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Expo 2017 would be held in Kazakhstan: great opportunities for Chinese investment

2017-05-05

Specialised Expo 2017 will be held in Astana, the capital of the Republic of Kazakhstan. The Expo, which is taking place on a site covering 25 hectares, will be open between 10 June and 10 September 2017.

China has become the first State to sign the participation agreement with Kazakhstan in EXPO-2017. Chinese pavilion received the maximum of the available options in the area of 1000 sq.m.

According to Vice-Chairman of The Committee for the promotion of international trade of China, National Commissioner of the Pavilion of China and representative of the Chinese Government to participate in Expo-2017» Wang Jinzhen: «China, as the second largest economy in the world and the largest producer and consumer of energy, considering the EXPO-2017 in Astana as a platform for a comprehensive demonstration of advanced technology and strategy of China in the energy sector, sharing experiences with Kazakhstan and other countries, as well as underscore China's image as a responsible power».

So, what is interest in Kazakhstan for China's business?

Kazakhstan is the largest country in the Central Asian region. And the richest in natural resources. On the territory of Kazakhstan last year started production at the biggest field in recent years - Kashagan. But except oil Kazakhstan is ready to offer foreign businesses numerous contracts in different fields: from the subsoil to the agricultural products.

Kazakhstan immediately after the collapse of the Soviet Union took dramatic start to becoming a market economy. And, unlike most of the post-Soviet States, Astana became not experimenting with the gradual transformation of the economy. Therefore, after 25 years after gaining sovereignty of this country is considered to be one of the most liberal business throughout the former USSR.

In the past few years, Kazakhstan took a course on industrialization of the economy. This was an attempt to get rid of commodity dependence, which is most acutely felt during recent economic crises. However, despite very substantial accumulated from financial resources (63 billion net reserves) bet on attraction of foreign investors. Moreover, as stated by the leadership of the country, it is not only and not so much on the financial investment, how about bringing in Kazakhstan competitive technologies and innovations.

It should be noted that the integration processes in the post-Soviet space makes Kazakhstan especially attractive for investors. Market for Eurasian economic space comprising five countries (Kazakhstan, Russia, Belarus, Armenia and Kyrgyzstan) is about 180 million people. Including Russia, which after the start of the sanctions war closed for many companies from Europe and the United States. Free movement of goods and capital, as well as the absence of customs and other barriers within the Eurasian economic space is very important for the producers, who mostly target today on the Russian market.

There is another important nuance, attracting investors into the country, its geographical location. Kazakhstan is located in the center of the Eurasian continent, has a significant transit potential. Today there are developing destinations both North-South and East-West. Already heavily used corridor in the framework of the new Silk Road in Western Europe-Western China. It helps to ensure the delivery of goods from China to Europe and back for 14-15 days (vs. 45 days by sea). The last year has launched a new railway corridor Kazakhstan-Turkmenistan-Iran.

Specified became important reasons for the growth of investments in the Republic in recent years. Only for the last 10 years the size of foreign direct investment amounted to 327 billion dollars, of which 15 billion came to the country only in the year 2016 (That amid the global crisis and observed outflow of capital in emerging markets is a good indicator).

In addition, business in Kazakhstan has attracted a number of advantages in comparison with neighbouring States.

Firstly, here clearly defined areas that the State is ready to open for investors. This engineering, agriculture, food industry, retail and chemical industry. For investors in these areas of Kazakhstan provides a number of preferences.

Basic package advantage for investors-exemption from customs duties and field grants. For the priority sectors identified by the Government, for investors with an investment volume of more than 13 million dollars an additional package preferences: exemption from corporate income tax and the land tax for 10 years, from 8 years of property tax. In addition, the Kazakh authorities guarantee a return cache Beck up to 30% of the capital expenditure spent on capital construction and equipment purchases.

It should also take into account the existence of 10 special economic zones, which also provide exemption from all major taxes for 10 years (including customs duties and CPN), as well as free of charge (for the entire duration of the FEZ 25 years) provide a plot of land for construction from the failed infrastructure.

If special economic zones focusing more on large production, the regional industrial zones are playgrounds and preferences for small and medium-sized businesses. The country provided 42 such playgrounds in all regions of Kazakhstan.

It should be noted that there is stability of investment contracts. That is, any subsequent changes to the national legislation (including the part of tax rates and preferences) do not touch the investment contract. Also guaranteed them stability, i.e. at the time of the conclusion of the investment contract with the Government of (Investment Committee) the investor commits those bets, those conditions that are stipulated for it at the time, when he signs a contract and subsequent changes to legislation and tax preferences will not touch it.

Kazakhstan also provides investors with the opportunity to attract its own (foreign) workforce without special permits. Such workers may bring for the period of construction objects and starting-up and adjustment works.

Such reforms to improve the investment climate creation allowed Kazakhstan to improve its position in the World Bank ranking of Doing business-last year the country was ranked 35 place. Moreover, such a measure as "reform" Kazakhstan took one of the leading places in the world.

Today Kazakhstan is one of the most open countries in the world. The attractive geographical location, enormous opportunities for investment in the most different business areas, and full support for investors on the part of the authorities to guarantee a successful enterprise development both local and foreign. Kazakhstan intends to in the next two decades to become one of the 30 most developed countries in the world. And, repeating the big leap in Singapore is quite able to do it. Especially making a bet for investors who are willing to bring into the country, the technology of the future. The benefit to this there are all conditions.

In December 2015 year between Kazakhstan and China signed a memorandum on simplification of group travel by Chinese citizens in Kazakhstan. In accordance with the memorandum, for tourist groups from China subject to availability of visa support, which prepares the travel company of Kazakhstan, visa is issued without personal presence of traveling within 5 working days.