Legislative News. May – June 2016

This Client Update covers the key amendments to the laws of the Republic of Kazakhstan (“RK”) and various legal developments introduced in May and June 2016.

NOVELTIES IN LEGISLATION

The laws covered by the present Client Update relate to both public and private sectors. Some of them may be of interest to you as they may affect your business activity in Kazakhstan.

We would like to draw your attention to the following legal acts.

RESOLUTIONS OF THE NATIONAL BANK OF THE RK

RULES FOR REGISTRATION OF AUTHORIZED SHARES ISSUE

On 29 February 2016, the Chairman of the National Bank of the RK signed the Resolution of the Board of the National Bank of the RK № 76 «On Approval of Rules for State Registration of Authorized Shares Issue, Review of Reports on Results of Placement of Shares, and Cancellation of Authorized Shares Issue, Rules for Preparation and Execution of Authorized Shares Issue Prospectus, Structure of Authorized Shares Issue Prospectus, and Requirements to the Report on Results of Placement of Shares». The Resolution supersedes the Resolution of the Board of the Agency of the RK on Regulation and Supervision over Financial Market and Financial Organizations № 268 dated 30 July 2005.

The Resolution, among others, stipulates:

• the procedure for state registration of authorized shares issue;

• the procedure for review of report on results of placement of shares;

• the procedure for cancellation of authorized shares issue;

• the requirements to the report on results of placement of shares;

• the rules for preparation and execution of authorized shares issue prospectus;

• the structure of authorized shares issue prospectus.

The Resolution came into force on 26 May 2016.

MONITORING OF CURRENCY TRANSACTIONS OF NON-RESIDENTS OF THE RK

On 31 December 2015, the Chairman of the National Bank of the RK signed the Resolution of the Board of the National Bank of the RK № 263 «On Approval of Rules for Carrying out Monitoring of Currency Transactions of Non-Residents of the Republic of Kazakhstan Performing Business Activity in the Republic of Kazakhstan». The Resolution supersedes the Resolution of the Board of the National Bank of the RK № 122 dated 14 October 2005.

The currency monitoring applies to branch offices (representative offices) of non-residents doing business in the RK for more than one year in the sphere of crude oil production, natural gas and associated gas production, construction services, services associated with mineral production, architectural, engineering and other technical services, research works and experimental development.

The Resolution requires the currency monitoring subjects to submit reports on branch offices, projects in the RK and their implementation, as well as cash flows on bank accounts.

The Resolution came into force on 24 June 2016.

FOREIGNERS’ STAY IN THE RK

PERCENTAGE RATIO OF NUMBER OF FOREIGN EMPLOYEES

On 5 April 2016, the Minister of Healthcare and Social Development of the RK signed the Decree № 259 «On Calculation of Percentage Ratio of Foreign Employees (Managers and Experts) Employed via Intra-Group Secondments to the Number of Kazakh Staff».

Pursuant to the Decree the percentage ratio of number of foreign employees (managers and experts) employed via intra-group secondments must be no more than 50% to the number of Kazakh staff of related category.

This ratio will not apply to subsoil users of Karachaganak, North Caspian and Tengiz projects, and their operators, contractors and subcontractors until 1 January 2017.

The Decree came into force on 17 June 2016.

ISSUANCE AND RENEWAL OF PERMITS TO LABOR IMMIGRANT

On 3 May 2016, the Minister of Foreign Affairs of the RK signed the Decree № 473 related to issuance and renewal of permits to labor immigrant.

The Decree amends the list of documents required for obtainment of the permission.

In particular, the originals are replaced by copies of:

• ID card;

• Confirmation of preliminary payment of the personal income tax.

Medical certificate is now included into the list, and the following documents are excluded:

• migration card;

• document confirming solvency;

• medical certificate;

• application form;

• copy of receipt for preliminary payment on personal income tax;

• migration card;

• criminal record certificate.

The Decree came into force on 1 July 2016.

Information contained in this Client Update is of general nature and cannot be used as legal advice or recommendation. Please note that Kazakhstan is an emerging economy, and its legislation and legal system are in constant development. Should you have any questions or want to discuss matters addressed in this Client Update, please contact us.