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Employing in Kazakhstan

At a glance

Employment in Kazakhstan

In Kazakhstan, labor relations are regulated by the regulatory legal instruments, individual contract of employment and, if one exists, a collective labor agreement. The labor laws and regulations of the Republic of Kazakhstan are based on the Constitution of the Republic of Kazakhstan and include the Labor Law and other legal instruments, which regulate labor relations of some separate categories of the employees. The major sources of labor legislation are laws adopted by the Parliament, and technical acts, passed by the governmental agencies.

According to Article 3 of the Labor Law of Kazakhstan, the labor law regulations in Kazakhstan are applicable to all workers who have entered into employment relations with employers.

The most important source of Labor Law is the Code of the Republic of Kazakhstan of 15 May 2007 No. 251 “Kazakhstan Pravda” of 22 May 2007 No. 76 (25321).

There are also a number of other legal acts, which regulate the labor and industrial relations, not covered by the Labor Law, such as:

  • The Law on Collective Labor Disputes and Strikes (July 8, 1996);
  • The Law on Collective Agreements (July 4, 1992);
  • The Law on the Occupation of the Population (1998);
  • The Edict on Approving a Position on Qualification Classes of State Employees
    (July 12, 1996);
  • The Law on Employment of Population (January 23, 2001);
  • The Law on State Service (July 23, 1999).
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Payroll & Tax in Kazakhstan

In 2015 Kazakhstan made paying taxes more complicated for companies by introducing a mandatory contribution to the National Chamber of Entrepreneurs and by increasing the vehicle and environmental taxes.

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Immigration / Work Permits in Kazakhstan

Foreign workers are required to have the proper visas and work permits in Kazakhstan, as established by immigration laws.  Work permits must be secured for employees, and sponsored by a locally licensed and incorporated entity, which can be a problem for companies just entering the market.  If you have yet to complete the incorporation process, you can use an outsourced management company or GEO to sponsor the employee for the necessary permits.

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Incorporation

The legislation in Kazakhstan provides for rather wide range of organisational forms of business entities. Limited liability partnerships (LLP), joint stock companies (JSC), and branches of foreign legal entities, however, remain the most popular.

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GEO Solutions or DIY Employment in Kazakhstan?

GEO Solutions or DIY Employment

Companies entering Kazakhstan must make a decision whether to use their own resources for a Do-It-Yourself (DIY) approach, or to use a Global Employment Organization to handle payroll and employment responsibilities.  A GEO or Kazakhstan Employer of Record solution makes it faster, easier and cheaper to deploy staff if they don’t have a Kazakhstan entity established that can run payroll.

A DIY approach will typically take 6-9 months until there is a properly incorporated WFOE ready to run payroll and cost up to 6 figures if registered capital is required. Shield GEO can deploy foreign staff in 4-6 weeks and local staff in 48 hours. Additionally, Shield GEO is responsible for all compliance issues related to the employment.

Using Shield GEO Employer of Record Services in Kazakhstan

Payroll Kazakhstan
Management Fee for Employer of Record Services / Monthly Payroll Costs

Please contact us for a quote

Notes

Shield GEO pays the employee on a monthly basis, typically on the last working day of the month although we can adapt to your preferred schedule. Income tax and social security (where applicable) are deducted at source and paid to the local tax authorities.

Tax Returns Supplied

Yes

Corporate Income Tax Rate

20% on taxable profits

Sales Tax

VAT: 12%

Withholding Tax

Dividends, capital gains, interest, royalties 15%;

Any income of an entity registered in a tax haven jurisdiction 20%;

Insurance premiums under risk insurance agreements 15%;

Income from international transportation services; insurance premiums under risk reinsurance agreements 5%.

Other Tax

Social Tax: 11%, calculated on gross salaries less obligatory pension contributions;

Property Tax: 1.5%, calculated on property annual average net book value;

National Chamber of Entrepreneurs contribution: 160*MCI (1 MCI = KZT 1,852 for 2014);

Land tax: KZT 28.95 per square meter (of land area);

Pension contributions: 10%.

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