Archives

  • 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

  • Overcoming barriers to export

    Posted 23/09/2014

     

    A recent article in the ICAEW’s Economia magazine highlighted that one of the main blockers to businesses choosing to export to a foreign country was concern about difficulties understanding local culture. Overseas UK embassies often fall short when it comes to business expertise, even if such resource is available, so there can be little help on hand for companies struggling to adjust to local business practice and customs.

    But if businesses don’t find a way to bridge this gap, could they be missing out on some of the most lucrative export markets? Kazakhstan is a country the size of the whole of Western Europe, with a wealth of natural resources and in particular a flourishing oil and gas industry. 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. These industries are huge and the potential to break into the market is not to be underestimated, particularly as Kazakh companies may not always have the necessary experience and knowledge for complex oil and gas sector services. And yet most British probably have little idea of local Kazakh culture, let alone business practice and procedure. Worse still, some may be influenced by fictional comedic characters of yesteryear which portray an inaccurate and misleading image.

    So how can UK SMEs overcome such issues and seize this opportunity, without having to commit time and money to detailed research and building business relationships from scratch?

    The simplest way is to link up with a company which already has the necessary experience and knowledge. With any luck, they will also have the contacts and business relationships to get your product or service to market in the quickest time possible. Moreover, it can save potential exporters perhaps months or years of research and groundwork in getting to grips with local regulatory and tax requirement and all that may be necessary to get started. With the right advice, companies can avoid the prospect of making mistakes early in their export journey into a new country, like Kazakhstan.

    Like the idea of bringing your products or services straight to a vast new market? If so, get in touch – we have nearly twenty years of experience of running and helping business in Kazakhstan with a vast array of contacts and advice to help your SME hit the ground running! Can you afford not to make contact with Kazopp?

    Posted in: Opportunities for SMEs

  • How to begin your Export Success Story

    Posted 15/09/2014

    Often export success stories involving businesses tapping into the huge potential market in Kazakhstan cite the need to take the long term view.  Many large corporates emphasise the importance of taking time to establish local partnerships and relationships.

    Companies who have built up experience within the country place high value not only on partnerships, but also upon another virtue – patience. The volume of government regulation can appear daunting initially, especially for those without local help or experience.

    But how many SMEs can afford the time and expense involved in developing business relationships? And will it all be worth it?

    When you realise that you’re talking about a country which is geographically larger than the whole of Western Europe – a fact which alone commands attention – potential rewards are exciting. Kazakhstan has a population of 17 million people and has been led by President Nazarbayev since becoming independent of the former Soviet Union in 1991. Notwithstanding its own size, the country is dwarfed by its neighbours, China and Russia and yet scored ahead of these superpowers on its borders in a 2014 World Bank survey on the ease of doing business in various countries.

    The fact that several countries, including China, Canada and some from Western Europe continue to eye the country’s potential, attracted perhaps by the wealth of its natural resources, particularly oil and gas, speaks volumes. In addition, the government has begun to implement reforms in the energy sector and simplify regulatory requirements, for example, as to visas, which should make it even easier to do business there.

    As for the business relationships, the easiest way to get around this is to let an agent with the relevant knowledge, experience and contacts represent you, your products or services. This way any burden upon cash flow can be neatly avoided, not to mention a raft of time consuming research and business relationship building. Exports can be directed straight to the right buyer and market and with the additional advantage of accessible advice as to local business practices and procedures, there need be no sleepless nights worrying about business faux pas.

    Makes sense, right? Let us do the talking for you. What have you got to lose?

    If you’re interested in setting up exports to Kazakhstan or getting help with doing business there, get in touch.

     

    Posted in: Opportunities for SMEs, Recent Developments

  • Setting up in Kazakhstan – what all businesses need to know

    Posted 01/09/2014

    Business people shake hands on KZ flag

    Last month’s Somerset Chamber of Commerce magazine picked up on research by the British Chambers of Commerce which identified Kazakhstan as one of the countries perceived as providing the greatest opportunities for growth in the next five years.

    Perhaps you’ve picked up on that message too? Maybe you’re keen to move into this market, but no doubt without putting lots of cash at risk.

    Whether you’re thinking from your own perspective as an entrepreneur, or weighing the issues up with support from your board of directors, here are some of the key questions you should be asking.

    • How will you identify and contact potential customers, partners and distributors?
    • How will you obtain sales leads and opportunities?
    • How will you ensure you pre-qualify for tender opportunities, or better still, obtain direct sales?
    • How will you address the practicalities of language, business etiquette and culture?
    • Where will you obtain advice, and who will you trust to understand and protect your interests?

    If you’re thinking of taking things a step further and registering a local branch or setting up a local company to ensure you have a real presence in country:

    • How will you identify and select a local partner?
    • How will you protect your investments, assets and people?
    • How will you obtain visas, work permits, licences and other operational requirements?
    • How will you get money out of Kazakhstan, and what taxes will apply?
    • How will you ensure that management / overhead costs are allowed against local taxes?

    It’s more crucial than ever that your investment is of demonstrable benefit to the local economy. As with other countries in the region, the government are increasingly promoting the importance of “local content”. So you’ll need to understand:

    • What constitutes “local content” in relation to business ownership, staffing, purchasing and manufacturing.
    • How can you maximise local content while bringing in outside investment, assets and people.

    If you’re already doing business in Kazakhstan, why not share your experiences with us via twitter.

    Alternatively, if you’re just starting out in Kazakhstan, let us know if you are looking for opportunities, local delivery partners or professional tax advice. We’ll be happy to talk to you.

     

    Posted in: Opportunities for SMEs, Recent Developments