Doing Business In Kazakhstan: Establishing Legal Presence
Mr. Vladimir Furman is in co-authorship with Ms Yulia
Petrenko
Since its independence in 1991 Kazakhstan has been rapidly
developing to become a country with a market economy
establishing and strengthening its economic and trade ties with
foreign countries, encouraging foreign investment, and
liberalizing trade. Since the economic life of Kazakhstan keeps
changing rapidly, the law is changing, as well, in order to
create a favorable climate for foreign investors and to be a
good location for business.
Key legislative acts that regulate establishment of business
structures in Kazakhstan are the Civil Code of the Republic of
Kazakhstan (Civil Code), Law on Economic Partnerships, Law on
Partnerships with Limited and Additional Liability (LLP Law),
Law on Joint Stock Companies (JSC Law), Law on State
Registration of Legal Entities and Record Registration of
Branch Offices and Representative Offices, and Law on State
Registration of Rights on Immovable Property and Transactions
with It.
Legal presence of a foreign company in Kazakhstan may be
established either through opening of a subdivision in
Kazakhstan or incorporating a separate legal entity.
Branch/Representative Office
Legal presence in Kazakhstan can be established through
opening a subdivision of a foreign company in the form of a
representative office or a branch. Neither a representative
office nor a branch is a legal entity under Kazakhstan law.
They act on behalf of a parent company within the limits
defined by the latter. A representative office merely
represents and protects interests of its parent company and is
not entitled to generate profit. A branch, in addition to
representing the parent company's interests, may carry out
all or a part of the parent company's activities, including
those subject to licensing, and may generate profit.
The organizational legal forms of legal entities depend on
what types of activities foreign investors and businessmen
intend to carry out in Kazakhstan. Kazakhstan legislation
provides for a number of forms for organizing business in
Kazakhstan. The most common and effective forms of a legal
entity are: (i) a limited liability partnership and (ii) a
joint stock company.
Limited Liability Partnership (LLP) is a corporate
entity established by one or several individuals or legal
entities, whether foreign or local, vested with its separate
property, rights and liability. Participants of an LLP are not
liable for its obligations and bear the risk...
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