On 8 May 2026, the President of the Republic of Kazakhstan signed the Constitutional Law of the Republic of Kazakhstan “On the Special Legal Regime of Alatau City”, introducing a new regulatory model known as a “City of Accelerated Development.” The primary objective of this regime is to attract investment, promote innovation and digital technologies, and create a favorable business environment.
A special procedure has been established for obtaining legal status and access to the preferential regime within Alatau City. Commercial entities may apply to the Alatau City Administration for Alatau Resident status, provided that they conduct business activities within the city. Other applicants may submit a declaration of intent to carry out their principal activities in Alatau City. Upon review of the application and approval of the proposed project, the applicant is issued a business license authorizing operations under the city’s special legal regime.
Tax Incentives for up to 30 Years
One of the key advantages of the regime is the possibility for Alatau residents to benefit from tax incentives for a period of up to 30 years. Such incentives may apply to:
- Corporate Income Tax (CIT);
- Individual Income Tax (IIT);
- Value Added Tax (VAT);
- Social Tax;
- Property Tax;
- Land Tax; and
- other mandatory budget payments.
The scope and conditions of the incentives will depend on the category, scale, and significance of the investment project.
In addition, priority investment projects are entitled to a 10-year tax stability guarantee from the date the business license is issued. During this period, investors are protected from the introduction of new taxes, increases in tax rates, or other changes resulting in a higher tax burden for the relevant project.
Customs Benefits
Starting from 1 January 2027, Alatau City will operate as a Special Economic Zone (SEZ) for a period of 50 years. Residents will be able to benefit from a free customs zone regime, providing customs incentives and special conditions for the importation, use, and processing of goods in accordance with the legislation of the Eurasian Economic Union (EAEU) and the Republic of Kazakhstan.
A key element of the regime is the investor’s project itself. The Alatau City Administration will assess each project and determine both the resident status and the scope of available incentives. Depending on the value, scale, and strategic importance of the project, different categories of investment incentives (A, B, and C) may apply, including special conditions for certain industrial sectors and high-tech manufacturing.
The new legal regime will be introduced gradually starting from 1 July 2026. During the transition period, secondary legislation is expected to be adopted to regulate in detail the procedures for obtaining resident status, receiving business licenses, and accessing available incentives.
Application of English and Wales Law Principles
A distinctive feature of the new regime is the ability of the Alatau City Administration to develop regulations based on the principles, rules, and precedents of the law of England and Wales, as well as internationally recognized business standards.
Although English law will not automatically become the governing law for all legal relationships within Alatau City, this approach allows the incorporation of internationally recognized regulatory practices and enhances legal certainty for foreign investors.
International Arbitration and Investor Protection
The Constitutional Law grants investors the right to choose the forum for resolving investment disputes. In addition to the courts of Kazakhstan, disputes may be referred to leading international arbitration institutions, including the International Arbitration Centre (IAC) of the Astana International Financial Centre (AIFC).
As the AIFC legal framework is based on the principles and rules of the law of England and Wales, investors gain access to independent dispute resolution mechanisms that operate in accordance with internationally recognized standards and investor protection principles.
The Alatau City regime combines long-term tax incentives, customs benefits, elements of English and Welsh legal principles, and access to international arbitration. This framework positions Alatau City as one of Kazakhstan’s most promising destinations for major investment and business projects.
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Author
Zhanna Umirova
- Lawyer
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