Naubet Bisenov in Almaty -
The Kazakh government has drafted a new package of incentives, including guaranteed state orders, tax breaks and the import of labour, to attract foreign investors.
Economy and Budget Planning Minister Yerbolat Dossayev told a news conference in Astana on April 29 that the government would cover up to 30% of investors' costs after they put their facilities into operation. The government will also exempt investors from corporate tax for 10 years, he said.
That offers them the chance to save on the 20% rate, although agricutlutral producers pay a reduced rate of 10%. Investors will also be provided with guaranteed orders for goods and services from state-owned companies and government agencies.
Astana is also keen to reassure investors that it plans no nasty surprises. Tax, migration and environmental protection legislation will remain intact for 10 years. Investors will also be forewarned about long-term changes in government-set tariffs and prices.
The package of incentives also includes 90-day visa-free travel for investors from OECD countries and top managers of their projects. They will be free to import foreign labour during project development, plus a further year after commissioning. Foreign investors and multinationals usually have to undergo strict licensing processes in order to bring in foreign labour and the government sets manpower quotas for specific investment projects.
For investors funding agricultural projects the Kazakh government intends to extend the terms of lease on farming land. It will also introduce an "investment ombudsman" to help protect investors' rights.
"All these are main approaches which were discussed at a government sitting and were endorsed," Dossayev reported, according to Kazinform. "These proposals will be coordinated with the presidential administration and then endorsed by a corresponding government resolution."
The government is concerned over the Kazakh economy's growth prospects following the suspension of production at the giant Kashagan oil field. Against mounting speculation, Astana had been insisting the Caspian project was expected to resume output in July. However, earlier this week, operating consortium NCOC and Dossayev both finally admitted production would not resume until 2015 at the latest.
The government hoped the field would produce around 2.5m tonnes of oil this year, and it is now holding negotiations with other producers to increase oil production by at least 1.5m tonnes to make up for the shortfall.
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