In 2001, Kazakhstan turned its major capital city, Astana, into a 7,500 hectare Special Economic Zone, introducing city-wide corporate, land, property, and value-added tax exemptions, as well as exemptions on duties for goods imported to and exported from the city. The programme aimed at bringing multisectoral investment to a developing capital, a decade after the Republic of Kazakhstan became an independent country. Kazakhstan has since developed a total of ten SEZs to meet a broad range of policy goals. The zones are now regulated by the Law of the Republic of Kazakhstan “On special economic zones in the Republic of Kazakhstan” № 469-IV from July 21, 2011.
Many of the country’s SEZs have a single-sector focus, such as the tourism-focused SEZ Burabay in the north, petrochemical SEZs Pavlodar and the National Industrial Petrochemical Technology Park (NIPT), and the logistics-centred Khorgos SEZ, which is adjacent to the Khorgos Free Trade Zone that is jointly controlled by Kazakhstan and China. The country’s only coastal free zone at Aktau, set to be further developed with world maritime trade logistics leader DP World, focuses on developing electronics, leather, chemicals, and plastics clusters, among others. As industrial parks, NIPT and the Innovation Technologies Park (IPT) in the southern commercial hub of Almaty also enjoy special exemptions on labour and the nation’s social tax.
In 2014, Kazakhstan’s President Nursultan Nazarbayev unveiled his 5-year “Nurly Zhol” economic development plan, which called for $9 billion in infrastructure upgrades in a bid to hedge against waning commodities prices, political volatility, and slowing economic growth. The plan called for an additional $3 billion in annual spending from the country’s sovereign wealth fund, and coincided with the agreement of major long-term investment in Kazakh infrastructure from China. Current upgrades to the Aktau SEZ as well as to other zones represent a piece of that plan. In 2016 the government of Kazakhstan announced its $3 billion plan to build industrial railway from Khorgos in the eastern Almaty region, where Khorgos SEZ, Khorgos FTZ, and the IPT are located, to Aktau on the Caspian Sea in the west, as well as improving rail and maritime logistical connections with neighbouring Iran.
Kazakhstan has improved its business image substantially over the past decade, sustaining high rates of GDP growth, moving up in Doing Business rankings, the World Bank Logistics Performance Index, and the Intellectual Property Rights Index. With legislation in place offering tax-incentives that are comprehensive and not time-bound, and increasing trade with China, Caspian Sea neighbours, and Europe, it is likely to see growth in SEZ investment across multiple sectors in the short-term.