Kazakhstan

The Republic of Kazakhstan is located in Central Asia bordering Russia, China, Kyrgyzstan, Uzbekistan, Turkmenistan, and the Caspian Sea. It is about four times the size of Texas and covers an area of 2,717,300 sq. kilometers making it the second largest country in central Asia only to Russia. Kazakhstan’s total population is about 17.74 million and is growing at a rate of 1.2% with 53.6% living in urban areas. Kazakhstan’s capital of Astana has a population of about 295,000 with other major cities including Almaty (former capital, pop. 1 mil), Karaganda (415,000), and Shymkent (340,000). The people are governed by a republic with authoritarian presidential rule and are half Muslim and half Russian Orthodox. The primary language used for everyday business is Russian with many native speakers of Kazakh as well. The local currency used is the Kazakhstani Tenge.

Kazakhstan has the strongest economy of all of the Central Asian states, and it is firmly based in the export of its abundant natural resources, namely oil. Recent economic reforms including a tax code reform have been implemented to favor domestic industry and reduce dependence on the energy sector. Kazakhstan’s main trade partners are Russia, China, Germany, Italy, and France. Its primary imports are machinery and equipment, metal products, and foodstuffs. Exports consist of oil and oil products (59%), ferrous metals, chemicals, machinery, grain, wool, meat, and coal. Kazakhstan’s GDP (Purchasing Power Parity) is $253.6 billion and is growing at a real rate of 5% with an inflation rate of 5.1%. Kazakhstan ranked 49th out of 185 countries in the World Bank Group’s Ease of Doing Business Ranking.

Franchising Laws Overview

Disclosure laws:

• None.

Relationship laws:

• Franchisor’s Rights:
  • Control the quality of goods and services.
  • Preemptive purchase in the event the franchisee transfers its company.
  • To enter into additional contracts with the franchisee.
  • To act as the franchisee’s guarantor.
  • To terminate and claim damages if the franchisee violates the Agreement.

• Franchisor’s Obligations:
  • Provide the franchisee with an operation manual.
  • Train and consult the franchisee as defined in the franchise agreement.
  • Not to disclose confidential information obtained from the franchisee.
  •  

Registration laws:

• None.

Click the links below for articles with more information on Franchising in Kazakhstan

Doing Business in Kazakhstan(2012)

Franchising in Frontier Markets(2010)

US Commercial Service Market Report Kazakhstan(2009)

Picking the Best European Countries for Franchising(2009)

* CPI Scores published by Transparency International and relates to the perceptions of the degree of corruption as seen by business people and country analysts and ranges between 100 (highly clean) and 0 (highly corrupt).

**Ease of Doing Business Rankings determined by the World Bank Group and is ranked out of a possible 185 countries. www.doingbusiness.org

***Kazakhstan's corporate income tax rate will be slashed over the next few years after the country's president approved drafts of the new tax and budget codes in 2008. The new rate of corporate income tax will come into force yearly, decreasing from 30% to 20% in 2009, 17.5% in 2010 and 15% by 2011.

Most recent statistics have been taken from the CIA World Factbook unless noted otherwise.