Kazakhstan is becoming one of the preferred destinations for foreigners wishing to expand their companies as well as open up new companies. The economic indicators by the World Bank show that there is a lot of potential in this economy so more people are looking to set up businesses in Kazakhstan. Like any other country, there are steps that need to be followed in order to register a company and begin operating as a certified legal entity.
With the right documentation presented, ideally, the registration should be quick and straightforward with the company registered within 1 business day. However, many people still find a few issues because they may be ignorant of certain guidelines.
Under normal circumstances, legal entities simply need to fill in the registration form and submit the following documents:
- Copies of identification
- Notification on start of business activity
- Power of attorney
The registration process is expected to be a one-stop shop at the Public service centers in Kazakhstan. Alternatively, it can be done online and this is even much faster. The founders would be expected to obtain an electronic signature to complete this. Once everything is in order, the registration should be complete within one hour from the time the documents are submitted online.
Important points to consider
While on the surface everything should go smoothly, many times entrepreneurs find problems with registration because the following are not explained to them.
Location of legal entity:
The company name of any legal entities in Kazakhstan has to be unique, there shouldn’t be any confusion between the company being registered and those that are already registered. If there is, this may result in failure to register the company and a new name will have to be chosen.
For companies owned by foreigners who choose to use a name that is in the language of the foreign owners, it is a legal requirement that a translation of that name be provided for legal purposes even though the company can continue to use the name in a foreign language.
Legal entities are also forbidden from using names that may mislead the public into believing they are affiliated to government bodies. For example incorporating names like Kazyna cannot be used within a company name for a private business.
The names chosen should also be mindful of the culture and morals of Kazakhstan so that they do not in any way insult or demean the people and their culture.
Within the business foundation documents, it is a requirement that full address is provided explaining the actual address of the company as a legal entity as well as those that make up the founding members. This is necessary for cases like tax payments and any other legal dealings with the company, there needs to be an actual street, building and office number where legal documentation can be delivered and people responsible for things like paying taxes can be found.
This location and postal address should match all documentation in relation to registration as well as operation of the company at all times and the government carries out regulatory activities to see to it that the information provided in the registration documents is what is being used during operation of the business. A business may have many branches but as a legal entity it is expected to have one address that serves as a headquarter, so to speak.
For a foreigner to be appointed a head of a company, for example, a CEO they will need to have a work permit or residence permit. While the law does not prohibit the appointment of a foreigner as a CEO of a legal entity, there are laws that require that any foreigner employed in Kazakhstan, must have a work permit and at the same time a new company cannot apply for a work permit which means for purposes of registration, either a national of Kazakhstan will have to be appointed CEO or the foreigner will first have to get a residence permit before the company can be registered with them as CEO.
For a foreign legal entity, there may be the issue of the documents of incorporation of the company being in a different language. This means that the documents will need to receive a stamp of approval from a notarized body in Kazakhstan. The documents will also have to have a translated version for the benefit of the authorities doing the registration.
These are the 4 most common issues that delay the process of registration of legal entities in Kazakhstan. Once these are attended to and all other necessary documentation provided, the registration should go smoothly.
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Most investors like doing business in countries that are stable both politically and economically. Economic consideration is usually given the first priority. A country with poor economy may not favour business growth and development while that with stable economy will provide favourable environment for business. There are quite a number of countries that are doing well economically in Asia. One good example is Kazakhstan. It is indeed true that Kazakhstan is one of the best countries for doing business. You will find the reasons here.