Why Kazakhstan is attractive for foreign investors? National Export & Investment Agency “KAZNEX INVEST” Ministry of Investment and Development

2014f GDP per capita (ths.USD)GDP (bln.USD) Inflation (%) Gross International Reserves and Assets of the National Fund of RK (bln.USD) Free exchange Unemployment rate from 1999 to 2013 decreased by 8% Inflation from 1999 to 2013 decreased by 13% Unemployment rate (%) Birth rate (per 1000 people) GDP from 1999 to 2013 increased by 14 timesGDP per capita from 1999 to 2013 increased by 12 times Government External Debt to GDP (%) Government External Debt decreased by 14% Exchange rate regime - floating The total amount of gross FDI from 2005 to 2013 amounted to $184 billion. Herewith, the average annual growth rate of gross FDI is 17.4%. Average monthly nominal wage increased by 7.2 times Stable macroeconomic indicators and high growth Source: The National Bank of Kazakhstan, Committee on Statistics of the Ministry of National Economy of RK, IMF GDP growth (%) Average monthly nominal wage (USD) 2014f

Kazakhstan in the world ranking for reserves Natural resources Kazakhstan in the world ranking for mining

Doing Business 2015 Italy - 56 Russia - 62 Kazakhstan – 77 rank China - 90 The Global Competitiveness Index China – 28 Italy – 49 Kazakhstan – 50 rank Russia– 53 Protecting Minority Investors Italy - 21 Kazakhstan – 25 rank Russia – 100 China – 132 Protecting Investors Kazakhstan – 22 rank Italy - 45 China – 83 Russia– 98 Trust in political institutions index China – 26 Kazakhstan – 34 rank Russia – 74 Italy – 139 Taxation Kazakhstan – 17 rank Russia – 49 China – 120 Italy – 141 Platforms for dialogue between public authorities and investor Foreign Investors’ Council chaired by the President on strategic issues Council for improvement of investment climate chaired by the Prime Minister on systemic issues Investment Ombudsman chaired by the Minister on Investments and Development on current problems of investors Political stability and good investment climate PROTECTION OF FOREIGN INVESTMENTS

Metallurgical complex 1 1. Ferrous metallurgy 2. Non-ferrous metallurgy 3. Oil refining 4. Petrochemistry 5. Manufacture of food products 8. Manufacture of motor vehicles 9. Electrical equipment 10. Agricultural machinery engineering 11. Railway machinery engineering 12. Mining equipment 13. Oil producing equipment; oil and gas refining equipment 6. Agrochemistry 7. Production of chemicals for industry 14. Production of construction materials Oil refining complex 2 Food processing industry 3 Chemical industry 4 Industrial production 5 Production of construction materials 6 Priority sectors

Petroleum refining - $1,7 bln. Construction materials - $1,3 bln. 0,6 Domestic production 3,8 8,9 2,1 8,2 1,1 0,6 0,94 0,34 1,2 2,6 Domestic production Import 0,4 0,05 0,6 1,1 Petrochemicals - $0,5 bln. Foodstuffs - $3,8 bln. MMC - $12,7 bln. Machinery Industry - $10,3 bln. Chemical Industry - $1,7 bln. Industrial niches Domestic production Import

SEZ Customs privileges Customs duties 0% on the import of: equipment and its components, spare parts, raw materials and supplies. State in-kind grants Land plots, buildings, machinery and equipment in property. Tax benefits CIT – 0 % 10 years Land tax – 0% 10 years Property tax– 0% 8 years Investment reimbursement Up to 30% of construction and installation works and equipment Providing the land in the territory of the SEZ for a period of up to 10 years Tax benefits CIT – 0% Land tax– 0% Property tax– 0% VAT – 0% (on all goods completely consumed in the production process) Exemption from customs duties for goods imported into SEZ territory Customs privileges Simplified procedure for recruiting foreign workers Other privileges The "one window" principle for the investor and service support for investment Information, consulting, organizational and other assistance to the investor Assistance in obtaining the required approvals and permits Support for investment project till the start of the production Provision of services to foreign investors and representatives of Kazakhstan business Migration benefits The right to employ foreign labor without quotas and permits Visa-free travel for citizens of 10 countries INVESTMENT PREFERENCES* Support for investors SPECIAL ECONOMIC ZONES *for priority investment projects Priority types of activities: 1. Metallurgy 2. Oil refining 3. Food production 4. Chemical industry 5. Machinery industry 6. Production of construction materials

SKD assembly of motor vehicles CKD assembly of motor vehicles Production of car parts and accessories : Manufacture of electric motors, increasing localization:Production of locomotives and wagons: Production of equipment: Production of helicopters:Production of combines and tractors: Production of equipment: Railway machinery engineering Automobile production Machinery for mining, quarrying Other industrial machinery Machinery Chemical industry The production of chemical additives, sodium hexametaphosphate industrial gases, sulphuric acid, ammonia and ammonium nitrate: The production of ethanol based on the processing of the industrial gases, the production of bioethanol from spent grain, mixing special chemicals for oil extraction and refining: Professional training, production of generic products:Professional training, production of generics and original medicines: Pharmaceutical industry Industries

1 st level Border regions of Russia 2 nd level  Russia  Ukraine  Belarus 3d level Western regions of China 5 th level  Iran  Azerbaijan and other Caucasian countries 4 th level  China  Uzbekistan  Tajikistan  Turkmenistan  Kyrgyzstan High Low Level of integration of the macro-region Kazakhstan is a member of Customs Union with Russia and Belarus: - free trading without customs duties - access to population over 170 mln. people Market of the macro-region

RUSSIAN FEDERATION mln. UZBEKISTAN 30.2 mln. TURKMENISTAN 5.2 mln. KAZAKHSTAN 17 mln. Western Europe – Western China corridor on the territory of Kazakhstan (2,787 km) PEOPLE’S REPUBLIC OF CHINA 1.4 bln. MONGOLIA 2.8 mln. INDIA 1.3 bln. BELARUS 9.5 mln. IRAN 77.4 mln. PAKISTAN mln. TURKEY 74.9 mln. Western Europe – Western China corridor (8,445 km) Lianyungang St. Petersburg Aktobe Shymkent KYRGYZSTAN 5.7 mln. LOCATION AND INFRASTRUCTURE Infrastructure The Kazakhstan’s geographical position makes it a natural crossroads for major transit corridors from Asia to Europe. The transcontinental automobile road corridor “Western Europe – Western China” passes through the territory of Kazakhstan. The corridor will allow to deliver freights from China to Europe in 10 days. There is a territory with population of more than 3.3 bln. people within a radius of 2 thsd. km from Kazakhstan The flight time from most European destinations is five hours.

Population – – – > Electrified, high-speed line (1,320 km ) Freight and passenger line Constructed in Western Europe – Western China corridor (2,787 km) CONSTRUCTION OF TRANSPORT AND LOGISTICS INFRASTRUCTURE Infrastructure Temirtau Oskemen Taldykorgan Turkestan Uralsk Atyrau Aktau Kostanay Petropavlosk Kokshetau Pavlodar Astana Karaganda Almaty Taraz Shymkent Kyzylorda Aktobe Semey Ekibastus Rudniy New logistics hub - Khorgos Logistics hub in sea port TURKMENISTAN, IRAN EUROPE, RUSSIAN FEDERATION CHINA IRAN

METALLURGY * macro-region: Kyrgyzstan, Uzbekistan, Tajikistan, Turkmenistan, Armenia, Azerbaijan, Georgia, Iran, Ukraine, the Russian Federation, Republic of Belarus, China. Market potential, US$ mln. Prerequisites for development Availability of raw material base - Explored iron ore reserves of 30 deposits reach 9.1 bln. tons, previously assessed - 15 bln. tons, prospective - 15 bln. tons; - Copper reserves are estimated at 37 mln. tons (5.5% of world reserves); - Prospective resources of aluminum (bauxite) in Kazakhstan are estimated at 809 mln. tons; - Nickel reserves are estimated at 1,4 mln. tons. Level of labor productivity - In 2013 labor productivity in the iron and steel industry amounted to US$89.9 thousand. - In 2013 labor productivity in the nonferrous-metals industry amounted to US$107.8 thousand. Major players JSC ArcelorMittal Temirtau; LLP KSP STEEL Temirtau; LLP Casting; LLP ALZ; LLP Kazakhmys Corporation; JSC Kazakhstan Aluminium Smelter; LLP GRK Kaznickel LLP Kazzinc LLP ENRC Provision of industrial infrastructure The projects are fully provided with industrial infrastructure - Production of cast iron, steel and ferroalloys. - Production of pipes, tubing, profiles, steel fittings. - Cold drawing (production of steel rod and whole workpiece). - Cold rolling of tapes and narrow strips. -Cold forming or seaming. - Production of wire by cold drawing. - Production of precious metals. - Production of aluminum products - Production of lead, zinc and tin products - Production of copper products - Production of other nonferrous metals products Cold drawn wire Pipes, tubing, profiles and steel fittings Aluminum Copper Cold drawn wire Pipes, tubing, profiles and steel fittings MACRO-REGION* KAZAKHSTAN Priority types of activities

70,4 91,7 Availability of raw material base - Available reserves of phosphate ore (more than 8 bln. tons), potassium salts (6.5 bln. tons) and natural gas (1.8 trln. cubic meters). - Available reserves of common salt (more than 144 mln. tons), oil (3.9 bln. tons) and natural gas (1.8 trln. cubic meters). Level of labor productivity - In 2013 labor productivity in agricultural chemistry amounted to US$101 thousand per person. - In 2013 labor productivity in the production of chemical products for industries amounted to US$45 thousand per person. Major players LLC Kazphosphate; LLP Kazazot; JSC Aktobe chromium compounds plant; LLP Ulba Fluorine Complex. Provision of industrial infrastructure Aktobe region - infrastructure to the minefields was carried out by companies LLP Chilisai Chemicals and LLP Batys Kali. SEZ Taraz - all the necessary infrastructure will be carried out. SEZ Pavlodar - all the necessary infrastructure will be carried out. - Production of fertilizers and nitrogen compounds. - Production of pesticides and other agrochemical products. - Production of industrial gases. - Production of dyes and pigments. - Production of primary inorganic compounds. - Production of paints, varnishes and similar colorings. - Production of soap and washing, cleaning and polishing agents. - Production of explosives. Potassium chloride MAP/DAP Dyes and pigments Paints, varnishes and similar colorings, typographical paint Other chemical products MACRO-REGION* KAZAKHSTAN MACRO-REGION* KAZAKHSTAN MACRO-REGION* KAZAKHSTAN MACRO-REGION* KAZAKHSTAN MACRO-REGION* KAZAKHSTAN CHEMISTRY Priority types of activities * macro-region: Kyrgyzstan, Uzbekistan, Tajikistan, Turkmenistan, Armenia, Azerbaijan, Georgia, Iran, Ukraine, the Russian Federation, Republic of Belarus, China. Prerequisites for development Market potential, US$ mln.

- Production of refined petroleum products - Production of other basic organic chemicals. - Production of plastics in primary forms - Production of synthetic rubber in primary form Bitumen, propane, butane, refinery coke Other liquefied petroleum gases and similar products Plastics, synthetic rubber in primary forms MACRO-REGION* KAZAKHSTAN MACRO-REGION * KAZAKHSTAN MACRO-REGION * KAZAKHSTAN OIL REFINING AND PETROCHEMICALS Priority types of activities * macro-region: Kyrgyzstan, Uzbekistan, Tajikistan, Turkmenistan, Armenia, Azerbaijan, Georgia, Iran, Ukraine, the Russian Federation, Republic of Belarus, China. Market potential, US$ mln. Availability of raw material base - Available reserves of oil - (3.9 bln. tons) - Available reserves of natural gas – (1.8 trln. cubic meters) Level of labor productivity - In 2013 labor productivity in petrochemical industry amounted to US$36 thousand per person. Major players LLC United Chemical Company; LLP Nephtechim LTD Provision of industrial infrastructure SEZ National Industrial Technopark - all the necessary infrastructure will be carried out. Prerequisites for development

Availability of raw materials base - The components for production are available. Level of labor productivity In 2013 labor productivity was (US$thousand/per person): -in production of motor vehicles – in production of electric equipment – in production of agricultural machinery – in production of railway machinery – in production of machinery and equipment for mining industry – in production of machinery and equipment for oil refining and petroleum industry Major players JSC “AZIA AVTO” JSC “Agromash Holding” LLP “SaryarkaAutoProm” LLP “Hyundai Auto Trans” JSC “Kentau Transformer Plant” LLP “ KAZCENTRELECTROPROVOD” JSC “Kazenergokabel” LLP “Almaty Ventilation Plant” LLP “RIG” LLP “Kainar AKB” LLP “Zhersu Power” JSC “KEMONT” LLP “SemAZ” LLP “Agrotechmash” Provision of industrial infrastructure - The required industrial infrastructure is available. - Production of motor vehicles - Production of autobodies for vehicles, trailers and semi-trailers - Production of electrical and electronic equipment for vehicles - Production of other parts and supplies of vehicles and their engines - Production of electric motors, generators and transformers - Production of electric distributing and regulative apparatus - Production of electrical appliance - Production of other types of electrical wire and cable - Production of electric lighting equipment - Production of engines and turbines, except aircraft, automobile and motorcycle engines - Production of agricultural and forestry machinery - Production of railway locomotives and mobile train, as well as components for railway engineering - Production of machinery and equipment for metallurgy - Production of machinery for mineral resource industry, underground operation and construction - Production of other machines and equipment for special purpose, not included into other groups - Production of hydraulic equipment - Production of pumps, compressors, plugs and valves - Production of taps and valves - Production of other machines and equipment for general and special purpose, not included into other groups Motor vehicles, their parts, accessories and engines Electrical equipment Agricultural machinery Railway machinery Machinery and equipment for mining industry Machinery and equipment for oil refining and petroleum industry JSC “Semipalatinsk Machine Building Plant” LLP “Dormash” JSC “Lokomotiv Kurastyru Zauyty” LLP “Electric Kurastyru Zauyty” LLP “Tulpar Talgo” LLP “Kazakhstan Wagon Company” JSC “ZIKSTO” JSC “Stepnogorsk Bearing Plant” Karaganda Machine Building Plant after Parkhomenko Almaty Heavy Machine Building Plant JSC “Vostokmashzavod” JSC “Munaimash” LLP “Byelkamit” JSC “ Petropavlovsk Heavy Machine Building Plant” MACRO-REGION* KAZAKHSTAN Prerequisites for development MACRO-REGION * KAZAKHSTAN MACRO-REGION * KAZAKHSTAN MACRO-REGION* KAZAKHSTAN MACRO-REGION * KAZAKHSTAN MACRO-REGION * KAZAKHSTAN MACHINERY INDUSTRY Priority types of activities * macro-region: Kyrgyzstan, Uzbekistan, Tajikistan, Turkmenistan, Armenia, Azerbaijan, Georgia, Iran, Ukraine, the Russian Federation, Republic of Belarus, China. Market potential, US$ mln.

KAZAKHSTAN Prerequisites for development Availability of raw material base The raw materials for flat glass such as quartz sand and soda ash aren’t available. Fiberglass is made of molten glass. Raw materials - sand, dolomite, soda ash, cullet. Level of labor productivity In 2013 labor productivity in the production of construction materials amounted to US$39.0 thousand. Major players LLP KazStroySteklo. Provision of industrial infrastructure Deposit of quartz sand: Aysarinskoe in the North Kazakhstan Region (the preparation plant is available), Mugojarskoe in Aktobe, Aral field in Kyzylorda and Pavlodar region. - Production of veneer, plywood, slabs and panels. - Production of plastic construction materials. - Production of other non-metallic mineral products. Formation and processing of flat glass Fiberglass MACRO-REGION * KAZAKHSTAN MACRO-REGION* PRODUCTION OF CONSTRUCTION MATERIALS Priority types of activities * macro-region: Kyrgyzstan, Uzbekistan, Tajikistan, Turkmenistan, Armenia, Azerbaijan, Georgia, Iran, Ukraine, the Russian Federation, Republic of Belarus, China. Market potential, US$ mln.

Meat products Milk products Pasta, flour products, confectionery Baby food Vegetables and fruits MACRO-REGION * KAZAKHSTAN MACRO-REGION* KAZAKHSTAN MACRO-REGION * KAZAKHSTAN MACRO-REGION * KAZAKHSTAN MACRO-REGION* KAZAKHSTAN - Processing and preserving of meat - Milk processing and cheese production - Production of flour-and-cereals industry - Production of bread; production of fresh flour confectionery goods and cakes - Production of cocoa, chocolate and sugar confectionery goods - Processing and preserving of fish - Production of edible oils - Products of milling industry – starch products Priority Sectors in the frame of Law “on Investments” Priority Sectors in the frame development program “Agribusiness 2020” - Meat processing: sausages and preserved meat; - Milk processing (milk powder, butter, cheese and quark); - Sugar production; - Production of edible oils; - Production of processed vegetables and fruits; - Processing of wool and leather; Agribusiness 2020 development program also include state support measures as Investment subsidies, interest rate subsidies on loans and leasing, financial recovery program, subsidies to purchase the raw materials (milk and sugar beat) Meat, milk, fish, grain and oilseeds production also included to priority sectors of Agribusiness FOOD PRODUCTION Priority types of activities * macro-region: Kyrgyzstan, Uzbekistan, Tajikistan, Turkmenistan, Armenia, Azerbaijan, Georgia, Iran, Ukraine, the Russian Federation, Republic of Belarus, China. Market potential, US$ mln.

Organization of business forums (road show) Provision of information about business/investment projects and analytical information 1 Foreign investors support in regions Support of the National Investment Interactive Internet Resource Support of the Investment Projects Database Assistance in obtaining state support for investors Assistance to foreign investors

Thank you for your attention National Export & Investment Agency “KAZNEX INVEST” Ministry of Investment and Development