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INVESTMENT OPPORTUNITIES OF SOUTH KAZAKHSTAN REGION.

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Presentation on theme: "INVESTMENT OPPORTUNITIES OF SOUTH KAZAKHSTAN REGION."— Presentation transcript:

1 INVESTMENT OPPORTUNITIES OF SOUTH KAZAKHSTAN REGION

2 Kazakhstan  Capital: Astana city  Territory : 2,7 mln sq/m2 (9 th place in the world)  Population :17,2 million people. (62 nd place in the world)  Kazakhstan has borders with Russia, China, Kyrgyzstan and Uzbekistan  Administrative structure: 14 oblasts, 2 cities of state importance  GDP 2013 : 224,858 billion $ (45 th place in the world)  GDP per capital in2013: $ (57 th place in the world)  Currency: tenge (1 $ – 182 tenge)

3 Investment climate Business environment According to - «Doing Business» in 2013 Kazakhstan ranked 50 th place among 189 countries. «Taxation» - 18 th place. «Registry of ownership» - 18 th place. «Registry of enterprise» - 30 th place. 111 Foreign Direct Investment In 2012 holds 19 th place among Top-20 countries on Foreign Direct Investment. In 2012 Gross Foreign Direct investment in Kazakhstan achieved highest level of 28.8 billion US dollars. In 2013 Gross Foreign Direct investment amounted 24,1 billion US dollars.

4 Protection of investors rights According to Annual Index of Global Competitiveness for , Kazakhstan is on 10 th place investors rights protection. Kazakhstan signed agreements on mutual protection and stimulation with 47 countries. Foreign Investors Board In the country operates Foreign Investors Board under the President of Kazakhstan. Board develops and offers recommendations for President and Government of Kazakhstan for consideration on issues linked with investment activities in Kazakhstan. Investment ombudsman In order to apply systematic approach in solving issues of investors working in Kazakhstan, Investment ombudsman is created. Its main function – regulation of arguments and prevention of international investigation.

5 Investment advantages Volume of the market - over 170 million people with GDP sum of 2 trillion US Dollars. United trade rules within Customs Union: Single customs territory; Single foreign trade policy; Single customs rule, Single customs codex; Free flow of goods among Customs Union. Taxation regime Most attractive taxation regime among CIS and Central Asian countries (Corporate Income Tax – 20%, Value Added Tax – 12%). When implementing an investment project in the priority sectors or investment project in the textile industry in FEZ “Ontustik” exempt from the following taxes: Corporate income tax; Land tax; Property tax. Customs Union (Kazakhstan, Russia and Belarus)

6 Investment preferences Visa regime Kazakhstan is led visa requirements for citizens of the states as: Turkey, United States, Netherlands, United Kingdom, France, Germany, Italy, Malaysia, UAE, South Korea and Japan For more information about the visa regime in Kazakhstan can find on this link: Favorable location Center of the Eurasian continent, through the territory of Kazakhstan was once the Great Silk Road. Main transcontinental routes linking Asia Pacific with the Middle East and Europe pass through Kazakhstan. Three countries of the "quartet" of the BRICS are located near Kazakhstan: Russia, China and India.

7 Government support measures Taxation preferences Exemptions:  corporate income tax for 10 years;  land tax for 10 years;  property tax for 8 years. Taxation preferences Exemptions:  corporate income tax for 10 years;  land tax for 10 years;  property tax for 8 years. Natural grants State natural grants: land, buildings, construction, cars and equipment, computing technologies, metrical and regulating instruments and equipment, vehicles, apart from cars, production inventories Natural grants State natural grants: land, buildings, construction, cars and equipment, computing technologies, metrical and regulating instruments and equipment, vehicles, apart from cars, production inventories Release from Taxation duties Release from taxation duties during importing equipment, accessories, raw materials and spare parts, required for realization of investment projects. Release from Taxation duties Release from taxation duties during importing equipment, accessories, raw materials and spare parts, required for realization of investment projects. Investment subsidies Compensation of up to 30% of capital costs of the investor by the state after object input in operation Investment subsidies Compensation of up to 30% of capital costs of the investor by the state after object input in operation When concluding an investment contract for more than $ 20 million provides for the following preferences:

8 Government support measures Involving the workforce To investors granted the right to employ foreign labor for the entire period construction of investment project and one year after the object input in operation, beyond the quota without permission Involving the workforce To investors granted the right to employ foreign labor for the entire period construction of investment project and one year after the object input in operation, beyond the quota without permission Stability of tax rates Guaranteed "stability" of tax rates (excluding VAT and excise taxes), environmental fees and charges for a period of 10 years after the conclusion of contracts with investors Stability of tax rates Guaranteed "stability" of tax rates (excluding VAT and excise taxes), environmental fees and charges for a period of 10 years after the conclusion of contracts with investors Stability of legislation of the Republic Kazakhstan Guaranteed "stability" when changing legislation of Republic of Kazakhstan within the framework of investment contracts concluded with investors Stability of legislation of the Republic Kazakhstan Guaranteed "stability" when changing legislation of Republic of Kazakhstan within the framework of investment contracts concluded with investors When concluding an investment contract for more than $ 20 million provides for the following preferences:

9 South Kazakhstan Region  Area: km2  Population: people (1 st place in Kazakhstan)  Urban population: 40%  Administrative Centre: Shymkent (3 rd big city in Kazakhstan)  Oblast structure: 4 cities (Shymkent, Kentau, Turkestan, Arys) and 11 districts.  Higher Education Establishments: 12 Universities, 77,7 thousand students  Ethnic groups: over 100 nationalities 100% cotton-yarn 99,2% transformators 48,0% pharmaceutical products 46,1% petrol 22,9% heating oil 16,8% cement 15,0% flour 100% cotton-yarn 99,2% transformators 48,0% pharmaceutical products 46,1% petrol 22,9% heating oil 16,8% cement 15,0% flour Proportion of South Kazakhstan in Kazakhstani production

10 Prioritized fields of economy 1.Agro-industrial complex 2.Light industry 3.Pharmacy 4.Machinery manufacturing 5.Construction industry 6.Energy 7.Tourism 8.Logistics 1.Agro-industrial complex 2.Light industry 3.Pharmacy 4.Machinery manufacturing 5.Construction industry 6.Energy 7.Tourism 8.Logistics

11 Agribusiness and Food Industry % cotton; 71% of the grapes; 66% melons; 51% Safflower oil; 42% of the fruit; 25% vegetables.  In agriculture of the SKO 38 % occupied economically active population, or more than 500 thousand people.  For the period production of meat and meat products - grew by 14.8%, dairy products %, bread and bakery products %, beverages %.  In 2013, the food produced on the $ 721 million 27.2% of total industrial production and 12.7% of the national production of food and beverages.  75.6% of greenhouse complexes are located in the SKR SKO share in volume of production RK  In SKO work more than 50 large and medium-sized enterprises in the food industry.

12 Agro-industrial zones Agro-industrial zone «Garden» Location: Kazygurt district Allocated land: ha Government investment cost ( construction of infrastructure): 100 million tenge Private investment cost (expecting): 4,6 billion tenge Agro-industrial zone «Greenhouse» Location: Shymkent city Allocated land: 62 ha Government investment cost ( construction of infrastructure): 555 million tenge Private investment cost (expecting): 9,2 billion tenge Government assistance: - Free land; - Ready infrastructure (heating, electricity, fruit storage, domestic placement); - Consultation of technology election; - Agro support; - Support in obtaining credit in «KazAgro» JSC; - Support in obtaining government subsidy

13 Light industry SKR is a center for the sale of cotton and textile cluster Over 50 cotton processing, weaving and sewing companies Is the only area in Kazakhstan where cotton is grown and annual gross harvest of 350 thousand tons of cotton. Cotton processing plants annually produce more than 100 tons of fiber. The volume of exports of cotton fiber in Russia is more than $ 30 million For the development of the textile industry operates FEZ "Ontustik". The territory of FEZ "Ontustyk" 200 hectares, the SEZ infrastructure 100% complete. Large textile company:  JSC "Utex"  JSC "Melange"  LLP «SOUTH TEXTILINE KZ»  LLP "ginneries"  LLP «Oxi Textile»  LLP "Garment factory" Gauhar "  LLP "Hlopkoprom cellulose"

14 On SEZ Release Administrative body FEZ tax authority The customs authority FEZ Budget for infrastructure Administrative body FEZ tax authority The customs authority FEZ Budget for infrastructure Property tax Land tax Customs Administrative support Tax and customs support Corporate tax Infrastructure On the territory of the Republic of Kazakhstan 0% From 11,2$/ha 1,5% 20% From % 0% Advantages of SEZ "Ontustik"

15 Pharmaceutics FASTEST GROWING INDUSTRIES AT THE REGIONAL LEVEL Cadres: South Kazakhstan State Pharmaceutical Academy The volume of production of pharmaceutical products by SKR – $ 71 million U.S. dollars SKO share in the volume of pharmaceutical products – 48% Level of productivity – $ 36.6 thousand U.S. dollars Kazakhstan's pharmaceuticals market: Large manufacturers of the pharmaceutical industry: JSC "Chimpharm" LLP "Zerde-Fito" LLP SPC "Rauan" LLP «Eco Pharm International»

16 Machinery manufacturing  Industry during for demonstrates the dynamic development. Production volume in 2013 totaled $ 172 million, which is more than 2 times in comparison with  Prospects for development in this sector is characterized by high rates of domestic and foreign trade. So, in 2012, to the area imported machinery products for $ 417 million. Engineering companies made ​​ only 10.8% of the imported products.  A capacious market of agricultural machinery projected a perspective growth in demand for it. As of January 1, 2013 depreciation of agricultural machinery is estimated at 85%  Manufacturers Machinery Sector in SKO: 35 companies

17 Construction Industry The region has a huge amount of raw material (talc, mica, marble, feldspar, bentonite clays, tefritobazalt, vermiculite, zeolite, wollastonite, refractory and refractory clay, quartzite, mineral paint additives), required for the production of various kinds of building materials in the area.  In the area produces more than 50 kinds of basic building materials and structures  There are 30 large and medium enterprises and over 125 shops  Production of building bricks baked in the total volume of the republic occupies 14.9%, cement %, lime - 9.8%

18 Energetics  Mandatory connection objects to the nearest point of RES electricity and heating networks;  Reserve areas and priority in the allocation of land plots;  Investment incentives and preferences for the construction and operation of facilities for the use of renewable energy (according to the legislation);  Release objects from RES connection fees and transportation network.  Mandatory and guaranteed purchase of generated renewable energy;  Single rate for each type of RES;  Contracts for the purchase of electricity from renewable energy sources should be for the whole period of the project payback period RES.  5 WP for U.S. $ 750 million, 300 MW power  7 FES U.S. 533 million, 242 MW power  11 HPS U.S. 56 million, 35.3 MW power Support for connecting renewable energy infrastructure facilities and transmission networks Support for renewable energy in electricity sales Planned to implement 23 projects in the field of renewable energy for U.S. $ 939 million with total capacity of MW, including:

19 Tourism  One of the most visited tourist object in Central Asia is the Mausoleum of Khoja Ahmed Yassawi, which is included in the UNESCO World Heritage List.  There are 18 recreation centers in the famous resort «Saryagash». Every year, these resort complexes visited by more than 30,000 people  The region has two reserve : «Aksu Zhabagly» and «Karatausky».  In order to develop tourism are created 4 tourist zones:  Touristic and recreation center «Kaskasu»  Health-resort zone «Saryagash»  Beach zone on reservoir storage «Shardara»  Beach zone on reservoir storage «Badam» For more information about tourism of SKO can learn on this link:

20 Tourism zones Name Touristic and recreation center «Kaskasu» Health-resort zone «Saryagash» Beach zone on reservoir storage «Shardara» Beach zone on reservoir storage «Badam» Allocated land: 56 hа ha245 ha900 ha Required investments 230 mln. $ 120 mln. $ 192 mln, $ 384 mln. $ Government assistance: - Free land; - Ready infrastructure (ropeway, water, electricity, gas, highway); - Support in receiving licensing documents. - Marketing research from international consulting company.

21 Logistics «Southern Gateway» of Kazakhstan in international trade: Transport corridor «Western Europe – Western China», which is the shortest path in international traffic between Europe and China; motorway «Tashkent - Shymkent», opening Kazakhstan southern countries; Trans-Asian Railway. In Shymkent city operates an internatioanl airport, which has favorable geographical position: (1) 100 km from Tashkent; (2) 450 km from Kyzylorda; (3) 500 km from Bishkek ; (4) 700 km from Almaty. Large enterprises: LLP «Kazakhstan Logistic Group» - warehouse logistics 7 tons LLP «NGOs «Zerde» - storage of pharmaceutical products LLP «Sanjar Trade» - a logistics center LLP «Keremet center» - Growers capacity 4 tons. ASTANA SHYMKENT ALMATY CUSTOMS UNION Uzbekistan Kirgizstan Russia China Turkmenistan Azerbaijan

22 Trade logistic zones Location:Shymkent Saryagash district Turkestan Allocated land: 92 ha40 ha30 ha Government investment cost (construction of infrastructure): 9,3 mln $ 4,7 mln $ 4,1 mln $ Private investment cost (expecting): 181 mln $30 mln $25 mln $ Government assistance: - Free land; - Ready infrastructure (water, electricity, gas, highway, dead-end tracks, airport access); - Support in receiving licensing documents

23 Industrial zones of districts and cities of South Kazakhstan region 1173 Working Industrial zones Planned construction in 2014, documentations are designed Allocated lands, documentation are designing Total area of lands, ha  The land was allocated for Industrial zones with total area of 835,5 ha, with IZ of the Shymkent city total area is 1 172,5 ha.  In 2014 planned construction of infrastructure in 7 districts of the region (Kazygurt, Saryagash, Suzak, Shardara, Tyulkubas, Baidibek and Maktaaral)  In districts and cities of the region are realizing 65 projects amounting 46 billion 789 million tenge with the creation of 6407 workplaces.

24 International Investment Forum «New investment opportunities within the EAEC» Event venue of the Forum: «Rixos Shymkent» hotel, Shymkent city Date of the Forum: 3 October 2014 Organizer of the Forum: Akimat of South-Kazakhstan region The purpose and objectives of the Forum:  Presentation of new investment opportunities of Kazakhstan with the enhancements and additions to the legislative acts of RK on improving the investment climate, and with the creation of the Eurasian Economic Union;  Results of development in the first five-year plan of SP FIID and presentation of the second five-year plan of SP FIID;  Demonstration of investment opportunities of South Kazakhstan;  Organization of a dialogue platform for local and foreign companies to discuss opportunities for joint investment projects on the territory of South Kazakhstan;  Stimulation of inter-regional and inter-sectoral cooperation.

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