient firms formed less than 12 months before and based outside Kazakhstan’s existing special economic zones. While some incentives were introduced in July, specific tax assistance will be valid from January 1, 2015.
Speaking at a panel hosted by Norton Rose Fulbright, Sagadiyev highlighted the Kazakh government’s intention to divest from non-core, non-strategic businesses over the coming decade. “With 30 companies already privatized this year, we are looking to sell over 650 more.”
Sharing a border with Russia, China and the Caspian Sea, Kazakhstan is well-positioned to appeal to investors wanting to tap into the growth opportunities across Eurasia, and is the leading economy in a region set to produce 10% of the world’s oil and gas by 2020.
These latest government efforts to encourage foreign investment follow the successful issue in early October of Kazakhstan’s first Eurobond since 2000, which raised $2.5bn in the form of 10- and 30-year instruments and was heavily over-subscribed.
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