Kazakhstan’s Accession to the WTO: What Has Changed in Internal Employees’ Transfers (Intragroup Secondments)?

The accession of the Republic of Kazakhstan (‘RK’) to the World Trade Organization (‘WTO’) on 27 July 2015 led to the introduction of Law No. 365-V of 27 October 2015, ‘On Amendments to Some Legal Acts of the Republic of Kazakhstan in connection with the Accession to the World Trade Organization’.

The Law amends 11 legal acts. In this review, we would like to draw your attention to some amendments related to the internal employees’ transfers (intragroup secondments).

BACKGROUND

The approach and regulation of intragroup relocation matter were unclear under the Kazakh legal system. Moreover, discrepancies in regulation of this matter by separate laws complicated the law enforcement practice.

Application and consideration of international corporate practices related to intragroup staff relocations were introduced at the accession to the WTO. Respective amendments were made to the ‘On Employment’ Act of 23 January 2001 and the ‘On Migration’ Act of 22 July 2011.

WHAT HAS CHANGED?

Firstly, the definition of internal transfer (intragroup relocation) was clarified, which means a temporary transfer of a foreigner or stateless person engaged in labour activities as head, manager, or professional in a legal entity established in the territory of a WTO member country, located and operating outside the territory of the RK, to the branches, subsidiaries, representative offices of this legal entity established in the territory of the RK in accordance with the legislation of the RK.

Secondly, foreigners and stateless persons engaged in labour activity in the territory of the RK, within the framework of internal transfer (intragroup relocation) in sectors of economics designated by the Government of the RK, do not require annual quotas for employment of foreign nationals.

Further, an employer who employs foreign workers within the framework of internal transfer (intragroup relocation) shall, within 10 calendar days of their entry into the territory of the RK, notify the local executive body.

Terms of possible internal transfer (Intragroup relocation) are defined provided that stateless persons and foreigners can work in the RK for three years, with a possible extension of one year. At that the internal transfer (intragroup relocation) of managers and specialists is carried out with regard to the ratio of foreign workers to Kazakhstani personnel, determined by the central executive body. Local executive authorities keep records of foreigners and stateless persons working within internal transfer (intragroup relocation) positions.

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.