Getting The Deal Through - Investment Treaty Arbitration 2014

Background

1. What is the prevailing attitude towards foreign investment?

   The prevailing attitude of private businesses and local citizens towards foreign investment in Kazakhstan is positive. Central gov-ernment has always declared that it is open to foreign investment, and that it seeks ways to increase investment levels. In fact, Kazakhstan has entered into many treaties for the protection of foreign invest-ment. It is also very active in organising fairs and forums to allow investors to explore the market and develop business opportunities.

   Foreign investment was treated more favourably in the past, but Kazakhstan laws no longer differentiate between foreign and domestic investment. Central government has now implemented programmes to foster investment into so-called 'priority fields' of the economy.

2. What are the main sectors for foreign investment in the state?

   Of all foreign investment in Kazakhstan since it became independent in 1993, approximately 39.9 per cent has been directed towards the exploration for and production of oil and gas; 31.09 per cent has been directed into mining; 10 per cent has been directed towards the manufacturing industries; and the rest has been spread among remaining sectors of the economy. Construction and finance are also large consumers of foreign investment.

   In the past few years, the volume of foreign investment into manufacturing has grown steadily. For example, in the first half of 2011, such investments accounted for 15 per cent of all foreign direct investment.

3. Is there a net inflow or outflow of foreign direct investment?

   There is a steady inflow of foreign direct investment in Kazakhstan.According to official statistics, available from the Committee for Investments of the Ministry of Industry and New Technologies of Kazakhstan, from 1993-2012 the inflow of foreign direct investments was US$152.5 billion. In 2012 alone, the inflow of foreign direct investment was US$22.4 billion. The rate of growth of foreign direct investment slowed between 2008 and 2011, although the inflow remained strong at US$19.7 billion in 2008, US$19.017 billion in 2009, US$18.244 billion in 2010 and US$19.350 billion in 2011. The total outflow of investments between 2004 and 2012 was US$33.2 billion.

4. Describe domestic legislation governing investment agreements with the state or state-owned entities.

   The first situation is...