Foreign investments constitute the most significant part of the economic activity of different countries. Kazakhstan plays a major role in the Central Asian region. It has great potential for investors. The main sectors for investments are subsoil use and energy. I would like to turn attention to the main issues surrounding the legal regulation of investment activity in Kazakhstan. Kazakhstan’s investments policy is based on the concepts of stability and certainty, equal conditions for all investors (both local and foreign), and protection of investors’ rights and interests and the creation of a favorable climate for foreign investments. The main characteristics of making investments in Kazakhstan are not only the huge natural resources, but also skilled staff, a stable political and economic situation, and lucrative location.
Investments in Kazakhstan are regulated by international conventions (Kazakhstan ratified the Seoul Convention on Establishing the Multilateral Investment Guarantee Agency dated 1985 and the Moscow Convention on the Protection of Investor Rights dated 1997) and specific domestic laws oriented to the stimulation of increasing investments, the guarantee of investor’s rights, and the protection of their interests.
Nevertheless, the work of the government in all spheres of national economy, development of priority branches, and realization of new projects allows Kazakhstan to remain attractive for foreign investments. Nursultan Nazarbayev, President of Kazakhstan, stands strongly for business development with the inclusion of foreign investors. There are at least six Special Economic Zones (SEZs) in Kazakhstan, including Astana, Borabay, Seaport Aktau, Ontustik, a park of information technologies, and the National Industrial Petrochemical Technopark.
The other benefit for foreign investors in Kazakhstan is that the country follows international treaties, for example in the tax sphere, which is very important for foreign investors. Kazakhstan is party to more than 35 double tax treaties with various countries, which generally follow the OECD Model Income Tax Convention. Ratified double tax treaties prevail over the Tax Code of Kazakhstan, and shall apply according to the provisions of internal legislation and the treaty itself.
There is also a Foreign Investors’ Council (FIC), which is convened annually or twice a year and headed by the President of Kazakhstan, which is an advisory body established with the purpose of promoting direct dialogue between the government of Kazakhstan and foreign investors in order to efficiently address key issues related to their investment activities and improve the investment climate for the benefit of foreign investors. The FIC usually submits its recommendations for improvements upon deep analysis of the investment climate to the President and government of Kazakhstan. FIC members include the top management of different foreign organizations and foreign companies.
Disputes between investors may be solved by state courts and also by arbitration procedures. Kazakhstan has joined International Convention on Settlement of Investment Disputes between States and Nationals of Other States dated 1965 (ICSID Convention), which establishes the International Center for Settlement of Investment Disputes.
Also, Kazakhstani courts recognize arbitral awards. In December 2004 Kazakhstan adopted the Law on International Commercial Arbitration, which establishes that arbitral awards must be enforced according to common civil proceedings legislation and should not be reconsidered by courts. However, there are several (very limited) procedural grounds for reconsidering the arbitral award. As a result of all the mentioned developments, Kazakhstan is clearly the leader in terms of an investment environment in
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