On measures to liberalize the economy
Decree of the President of the Republic of Kazakhstan dated May 8, 2024 No. 542.
This Decree defines further legal, economic and social conditions and guarantees that ensure freedom of entrepreneurship in the Republic of Kazakhstan by promoting competition, reducing government participation in the economy and reducing business costs.
In order to accelerate structural economic and legal reforms aimed at expanding the country's economic potential and improving the business climate, I HEREBY DECREE:
1. Identify the main directions for further economic liberalization:
ensuring the inviolability of private property;
the full implementation of the principles of freedom of private business and the prevention of illegal government interference in market relations;
support the development and protection of free competition among market participants;
elimination of regulatory and administrative barriers to market access, as well as artificially created advantages for quasi-public sector entities;
frontal reduction of business costs for the administration of relations with government agencies.
2. In order to free up economic space and fully realize the potential of private entrepreneurship, the Government of the Republic of Kazakhstan should undertake a large-scale and accelerated reduction of the share of the public sector in the economy by completing the privatization process and building regulatory conditions that prevent the re-growth of the number of state-owned enterprises in competitive areas, including through the following measures:
1) the introduction of a moratorium on the creation of quasi-public sector entities until December 31, 2026, with the exception of the need to enforce the Law of the Republic of Kazakhstan "On the return of illegally Acquired Assets to the State", as well as special cases on direct instructions from the President of the Republic of Kazakhstan;
2) conducting an audit of all state and quasi-state assets at the national and local levels by December 31, 2024, followed by updating the unified public register of state property;
3) assistance to the Agency for the Protection and Development of Competition of the Republic of Kazakhstan in the establishment (with the involvement of independent experts) by June 1, 2024 of the National Office for Privatization, which by December 31, 2024 must ensure:
development of criteria for state-owned facilities subject to mandatory privatization;
conducting an analysis of the activities of existing state-owned enterprises and legal entities, more than fifty percent of which are owned by the state and affiliated persons, regarding the possibility and expediency of transferring non-core assets to a competitive environment, taking into account regional specifics;
formation of a list of state assets to be privatized (with the definition of conditions and methods of sale for each of them, including IPOs, SPOs, auctions, and others), approval and adjustment of which will be possible only by decision of the President of the Republic of Kazakhstan;
providing an opportunity to privatize facilities on the initiative of private business entities by forming and implementing an application list of state assets to be privatized;
monitoring the progress of privatization of state assets;
4) consolidation of the following approaches to privatization:
the subsidiary (auxiliary) role of participation in commodity markets with a low level of competition and supply;
temporary participation in market entities, which implies the mandatory privatization of all market entities with state participation, with the exception of strategic and social facilities, financial market infrastructure facilities, facilities that ensure the functioning of interbank payment systems and the financial market;
definition of a strictly limited range of goals and objectives of creating a market entity with state participation, its functions, assessment of their achievement and implementation;
the inadmissibility of the creation of private monopolies (including local ones) during privatization, with the exception of subjects of natural monopolies;
5) ensuring that the process of mass privatization of state assets is completed by December 31, 2028, in accordance with the approved list of state assets to be privatized, exclusively at the expense of own and borrowed funds from private investors (without attracting borrowed and other funds from state and quasi-state sources);
6) the adoption of a new format for the list of permitted types of activities for quasi-public sector entities, which provides for the mandatory indication of geographical boundaries for each code of the general classifier of all types of economic activity, the name of the entity with state participation engaged in a certain type of activity, the duration of the entity's presence in a particular market of goods and services;
7) review of the existing legislative bases for state participation in entrepreneurial activity.
The footnote. Paragraph 2 as amended by Decree of the President of the Republic of Kazakhstan dated 07/01/2026 No. 1337.
3. In order to enhance the independence, quality and independence of corporate governance of the Samruk-Kazyna National Welfare Fund Joint Stock Company (hereinafter referred to as the Fund) and its subsidiaries and affiliated companies, the Government of the Republic of Kazakhstan jointly with the Agency for Strategic Planning and Reforms of the Republic of Kazakhstan:
To review, by July 1, 2024, the procedure for forming the composition of the boards of directors (supervisory boards) of the Fund and its subsidiaries and affiliated companies, creating a system of open and predictable appointments by establishing the procedure and criteria for the selection of independent directors;
update the composition of the Boards of Directors (supervisory boards) of the Fund and its subsidiaries and affiliated companies by holding competitions for the selection of independent directors (independent members) by September 1, 2024;
By August 1, 2024, take additional systemic measures to reduce the possibility of the Fund interfering in the operational activities of its subsidiaries and dependent companies, including personnel decisions, procurement and production processes.;
By August 1, 2024, together with the National Chamber of Entrepreneurs of the Republic of Kazakhstan "Atameken" (as agreed), the Agency of the Republic of Kazakhstan for Combating Corruption (Anti-Corruption Service) and the Agency for Protection and Development of Competition of the Republic of Kazakhstan, to review the Fund's regulated procurement system, taking into account increased transparency of processes and an increase in the share of domestic value.
4. In order to further improve conditions that ensure fair competition in the markets by providing equal conditions and opportunities for all economic entities, regardless of their form of ownership, to conduct business, as well as to exercise the State's right to suppress non-competitive activities exclusively in accordance with the procedure established by law, the Government of the Republic of Kazakhstan, together with the Agency for the Protection and Development of Competition of the Republic of Kazakhstan, should take the following measures:
1) in the fields of fuel and energy complex, transport, communications and others:
By December 31, 2024, ensure a qualitative reduction in the share of the quasi-public sector in the market for oil supplies to refineries, equal and non-discriminatory access of private oil suppliers to oil refining, oil transportation, and aviation fuel storage at airports, including through digitization of access procedures.;
to ensure full-fledged equal access of telecom operators to cable sewerage by December 31, 2024;
To complete the digitization of agricultural land data by December 31, 2025 and to ensure the mandatory use of an electronic competition for their provision by December 31, 2026.;
By December 31, 2025, ensure the sale of subsurface plots through an electronic auction, in respect of which national companies in the field of hydrocarbons have not realized the priority right to obtain subsurface use rights through direct negotiations within three years.;
By December 31, 2029, cross-subsidization of tariffs within and between sectors of the economy (electricity, water supply and sanitation services) should be phased out;
By December 31, 2027, ensure the phased abolition of the maximum number of norms of the legislation of the Republic of Kazakhstan that directly or indirectly restrict the freedom to set prices and tariffs, with the exception of monopoly markets.;
By December 31, 2025, to ensure the practical application of the incentive methodology of tariff formation in order to attract private investment and increase the investment attractiveness of natural monopolies with quality control of the regulated services provided.;
By December 31, 2024, to work out the launch of an effective mechanism for compensatory measures for citizens, as well as the provision of state targeted social assistance and housing payments for utilities using digital technologies.;
2) in the field of improving procurement and exchange trading until December 31, 2024:
to implement the principles of "yellow pages" in public procurement by rejecting applications from a potential supplier that is a legal entity, fifty percent or more of the voting shares (shares in the authorized capital) of which belong to the state, if there are at least two applications from potential suppliers that are business entities.;
Review the list of cases in which public procurement of goods, works and services is carried out using a single source method by directly concluding a contract.;
exclude stock trading in non-standardized goods and public procurement through commodity exchanges;
to increase the efficiency of digital trading systems of commodity exchanges and clearing center software to eliminate the risk of interference in the course of exchange trading and ensure the fulfillment of obligations under exchange transactions;
3) ensure a phased transition from commodity-specific subsidies to concessional lending by December 31, 2028;
4) in order to ensure transparent and equal access to measures of state support for entrepreneurship:
to ensure the provision of state support measures for entrepreneurship by analogy with public services in order to standardize the procedure for their provision;
Complete the implementation of the digital format of government-business interaction by creating a digital ecosystem, including ensuring the provision of government support measures based on the "one-stop shop" principle;
to develop an effective mechanism for calculating and accounting for business counter-obligations in the provision of government support measures;
5) ensure the digitization of business processes for entering purchase lists, including the registration of prices for medicines and medical devices.
5. In order to further improve the conditions for fair competition in the financial markets:
1) The Agency of the Republic of Kazakhstan for Regulation and Development of the Financial Market jointly with the National Bank of the Republic of Kazakhstan:
By December 31, 2024, take measures to expand opportunities for opening new banks and increase the availability of banking services to the public and business entities, including by:
liberalization of legal requirements for the opening of subsidiaries of foreign banks and branches of foreign banks;
expansion of the list of permitted types of operations for branches of foreign banks;
institutional improvement of the banking system, including consideration of the feasibility of introducing a universal and basic banking license;
2) The Government of the Republic of Kazakhstan, together with the National Bank of the Republic of Kazakhstan, shall, by September 1, 2024, ensure the introduction of a ban on attracting public financing from the National Fund of the Republic of Kazakhstan on non-market (preferential) terms for quasi-public sector entities, with the exception of projects of national importance, in each case with the express consent of the President of the Republic of Kazakhstan after passing an appropriate examination (including evaluation of the project) and in the absence of alternative sources of financing.
6. In order to implement the fundamental principles of freedom of entrepreneurship, including by ensuring non-interference of state and law enforcement agencies in legitimate business activities, the Government of the Republic of Kazakhstan:
1) jointly with the National Chamber of Entrepreneurs of the Republic of Kazakhstan "Atameken" (by agreement) to ensure by December 31, 2025:
further improvement of regulatory policy in the field of business, including with an emphasis on improving the effectiveness of its enforcement at the regional level;
full automation (digitalization) of consumer access to commercial services provided by government agencies and quasi-public sector organizations, including such services as carriage delivery and cleaning, locomotive traction services, distribution of fuels and lubricants, and others (the list of services to be automated must be determined by June 1, 2025);
regulation, digitalization and simplification of procedures for obtaining technical specifications for connection to utility networks, including from private entities of natural monopolies;
2) provide for in the new Tax Code:
differentiated approach to measures of compulsory collection of tax arrears depending on their size (minimizing the seizure of accounts);
simplification of the procedure for granting deferrals/installments without collateral in the presence of minor debt;
setting a threshold for collecting arrears on social payments;
the restriction on suspending the tax audit of small and medium-sized businesses no more than twice;
3) jointly with the Prosecutor General's Office of the Republic of Kazakhstan, by December 31, 2024, ensure that amendments and additions are made to the legislation of the Republic of Kazakhstan, providing for:
further decriminalization of criminal offenses in the sphere of economic activity;
improving administrative and tort legislation, including in terms of suppressing illegal interference in business activities by quasi-public sector entities, natural monopolies and other organizations, regardless of their forms of ownership, and establishing administrative responsibility for acts related to obstruction of legitimate business activities if they do not contain signs of a criminally punishable act.;
coordination of state and local executive bodies with prosecutors:
prohibitive and restrictive measures (suspension of the activity of the entity (object or its separate site), action, process; suspension, revocation (revocation) of the permit and (or) the annex to the permit; refusal to extend the validity period of the permit; cancellation (revocation) of the decision made earlier in favor of the investor; unilateral termination of the contract or agreements);
decisions on the initiation of cases of administrative offenses and the appointment of inspections against investors, as well as claims of government agencies against investors included in the Register of Investors;
exclusion of registration of an application, report or report on a criminal offense in the field of economic activity in the Unified Register of Pre-Trial Investigations:
without the attachment of the tax audit report, the conclusion (certificate) of a specialist of the tax service, the conclusions of which contain sufficient data indicating the presence of signs of a criminal offense.;
in the case of pre-trial and judicial appeal of acts of tax authorities before the entry into force of the decision of a higher authority in cases of pre-trial appeal and court decision in the case of judicial appeal;
in case of full voluntary repayment of accrued amounts of taxes and (or) other mandatory payments to the budget, except in cases of charges made under transactions without actually performing work, providing services, shipping goods, failure to submit a declaration when filing a declaration is mandatory, as well as entering deliberately distorted data on income and (or) expenses into the declaration by concealment of other taxable items and (or) other mandatory payments;
4) by July 1, 2024, ensure the possibility of using implemented international projects developed in accordance with advanced global standards for the construction of facilities without the mandatory development of design estimates in accordance with Kazakhstani requirements;
5) by the end of 2025, review the qualification requirements for obtaining permits, as well as optimize the procedure and timing for obtaining them.;
6) by the end of 2024, to work out the expediency of the legislative introduction of the institution of collective claims, aimed at providing compensation to an unlimited number of people for damage caused by the actions of monopolistic and (or) dominant groups.
7. The Government of the Republic of Kazakhstan, together with the agencies for strategic planning and reforms, protection and development of competition of the Republic of Kazakhstan, should ensure that reporting information on the results of work for the first half of the year and the year is submitted to the Presidential Administration of the Republic of Kazakhstan by February 1 and August 1, as well as for consideration by the Commission on Economic Demonopolization under the Government of the Republic of Kazakhstan on a quarterly basis.
8. The Government of the Republic of Kazakhstan shall take other measures arising from this Decree.
9. Control over the implementation of this Decree is entrusted to the Administration of the President of the Republic of Kazakhstan.
10. This Decree shall enter into force from the date of its signing.
President
Republic of Kazakhstan
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