ALMATY – Kazakhstan has made significant progress in developing a market economy and attracting foreign investment, but regulatory uncertainty, localization policies and concerns over the rule of law continue to pose challenges for international businesses, according to the United States Department of State’s 2026 Investment Climate Statement for Kazakhstan.
The report, released in September, said Kazakhstan has attracted substantial foreign investment since gaining independence in 1991, particularly to develop its mineral and petroleum resources. As of Jan. 1, the country’s stock of foreign direct investment (FDI) stood at $170 billion, including $35.5 billion from the U.S.
The report also noted that publicly available information suggests U.S. investment in Kazakhstan’s hydrocarbons sector could be higher than reflected in official bilateral FDI statistics, partly because some investments are routed through third countries and reinvested earnings are not fully reflected in bilateral data.
Diversification and reform
According to the State Department, Kazakhstan has made progress in economic diversification and digitalization, while President Kassym-Jomart Tokayev’s reform agenda aims to diversify the economy, promote industrial development and reduce state participation.
The government continues to engage with foreign investors through several formal mechanisms, including the Foreign Investors’ Council, a semi-annual Prime Minister’s forum for U.S. companies and bilateral consultations.
Kazakhstan’s membership in the World Trade Organization and Eurasian Economic Union also shapes the country’s investment environment. At the same time, foreign businesses continue to identify areas where further reforms are needed.
“Foreign firms cite the need for better rule of law, more predictable and transparent tax and regulatory systems, deeper investment in human capital, and investment in modern transport and logistics infrastructure,” reads the statement.
The State Department also highlighted concerns over increasing regulation, localization and import substitution policies, as well as corruption.
New Tax Code changes investment landscape
The report paid particular attention to Kazakhstan’s new Tax Code, enacted in January 2026. Among the changes, the standard value-added tax rate increased from 12% to 16%, while reduced rates were introduced for medicines and medical services. The corporate income tax rate now varies by sector, reaching a maximum of 25% for the banking sector, while agriculture and healthcare benefit from reduced rates of 5% and 10%, respectively.
The new Tax Code also changed taxation in the subsoil use sector, expanded the definition of royalties, revised taxation of non-residents and introduced taxation of dividends.
The State Department said several of these changes, particularly those concerning royalties, international taxation and the cancellation of tax deductions for contracts with individual entrepreneurs, have raised concerns among businesses and remain subject to clarification or negotiations with the government.
Kazakhstan seeks to develop capital markets
The government is also working to strengthen Kazakhstan’s capital markets and attract foreign financial investment. Foreign investors can trade financial assets through local or foreign brokerage companies and through the Kazakhstan Stock Exchange (KASE) or the Astana International Financial Centre.
KASE currently has 322 listed companies, with equities, funds, corporate and sovereign bonds, foreign currencies, repurchase agreements and derivatives among the assets traded. The KASE Global platform, launched in 2021, provides access to around 64 U.S. securities listed on Nasdaq and the New York Stock Exchange.
The Astana International Exchange, meanwhile, has partnerships with institutions including the Shanghai Stock Exchange, Nasdaq and Silk Road Fund. Its official list includes around 374 securities from 158 issuers.
Kazakhstan is currently developing a Stock Market Development Program through 2030 and a new securities bill aimed at modernizing the capital market, expanding the investor base and bringing the market closer to international standards.
According to the State Department, the reforms are intended to attract foreign investment, introduce new financial instruments and strengthen transparency and regulatory oversight.
National Fund holds $73.8 billion
The report also highlighted the role of Kazakhstan’s National Fund in the country’s financial system. According to the National Bank, the fund’s assets stood at $73.8 billion as of Jan. 1, 2026, equivalent to around 24% of GDP. This included $63.9 billion in foreign assets and $9.5 billion in securities issued by Kazakh entities.
The government regularly uses transfers from the National Fund to support the state budget, alongside special transfers ordered by President Tokayev. By the end of 2025, almost 45% of the National Fund’s assets were invested in U.S. securities, according to National Bank data cited in the report.
The report said the fund’s foreign-currency assets are diversified across different asset classes and investment mandates, including bonds, equities and other financial instruments, with some investments benchmarked against broad global indices.
