Financial & Professional Services Sector in Kazakhstan
Kazakhstan is rich in natural resources, mainly oil and natural gas, but also coal and minerals, including iron ore, chromium, uranium, copper, nickel, cobalt, gold and many others. Raw minerals extraction is the biggest sector of Kazakhstan’s economy, making it overly dependent on world market prices for mineral resources. Authorities are developing plans to diversify the economy by using oil revenue.
Today, the level of foreign direct investment is among the highest in the former USSR. Kazakhstan has seen growth levels of 7% in 2010, 7.5% in 2011 and 5% in 2012.
The financial condition of the banks under restructuring has improved, and the level of systemic risks throughout the sector has decreased. The share of external liabilities in total banking sector liabilities fell from 53.3% in January 2008, to 21.1% by April 2011. Deposits have been growing steadily for the last 3 years or so.
Although both the banking and insurance sector suffered sharply during the recent world financial crisis, when the insurance premiums declined from $1.1 billion to $900 million, the market started recovering in 2010 with 15% growth, reaching $1 billion, according to the industry experts.
Recently, the Samruk-Kazyna, the state holding company managing most of government assets, started a national IPO program. KazTransOil was Kazakhstan’s first national company to float its shares in the "people’s" IPO. KazTransOil floated 38,463,559 shares, accounting for 10% of the company’s declared common shares minus one share. Analysts expect dual listings, with an offering in Almaty and either London or the Hong Kong. Since China is the primary consumer of Kazakh raw materials, investor interest in Hong Kong is high, while London remains the international hub of emerging markets investment.
Most of the international legal firms are based in Almaty, their main sector of interest being energy.
Provision of UK expertise in business education and professional skills development.
Investing, advising, and insuring the development of Kazakhstan’s hydrocarbons and other mineral resources.
Supporting development of Kazakhstan’s infrastructure.
Further listing by Kazakh firms on LSE
Provision of professional services for the development of the banking sector
Fulfilling demand for British non-executive directors for Kazakhstani companies.
Private-public partnerships (non oil sector and infrastructure development)
Getting into the market
All banking activities, including the acceptance of deposits, maintenance of correspondent accounts, cash operations, money transfers, discounting operations and lending are subject to licensing by the National Bank of Kazakhstan.
Non-resident insurance companies may open representative offices without having to obtain approval from the NBK (representative office cannot carry out any business activity in Kazakhstan), although they must notify the NBK about this. Non-resident insurance companies are prohibited from establishing branch offices (as opposed to representative offices) of in Kazakhstan.
More foreign law firms are opening branches in Kazakhstan, whereas before they would have worked through local partners.
Market intelligence is critical when doing business overseas, and UKTI can provide bespoke market research and support during overseas visits though our chargeable Overseas Market Introduction Service (OMIS).
To commission research or for general advice about the market, get in touch with our specialists in country – or contact your local international trade team.
Fiona Kushvid, British Embassy in Astana, Kazakhstan. Tel: +7 7172 556214 or email: firstname.lastname@example.org
Sholpan Tursynbayeva, British Embassy in Astana, Kazakhstan. Tel: +7 7172 556237 or email: email@example.com.
Event: British Kazakh Law Association’s seminar in Almaty and Astana
UKTI runs a range of events for exporters, including seminars in the UK, trade missions to overseas markets and support for attendance at overseas trade shows.