Factors of attractiveness of the investment climate in

Factors of attractiveness of the investment climate in Kazakhstan Date: 30 th of November, 2012 Place: Astana JSC “NATIONAL EXPORT & INVESTMENT AGENCY “KAZNEX INVEST” Ministry of Industry and New Technologies of the Republic of Kazakhstan

FDI FLOWS INTO KAZAKHSTAN HAVE DEFIED GLOBAL ECONOMIC CRISIS FDI inflows into Kazakhstan, bill USD FDI Structure, 1993 – IIQ 2012, bill USD 25 20 2, 500 World investment flows, bill USD 1, 791 1, 976 2, 000 19 37; 23% 1, 000 500 10 11 2007 2008 2009 1 1 1 2 2 1 2 4 16; 10% 49; 31% 7 5 3 11 8 - 5 0 21 19 1, 198 1, 500 15 18 20 5 57; 36% 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 1 пг II Q 2012 Source: National Bank of the RK UNCTAD Stat Exploration Other sectors Mining Manufacturing

KAZAKHSTAN HAS ATTRACTED GREATEST FDI PER CAPITA IN CIS FDI in the CIS countries per capita, 2011 y. , USD Accumulated FDI in the CIS, 2000 -2011 yy. , bln. USD CAGR* Russian 457. 5 28% Kazakhstan 21% Russian 3203 23% Turkmenistan 3257 30% Azerbaijan 34% Armenia Az erbaijan 9. 1 22% Ukraine 1443 Uz bekistan 6. 8 28% Belarus 1359 14% Moldova Ka zakhsta n Ukraine 93. 6 65. 2 T 16. 6 urkmen istan Belarus 13. 0 Armenia 5. 0 Moldova 3. 2 Ky rgyzstan 1. 3 -6% Ta jikistan 1. 0 Source: UNCTAD Stat *Compound annual growth rate 5777 979 1628 892 7% Kyrgyzstan 236 63% Uzbekistan 244 Tajikistan 142

DOING BUSINESS IN KAZAKHSTAN IS MUCH EASIER THAN IN MOST EMERGING MARKETS Doing Business 2013 Country rank 1 Singapore 9 Georgia 15 Ireland 32 Armenia 49 Kazakhstan 58 Belarus 67 Azerbaijan 73 Italy 112 Russian Federation 130 Brazil 137 141 Ukraine Tajikistan 154 Uzbekistan 168 Afghanistan 185 Central African Republic 0 20 Source: World Bank Doing Business 2013 40 60 80 100 120 140 160 180 200

WHY IS KAZAKHSTAN ATTRACTIVE FOREIGN INVESTORS? INDUSTRY OF KAZAKHSTAN Political stability and good investment climate 1 ▪ ▪ ▪ ▪ 4 Springboard to circa 3 billion potential customers Higher level of trust in political institutions and efficient allocation of public funds (WEF 2012) than in the CIS region Easy to do business (ranked 49 th on WB Doing Business indicators 2013; top 10 reformer in last 2 years) Stable macroeconomic indicators and high growth 3 2 Regionally attractive fiscal and non -fiscal regime and protection of foreign investment ▪ Attractive corporate tax rate (20%) and low VAT (12%) ▪ Fiscal and non-fiscal incentives for investors, including in SEZs ▪ 48 bilateral agreements on mutual protection of investments ▪ Main international arbitration instruments ratified GDP growth: 7. 5% (IMF 2011) One of the lowest debt/GDP ratios in the world: 12. 4% (WEF 2011) Budget deficit: -2. 2% (WEF 2011) Inflation rate: 8. 4% (2011 NBK) Upgrade from stable to positive offered by major ratings agencies ▪ ▪ 3 out of 4 BRICs are within 4 hours plane ride Customs Union with Russia and Belarus, with 170 million people and total GDP of USD 2 trillion Open Economy (trade 70% of GDP) Numerous trade agreements signed

GOVERNMENT SUPPORT TOOLS IN OCCASION OF AIIDP № Programs of support Numbers of tools 1 Investor 2020 5 2 Exporter 2020 10 3 Productivity 2020 5 4 Business road map 2020 9 5 Damu’s support programs 15 6 Financial tools (loans, leasing) 9 7 Innovation development 9 8 Program of after crisis recovering 22 TOTAL 84

INVESTOR 2020 Administrator: Committee on Investments of the MINT RK Operator: National Agency of export and investment “Kaznex. Invest” JSC Receivers: Investors, which implement projects in priority sectors 1. Investment incentives: Tools: üExemption from customs duties on equipment, components üIn-kind state grants 2. Service support 3. Accompanying investors on the territory of Kazakhstan 4. Business forums, road shows on attraction investments 5. National investment interactive web-site and data base of investors and projects

SECTOR-SPECIFIC INCENTIVES IN 9 DEDICATED SEZS ACROSS COUNTRY SEZ “Burabai” SEZ “Astana new city” (Tourism) SEZ “Petrochemical park” (construction industry) (Oil and gas industry, petrochemicals) SEZ “Pavlodar” (chemical industry) Astana Pavlodar Karaganda Atyrau SEZ “Saryarka” (metallurgy) Aktau Taraz Almaty Shymkent SEZ “Marine Port Aktau” (logistics, transport) SEZ “Ontystik” (textile industry) SEZ “Khorgos Eastern Gate” (Trade, logistics) SEZ “Chemical park Taraz” (chemical) SEZ “Innovation Techno. Park” (IT-industry, innovations)

ATTRACTIVE INVESTMENT INCENTIVES IN SEZS FISCAL INCENTIVES in SEZs • 0%Corporate Income Tax until 2020 -2025 with possibility for extension • 0% for land property tax until 2020 -2025 with possibility for extension • VAT– 0% (for products consumed in SEZ) until 2020 -2025 with possibility for extension • Increase of marginal rate of depreciation for tax on the production of software to 40% • For SEZ “Innovation technopark” – social tax is 0% for 5 years, under certain conditions • For SEZ“Innovation technopark”– depreciation rate for software increased to 40 % NON-FISCAL INCENTIVES • Provision of free land in SEZ for a period of up to 10 years from registration time as SEZ resident

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