Regime for foreign participants of legal entities simplified

For the purpose of improving the country’s investment climate and increasing the competitiveness the Concept of Draft Law of the Republic of Kazakhstan ‘On amendments to certain legislative acts of the Republic of Kazakhstan on the Regulation of migration processes’ was developed in June 2018.

We are glad to note that among other questions the Concept suggests to exclude extract 3 of subparagraph 2) of paragraph 2 of Article 40 of the Law ‘On Migration’, which states that foreigners, who have not received visa for entry as business immigrants, are not allowed to incorporate legal entity, as well as to participate in the charter capital of commercial organizations by becoming participants of legal entities.

As it is known, nowadays the cases when provision above seriously complicates the procedure of incorporating companies with participation of foreign natural persons or entry of such persons as new participants are not rare. There are precedents of legal entities’ registration and re-registration denial even in cases having visa-free regime with particular countries, including within the framework of the Customs Union.

We believe that mentioned legislative initiative is the right and progressive one, and we expect that after adoption the relative amendments to the legislation, there will be no requirements with regard to foreigners to obtain visa for incorporation of legal entity on the territory of Kazakhstan.

It should be reminded, that since May 2018 the procedure of appointing foreign employee – the head of legal entity was also simplified.

The list of persons for performance of labor activities that do not require the permission of local executive bodies to employ foreign labor was approved by the Decree of the Government of the Republic of Kazakhstan No. 802  dated 15 December 2016 and was amended by the Decree of the Government of the Republic of Kazakhstan No. 189 dated 13 April 2018.

Today it is no longer necessary to obtain permission from local executive bodies to attract foreign labor for persons that work as heads of Kazakh legal entities and their deputies with 100% foreign participation in their charter capital.

Reducing procedural requirements removes barriers for attracting investments to the country. Bureaucratic processes that took a lot of time and effort to incorporate companies are now simplified and this positively affects the investment sphere in the Republic of Kazakhstan.