Monthly Archives: October 2014

  • Tax Penalties for Non-compliance

    Posted 20/10/2014

    In this third edition of our Kazakhstan Tax Series, we’re taking a closer look at tax penalties exporters can face for non compliance with tax rules and regulations in Kazakhstan and more importantly, how to avoid them!

    Read More…

    Posted in: Tax

  • UK Businesses encouraged to collaborate and export

    Posted 15/10/2014

    The operators of Kazakhstan’s largest oil fields, Kashagan, Karachaganak and Tengiz announced last month that they were to establish a joint venture engaged in the drilling and engineering fields.

    Kazakhstan’s First Deputy Energy Minister, Uzakbai Karabalin, was keen to emphasise that “With [this] active phase of expansion.. high-tech types of service and equipment will be needed, and we will need to use every opportunity to establish competent local companies.” He went on to say that “[The] optimal option is to set up joint ventures with world leaders with the assistance of advanced technologies.”

    Could your manufacturing/service SME seize this opportunity?

    It is well known that Kazakh companies often lack the experience, knowledge for complex oil, gas sector services, creating a huge opportunity for foreign companies to forge a way into the market to bridge the gaps in expertise. And this is no ordinary overseas market. One of the five Central Asian countries, Kazakhstan is rich with hydrocarbon reserves. The country’s production comes mainly from five onshore fields – Tengiz, Karachaganak, Aktobe, Mangistau, and Uzen – and two offshore fields – Kashagan and Kurmangazy, which are both located in the Caspian Sea.

    Sheer market potential is HUGE!

    The recoverable oil reserves of the Kashagan field are estimated at 11 billion barrels, whilst total geological raw material reserves stand at 35 billion barrels. In addition, natural gas reserves are estimated at over 1 trillion cubic metres. The Tengiz oil field is one of the deepest and largest oil fields in the world. Reserves of the deposit are estimated at 750 million to 1.1 billion tons (6-9 billion barrels) of recoverable oil. Karachaganak is another of the world’s largest oil fields. Its reserves amount to 1.2 billion tons, while those of natural gas are 1.35 trillion cubic metres.

    Total oil production in Kazakhstan amounted to 81.7 million tons last year which is 3.2 percent more than in 2012. The forecasts show after 2020 around two million barrels of oil will be produced in Kazakhstan per day. The country plans to produce 83 million tons of oil, 41 billion cubic meters of gas, as well as to process 14.7 million tons of oil in 2014.

    Could your SME collaborate?

    There are lots of companies in Kazakhstan who are looking to collaborate with overseas companies with the right skills and expertise. If you your SME is part of the high tech services industry or manufactures specialist equipment, particularly with applications in the oil/gas sector, now is the time to consider the type of growth your business could achieve by exporting to Kazakhstan. With many years experience of trading in country, we can help you make the connections you need to get started and smooth the way to working successfully in Kazakhstan.

    Interested? To find out more about the opportunities available, call us on 01935 315055 or get in touch via the website.

    Posted in: Uncategorized

  • Export Finance for SMEs

    Posted 07/10/2014

    Export finance

    UK Export Finance is the UK’s export credit agency. The organisation is well established in the UK, with a clear remit to support UK exports with a view to benefiting the economy. They do this by providing insurance to exporters and guarantees to banks to share the risks of providing export finance. In addition, they can make loans to overseas buyers of goods and services from the UK.

    What type of insurance might businesses wish to consider?

    Two of the main types are;

    • Insurance for UK exporters against non-payment by overseas buyers, and;
    • Insurance for investors in overseas markets against political risks.

    However, sometimes exporters find that even if they do secure a significant export order, there is little support from the banking sector to enable them to realise the order. Not many SMEs have sufficient financial standing to secure funding from banks and thereby qualify for the insurance on such loans which is available to banks through UK Export Finance.

    Finance may be needed throughout the process of sourcing raw materials and manufacturing until full payment has been received on an order. However, often innovative arrangements for financing different stages of an export deal can be agreed with the customer. A recent example of this in respect of exports to Kazakhstan was where a security company won a £1.4 million order for a project to provide protection to a school (funded by international oil companies). Significant outlay at the manufacturing stage was alleviated by the customer in Kazakhstan agreeing to pay 50% of the unit costs upon delivery.

    Good business relationships are always an advantage

    Clearly, it is to the exporter’s advantage in this regard if a good business relationship has already been established, either directly or through an intermediary. Small business owners often don’t have the time or resources to pursue international sales. However, if there is a demand for their company’s products or services, use of an export intermediary can prove extremely beneficial.

    If you would like to talk to us about the prospects of your SME exporting successfully to Kazakhstan, please get in touch.

    Posted in: Opportunities for SMEs