On November 6, 2018, the President of Kazakhstan Nursultan Nazarbayev officially opened the Astana Hub International Technopark.
Nursultan Nazarbayev said that the international technology park of IT startups would become the core of the innovative eco-system. Technopark members can use simplified visa and employment modes. They will be provided with tax and other incentives, and experts will accompany the startup teams.
According to him, digitalization has become one of the key factors in the development of the competitiveness of the state, and Astana Hub is an international technopark of IT startups with the main mission of developing a startup culture and supporting high-tech projects to strengthen the country’s economy.
On December 27, 2018, the President of the Republic of Kazakhstan Nursultan Nazarbayev signed the Law on Amendments and Supplements to Certain Legislative Acts of the Republic of Kazakhstan on Employment Issues, providing for tax benefits for members of the Astana Hub International Technology Park from January 1, 2019.
As Olympex Advisers LLP was developing this document in terms of providing tax benefits, at all stages of its approval it officially represented the interests of the Ministry of Information and Communications of the Republic of Kazakhstan, as well as taxpayers who are members of the Astana Hub International Technology Park.
The following benefits are provided for the members of the Astana Hub International Technology Park:
Corporate income tax (CIT): 0 percent, including:
Income of a non-resident in the form of dividends and growth in value subject to holding shares (interest) for less than 3 years: 5 percent;
Income of a non-resident, except for the income of a person registered in a state with preferential taxation included in the list approved by the authorized body, in the form of dividends and growth in value subject to holding shares (interest) for more than 3 years: 0 percent;
Income of a non-resident, except for the income of a person registered in a state with preferential taxation included in the list approved by the authorized body, in the form of royalties and income from the provision of consulting, marketing, engineering services: 0 percent.
Value added tax (VAT), including turnovers on the import of goods, on the purchase of works, services from a non-resident, on the sale of goods, works, services of own production: 0 percent.
Social tax on income paid to foreign employees: 0 percent;
Individual income tax (IIT) on employees’ income: 0 percent.
These tax benefits are provided to the participants of the Astana Hub International Technology Park for 10 years, with the exception of CIT benefits on non-resident income in the form of royalties, which will be valid for 5 years.
The status of a participant of the Astana Hub International Technology Park.
In order to be eligible to use the benefits provided for the participants of the Astana Hub International Technology Park, an entity must receive such a status. An entity receives the status of a participant of the Astana Hub International Technology Park upon making a relevant entry in the List of Technopark Members.
To be included in the List of Technopark Members, the applicant must submit a package of documents. The applicant must meet the following requirements:
- be a legal entity;
- have, at the time of filing the application, no branches, or other separate structural divisions, except for representative offices;
- do not belong to organizations that implement (have implemented) a priority investment, as well as a strategic investment project under investment contracts entered before January 1, 2015;
- do not be a legal entity, fifty or more percent of shares (interest in the authorized capital) of which are directly or indirectly owned by the State, national managing holdings, national holdings, and national companies or their subsidiaries;
- do not be a subsoil user or a member of a special economic zone;
- do not be a payer of excisable goods.
A member of the Astana Hub International Technology Park has the right to receive income exclusively from the implementation of priority activities in the field of information and communication technologies according to the approved list.
We recommend carefully analyze the opportunities provided by the new legislation in order to assess the effectiveness of investments made in this industry.
We will be happy to provide assistance in case of any questions related to the implementation of the provisions of the new legislation, in particular, in connection with the individualities of obtaining the status of a member of the Astana Hub International Technology Park, of taxation of a member of the Astana Hub International Technology Park.