KAZAKHSTAN Law and Practice Contributed by: Timur Odilov, Mikhail Abdulov, Olzhas Abubakirov and Alnur Dauylbay, Haller Lomax LLP
sale of shares in local companies is exempted from VAT.
tax regime have resulted in delays in making invest - ments. 5.2 Foreign Investment Restrictions and Approvals in the Exploration and Mining Sectors There are no general restrictions on foreign companies holding mining rights. Any individual and legal entity (whether national or foreign) can hold exploration or mining rights, provided they comply with the require - ments of the SSU Code (eg, availability of financial, professional and technical capabilities). The proce - dure for obtaining licences is the same for national and foreign investors. However, the MIC retains the right to refuse an appli - cation for an exploration or mining licence due to national security issues. Mining rights to a uranium deposit may only be grant - ed to the National Atomic Company Kazatomprom JSC (KAP) and can be subsequently transferred to an investor or joint venture, by which more than 75% of direct or indirect interest must remain for KAP. This 75% direct or indirect interest threshold was increased from the previous 50% by amendments to the SSU Code relating to uranium and hydrocar - bons (the “Uranium Amendments”), adopted by the President of Kazakhstan on 26 December 2025 and effective from late February 2026. Moreover, the Ura - nium Amendments introduced a priority right for KAP to obtain exploration licences for territories contain - ing uranium mineralisation and/or uranium deposits identified in the State Subsoil Fund Management Pro - gramme. Previously, the MIC issued exploration licences for such areas to third parties. In addition, a mandatory condition for granting the subsoil use right for hydrocarbons in the Caspian Sea is that the National Company KazMunayGas JSC (national hydrocarbon company) must have a minimum 50% of share participation as a subsoil user under the contract in the field of hydrocarbons.
5. Mining Investment and Finance 5.1 Attracting Investment for Mining Kazakhstan secured the 43rd position out of 82 in the Investment Attractiveness Index of the Fraser Institute’s Annual Survey of Mining Companies 2024, after ranking 79th (of 86) in 2023. Investors showed decreased concern about the country’s regulatory overlaps and inconsistencies. Nevertheless, challenges remain, particularly in enhancing investor confidence in the political stability and fully realising the country’s geological potential. Kazakhstan is balancing between institutional devel - opment and public micromanagement, between pro - motion of local manufacturing and improvement of the investment climate, particularly in the mining sector. To achieve these objectives, Kazakhstan implemented the SSU Code, thereby opening up the state territory for exploration on a “first come – first served” basis. This proactive approach is part of Kazakhstan’s broader strategy to enhance transparency and sim - plify regulatory processes in the mining industry. The SSU Code introduced reforms aimed at streamlining administrative procedures, reducing bureaucratic hur - dles and promoting a more investor-friendly environ - ment. By adopting the SSU Code, Kazakhstan aims to boost investor confidence and create a competitive edge in the global mining landscape. Beyond regulatory changes, Kazakhstan has under - taken strategic efforts to improve its investment cli - mate. The country has embraced common-law princi - ples under the AIFC, reinforcing legal frameworks and providing additional incentives for investors. One of the primary issues surrounding investment in the mining sector in Kazakhstan revolves around fre - quent alterations to tax legislation, leading to incon - sistent application and interpretation. Companies argue that the unexpected and frequent shifts in the
212 CHAMBERS.COM
Powered by FlippingBook