A concise yet vital overview of key information with which to be briefed before setting to work in Kazakhstan: from red tape and regulation to day-to-day customs and the etiquette of business life in the country.
Kazakhstan has worked hard to create an environment that is business-friendly and open to FDI. Ranked 41st out of 189 economies in 2016, 12 places higher than in 2015, the World Bank’s annual Doing Business report masks even larger increases when it comes to specifics. Kazakhstan’s ranking is 32 places higher than last year for starting a company, rising from 53rd place to 21st. The country improved in seven out of 10 business-friendly indicators from 2015 to 2016. Yet to succeed in a fast-moving and often unpredictable economy, it is important to be fully briefed on the specifics before you start working there.
Like many emerging markets, investing in Kazakhstan poses risks for foreign investors. A long-term commitment, however, can more than make up for the costs incurred in setting up business in the country. First, the benefits and strengths of being part of Kazakhstan’s economy. The need for diversification across the economy, especially onto non-energy sectors, raises many opportunities for investors, as does the ongoing effort to modernize sections of Kazakhstan’s industrial base. One of the strongest FDI sectors is construction, especially as it relates to energy infrastructure (pipelines, refineries) and transport infrastructure (road and rail projects), consultancy, or engineering. Whichever field you are in, one of the most important things to establish early on is a local partner to facilitate exports, form-filling, and generally act as your Kazakhstani representative. A good way to start seeking a partner is via your country’s chambers of commerce. Kazakhstan plays host to numerous trade fairs and exhibitions. These are a great way to become familiar with the business scene in a large country like Kazakhstan and offer a fast track to meeting relevant people and getting yourself recognized.
Kazakhstan’s new-found membership of the World Trade Organization (WTO) will be of some reassurance to the businessman or investor in the country, as membership will make some aspects of regulation, particularly those of imports and exports, more standardized. However, few companies and fewer websites have information in English. So non-Kazakh speakers (or those without working knowledge of Russian) might do well to invest in a translator when dealing with the country’s bureaucracy. It is a good idea to have business cards printed in English and Russian, and to take your interpreter with you to business meetings. Relatively few Kazakhstani companies will have audited accounts. And doing business in Kazakhstan is still very often a matter for government—it will be difficult to avoid dealing with ministries and civil servants.
Arranging meetings in the private sector is not difficult, but formalities have to be observed. Business people in Kazakhstan tend to be more formal than their Western counterparts. Always be punctual and dress in business attire—men should wear a suit and tie. Day-to-day business can, however, feel almost casual, with less sense of time pressing on a deal, or signings being postponed. Driving in Kazakhstan is hazardous and often frustrating. A good idea is to take a local driver, and let them deal with the hassle.
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