Kazakhstan seeks to attract foreign investment

Kazakhstan's efforts to attract foreign investment by simplifying banking regulations.

As part of an ambitious strategy to attract foreign investment, Kazakhstan is taking decisive steps to simplify banking regulations for international financial institutions. These changes are aimed at creating a more favorable environment for foreign banks and increasing the flow of investment into the country. One of the key changes concerns the minimum capital requirements for foreign banks. The previously established threshold of USD 20 billion has now been reduced to USD 10 billion, which significantly expands the range of potential market participants. In addition, the new rules provide for an expanded range of banking operations that can be performed by branches of foreign banks in Kazakhstan.

• An important aspect of the reform is the simplification of the document flow procedure. Instead of submitting an extensive set of documents, banks now only need to provide information available to state authorities through digital platforms. This not only speeds up the process, but also reduces the bureaucratic burden on foreign financial institutions.
• The new rules also aim to reduce administrative barriers. One of the significant changes is the removal of the requirement for foreign banks to acquire real estate for their operations. Now banks can rent premises, which is in line with generally accepted international practice and reduces the initial costs of entering the market.
• Special attention has been paid to reducing corruption risks. The requirement to hire a certain number of employees within a year after obtaining a license has been abolished. This provision was considered ambiguous and potentially corruption-prone, and its removal should contribute to a more transparent operation of banks.

These changes are part of Kazakhstan's broader economic strategy. The country aims to increase foreign investment inflows to $150 billion by 2029, focusing on sectors such as energy, transport and digitalization. However, certain obstacles stand in the way of achieving this goal. Kazakhstan faces a number of challenges in attracting foreign investment. Global economic instability and geopolitical tensions have a negative impact on the investment climate. In addition, there are specific problems, such as technological and administrative complexities, which may discourage potential investors.

• To address these challenges, the Government of Kazakhstan has launched a number of initiatives. One of them is the National Digital Investment Platform, which allows foreign investors to directly contact the government on issues related to their projects. This greatly simplifies communication and speeds up the resolution of problems that arise.
• Kazakhstan offers various incentives and special economic zones to attract international companies. These measures include tax incentives, simplified registration procedures and access to modern infrastructure.

Reform of the banking sector is an important step in creating a more attractive investment environment in Kazakhstan. However, the success of these measures will depend on their effective implementation and the country's ability to adapt to changing global economic conditions.

Experts note that, in addition to simplifying regulation, Kazakhstan needs to continue to work on improving the overall business climate, including fighting corruption, strengthening the rule of law and developing human capital. Only a comprehensive approach can ensure long-term success in attracting and retaining foreign investment. Kazakhstan's new banking regulations represent an important step towards creating a more open and attractive economy. However, the real success of these reforms will be measured not only by an increase in investment inflows, but also by their impact on the country's overall economic development and the well-being of its citizens.