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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