What changed for entrepreneurs following the reform of state control in Kazakhstan

The number of business entities in Kazakhstan continues to grow amid the reform of the state control system and the expansion of business support measures. During the first half of the year, the number of registered legal entities and individual entrepreneurs reached 2.9 mln, El.kz reports primeminister.kz.

Business growth

According to the State Revenue Committee, the number of registered business entities has increased by 20.4% since the beginning of the year, representing an increase of nearly half a million companies and individual entrepreneurs.

Growth has been recorded across sectors considered strategic to the national economy. The number of small legal entities has risen in the mining industry, construction, agriculture, as well as the information and communications sector.

The contribution of SMEs to the economy has also continued to expand. At the end of last year, SMEs accounted for 40.9% of the country’s gross domestic product (GDP), while total SME output reached KZT 104.7 trln.

Fewer inspections

The Government attributes the increase in entrepreneurial activity, in part, to a revised approach to state control, with the focus on the prevention of violations.

According to the Prosecutor General’s Office, the number of business inspections declined by 8.6% last year. Over 10,000 redundant regulatory requirements were removed from legislation, while new regulations are now introduced under the “1 in, 2 out” principle, whereby the introduction of one new regulatory requirement requires the repeal of two existing ones.

At the same time, the digitalisation of interactions between businesses and the Government continues. Nearly half of mandatory reporting requirements have already been streamlined, and entrepreneurs can access public services through the eGov Business application.

Improved access to finance

The Government continues to expand financial support instruments for entrepreneurs. Last year, approximately 9,500 projects received concessional financing totalling KZT 1.6 trln.

New lending programmes also remain available. Under the Orleu programme, entrepreneurs can obtain loans at an annual interest rate of 12.6% for terms of up to 10 years. As of early June, 91 borrowers had received financing exceeding KZT 18.4 bln.

In the regions, the Isker Aimaq programme continues to support manufacturing projects by providing loans at an annual interest rate of 13.2%.

New guarantee funds increase access to bank financing

To improve businesses’ access to credit, two guarantee funds have been established under the Damu Entrepreneurship Development Fund.

The funds focus on supporting projects in industry, logistics, transport and education.

As of early June, the first guarantee fund had supported 1,305 projects with financing totalling KZT 248.1 bln. The second fund had approved eight major projects with a combined financing volume of KZT 456.3 bln.

The effective use of financial resources is monitored automatically through the Baqylauda digital monitoring system.

Public procurement becomes faster and more business-friendly

Another key element of the reform has been the modernisation of the public procurement system. Following the entry into force of the new Law on Public Procurement, procurement procedures have been reduced from 30 to 10 working days.

At the same time, the share of single-source procurement has declined, while additional support measures have been introduced for domestic manufacturers. These include a mandatory 50% advance payment, the removal of contract performance security requirements, and reduced penalty rates.

During the first six months of the year, the total value of public procurement reached KZT 7.7 trln. A total of 61,532 contracts worth KZT 85.2 bln were concluded with Kazakhstani manufacturers.