On special economic zones in the Republic of Kazakhstan

Updated Unofficial translation

Law of the Republic of Kazakhstan dated 21 July 2011 No 469-IV

Unofficial translation

      The order of enforcement of this Law of the Republic of Kazakhstan, see the Article 33.

      This Law regulates social relations arising under the creation, operation and abolition of special economic zones in the territory of the Republic of Kazakhstan.

Chapter 1. GENERAL PROVISIONS

      Article 1. Main definitions, used in this Law

      The following main definitions shall be used in this Law:
      1) special economic zone - a territory of the Republic of Kazakhstan with exactly marked borders, on which a special legal regime shall be organized to carry out priority activities;
      2) regulatory agency of the special economic zone - a managing company or a public institution of local executive agency of the capital city;
      3) the unified register of the special economic zone participants - the register of participants of all special economic zones, created in the territory of the Republic of Kazakhstan, and maintained by an authorized body;
      4) special legal regime of the special economic zone - a combination of operation terms and conditions of the special economic zone according to this Law, the tax, customs, land legislation of the Republic of Kazakhstan, the legislation of the Republic of Kazakhstan on the employment of population;
      5) participant of the special economic zone - a legal entity, carrying out priority activities in the territory of a special economic zone which shall be included in the unified register of the special economic zone participants;
      6) managing company - a legal entity established under this Law, in the legal status of a joint-stock company, to ensure operation of the special economic zone;
      7) "one stop" principle - a form of rendering public services in the territory of the special economic zone, providing minimization of the involvement of applicants in collection and preparation of documents and limitation of their immediate contact with the entities, rendering public services;
      8) infrastructure facilities means immovable property, forming the part of heat and electric power production and transmission systems, water and gas supply, sewage, transport communications, communication services and other facilities in accordance with the special economic zone feasibility study and the approved master plan;
      9) agreement for carrying-out activities in capacity of a special economic zone participant (hereinafter referred to as the agreement of carrying-out activities) - the agreement entered into by a special economic zone participant or several special economic zone participants and the regulatory agency of the special economic zone, specifying types of activity of the special economic zone participant or several special economic zone participants in the territory of the special economic zone, conditions of carrying-out such activity, rights, obligation and liabilities of the parties;
      10) priority activities means the activities, consistent with the objectives of the creation of a special economic zone, with the special legal regime of the special economic zone;
      11) ancillary activities means the activities, required for the support of the activities of the participants of the special economic zone, carried out by the persons, not participants of the special economic zone, in its territory;
      12) entities, carrying out ancillary activities, are individual entrepreneurs or legal entities, which are not covered by the special legal regime of the special economic zone, carrying out ancillary activities in the territory of the special economic zone in accordance with this Law;
      13) critical level of non-achievement of target indicators - a scope of economic, technical, social and (or) other indicators of operation of the special economic zone, non-achievement of which prevents implementation of the main targets of the special economic zone creation;
      14) an applicant - the entity, filing application to the regulatory agency of the special economic zone for carrying out priority or ancillary activities;
      15) an expert council - the multiagency consultative and advisory body under the authorized body, which shall be established by the Prime-Minister of the Republic of Kazakhstan for the consideration of the issue related with the expedience of creation or abolition of the special economic zone;
      16) authorized body - the central executive agency, carrying out state regulation concerning the creation, operation and abolition of special economic zones.

      Article 2. Legislation of the Republic of Kazakhstan about special economic zones

      1. The legislation of the Republic of Kazakhstan in special economic zones shall be based on the Constitution of the Republic of Kazakhstan and this Law and other regulatory legal acts of the Republic of Kazakhstan.
      2. If the international treaty, ratified by the Republic of Kazakhstan, establishes the rules other than those that are specified in this Law, then the rules of the international treaty shall be applied.

      Article 3. Purposes of the creation of the special economic zone

      The special economic zone shall be created for the purposes of accelerated development of advanced highly productive, competitive productions, attraction of investments, new technologies in the economy sector as well as increasing the employment of population.

Chapter 2. STATE REGULATION OF THE CREATION, OPERATION AND ABOLITION OF THE SPECIAL ECONOMIC ZONE

      Article 4. Competence of the Government of the Republic of Kazakhstan

      The competence of the Government of the Republic of Kazakhstan shall include:
      1) development of guidelines of the state policy in the creation and operation of special economic zones;
      2) approval of regulatory legal acts, regulating the activity of special economic zones;
      3) appointment of the authorized body;
      4) introduction of the presentation to the President of the Republic of Kazakhstan of the creation or abolition of the special economic zone;
      5) adoption of the decision of the creation of a managing company;
      6) participation in the managing company;
      7) approval of the provisions concerning the expert council;
      8) approval of frame agreements on carrying out activities;
      8-1) approval of a model agreement of temporary use of land for a fee (lease) of the land plots, privately owned, where the special economic zone shall be created;
      8-2) ) approval of a model agreement of temporary secondary use of land for a fee (sublease) of the land plots, privately owned, where the special economic zone shall be created;
      9) performance of other functions, imposed by the Constitution, this Law, other laws of the Republic of Kazakhstan and Acts of the President of the Republic of Kazakhstan.
      Footnote. Article 4 as amended by the Law of the Republic of Kazakhstan dated 18.02.2013 No 79-V (shall be enforced upon expiry of ten calendar days after its first official publication).

      Article 5. Competence of the authorized body

      The competence of the authorized body shall include:
      1) implementation of the state policy in the sphere of creation and operation of the special economic zones;
      2) carrying out of coordination of the activity of state agencies and managing companies in the sphere of creation, operation and abolition of the special economic zones, except for the special economic zone "Astana – the new city";
      3) the development of regulatory legal acts, regulating the activities of special economic zones;
      4) the development and the approval of an application form and a questionnaire for registration as a participant of the special economic zone;
      5) the development of frame agreements of carrying out activities;
      6) the attraction of the participants of the special economic zone to participate in the activity of the special economic zone, except for the special economic zone "Astana – the new city";
      7) keeping the unified register of the special economic zone participants based on the data, provided by the management bodies of the special economic zones;
      8) approval of the requirements for the establishing special economic zone feasibility study;
      9) submission of a proposal about the creation or abolition of the special economic zone to the Government of the Republic of Kazakhstan;
      10) establishment of the procedure and periodicity of the presentation of accounts by the regulatory agency of the special economic zone;
      11) implementation of monitoring over the fulfillment of the conditions of agreements for carrying out activities, as well as the analysis of this monitoring;
      12) annual submission of analytical information on the results of the special economic zones activities to the Administration of the President of the Republic of Kazakhstan and the Government of the Republic of Kazakhstan;
      13) carrying out of other powers, stipulated by this Law, other laws of the Republic of Kazakhstan, acts of the President of the Republic of Kazakhstan and the Government of the Republic of Kazakhstan.

      Article 6. Competence of local executive agencies of a region, the city of national status, the capital city

      1. The competence of local executive agencies of a region, the city of national status, the capital shall include:
      1) implementation of the state policy in the sphere of operation of special economic zones;
      2) submission of a proposal to establish the special economic zone to the authorized body;
      3) participation in the managing company according to the procedure prescribed by this Law;
      4) provision of a land plot for location of the special economic zone in accordance with the procedure established by the land law of the Republic of Kazakhstan, and conclusion of contracts for lease of a land plot and infrastructure, built for the account of budgetary funds with the managing company;
      5) exercise of other powers, assigned to local executive agencies by the laws of the Republic of Kazakhstan for the benefit of local state administration.
      2. The competency of the local executive agency of the capital additionally includes:
      1) provision of coordination of state agencies and the managing body of the special economic zone in operation and abolition of the special economic zone;
      2) attraction of the participants of the special economic zone "Astana – the new city";
      3) maintaining records of the participants of the special economic zone "Astana – the new city".

Chapter 3. CREATION, OPERATION AND ABOLITION OF THE SPECIAL ECONOMIC ZONE

      Article 7. Procedure of creation of the special economic zone

      1. The proposal to establish the special economic zone shall be submitted to the authorized body by central or local executive authorities, legal entities, interested in the creation of the special economic zone, with the presentation of a concept of the creation of the special economic zone, registered in accordance with the requirements, approved by the Government of the Republic of Kazakhstan.
      The proposal may be submitted jointly by several legal entities.
      The concept of the creation of the special economic zone should provide the purposes of the creation, place of locality, priority activities, information about potential participants of the special economic zone, analysis of current economic situation of consistent region, and projected influence on the economy from the creation of the special economic zone.
      2. The issue of the expediency of the creation or of rejecting the proposal to establish the special economic zone shall be considered by the authorized body within thirty working days from the date of submission of such proposal.
      The proposal to establish the special economic zone shall be directed by the authorized body for consideration of the expert council within ten working days from the date of its submission, which shall be created from the moment of the submission of the proposal to establish the special economic zone to the authorized body.
      The membership of the expert council shall be approved subject to the type of activity of the establishing special economic zone.
      The expert council shall prepare the conclusion within the period no later than twenty working days from the day of submission of the proposal to establish the special economic zone by the authorized body.
      3. The authorized body within three working days upon making the consistent decision shall notify the person, submitted the proposal to establish the special economic zone, with the foundation of making such decision.
      4. The authorized body shall reject the proposal to create the special economic zone in cases of:
      1) inexpedience of the creation of the special economic zone;
      2) inconsistency of the proposal to establish the special economic zone with the priorities of economic policy;
      3) deficiency or unreliability of the submitted materials;
      4) inconsistency of the proposal with the requirements of the environmental defense;
      5) necessity of the defense of conservation areas, life and health of people, the threat of destruction and damage of the objects of historical and cultural heritage and national security protection of the country.
      Rejection of the proposal to create the special economic zone shall not be an obstacle for further submission with the proposal to establish the special economic zone.
      5. Within six months upon the receipt of notice of expediency of the creation of the special economic zone the persons, having submitted the proposal to establish the special economic zone, shall provide the preparation of feasibility study of the established special economic zone with the environmental impact assessment.
      The prepared feasibility study should contain projected financial - economic, social consequences, the foundation, the expediency and the assessment of the result of the creation of the special economic zone.
      The feasibility study should comply with the following criteria:
      1) expediency means compliance of the activities, provided in the feasibility report, with strategy documents;
      2) relevance means the presence of evidence, supported by calculations, of the amount of financing for the implementation of activities in terms of each component;
      3) Efficiency means adequacy of evidence substantiated by calculations confirming the possibility to obtain direct final result.
      In the event of submission of the proposal to establish the special economic zone, central or local executive bodies shall allocate budget funds for conducting of the feasibility study in accordance with the fiscal legislation of the Republic of Kazakhstan.
      6. The authorized body shall send the feasibility study of the special economic zone to be created to the concerned state agencies for conducting of the respective assessments under the legislation of the Republic of Kazakhstan. Investors shall hold an independent assessment of the feasibility study.
      Performance of expertise of the feasibility study of the special economic zone to be created shall be completed by state agencies within forty five calendar days after submission of the feasibility study to the authorized body.
      7. Within sixty calendar days upon the receipt of feasibility study the authorized body shall submit to the Government of the Republic of Kazakhstan the proposal to establish the special economic zone with attachment of the concept of the consistent Feasibility study of the creation of the special economic zone with the environmental impact assessment, and conclusion of the expert council.
      8. Decision on the creation of the special economic zone and priority activities, consistent with the purposes of the created special economic zone shall be adopted by the President of the Republic of Kazakhstan upon the presentation of the Government of the Republic of Kazakhstan.
      The provisions of the special economic zone, target indicators of the operation of the relevant special economic zone, critical level of non-achievement of target indicators shall be approved by the President of the Republic of Kazakhstan.

      Article 8. Terms and conditions of operation of the special economic zone

      1. Special economic zone shall be created for the period up to twenty five years.
      2. Special economic zones shall be created on the land plots, publicly owned and not given to land use, or on the land plots, enforceable alienated from the land plot owners and land users for the State requirements in accordance with the land legislation of the Republic of Kazakhstan.
      Special economic zones shall also be created on the land plots, privately-owned by the citizens and (or) non-governmental legal entities.
      3. Land plots, publicly owned, where the special economic zone is created, intended for carrying out priority activities, shall be available for temporary use of land for a fee (lease) to the participant of the special economic zone in accordance with the land legislation of the Republic of Kazakhstan for the period of the creation of the special economic zone.
      Land plots publicly owned, on which the special economic zone is created, intended for the construction of infrastructure facilities as well as for carrying out ancillary activities, shall be available for temporary use of land for a fee (lease) zone in accordance with the land legislation of the Republic of Kazakhstan for the period of the creation of the special economic zone.
      The managing company shall have the right to transfer to the entities, carrying out ancillary activities, the land plots, specified in the second part of this paragraph, to the temporary secondary use of land for a fee (sublease) in accordance with the land legislation of the Republic of Kazakhstan.
      Infrastructure facilities, fully or partially established at the account of budgetary funds on the land plots, publicly owned, transferred to the temporary use of land for a fee (lease) can also be transferred to the lease of the managing company.
      The managing company may also transfer infrastructure facilities to the entities, carrying out ancillary activities, fully or partially at the account of budgetary funds on the land plots, publicly owned, transferred to the secondary use of land (sublease).
      4. Land plots, where the special economic zone is created, should be provided with infrastructure facilities at the account of budgetary funds and (or) other not prohibited by the Laws of the Republic of Kazakhstan sources in accordance with the Feasibility study of the special economic zone.
      The procedure of financing the construction or reconstruction of infrastructure facilities at the account of budgetary funds shall be carried out in accordance with the budgetary legislation of the Republic of Kazakhstan.
      Participants of the special economic zone or the entities, carrying out ancillary activities, shall have the right to carry out the construction of the infrastructure facilities required for them at their own expenses on the territory of the land plot, transferred to them for temporary use of land for a fee (lease) or to the secondary use of land (sublease).
      4-1. Land plots, privately owned, where the special economic zone is established, intended for carrying out priority and (or) ancillary activities, can be transferred by their owners to the managing company to the temporary use of land for a fee (lease) in accordance with the agreement for the temporary use of land for a fee (lease) of the privately owned land where the special economic zone is established.
      The managing company shall have the right to transfer privately owned land plots, where the special economic zone is established, intended for carrying out priority and (or) ancillary activities to the temporary secondary use of land for a fee (sublease) to the participants of the special economic zones or entities, carrying out the ancillary activities, in accordance with the agreement for the temporary secondary use of land for a fee (sublease) of the privately owned land plots, where the special economic zone is established.
      The agreements for the temporary use of land for a fee (lease) of the privately owned land plots, where the special economic zone is established, and temporary secondary use of land for a fee (sublease) of the privately owned land plots, where the special economic zone is created, shall be concluded in accordance with the frame agreements of the temporary use of land for a fee (lease) of the privately owned land plots, where the special economic zone is established, and temporary secondary use of land for a fee (sublease) of the privately owned land plots, where the special economic zone shall be established.
      The terms of the agreements for the temporary use of land for a fee (lease) of the privately owned land plots, where the special economic zone is created, and temporary secondary use of land for a fee (sublease) of the privately owned land plots, where the special economic zone is created, shall not exceed the term, on which the special economic zone is established.
      The owner of a land plot shall have the right to carry out activity in the territory of the special economic zone as a participant of the special economic zone or a person, carrying out ancillary activities in accordance with the requirements of this Law. Provided that the agreement of temporary use of land for a fee (lease) of the privately-owned land plots, where the special economic zone is established, shall not be concluded with the owner of the land plot.
      5. Provisions of the paragraphs 2, 3 and 4 of this Article do not apply to privately-owned land plots of the participants of the special economic zones, established prior to the implementation of this Law.
      6. The “one-stop” principle shall apply in the territory of the special economic zones, providing:
      1) prompt and high-quality provision of state services;
      2) rendering of information assistance for provided state services.
      7. The provision of state services under the “one-stop” principle shall be carried out in the territory of the special economic zone by public service centers in accordance with the legislation of the Republic of Kazakhstan.
      Public service centers in the territory of the special economic zone shall be provided with necessary infrastructure facilities for location and operation in accordance with the paragraph 4 of this article.
      Footnote. Article 8, as amended by the Law of the Republic of Kazakhstan dated 18.02.2013 No 79-V (shall be enforced upon expiry of ten calendar days after its first official publication).

      Article 9. Requirements for applicants

      1. The applicant, submitting the application to carry out activity in capacity of a participant of the special economic zone, must have financial security in the amount, corresponding to the feasibility report.
      Financial security of the applicant to carry out activity in capacity of a participant of the special economic zone shall be formed as follows:
      1) money;
      2) bank guarantee;
      3) guarantee;
      4) pledge of property;
      5) Insurance agreement.
      The applicant, submitting the application to carry out activity in capacity of a participant of the special economic zone shall have the right to choose any of the means of financial security, including combination of two or more means.
      The requirement on existence of the financial security in the amount, reasonable to the feasibility study of the applicant, submitting an application for implementation of activity as the participant of a special economic zone, shall not be extended on the applicant, submitting an application for implementation of activity as the participant of the special economic zone "Astana — the new city" that is included in the list of legal entities approved by the legal entity, created by the decision of the Government of the Republic of Kazakhstan and carrying out activities on organization and holding of the international specialized exhibition in the territory of the Republic of Kazakhstan.
      2. The following entities shall not be applicable to the applicants:
      1) subsoil users;
      2) organizations, producing excisable goods except for the organizations, carrying out the production, assembly (integration) of excisable goods, specified in sub-paragraph 6), Article 279 of the Code of the Republic of Kazakhstan “On taxes and other compulsory budgetary payments” (Tax code);
      3) organizations, working under special tax treatment;
      4) organizations, having applied investment tax preferences
      5) gambling business organizations.
      Footnote. Article 9, as amended by the Law of the Republic of Kazakhstan dated 18.02.2013 No 79-V (shall be enforced upon expiry of ten calendar days after its first official publication).

      Article 10. Documents, submitted by the applicant for carrying out the activity in special economic zones in the capacity of a special economic zone participant and inclusion in the unified register of the special economic zone participants

      1. The activity of the participant of special economic zone shall be performed in accordance with the agreement on carrying out the activity.
      2. Application shall enclose the following documents in hard or soft copy:
      1) applicants questionnaire in the form, approved by the authorized body;
      2) certificate of state registration (re-registration) of the legal entity;
      3) a notarized copy of the identification document of the chief executive officer of the applicant;
      4) a notarized copy of the taxpayer’ certificate – up to the 1st of January, 2013 or a notarized copy of the document containing identification number – since 1 January, 2013;
      5) a notarized copy of the memorandum of association of the legal entity;
      6) a notarized copy of the decision of the supreme body of the legal entity on the performance of activity in the territory of the special economic zone;
      7) a copy of financial reports as of the last reporting date signed by the chief executive officer of the applicant or a person substituting his/her, as well as the chief accountant (accountant);
      8) feasibility study of the project meeting the requirements established by the authorized body;
      9) a statement of the servicing bank on the financial motion at the applicant’s bank accounts (on the absence of the files) and credit report from the credit bureau containing complete or partial information from the credit history;
      10) a statement from the tax administration at the place of the registration record on availability or absence of taxes and other compulsory payments to the budget;
      11) documents, confirming the availability of the applicant’s financial provision.
      If a legal entity, at the moment of submission of the documents, has a status of non-resident of the Republic of Kazakhstan and is not registered as a taxpayer, this legal entity shall submit the copy of the statement confirming the absence of a state registration as a taxpayer in the tax authority of the Republic of Kazakhstan.
      Foreign legal entities shall submit legalized documents as specified in sub-clauses 2), 5) and 6) of this clause, legalized extract from the trade register or another legalized document confirming the status of a legal entity in a foreign country under the legislation of that country along with a notarized translation into Kazakh and Russian.
      3. To the foreign legal entities, submitting an application for implementation of activity as participants of the special economic zone "Astana — the new city" included in the list of legal entities approved by the legal entity, created according to the decision of the Government of the Republic of Kazakhstan and carrying out activities for the organization and carrying the international specialized exhibition in the territory of the Republic of Kazakhstan, the requirement about submission of the documents provided by subparagraphs 7), 8) and 11) paragraph 2 of this Article shall not be applied.
      Footnote. Article 10, as amended by the Law of the Republic of Kazakhstan dated 12.01.2012 No 538-IV (shall be enforced from 01.01.2012); dated 24.12.2012 No 60-V (shall be enforced upon expiry of ten calendar days after its first official publication); dated 18.02.2013 No 79-V (shall be enforced upon expiry of ten calendar days after its first official publication); dated 03.12.2013 No 151-V (shall be enforced upon expiry of ten calendar days after its first official publication).

      Article 11. Procedure of consideration of the application for carrying out activities in capacity of a special economic zone participant

      1. Upon submission of an application, the regulatory agency of the special economic zone shall:
      1) register the application in the application register on the date of its submission;
      2) check the completeness of the document package submitted;
      3) return the application on the day of its submission in case of inconsistency between the submitted document and the approved list. Returning of the application shall not deprive the applicant of the right to apply to the special economic zone again after elimination of the identified faults.
      2. Regulatory agency of the special economic zone shall deny the conclusion of the agreement for carrying out activities to the applicant if the declared type of activity does not comply with the priority activities.
      3. If the declared type of activity complies with the priority types of activity, regulatory agency of the special economic zone shall conclude the agreement for carrying out activities within ten working days.
      Regarding the applicant, submitting an application for implementation of activity as the participant of the special economic zone "Astana — the new city" that is included in the list of legal entities, approved by the legal entity, created according to the decision of the Government of the Republic of Kazakhstan and carrying out activities for the organization and carrying the international specialized exhibition in the territory of the Republic of Kazakhstan, this term shall not exceed five working days.
      4. Special economic zone regulatory agency shall inform the authorized body on this fact and submit a copy of the agreement for carrying out activities within two working days after conclusion of the agreement for carrying out activities.
      Upon receipt from the regulatory agency of the special economic zone of the notification on conclusion of the agreement for carrying out activities, the authorized body shall include information about the special economic zone participant into the unified register of the special economic zone participants.
      5. The Regulatory Agency of the special economic zone shall notify tax and customs authorities of this fact within two working days after conclusion of the Agreement for carrying out activities.
      6. Tax administration bodies and customs authorities shall register the special economic zone participant upon receipt of the notification from the regulatory agency of the special economic zone about conclusion of the Agreement for carrying out activities, in the manner prescribed by the Laws of the Republic of Kazakhstan.
      7. Based on the concluded agreement for carrying out activities special economic zone participant shall cease the activity of its economically autonomous structural subdivisions beyond the special economic zone.
      Special economic zone participants, engaged in information and innovation technologies sphere shall be allowed to perform activity beyond the Special economic zone, unless otherwise provided by this Law.
      8. Agreement for carrying out activities shall be terminated in the following cases:
      1) abolition of the special economic zone;
      2) maturity or early termination of the agreement for carrying out activities;
      3) other cases, specified by the civil legislation of the Republic of Kazakhstan or agreement for carrying out activities.
      The regulatory agency of the special economic zone shall notify the tax administration bodies and customs authorities of the termination of the agreement for carrying out activities.
      Footnote. Article 11, as amended by the Law of the Republic of Kazakhstan, dated 03.12.2013 No 151-V (shall be enforced upon expiry of ten calendar days after its first official publication).

      Article 12. Requirements for the entities, qualifying for performance of ancillary activities in the territory of the special economic zone

      Entities, qualifying for performance of ancillary activities in the territory of the special economic zone shall meet the following requirements:
      1) to be a Kazakhstan entity performing works or services;
      2) an individual entrepreneur and a legal entity must be registered in the manner, prescribed by the laws of the Republic of Kazakhstan, by the relevant registration body (justice agency, tax or statistics body) in the territory of the Republic of Kazakhstan.
      If entities, qualifying for performance of ancillary activities meet the specified criteria, they must conclude a contract with a Special Economic Zone Participant for performance of some types of subcontract works and services in the prescribed manner.
      Ancillary activities, performed by subcontractors shall not coincide with the priority activities in the nature of the works and services.

      Article 13. Documents, to be submitted for admission to perform ancillary activities

      1. Ancillary activities shall be performed in accordance with the contract, concluded with a special economic zone participant.
      2. Individual entrepreneurs and legal entities shall submit to the regulatory agency of the special economic zone application for admission as an entity performing ancillary activities within three working days after conclusion of agreement for carrying out activities with special economic zone participants.
      3. Application shall enclose documents in hard and soft copy in accordance with the list approved by the Government of the Republic of Kazakhstan.

      Article 14. Basis and procedure for the admission to perform ancillary activities

      1. Upon receipt of application for admission as an entity performing ancillary activities, the regulatory agency of the special economic zone shall:
      1) check the conformity of the submitted documents with the list, approved by the Government of the Republic of Kazakhstan;
      2) register the application in the application register. Registration date is the date of its submission.
      2. If the submitted documents conform to the list of the documents, approved by the Government of the Republic of Kazakhstan, the entity, submitting the documents shall be deemed admitted to performance of ancillary activities in the territory of the special economic zone.
      The regulatory agency of the special economic zone shall inform the entity, submitting the application and customs authority related to the special economic zone about the admission of the entity to performance of ancillary activities within the territory of the special economic zone within three working days, after the date of registration..
      3. In case of discrepancies between the submitted documents and the list approved by the Government of the Republic of Kazakhstan, the regulatory agency of the special economic zone shall return the application within three working days after the registration of the application. Returning of the application shall not deprive the applicant of the right to apply to the special economic zone again after elimination of the identified faults.

      Article 15. Rendering of public utility services in the territory of the special economic zone

      Suppliers, providing the territory of the special economic zone with electric and thermal power, gas, water and rendering other public utility services shall grant access to such services, analogous to other users of such services.

      Article 16. Abolition of the special economic zone

      1. The Special economic zone shall be abolished upon the expiration of the period for which it was created. Term of validity of a special economic zone shall be determined by the corresponding Act of the President of the Republic of Kazakhstan on the creation of the Special Economic Zone.
      2. In case of critical level of non-achievement of target indicators the special economic zone may be abolished before time by the President of the Republic of Kazakhstan under a presentation of the Government of the Republic of Kazakhstan.
      3. Upon the abolition of the special economic zone, special economic zone participants and entities engaged in ancillary activities who leased land plots in the territory of special economic zone shall have an option to buy land offered for sale in the manner prescribed by the land legislation of the Republic of Kazakhstan.

Chapter 4. MANAGEMENT OF THE SPECIAL ECONOMIC ZONE

      Article 17. Establishment of the regulatory agency of the special economic zone

      1. After introduction into effect of the Act of the President of the Republic of Kazakhstan on organization of a special economic zone, the Government of the Republic of Kazakhstan or local executive body of a region, a city of the national status, the capital city shall adopt the decision on establishment and (or) participation in the establishment of regulatory agency of the Special Economic Zone.
      2. Establishment of the regulatory agency of the special economic zone of the capital city with regard to the legal form shall be performed in accordance with the legislative acts of the Republic of Kazakhstan.
      3. The following entities may become founders of the managing company on their own initiative in case of the creation of the special economic zone:
      1) Government of the Republic of Kazakhstan;
      2) local executive bodies of the oblast, cities of republican significance, capital cities;
      3) non-governmental legal entities;
      4) foreign legal entities with experience of special economic zone management in other countries or in the Republic of Kazakhstan.
      4. If a special economic zone is created on the initiative of the central executive bodies or local executive bodies of oblasts, cities of republican significance, capital cities, over fifty percent of voting shares emitted by the managing company shall be owned by the state unless otherwise provided in the Act of the President of the Republic of Kazakhstan on the creation of a special economic zone.
      If a special economic zone is created on the initiative of non-governmental legal entities at least twenty six percent of voting shares emitted by the managing company shall be owned by the state.
      5. The first meeting of founders shall be held within thirty calendar days after adoption of the decision of the Government of the Republic of Kazakhstan on participation of the State in the creation of the managing company.
      6. The regulatory agency of the special economic zone shall be registered at the location of the special economic zone in the manner prescribed by the Laws of the Republic of Kazakhstan on registration of legal entities and record registration of subsidiaries and representative offices.
      7. The independent director from among the persons recommended by National chamber of entrepreneurs of the Republic of Kazakhstan that heads committee of board of directors on a position concerning strategic planning of management company shall be elected by the shareholders in the composition of board of directors of management company.
      Footnote. Article 17 as amended by the Law of the Republic of Kazakhstan, dated 04.07.2013 No 130-V (shall be enforced upon expiry of ten calendar days after its first official publication).

      Article 18. The Functions of regulatory agency of the special economic zone

      The functions of the regulatory agency of the special economic zone shall include:
      1) interaction with state bodies on issues of activities of special economic zones;
      2) secondary use of land (sublease), of land plots and subleasing of infrastructure facilities to the entities performing support activities;
      3) concluding and termination of agreements for carrying put activities;
      4) submission of reporting to the Authorized Body on the results of activity of special economic zones in the manner established by the authorized body based on annual reports by special economic zone participants;
      5) attraction of special economic zone participants;
      6) attraction of investments for construction of infrastructure facilities and performance of other special economic zone activity types;
      7) construction of infrastructure facilities in accordance with the approved feasibility study on the land plots not leased to special economic zone participants;
      8) arrangement of consultation center for operation of the public services center on the “one-stop” principle;
      9) confirmation of the actual consumption of imported goods during performance of activities corresponding to the objectives of the creation of the special economic zone e;
      10) monitoring of implementation of agreements for carrying out activities.

      Article 19. Selection of entities to perform management of the managing company

      1. The authorized body shall conduct competitive selection of entities to perform management of the managing company upon presentation of the Government of the Republic of Kazakhstan on the creation of a special economic zone to the President of the Republic of Kazakhstan according to the Article 7 of this Law.
      2. Competitive selection of entities to perform management of the managing company shall be conducted by the authorized body in cooperation with the relevant interested public agencies within sixty calendar days after presentation of the Government of the Republic of Kazakhstan on creation of a special economic zone to the President of the Republic of Kazakhstan.
      3. The procedure of competitive selection of entities to perform management of the managing company as well as requirements to them shall be determined by the Government of the Republic of Kazakhstan.

      Article 20. Rights and obligations of special economic zone participants

      1. The special economic zone participants shall have the right to:
      1) use guarantees of legal protection, tax and other remissions as specified by legislative acts of the Republic of Kazakhstan for special economic zone participants;
      2) obtain land plots and construct infrastructure facilities for performance of priority activities in the manner prescribed by this Law;
      3) engage entities carrying out ancillary activities while performing ancillary activities;
      4) determine the ancillary activities;
      5) enjoy other rights as specified by the legislative acts of the Republic of Kazakhstan.
      2. The special economic zone participants shall be obliged to:
      1) submit annual report on its activity to regulatory agency of the special economic zone;
      2) discharge duties specified by the laws the Republic of Kazakhstan and agreement for carrying out activities in good faith and proper manner.

      Article 21. Monitoring of the implementation of terms and conditions of the agreements for carrying out activities

      Monitoring of the implementation of terms and conditions of the agreements for carrying out activities shall be performed by the authorized body on the basis of information provided by the regulatory agency of the special economic zone in the form of reporting, as well as the information on the special economic zone participants according to this Law.
      Monitoring, stipulated by the sub-paragraph 10) of the Article 18 of this Law shall be performed by the regulatory agencies of the special economic zones on a regular basis.

      Article 22. Financing of the activity of the regulatory agency of the special economic zone

      1. Financing of the activity of the regulatory agency of the special economic zone established in the legal form of the state institution shall be performed in accordance with the legislative acts of the Republic of Kazakhstan.
      2. Financing of the activity of the managing company shall be performed on the account of:
      1) repayment for services rendered by the managing company to the special economic zone participants;
      2) special purpose debt financing;
      3) income from lease and (or) sublease of infrastructure facilities, land plots and other property;
      4) other type of income of regulatory agency not prohibited by the laws of the Republic of Kazakhstan.

      Article 23. Dissolution of the regulatory agency of the special economic zone

      1. After expiry of the special economic zone, validity period or adoption of decision on early abolition of a special economic zone, regulatory agency established in the form of a state institution shall be dissolved (reorganized) in accordance with legislative acts of the Republic of Kazakhstan.
      2. After expiry of the special economic zone, validity period or adoption of decision on early abolition of a special economic zone, general meeting of shareholders shall adopt the decision on voluntary dissolution of the managing company, define the dissolution procedure in agreement with the creditors, under their supervision and in accordance with the legislative acts of the Republic of Kazakhstan.
      If shareholders of the managing company fail to adopt decision on voluntary dissolution, managing company shall be dissolved by enforcement.
      Enforced dissolution of the joint-stock company shall be performed in the manner prescribed by the Civil Code of the Republic of Kazakhstan.

Chapter 5. LEGAL REGIME AND THE CONDITIONS OF OPERATION OF THE SPECIAL ECONOMIC ZONE

      Article 24. Special legal regime of the special economic zone

      Special legal regime shall apply to special economic zone participants in the territory of a special economic zone. This special legal status is established under this Law, tax, customs and land legislation of the Republic of Kazakhstan, as well as the legislation of the Republic of Kazakhstan related to the employment of the population.

      Article 25. Taxation of special economic zone participants

      Taxation and collection of other compulsory budgetary payments of special economic zone participants shall be effected in accordance with the tax legislation of the Republic of Kazakhstan.

      Article 26. Customs regulation in special economic zones

      1. Customs procedure of a free customs zone shall apply to the territory of a special economic zone or its part.
      The borders of a special economic zone within the limits of which customs procedure of free customs zone is applied shall be determined in accordance with the Act of the President of the Republic of Kazakhstan on the creation of the special economic zone.
      2. Customs procedure of free customs zone shall apply in accordance with the customs legislation of the customs union and (or) customs legislation of the Republic of Kazakhstan.
      3. Special economic zone territory is deemed a part of the customs union customs territory.
      4. Special economic zone territory where customs procedure of free customs zone is applied is deemed the customs controlled area.
      Customs control in the territory of a special economic zone where customs procedure of free customs zone is applied shall be performed by customs bodies under the customs legislation of the Customs Union and (or) customs legislation of the Republic of Kazakhstan.

      Article 27. Goods, placed under the customs procedure of a free customs zone

      Goods, imported in the territory of a special economic zone where customs procedure of free customs zone is applied shall be placed under the customs procedure of a free customs zone in accordance with the procedure and under conditions specified by the customs legislation of the customs union and (or) customs legislation of the Republic of Kazakhstan and shall be treated as goods located beyond the customs union territory for the purposes of the application of customs duties, taxes and non-tariff regulation measures.

      Article 28. Employment of foreign labour

      The issuance of permits for the employment of foreign labour by local executive agencies of the corresponding administrative-territorial entity shall be performed in the context of simplified procedure without searching the relevant candidates in the internal labor market in accordance with the rules, established by the Government of the Republic of Kazakhstan.

      Article 29. Guarantees of interim protection of the special economic zone participants

      1. The participants of the special economic zone shall be guaranteed with the protection of rights and interests, which is provided by the Constitution of the Republic of Kazakhstan, this Law and other international treaties, ratified by the Republic of Kazakhstan.
      2. Forcible withdrawal of property of the special economic zone participant (nationalization, seizure) is allowed in exceptional cases and in the order provided by the laws of the Republic of Kazakhstan.
      3. The special economic zone participants shall have the right to use income in their own discretion gained due to activities performance in the territory of the special economic zone after having paid taxes and other compulsory payments to the budget in accordance with the tax legislation of the Republic of Kazakhstan.

Chapter 6. CONCLUSIVE AND TRANSITIONAL PROVISIONS

      Article 30. State control on observance of the legislation of the Republic of Kazakhstan on the special economic zones

      State control on observance of the legislation of the Republic of Kazakhstan on special economic zones is performed as an inspection and other forms.
      Inspection is performed in compliance with the Law of the Republic of Kazakhstan “On state control and supervision in the Republic of Kazakhstan”.

      Article 31. Responsibility for violation of the legislation of the Republic of Kazakhstan on the special economic zones

      Violation of the legislation of the Republic of Kazakhstan on the special economic zones shall involve the responsibility established by the Laws of the Republic of Kazakhstan.

      Article 32. Transitional provisions

      1. Special economic zones, established prior to enactment of this Law shall maintain its status before making the decision on their abolition or termination of the period according to which this special economic zone was created. The Administrations of the special economic zones can perform functions of managing companies before establishment of a managing company but no more than a period specified by the authorized body.
      2. Operator-companies involved in order to manage the special economic zones established prior to enactment of this Law can perform functions of the managing companies before their handover to newly established company.
      Moreover, these operator-companies perform functions of managing companies no more than one year upon the moment of enactment of this Law.
      Decision to perform function of a managing company involved by an operator-company for the special economic zone shall be taken by the authorized body.
      3. No later than one year upon the date of the establishment of the managing company, the administration of the special economic zone shall transfer to the managing company all the documents and information related to the special economic zone and required to perform by the managing company the functions provided by the Law, whereupon this administration shall be terminated.
      4. Upon the date of the establishment of the managing company, the contracts, concluded between the authorized body and operator-companies, shall be terminated.
      5. For the special economic zone participants engaged in the sphere of information and innovation technologies the requirement to perform activities in the territory of the special economic zone shall not be a compulsory condition before 1 January 2015 for the following types of activities:
      1) design, development, implementation, pilot production, and production of software, databases and hardware of information technologies as well as the services of data-centers, on-line services;
      2) conduct of scientific-research and development activities on creation and implementation of projects in the sphere of information technologies.
      6. Provisions, provided by the paragraphs 1-4 of this Article shall not cover the special economic zone “Astana – the new city”.

      Article 33. Procedure of promulgation of this law

      1. This Law shall be enforced within ten calendar days after its first official publication.
      2. The Law of the Republic of Kazakhstan “On special economic zones in the Republic of Kazakhstan” dated 6th of July 2007 shall be deemed to have lost force(Bulletin of the Parliament of the Republic of Kazakhstan, 2007, No.14, Art.104; 2010, No.15, Art.71).

      The President of
      the Republic of Kazakhstan                 N. NAZARBAYEV

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