Kazakhstani legislation provides several options for conducting business, including:

• Individual entrepreneurship (IE)
• Representative offices or branches of legal entities
• Legal entities in various forms

However, not all these options are available to foreigners.
For instance, registration as an individual entrepreneur in Kazakhstan is limited to the following categories:

• Citizens of Kazakhstan
• Kandasy (Oralmans) – ethnic Kazakh repatriates

There are exceptions for citizens of countries that have signed and ratified an international agreement with Kazakhstan, such as those within the EAEU (Eurasian Economic Union). In such cases, a citizen of an eligible country must hold both a permanent residence permit and a residence permit in Kazakhstan to qualify.
If no relevant international agreement exists between your country of citizenship and Kazakhstan, you can still engage in entrepreneurial activity. This can be done by either establishing a branch or representative office of an existing foreign legal entity or creating a new legal entity in one of the forms provided by Kazakhstani law.

Which form is best to choose, and what steps need to be taken to register?
1. Representative Office and Branch in the Republic of Kazakhstan
The key difference between a representative office and a branch lies in their activities:

• A representative office acts on behalf of a foreign company to conduct transactions and other legal actions but is not authorized to engage in income-generating business activities in Kazakhstan.
• A branch, on the other hand, can perform the same functions as a representative office and also engage in income-generating activities, similar to its parent company.

To establish a branch or representative office, the foreign parent company must first formalize its decision to create such an entity. This involves preparing the following internal documents:

• A decision to establish the branch or representative office;
• The branch or office’s regulations;
• A power of attorney for the director.

These documents are not submitted to the registration authority but must be legalized (apostilled) and notarized unless otherwise stipulated by an international agreement. If a foreigner is appointed as the CEO they will need to obtain an Individual Identification Number (IIN).

Steps for Registration:
An application, in the form prescribed by law, must be submitted to the registration authority along with:

• A legalized extract from the trade register
• Constituent documents or another legalized document confirming registration under the laws of the foreign country;
• A document verifying the company’s tax registration in its home country, including the tax registration number (or its equivalent).

All documents of a foreign legal entity creating a branch (representative office) are submitted with a notarized translation into Kazakh and Russian.
The registration process typically takes 1 working day from the time of submission.
For online submissions via the e-government system, this time is reduced to 1 hour, provided preliminary steps—such as assigning an IIN for the CEO and obtaining an electronic digital signature (EDS)—are completed.

2 Commercial Legal Entities
Kazakhstan allows the formation of the following types of legal entities:
·       Business partnerships (e.g., general partnerships, limited partnerships, limited liability partnerships, partnerships with additional liability);

• Joint-stock companies (JSC).
• The two most common forms are Limited Liability Partnerships (LLP) and Joint Stock Companies (JSC).

1.1 LLP Registration
LLPs are classified based on their size and financial capacity:
Micro-business entity:

• Up to 15 employees;
• Annual income of no more than 30,000 times the MCI (approximately $223,409 USD).

Small business entity:

• Up to 100 employees;
• Annual income of no more than 300,000 times the MCI (approximately $2,234,090 USD).

Medium-sized business entity:

• 101–250 employees;
• Annual income of 300,000–3,000,000 times the MCI.

Large business entity:

• More than 250 employees;
• Annual income exceeding 3,000,000 times the MCI (approximately $22,340,909 USD).

Note: Certain restrictions apply. For example, LLPs engaged in banking, securities, auditing, production or wholesale of excisable products, and other specified activities cannot register as small business entities.
Depending on the selected category, the procedure for registering an LLP and the list of required documents may also differ.
Required Documents for LLP Registration (Foreign Participation):

• Application for registration;
• Legalized extract from the trade register or equivalent document certifying the founder (foreign legal entity) is a registered legal entity in its home country, with a notarized translation into Kazakh and Russian;
• If the founder is an individual, a copy of their passport or equivalent ID, with a notarized translation into Kazakh and Russian.

For single-founder LLPs, a decision to establish the LLP is required. For multiple founders, a constituent agreement must be signed, and the LLP’s charter drafted (a standard charter may be used). These documents are internal and are not submitted during registration.

1.2. Registration of JSC
Joint-stock companies (JSCs) can be established by individuals or legal entities, including non-residents. A single founder issues a resolution to establish the JSC, while multiple founders must sign a founding agreement.
JSCs are permitted to issue common and preferred shares, as well as other securities, under Kazakhstani securities market regulations.
Required Documents for JSC Registration:

• Application;
• Legalized extract from the founder’s registration (if a legal entity) or passport (if an individual), with notarized translations into Kazakh and Russian;
• Constituent documents, such as the charter, resolution, or founding agreement.

The registration period for a JSC is 5 working days.

Additional Considerations
In certain cases, it is possible to establish a permanent establishment in Kazakhstan, which can help avoid double taxation if a relevant tax treaty exists between the foreign country and Kazakhstan.
Also, the Astana International Financial Center (AIFC) offers a unique jurisdiction for legal entity registration, independent of Kazakhstani legislation.
This provides certain tax benefits, such as:

• Dividends from private companies or
• capital gains from share sales are exempt from Kazakhstani withholding tax without conditions.

While setting up a business in Kazakhstan may seem straightforward, various nuances and challenges can arise during document preparation, registration, or post-registration processes.
We are here to provide guidance, consultation, and legal support at any stage of this process.
DISCLAIMER:
The content of this article is provided for informational purposes only and should not be construed as legal advice. It is not intended to create, and receipt of it does not constitute, a lawyer-client relationship. Readers should not act upon this information without seeking professional counsel and should not rely on it as a substitute for obtaining legal advice from a qualified attorney licensed in their jurisdiction.
 
Yana Daloglu