Kazakhstan is a country with a complex history but a strong potential for investments.
Since its independence, Kazakhstan had to manage conflicting and large and powerful neighbours like the Russian federation and the People’s republic of China while maintain excellent relationships with western economic heavy weights like the EU and the United States.
In a world that increasingly needs more and better diplomacy it is reassuring to know that Kazakhstan head of state Kassym-Jomart Tokayev, himself is a career diplomat fluent in Kazakh, English, Chinese, French, Russian having started his career in the Soviet Union embassy in Singapore in the 1970s. even in an Artificial intelligence driven world, individual people still make a difference, especially when it comes to creating trust and an environment conducive to investment.
The unfortunate war in the Ukraine put global attention on Kazakhstan and its geopolitical location in the "centre of Eurasia" Kazakhstan became a country "with which it is beneficial to be friends."
Firstly, logistics through the Caucasus is safe both from the political side (there is no risk of goods falling under the sanctions of the Russian Federation or the Republic of Belarus), and from the economic side.
Kazakhstan is an independent country that values its sovereignty and international reputation. While it maintains a close relationship with Russia, it has its own foreign policy goals and interests. Furthermore, Kazakhstan is a member of the United Nations and is committed to upholding international law, including sanctions imposed by the UN or other countries.
However, we are talking not only about the relocation of companies, but also about foreign direct investment by a number of countries into new projects in Kazakhstan.
In just 9 months of 2022, the volume of foreign direct investment exceeded $22.1 billion, which is 18% more than a year earlier. During the year, 46 new projects with foreign participation were launched in mechanical engineering, renewable energy, metallurgy and agriculture. At the same time, the main investor countries were the United States, European countries (primarily the Netherlands, France, Switzerland, Belgium, Great Britain), as well as South Korea, Turkey and China. That is, the main part of the countries that have entered into a political and sanctions confrontation with Russia.
And this despite the fact that the same United States in the spring and summer of last year expressed great concern about the likelihood of Moscow circumventing trade sanctions through the territory of Kazakhstan. First of all, we are talking about the so-called "parallel import". However, both then and during a recent meeting in Astana between President of Kazakhstan Kassym-Jomart Tokayev and US Secretary of State Anthony Blinken, the Kazakh side expressed a firm position that the country would not be a tool to circumvent US and EU sanctions against Russia. Kazakhstan has repeatedly assured its Western trading partners that it will tightly control sanctioned goods and investments on behalf of a person or entity under sanctions.
At the same time, Astana does not intend to retreat from trade relations with Russia and Belarus. A similar position was expressed by Tokayev at meetings both in European capitals during state visits to a number of EU countries, and in Moscow.
The fact that Kazakhstan adheres to the chosen strategy clearly demonstrates Washington's "financial" confidence: 86% of all US trade with the Central Asian region last year fell on Kazakhstan. Only in the 3 quarters of last year, the volume of direct investments from the United States exceeded $ 5 billion, almost 40% more than in 9 months of 2021.
The trust in Kazakhstan, as a reliable and risk-free partner, is also evidenced by the fact of increased interest in increasing investment and trade turnover with the Republic of Kazakhstan from a number of other countries.
For example, the United Arab Emirates announced their intention to increase their investments in the Kazakhstan's economy by more than US$ 5.5 billion during the current year, while the total amount of investments in the Republic of Kazakhstan by the UAE over the past 30 years does not exceed $1 billion.
However, Kazakhstan’s prudent policy of balancing between political partnership and economic cooperation not only successfully harmonizes with the country’s geopolitical attractiveness and potential access through its territory to the vast markets of the EAEU and Central Asia, but is also stimulated by very attractive business conditions.
Investors in Kazakhstan are provided with a full range of support services according to the “one-stop-shop” principle – from finding an idea to commissioning a project, as well as monitoring in the post-investment period, which allows you to work with each investor and project point-to-point, at all levels.
This mechanism allows you to broadcast projects from the regions directly to foreign institutions to search for potential investors and vice versa.
In order to increase the efficiency of work to attract investment in the country's economy, an information and monitoring CRM system is being introduced in Kazakhstan, which includes all agreements, developed roadmaps for their implementation, tasks are assigned to all participants in the process - central state and local executive bodies.
Foreign investors are given the opportunity to operate within the framework of English law - on the site of the Astana International Financial Centre. Companies registering as AIFC participants receive not only a guarantee of protection of their rights based on case law, but also automatically receive additional preferences: tax benefits up to 50 years, simplified currency, visa and labour regimes. The centre is a financial hub for companies and investors from Central Asia, the republics of the Caucasus, the EAEU, the Middle East, Western China, Mongolia and Europe.
Kazakhstan, declaring the inviolability of its multi-vector foreign policy, strictly adheres to the logic of economic benefit and very effectively adapts to today's situation, ensuring mutual benefit in relations with any foreign investor.
