Assets and Money Legalization

Regulatory law

The Law of the Republic of Kazakhstan (hereinafter ‘the RK’) ‘On amnesty of citizens of the Republic of Kazakhstan, repatriates and persons who hold a residence permit in the Republic of Kazakhstan in connection with property legalization’ (hereinafter ‘the Law’) dated 30 June 2014 is the normative legal act regulating property legalization initiatives carried out by the state, including monies previously removed from legal economic turnover.

What is legalization?

Property legalization refers to a procedure that allows state recognition of the rights for the property removed from legal turnover for the purposes of concealment of income, and/or not registered in accordance with Kazakhstani legislation, or registered to an improper person.

What are subject to legalization?

The following are subject to legalization:

• Monies

• Securities

• Participation interest in the charter capital of a legal entity

• Immovable property registered to another person, the right to which or transaction of which is subject to state registration in accordance with Kazakhstani legislation

• Buildings (constructions and structures) located in the territory of the RK, complying with construction rules and regulations, as well as the intended purpose of occupied land owned by a subject of legalization on the right of ownership

• Immovable property

Property located both within the territory of the RK and outside the RK is subject to legalization, except for the aforementioned buildings (constructions and structures).

The Law applies to persons listed in its title (subjects of legalization) who legalize or have legalized property belonging to them or received by them before 1 September 2014.

Period

The legalization period is from 1 June 2014 to 31 December 2016. Moreover, the submission period for documents relating to the legalization of immovable property located in the territory of the RK, the rights to which are not perfected in accordance with Kazakhstani legislation, begins on 1 September 2014 and ends on 30 November 2016.

What must be legalized by the law?

The Law stipulates general provisions regarding the organization and legalization procedures of the following objects:

• Immovable property located in the territory of the RK, the rights to which are not perfected in accordance with Kazakhstani legislation

• Monies

• Property (other than monies) located outside the territory of the RK, including that registered to another person

• Property (other than monies) located within the territory of the RK, including that registered to another person

Legalization of immovable property procedure in Kazakhstan

Legalization of immovable property located within the territory of the RK, the rights to which are not perfected, is carried out by the subjects submitting the following documents to a committee created by local authorities at the location of the immovable property:

• Application for performance of legalization

• A copy of ID, with the original available at the time of application

• Evidence by a certified expert who carried out a technical inspection of buildings and structures for compliance with construction rules and regulations

• Technical passport of the property object

Money legalization procedure

Monies should be legalized by their deposition (transfer) in national and/or foreign currency to the current account held in the second-tier banks, at the national mail operator, by filing a special declaration to the State Revenue authority at the place of the legalization subject’s residence, or without depositing monies to a current account, by payment of a fee from the amount of legalized money and by filing of a special declaration.

Such declaration shall be submitted by the latter at the legalization of property (located within the territory of the RK and abroad) registered to another person.

Legalization expenses

For legalization, a fee is payable in the amount of 10% from

• the sum of legalized money[1] or

• the cost of property stated in the special declaration (immovable property, securities, participation interest) located outside the RK, including property registered to another person.

Liability Exemption

The subjects of legalization, among other things, shall be exempt from criminal and administrative responsibility for a variety of articles. In addition, the legalized money and property are not recognized as income for tax purposes and, accordingly, are not subject to income tax.

[1] If moneys are not placed at the bank account

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.