Factors of attractiveness of the investment climate in ...
Transcript of Factors of attractiveness of the investment climate in ...
Factors of attractiveness of the investment climate
in Kazakhstan
JSC “NATIONAL EXPORT & INVESTMENT AGENCY “KAZNEX INVEST”
Ministry of Industry and New Technologies of the Republic of Kazakhstan
Date: May 13, 2013 Place: Stockholm, Sweden
KAZAKHSTAN: YOUR GATEWAY TO 3/4 BRIC OR TO 3 BILLION PEOPLE
KAZAKHSTAN
47
5 5.
4 5.
4 5.
4
The average minimum duration of flights to major centers of economic activity (in hours)
KAZAKHSTAN
Territory: 2.7 mln. sq. km. Population: 16,8 mln
GDP, 2011: $ 188 bill
GDP per capita, 2011: $ 11 356
Major languages
• Kazakh (state language) • Russian (official, business language) • English, Chinese (young generation)
Main ethnic groups: • Kazakhs: 65% • Russian: 25% • Other: 10%
Source: The Agency of Statistics of the Republic of Kazakhstan
16,4
8,3
30,2
21,0
Mining and oil Manufacturing Exploration Other
FDI FLOWS INTO KAZAKHSTAN HAVE DEFIED GLOBAL ECONOMIC CRISIS
Source: National Bank of the RK UNCTAD Stat
1,3 0,7 1,0 1,7 2,1 1,2 1,9 2,8 4,6 4,1 4,6
8,3 6,6
10,6
18,5 19,8 19,0 19,0 20,8
17,0
0,0
5,0
10,0
15,0
20,0
25,0
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 9 m2012
FDI inflows in RK, bill. USD
165.5 bill. USD
75.9 bill. USD
46%
By industry 2009-9m. 2012
By country 2009-9m. 2012
27,1
6,4
5,3
4,5
3,4
2,8
2,6
2,5
2,2
19,1
Netherlands
USA
France
China
UK
Virgin Isles (UK)
Russian Fed.
Canada
Japan
Other countries
1,0
1,3
3,2
5,0
6,8
9,1
13,0
16,6
65,2
93,6
457,5
-6%
63%
7%
14%
28%
22%
34%
30%
23%
21%
28%
Tajikistan
Kyrgyzstan
Moldova
Armenia
Uzbekistan
Azerbaijan
Belarus
Turkmenistan
Ukraine
Kazakhstan
Russian
KAZAKHSTAN HAS ATTRACTED GREATEST FDI PER CAPITA IN CIS
*Compound annual growth rate
Source: UNCTAD Stat
CAGR*
Accumulated FDI in the CIS, 2000-2011 yy., bln. USD
FDI in the CIS countries per capita, 2011 y., USD
142
244
236
892
1359
1443
1628
979
3257
3203
5777
Tajikistan
Uzbekistan
Kyrgyzstan
Moldova
Belarus
Ukraine
Armenia
Azerbaijan
Turkmenistan
Russian
Kazakhstan
INDUSTRY OF KAZAKHSTAN WHY IS KAZAKHSTAN ATTRACTIVE FOR FOREIGN INVESTORS?
Political stability and good investment climate
1 ▪ A high level of trust in political
institutions and the effective allocation of funds (WEF 2012) in comparison with the countries of the CIS.
▪ ▪ Ease of Doing Business (49 on the list of World Bank Doing Business 2013: 10 place in the investor protection and 17 place in the payment of taxes).
2 Regionally attractive fiscal and non-fiscal regime and protection of foreign investment
▪ Attractive corporate tax rate (20%) and low VAT (12%)
▪ Fiscal and non-fiscal incentives for investors, including in SEZs
▪ 48 bilateral agreements on mutual protection of investments (US also)
▪ Main international arbitration instruments ratified
Stable macroeconomic indicators and high growth 3 ▪ GDP growth: 5.5% (IMF 2012) ▪ Low debt / GDP ratio in the world:
15.8% (IMF 2012) ▪ Budget deficit: 2.5% (IMF 2012) ▪ Inflation rate: 6.0% (IMF 2012)
4 Springboard to circa 3 billion potential customers
▪ 3 of the 4 BRIC countries are in 4 hours flight
▪ Customs Union with a population of 170 million and a total GDP of 2 trillion.
▪ Open economy (trade 70% of GDP) ▪ Anticipated entry into the WTO in
2013
2,3
2,4
2,5
2,5
2,8
2,8
2,9
2,9
3
3,1
3,6
3,6
3,8
4
4,7
5,1
5,2
5,5 5,7
127
126
117
115
99
91
87
86
79
74
55
54
47
44
30
24
22
17
11
Czech
Russian
Ukraine
Romania
Croatia
India
Bulgaria
Azerbaijan
Lithuania
Kazakhstan
Turkey
Macedonia
Jordan
Poland
Georgia
Saudi Arabia
Chile
Australia
UAE
HIGH CONFIDENCE IN POLITICAL INSTITUTIONS AND EFFECTIVE MANAGEMENT OF PUBLIC FUNDS
1,6
1,8
2
2,1
2,1
2,2
2,4
2,5
2,5 2,9
3
3,3
3,4
3,4
3,7
4
4
5,6
5,8
139
133
120
115
113
106
90
86
85
65
63
47
45
43
37
29
27
5
3
Czech
Romania
Ukraine
Croatia
Lithuania
India
Poland
Russian
Bulgaria
Macedonia
Georgia
Azerbaijan
Jordan
Turkey
Kazakhstan
Chile
Australia
Saudi Arabia
UAE
The index of trust political institutions Place in the ranking
Place in the ranking Efficiency of the allocation of public funds
144 Extremely low Very high Irrational Highly
1 1
Source: The Global Competitiveness Report 2012-2013
144
185
168
154
141 137
130
112
73 67
58
49
32 15
9
1
0 20 40 60 80 100 120 140 160 180 200
Central African Republic
Afghanistan
Uzbekistan
Tajikistan
Ukraine
Brazil
Russian Federation
Italy
Azerbaijan
Belarus
Kazakhstan
Armenia
Ireland
Georgia
Singapore
DOING BUSINESS IN KAZAKHSTAN IS MUCH EASIER THAN IN MOST EMERGING MARKETS
Source: World Bank Doing Business 2013
Doing Business 2013 Country rank
10
LAW OF THE RK DATED AS 21.07.11 № 469 “ON INVESTMENTS»
Exemption from customs duties on equipment, components, raw materials and spare parts imported for a
project
In-kind state
grants Tax allowances as per Tax code
of the RK (deductions of the value of the preference objects,
and (or) further costs to modernization up to 3 years)
Preferences for projects in priority sectors
Preferences for strategic investment projects *
Land , property tax 0% for up to 7 years Guaranteed state order Industrial subsidies for areas with low
socio-economic development
Corresponds to the List of high-technology products
The volume of investment exceeds 50 million USD OR
10
CRITERIA for investment projects: Corresponds to the List of priority activities
Corresponds to the List of priority activities
INVESTMENT PREFERENCES
SECTOR-SPECIFIC INCENTIVES IN 9 DEDICATED SEZS ACROSS COUNTRY
SEZ “Innovation TechnoPark”
(IT-industry, innovations) SEZ “Ontystik” (textile industry)
SEZ “Khorgos Eastern Gate” (Trade, logistics)
SEZ “Saryarka” (metallurgy)
SEZ “Astana new city” (construction industry)
SEZ “Burabai” (Tourism)
SEZ “Pavlodar” (chemical industry)
SEZ “Petrochemical park” (Oil and gas industry, petrochemicals)
SEZ “Marine Port Aktau”
(logistics, transport)
Aktau
Atyrau
Shymkent
Astana
Karaganda
Almaty
Pavlodar
SEZ “Chemical park Taraz”
(chemical)
Taraz
FISCAL INCENTIVES in SEZs
• 0%Corporate Income Tax until 2020-2025 with possibility for extension
• 0% for land and property tax until 2020-2025 with possibility for extension
• VAT– 0% (for products consumed in SEZ) until 2020-2025 with possibility for extension
• Increase of marginal rate of depreciation for tax on the production of software to 40%
• For SEZ “Innovation technopark” – social tax is 0% for 5 years, under certain conditions
• For SEZ“Innovation technopark”– depreciation rate for software increased to 40 %
NON-FISCAL INCENTIVES
• Provision of free land in SEZ for a period of up to 10 years from registration time as SEZ resident
• Simplified procedure for the recruitment of foreign labor
ATTRACTIVE INVESTMENT INCENTIVES IN SEZS
KAZNEX INVEST:YOUR ONE-STOP-SHOP FOR INVESTING
Providing information about business / invest
projects and analytical information
Assist in the selection of projects of AIID Help in choosing a partner
Assistance in administrative mattersOrganization of meetings
with officials
COMPREHENSIVE ASSISTANCE TO FOREIGN INVESTORS
Assistance in obtaining state support for investors