The process of construction in Kazakhstan 2016: brief overview from A to Z

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Introduction

Due to the numerous changes that take effect in 2015 and are in force as from January 2016, we had updated the information in this article. Information was upgraded regarding to the projects expert examination; about the commissioning of construction projects into operation, the procedure for granting land for the construction, as well as the new information was added in respect of the Eurocodes, the introduction of a new regulatory framework in the construction industry.

According to the World Bank Group, as on June of 2015 Kazakhstan ranked 41st out of 189 countries in terms of doing business. This ranking shows the extent of easiness of doing business by countries and is made up of several indexes. Kazakhstan ranks 21st in starting a business (7th in the region), 92nd in dealing with construction permits (11st in the region), 71stin getting electricity, 19th in registering property, 70th in obtaining loans, 25th in protecting investors, 18th in paying taxes, 122nd in trading across borders, 9th in enforcing contracts, and 47th in resolving insolvency.

The above statistics is in the public domain. Coupled with an active advertising campaign of the Republic of Kazakhstan in recent years to show the investment case of Kazakhstan, these factors make it possible for the world’s major construction companies to expand their businesses to Kazakhstan.

Later, we will cover the main issues of foreign companies, which want to work in Kazakhstan in the field of construction ranging from the registering of business to the final acceptance and commissioning of the facility, taking into account the features of regulation of this process with the participation of foreign companies as the entities engaged in construction activities.

This article describes the general requirements to the construction, without taking into account the features of construction of specific projects and facilities, implemented for example, in the framework of the state procurement or in adverse conditions of the sea.

It takes a lot of time, costs, and passing through numerous bureaucratic procedures in order to build a facility in the Republic of Kazakhstan. We recommend you to plan properly your projects.

In the introduction section, we will pay a little more attention to the planning stage, since it uncovers the interweaving of various processes and stages of construction, which are outlined in detail.

Sharing the common driveways and utilities in the construction of a few buildings on the same plot of land is a quite clear synergy and cost saving. However, for some reason, the issues of shared use of the property by a few owners as a result of such cost saving are solved, as a rule, at the stage of selling of the constructed and commissioned facility.

It is important to determine in advance the order of parceling the land in the future. Some limitations can appear due to the neighboring of urban utilities network/facilities or water protection zones. The status of the land will determine the order of its sharing in the future, especially when it comes to the construction of a few office and trading facilities (as well as multifunction buildings) in close proximity to the public utilities network, which later, according to the investor’s plan, should be able to become the property of third parties (in whole or in part).

As early as at the planning stage, the investor should think about the goals it follows (whether it will sell the facilities separately or not, whether all the facilities will have a single management company or not, whether it is necessary to think about the image of the project for decades ahead or no, etc.), so that to dispose the asset in the future in the most efficient way.

With regard to the use of the common property, lack of the relationship regulation tool, which is organized in advance and signed by all the owners of the properties, can become a cause of protracted litigation and/or difficulties in the current management of the constructed facilities (for example, failure to raise money for the current/capital repairs of the common property - roads, common utilities, yards and other surrounding areas; failure to make effective use of the common property, and etc.).

Our company recommends you to do the following at the planning stage:

  • To determinethe timeand procedure for parceling the landfor the purpose oftimely receipt ofconstructionpermits and completion of all necessary paperwork for thesale of the facility entirely or in parts;
  • To make proposals beforehand, discuss and adopt management options jointly with the supposed management company, taking into account thefeatures of the projectand its supposed implementation;
  • For the preparation and timely implementation under control of the process (plan) of transfer of the rights to the property, common property and other assets, including those under control of the management company;
  • To clearly define what property and under what conditions to give to the municipality or leave in shared use, what property to give in own use together with the building (premise), and etc.;
  • To solve the issue of the possible usage of an easement;
  • To developa package of documentsnecessary for theimplementation of decisions adopted by the investor in terms of implementation, managementand sharing both ofthe entire projectandits parts(sale contract, easementagreement, the protocol on the establishment of a condominium, the Charter of the cooperative, the report on management of the condominium, and so on).

Therefore, we recommend you to attract local professionals with relevant experience and recommendations to cover these complicated and overregulated issues.


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1.Entities engaged in construction activities

Local construction companies usually work in the form of LLP (the same analog in Russia) or in the form of joint-stock company (JSC). You should take into account that the newly-created (just registered) companies cannot immediately proceed to the construction of technically complex buildings; due to the lack of experience they will not be able to obtain a relevant license.

1.1. Branch/representative office of a foreign company

A foreign company may operate in the Republic of Kazakhstan through its branch or have a representative office to protect its interests. Only this way they can engage in construction activities in Kazakhstan, using their previous experience in this field gained in other countries. Foreign companies have the opportunity to get a license without the need to set up a branch here. To meet the formalities on obtaining the necessary permits for the construction activities it is sufficient for the company in some cases just to get a business identification number (BIN) and open an account at one of the local banks.

The procedure for the setting up and registration of a branch of a foreign company (meaning any foreign company registered in the CIS or outside of the CIS) does not differ much from the registration of branches of local legal entities. The difference is the necessity to apostille the constituent documents of the company, as well as translation this documents into Kazakh and Russian languages. After registering with the tax authorities and upon receipt of the certificate of the state registration, further it is necessary to order the manufacturing of the company’s seal, to open a bank account, and to hire an accountant.

Branch director is appointed by the top manager of the holding company and acts under the general power of attorney. If the director is a foreign citizen, there is no need to obtain a relevant work permit for him/her. However, if the company wishes to hire other foreign staff to work in the branch, it is required to obtain relevant work permits for them in accordance with the regulations on attracting foreign labor force and taking into account the quota set by the authorized body regulating the labor market (it should be noted that the size of the quota varies from year to year).

Permit to attract foreign labor force is issued by four categories of employees: 1st category - managerial staff of the company; 2nd - specialists with higher and secondary vocational education; 3rd - skilled workers and workers hired for seasonal agricultural work. The employer shall comply with the ratio of local staffers and foreign staffers: for the 1st and 2nd categories, the ratio of local staff shall not be less than 70% of the total number of employees, and for the 3rd and 4th categories - not less than 90%.

It is not required with regard to some foreign employees to obtain work permits. Apart from the director of the branch or representative office of a foreign company, such foreign staffers include:

  • Resident individuals in the Republic of Kazakhstan;
  • Those on a business trip, for business purposes, the term of which does not exceed a total of one hundred and twenty calendar days in any one calendar year;
  • Citizens of the RussianFederation or the Republicof Belarus;
  • The top managers of the companies who have signed with the Government of the Republic of Kazakhstan contracts of investment in the amount exceeding US$ 50 million in money terms;
  • The top managers of Kazakhstani companies who carry out investment activities in the priority sectors of the economy and signed a contract with the local authorized body on investment.

1.2. Licenses and permits

To engage in construction activities or design in Kazakhstan, the foreign or local company shall obtain a relevant permit from the Kazakh state authorities. Such permit is the license. It should be necessarily obtained, if the type of activity the company is going to engage in, is specified in the applicable laws, regardless of whether the company is going to operate in Kazakhstan or implements any short-term project.

Laws on Permits and Notices of the Republic of Kazakhstan, which came into force on November 20, 2014,  give a detailed list of licensed activities, including construction operations, design and survey. License and (or) annex to the license can be issued either in paper or electronic form.

Below is the exhaustive list of activities in the construction sector, for which the license is needed:

  • Surveying operations;
  • Design development;
  • Construction and assembling operations;
  • Activities on the organization of construction of residential buildings for the money of shared construction participants.

With this, each of the above-listed licensed activities is divided into many more items. For example, the licensed construction and assembling operations are divided into more than 25 items.

Licenses are issued by the authorized body in the field of architecture, construction and urban development. Documents for obtaining the license are submitted to public service centers (PSC) or State Administration Administration of State Architectural and Construction Control of Local Administrations (Akimats) of the Regions and cities of Astana and Almaty.

Licenses, which are issued for the implementation of design and construction and assembling operations, are divided into three categories, depending on the level of works complexity.

Rules for the Assignment of construction and urban planning areas to the level of complexity earlier it was determined in accordance with the Management directive of certification system of RK 1.02-04-2013.

May 4, 2015 Management directive of certification system of RK 1.02-04-2013 became inoperative and instead of it were adopted Rules for determining the general classification of buildings to technical and (or) a technologically complex facility, approved by Order of the Minister of National Economy of the Republic of Kazakhstan dated February 28, 2015 № 165, which entered into force on May 2, 2015.

The new rules assign the procedure for classification of buildings to technical and (or) a technologically complex facilities and establish criteria for determining the complexity of the design facilities.

On ground of the reform of expert activities by transmitting to the competitive environment of the projects of expert activities, which will be discussed later in the article, there was a need to define the criteria for classifying buildings as a technical and (or) a technologically complicated projects. The new rules just defined a clear list of technical and (or) the technologically sophisticated facilities, complexes, engineering and transport communications.

Rules thereafter amended the list of buildings and structures that are attributable to the I, II and III levels of complexity, some facilities have been added in addition, some are excluded, but the overall situation remains the same:

  • 1st category (high level of complexity) involves unique buildings (over 9 floors), industrial facilities of the national importance (factories, plants, motorways and railways);
  • 2nd category (medium level of complexity), where the involvement of a general contractor is possible, involves any construction operations that are not included in the 1st category; operations are possible in a seismic area;
  • 3rd category (low level of complexity) does not allow the involvement of a general contractor or construction of permanent buildings and structures; this category involves erection of temporary buildings, seasonal or auxiliary facilities.

In the selection of a category, you should be aware that the newly created company (usually in the form of a limited liability company) can be issued a license only for the third category.

To apply for a license for the second and the first categories, the potential recipient of the license must have relevant experience in completed projects. Even if the founder of a newly established company is a well-known design or construction company, which already has its own portfolio and a list of completed projects, its previous experience will not be recognized as adequate experience of the newly created company. The only exception is the companies whose founders have relevant experience (in any countries) for more than thirty (30) years.

The only way for the founder (it does not matter whether it is resident or not) to use its previous experience (both in Kazakhstan and outside of Kazakhstan) for obtaining of the license is to set up a branch in Kazakhstan. This option is most suitable for foreign construction and design companies, which have decided to extend its activities to the Kazakhstan market. The branch will be able to obtain a license for the parent company, submitting necessary documents on its behalf in Kazakhstan.

The legislation provides a clear list of requirements for a particular category of license. Previously, these requirements were in the Resolution of the Government of RK №89 from February 5, 2013, These times the list of qualification requirements defined by Government of RK by the order of Acting Minister of National Economy of the Republic of Kazakhstan №136 from December 5, 2014.

The main difference between the new requirements and the old ones is that:

  • There is no need for the admission of executives to work in areas of high seismic risk in the new requirements;
  • There is no need to confirm the presence of the tools;
  • Experience of the licensee must be permanent for a license category 1 and 2 for the design, construction and installation work (in the case of termination of the license, the experience is accounted as null);
  • for the licensee as a legal entity, the members (shareholders) of this legal entity is a resident of the Republic of Kazakhstan and foreign legal entity, which the members (shareholders) is a legal resident of the Republic of Kazakhstan holds 50 or more shares in the shared capital and have the license of the first category to engage in project activities / construction and installation work on the Category 1 do not need to provide information confirming the experience of the licensee, of the previously completed work, projects, and information in the form of positive feedback from customers and / or exploit persons interested local executive bodies.

The most important qualification requirements of those specified in the list are:

  • Requirements to the personnel,
  • Production base,
  • Equipment, vehicles and machines, devices, special mechanisms, etc;
  • Internalrules and regulations(health and safety, quality control, etc.),
  • Work experience and completed projects (with the exception for the 3rd category).

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1.3. Access to electronic services

At the moment, many services in the field of real estate are presented in electronic format on the website of the electronic government. The use of the given services allows saving time on administrative procedures at all stages of the registering and doing business in Kazakhstan in the field of construction and design.

In order to have access to electronic services, the company has to get a digital signature, which is issued by the National State Company State Technical Service within 2 business days. The application is filed directly to the Service Provider or through a public service center.

Recognition of foreign electronic signature shall be in accordance with international agreements ratified by the Republic of Kazakhstan. At the moment, such agreements are available only with the Customs Union members.

In the absence of the international agreement, a foreign company is issued a digital signature in accordance with the laws of the Republic of Kazakhstan. For this, it is necessary to file an application with the enclosure of a document containing the personal identification number (PIN) of a representative of the non-resident legal entity (for example, the certificate of registration), as well as the document containing the business identification number (BIN) of the legal entity. To get a BIN, the legal entity shall obtain a certificate of registration on the grounds set forth in the tax code of the Republic of Kazakhstan (eg. open a current account at a local bank).

2. Getting a land plot

2.1. Ways to get a land plot

A person or legal entity can get a land plot in two ways:

  1. By buying it from the state. For this, it is necessary to obtain from the local executive bodies of the district (city) a decision on the relevant granting of appropriate rights to the land;
  2. By searching a plot of land in the secondary market for the rental or purchase it in private ownership.

Each of the options has its advantages and disadvantages. If the project owner wants to get land from the state, it should be ready for a long bureaucratic procedure, which consists of several stages; at each of them delays are possible. On the other hand, acquiring from the state, the project owner pays the cost of the land plot, which is moderate, comparing with the market prices.

In its turn, the purchase of land plot from an individual entails certain risks associated with the previous owners. It can be so that land might be pledged or be in the arrest, third parties may claim the land, or there might be any other encumbrance, which the seller has not disclosed. The advantage of buying the land plot in the secondary market is that the buyer is on a par with the seller at the conclusion of the contract – the parties are free in their actions and can negotiate a contract in a fairly short period of time.

If the project owner already has land, it needs to make sure that it has the right to perform construction on it.

It should be noted that the rights of foreigners to certain types of land are limited:

  • Non-residents cannot have in ownership the land designated for agricultural production and afforestation;
  • It is not allowed to provide land, located in the border zone and border strip of the Republic of Kazakhstan, in private ownership to non-residents;
  • Non-residents and companies, in the authorized capital of which the ratio of non-residents is more than fifty percent, can dispose of the land plot designated for agricultural purpose only under the right of temporary use of land under lease for a period of up to twenty five years (previously this period was up to 10 years), due to amendments to the Land Code of the Republic of Kazakhstan by Law dated 29.12.2014 №269-V.

2.2. The procedure for granting a land plot by the state

To get a land plot for construction within the city boundaries from the state, the project owner will have to go through a procedure consisting of the following steps:

  • Applying for the granting of the land plot;
  • Deciding whether it is possible to satisfy the application (pre-selection of land plot);
  • Findings of the commission on the granting of the land plot;
  • Development and approval of land project;
  • Making decision by the Regional/City Governor (Akim)/Governor’s office (Akimat), based on the Commission's decisions and the land project;
  • Entering into a contract of sale or temporary/short-term/long-term land use for a fee/at no charge;
  • Marking delimitations of the land plot on the ground;
  • Preparation and issuance of the documents certifying the right to land.

In the receipt of the land from the state, it is necessary to pay attention to the following:

  • The purpose of the land use, specified in the relevant document, shall match the objective of the future project, according to the Classification by Designated Purpose (for example, for Almaty, it is necessary to refer to the Appendix to Resolution No.1/85 of the Akim of Almaty of February 13, 2013);
  • Possibility to divide the land;
  • Registered encumbrances to the land;
  • Setting the fenced off area or sanitary protection zone of the land (is executed in the form of certificate of selection of the land with local executive bodies, according to the Land Code of the Republic of Kazakhstan);
  • The general plan of the inhabited locality. It is prohibited to grant a land for construction, if no detailed layout and/or design made on the basis of the general plan of the inhabited locality, have been provided.

2.2.1. Filing an application for getting the land plot.

To get the land plot, the applicant has to file an application to the local executive bodies at the location of the land plot. The term of consideration of an application is up to two months from the date of its receipt. The application shall contain:

  • The purpose the land will be used for (in our case, for construction purpose);
  • The alleged size of the plot of land (to be determined in accordance with the norms of land allocation as per the procedure established by the laws of the Republic of Kazakhstan for these types of activities, or in accordance with the architectural and urban planning and/or construction documents;
  • Location (the approximate location of the land);
  • Requested right to use the land (private ownership of land, the right of permanent use of the land, the right of temporary (long-term, short-term) use of the land for a fee, the right of temporary use of land at no charge);
  • The availability or the lack of another plot of land (in case of the plots of land for a private farm in rural areas).

2.2.2. Preliminary selection of the land plot.

A necessary step in the procedure of getting the land for construction is preliminary selection of the land. After the land is selected, the relevant statement is issued by the structural subdivision of respective local executive bodies in the field of architecture and urban planning.

The statement on the selection of the land plot is issued with the annex showing the boundaries of each plot of land in accordance with possible options of their selection. The statement on the land plot selection shall be executed within ten business days, with the subsequent submission of the land plot selection statement to the commission for consideration and opinion.

2.2.3. The decision to grant the land plot

The decision to grant the land plot is issued by local executive bodies on the basis of the commission's opinion and land project.

The Commission is established by the local executive bodies of the region, the city of national status, the capital, district, the city of regional status. The commission is comprised of deputies (legislators) of the local representative bodies, the representatives of the authorized body of the region, the city of national status, the capital, district, the city of regional status, the structural subdivisions of relevant local executive bodies in the field of architecture and urban planning, the National Chamber of Entrepreneurs of Kazakhstan, as well as local governments (if any). If the commission has been established at the level of regions, the cities of national status, and/or the capital, then it shall also comprise representatives of relevant territorial subdivisions of the authorized bodies in the field of environmental protection, agriculture and forestry, use and protection of water resources, land management, as well as other persons at the discretion of the local executive body.

Endorsement of the committee is handed over to the applicant within five business days for preparation of the land project. The land project specifies the area of land plot granted its boundaries and location, the adjacent land owners and land users, as well as encumbrances and easements of the land granted.

A copy of the decision of the local executive body on granting the right to the land plot is handed over (sent) to the applicant within five business days since the decision.

2.2.4. Registration rights to the land plot.

Registration the right to the land plot is carried out as per the same procedure as the registration of construction facility. The rate of fee for land registration is 0.5 MCI that is at the current exchange rate is about US$3. The rate of fee for expedited registration of land is 15 MCI that is equal to about US$ 97 at the current exchange rate.

Without registration of the land, it will be impossible in the future to register the construction facility. If the project owner has failed to make such registration, the law permits the simultaneous registration of the land and the constructed facility. If the right to land has emerged before the introduction of the system of state registration, the registration of the construction facility is allowed, subject to the simultaneous registration of the right to the land.

2.3. The procedure for granting land by the state for the construction within the city boundaries.

Due to the Amendments to the Land Code of the Republic of Kazakhstan, which came into force in 2015, there is a separate article defining the procedure for granting land plot for the construction of property within the boundaries of the city.

The procedure for obtaining of land plot has several stages:

  • submission of an application;
  • approval of the final act of choice land;
  • signing of the contract of temporary land use;
  • preparing of land-cadastral plan;
  • the decision of the local executive body for the land plot;
  • demarcation of land in-situ.

In addition to the above, the redemption of a land plot granted to the land in private ownership is permitted only after commissioning (finalization of property construction within the special procedure of building acceptance).

2.3.1. Filing the application

To obtain a land for construction within the boundaries of the city applicant must apply to the local executive body for the locality of the land plot on the web portal of electronic government or the center of public service.

The application must contain:

  • Address (location) of land plot;
  • The area in hectares (sq.m.);
  • Name of the construction of the planned facility, number of floors, and the approximate area of the building.

Application should have attached location plan of land plot in an electronic format.

2.3.2. Approval of the final act of choice of land plot

The appropriate department of the Akimat (local execution state body) within 7 working days is preparing the act of choosing the land plot with its situational scheme and should send it for the approval to all relevant authorities. Approving authorities within 12 working days submit opinions on the usage possibility of the land. By the conclusion of a specialized state-owned enterprise, which is leading the state land cadastre shall be attached requested information on the land plot and estimate fees for land works (measuring, etc.) and cadastral works.

In the case of a positive conclusion, the appropriate Akimats department within 5 working days should prepare a final act of choosing the land plot, which should be send for approval to the applicant.

The applicant within 3 working days negotiates a final act of choosing of the land plot and pays amount of services for executed cadaster works.

2.3.3. The decision granting the land plot

After signing by the applicant of the temporary land use contract and construction, upon getting the approved developed land-cadastral plan, it goes to the Akimat for its decision to grant the right to the land plot. Akimat takes a decision on granting the right to the land plot within 5 working days from the date of approval of land-cadastral plan. Cadastral plan is an integral part of the granting decision.

The applicant gets a copy of the granting decision of land plot to applicant on the web portal of e-government. A copy of the decision and the interim agreement's land use are sent to the authorized body for the registration of rights to land plot.

2.3.4. Land acquisition

After commissioning (finalization of construction and signing the commissioning act by authorities) the land user has the right to buy land plot from the state by submitting an application to the local executive authority with the accompanying documents.

The following document are attached to the application:

  • the document certifying the right to land plot, or a copy of a document certified by a notary;
  • the copy of the taxpayer certificate;
  • the certificate from the center of the real estate confirming the absence of encumbrances on the property, preventing the conclusion of transactions;
  • the certificate of state registration (re-registration) of the legal entity.

The granting decision on the land property ownership shall be made within 15 working days from the date of submission of the application by the land user.


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3. Project documentation

In the Republic of Kazakhstan, within the technical regulation rules now we are in process of gradual replacement from outdated building codes to Eurocodes - European technical standards for design and construction of buildings and structures. The process of implementation of Eurocodes is gradual and has been divided to three stages:

  • 2010 – 2014, preparatory stage;
  • 2015 – 2020, the coexistence of new and existing standards;
  • 2021 – 2025, summarizing the experience of the application and adjustment of the new regulatory framework.

Due to our legislation Eurocodes are designated as SN RK EN, and entered into force on July 1, 2015, according the Order of the Chairman of the Committee for Construction, Municipal housing and Land Management of the Ministry of National Economy of the Republic of Kazakhstan dated December 29, 2014 №156- NК On approval of the new regulatory framework of the construction industry.

So far, there were developed more than 50 Eurocodes with national specific application rules and some 16 amendments to national applications Construction Rules and Regulations RK EN. Examples of the acting in Kazakhstan Eurocodes:

  • Construction Rules and Regulations EN 1990: 2002 + A1: 2005/2011 Basics of structural design
  • Construction Rules and Regulations EN 1991-1-3: 2003/2011 The effects on structures. Part 1-3. General actions. Snow loads
  • Construction Rules and Regulations EN 1992-1-2: 2004/2011 Design of Concrete Structures. Part 1-2. General rules for determining fire resistance.

Basic rules for the development, coordination and approval of project documentation, its composition and the content were set out in Construction Rules and Regulations 1.02-03-2011, which became invalid due to the introduction of the new regulatory framework.

These days, the basic requirements for design documentation are in different construction rules, such as the SP RK 1.02-108-2014 The order of development, coordination, approval and composition of the project documentation for the construction of individual houses, or SP RK 1.02-106-2013 Typical designing, etc.

Developed and approved project documentation is valid for three years from the date of its approval.

When this period expires, the documentation is considered outdated. In this case, it must be brought into conformity with the applicable government regulations and reapprove that is produced in the same manner in which it was approved, but in view of the changed technical regulations.

3.1. The procedure of preparation of project documentation

Design can be made in several stages. Stages are defined in the design assignment. The first stage is the preparation of the project, which is developed on the basis of pre design documentation. The second stage is the preparation of working documentation. A two-stage design applies when it comes to construction of large facilities for civil purpose or industrial facilities, or the construction of critical facilities, affecting the state or public interests, and implemented with the participation of public investments.

Designing facilities with the term of construction of up to 24 months is carried out in one stage, without the development of working documentation. Projects of construction facilities built as per the model projects are also developed in one stage, when the previously developed individual project is executed; the same concerns the renovation of facilities.

The beginning of the design shall be the date of entry into force of the contract for the development of design estimates, signed between the customer and contractor (contractor, general designer). The contract for the development of design estimates includes the types and scope of work, terms of carrying out designer’s supervision when necessary (otherwise, it is indicated that there is no need for designer’s supervision). Thus the customer must give to the contractor the approved design assignment and other initial data valuable to the development of design estimates. With this, it is not permitted to subcontract the work on the design, which value is more than two-thirds of the total cost of the work.

At the stage of preparation of project documentation, those solutions which refer to the area of general planning and 3D solutions that have been adopted and approved by the general plan of the settlements, are outlined in detail. Project documentation shall contain solutions and indicators of the general plan (including zoning area).

If the prepared design documentation reasonably goes rightly beyond or differs from the government regulations including the general plan, it will be necessary to get written approvals from the authority which approved the government regulations (in case of the general plan it is the local rrepresentative bodies). Prior to submission for the approval, it will be necessary to obtain to approve any differences (deviations) from the mandatory requirements of state standards from the relevant authorities.

The design assignment/ source materials for the preparation of project documentation

The customer (or the project owner) draws up and approves the design assignment, which can also be prepared by the general designer, or other contractor. Design assignment is an integral part of the contract for the development of design estimates.

Together with the design assignment, the customer provides the contracting engineering company (the general designer) source materials/data for the development of project documentation, which include:

  • The decision ofthe local executive bodiesof districts (cities) on the granting of the relevant right to land, including regulationson the use ofthe territorywithin its bordersand designated purpose;
  • Data on engineering survey of the construction site (within the boundaries of the land and the routing of communications), including data on surveying, geological and hydrogeological surveys required for the design and construction;
  • Technical conditions forconnection to the public utilities and engineering networks,providedon requestof local executive bodies by service providers in the field ofpublic utilities and engineering networks in the area ofthe supposed construction;
  • Architectural andplanning assignment,issued by the local(city, district) body for architecture and urban planning, including land developmentconditions, and landscaping.

3.2. Coordination of the project documentation

Developed in accordance with the design assignment, the architectural and planning assignment, and other source materials, the project documentation/ design estimates shall pass through coordination and approval in accordance with the requirements established by state regulations.

Project documentation shall include a record of the chief engineer or the chief architect of the project as to the compliance of the project documentation with the state regulations.

In some cases it is necessary to make additional coordination of project documentation with government agencies, such as the Committee for Construction and the Committee for Industrial Development and Industrial Safety. These cases are related to the construction of special purpose facilities, such as hazardous production facilities, if this is expressly provided by the legislation.

Additional coordination is also required for retraction of additional land (reduction in the land), in the change of transport or communication routes, in the deterioration of initially set architectural-aesthetic, engineering, fire-fighting, anti-explosion, and sanitary qualities of the environment.

3.3. The expert examination of the project documentation

The expert examination is one of the final stages of development of project documentation, preceding its approval. The goals of the expert examination are the analysis of documentation, the determining of effectiveness of investment, and the provision of design solutions for sustainable operation of the facilities after their commissioning.

The expert examination is carried out by expert organizations or experts certified in the relevant sections (parts) feasibility studies and design estimate documentations. The expert examination is performed within 45 calendar days. It is possible to not perform the expert examination at the request of the customer, in some cases. For example, whilst designing technically simple structures (houses, temporary structures, household structures, and so on), the expert examination is optional.

Law of Kazakhstan On amendments and additions to some legislative acts of Kazakhstan on the radical improvement of the business environment in the Republic of Kazakhstan, which greatly changed the order of the expert examination was signed on December 29, 2014.

The term state expert examination was excluded. Instead, the following concepts were introduced and the types of the expert examinations:

  • the projects expert examination (the integrated departmentalexpert examination of feasibility studies, design and construction documents), intended for the construction, carried out by the accredited expert organizations or experts with the appropriate certificate;
  • the integrated departmental expert examination of construction projects (feasibility studies, design and construction documents), referred to the state monopoly;
  • the integrated urban planning expert examination is a mandatory expert examination of urban development projects at various levels;
  • the interstate expert examination of projects of common interest to two or more States parties to the relevant international instruments for the design and construction of urban planning or adjacent border areas.

In some cases, required to conduct a comprehensive expert examination of departmental classified as a state monopoly in the Republican State Company State Expert examination (formerly called simply - state expert examination). Integrated departmental the expert examination carried out by the state expert organization is needed, in particular, in the construction of potentially hazardous and technically, and (or) a technologically complex facility (such as nuclear facilities, mainline railroads, subway, etc.). For the facilities and complexes that should be designed and constructed by stages, the project expert examination can be carried out under the relevant stages (expert support).

Project documentation of facilities that have impact on the environment, is subject to mandatory Environmental Impact Assessment.

Pursuant to the requirements of the Law of RK of 12.29.2014, referred to above, an order was issued by the Minister of National Economy of Kazakhstan from April 1, 2015 № 299 On approval of a comprehensive departmental expert examination of feasibility and design estimates for construction of the new, and changes (reconstruction, expansion, technical re-equipment, modernization and overhaul) existing buildings and structures and their complexes, engineering and transport communications, regardless of funding source.

According to the amendments the expert examination of construction projects is carried out on the principle of one stop through a single electronic information system with all the required specialized expertise. Thereafter, changes were made to the powers of the state comprehensive departmental of expert examination. It is planned to hold a two-step transfer of authority for the expert examination of certain types of projects in the competitive environment.

Since January 2015, about 50% of expert works will be given to the competitive environment. These are projects that do not belong to the state monopoly, but rather projects technically and technologically simple construction projects.

From January 2016 the state monopoly will include comprehensive departmental expert examination of projects (feasibility studies, design and estimate documentation) for:

  • construction of new industrial buildings and structures related to the potentially dangerous construction projects, as well as new technical and (or) the technologically complex facilities, complexes, engineering and transport communications, regardless of funding source;
  • reconstruction, expansion, modernization, technical re-equipment and overhaul of existing potentially dangerous, as well as technical and (or) the technologically complex facilities financed from the budget and other forms of public investments.

By 2020 it is planned to transfer 90% of the expert works to market entities. This will be achieved by changing the criteria of inclusion of facilities to the technically and technologically simple.

From January 2020 the state monopoly will include only projects:

  • regardless of the source of funding facilities of national and interstate (international) values, as well as unique facilities, which, because of the lack of regulatory and technical requirements necessary to develop special technical conditions - specific standards of design and construction;
  • technically and technologically complex buildings financed from the budget or other public investments.

3.4. Approval of the project documentation

Approval of the project documentation shall be made through the decision of the customer with the indication of the main technical and economic performance indicators under approval.

The law provides for the procedure for approval of project documentation on projects whose construction is invested by the state. In this case, the project documentation/design estimates for the facilities shall be submitted for approval not later than three months after receiving the approval from the commission on state the expert examination.

The approval is made by the relevant public authority or other authorized legal entity by issuing a relevant order, with the indication of the main technical and economic performance indicators in accordance with the legislation of the Republic of Kazakhstan and the budget/estimated cost of construction on the base price level of 2001 and the price level as of the time of approval in the national and/or foreign currency.

4. Property construction

Basic requirements and standards on construction are contained in the Law On Architectural, Urban Planning and Construction Activities and the Construction Rules and Regulations (SNiP) of the Republic of Kazakhstan 1.03-00-2011 Construction Process, Organization of Construction of Plants, Buildings and Structures.

The construction process can be divided into several stages:

1) Notice on the beginning of construction;

2) Preparation for construction operations;

3) Construction: construction of the building/structure;

4) Completion of construction: acceptance of the facility and its commissioning.

 

4.1. Notice of the beginning of construction

The customer (or project owner) shall make a notice to the State Architectural and Construction Supervision Body, not less than 10 (ten) business days prior to the beginning of construction, of the beginning of construction and assembling operations. PSC at the location of the construction site, receive the notice, which can be submitted in both electronic and paper form.

The notice is submitted to the Chief State Inspector on Construction, the inspector of the region or city of national status. The notice shall contain the name of the customer or project owner, the name and location of the proposed facility for construction, the construction start date, the date of commissioning, and the source of financing. The notice shall also include data, such as right to land, the approval of design estimates, the expert examination (if required), the data about the contractor’s company, the persons in charge of the customer and the contractor, data on designer’s and technical supervision.

The notice of the beginning of construction and assembling operations shall contain the attached copies of the endorsement on the expert examination (if it was carried out), as well as the statement of the selected land.

In the filing of the application, the applicant gets a ticket that the application is accepted for consideration, or a copy of the notice with a note on the reception, or a ticket in the electronic form. Upon receipt of such document, the applicant is entitled to start the work. In this case, the State Architectural and Construction Inspectorate (inspector) is entitled not later than five business days since the date of receipt of the notice to attend the construction site.

4.2. Requirements to the construction

During the whole period of construction (mothballing) and lifetime of the facility, the owner of the facility (customer, project owner, leasee, leasor) shall ensure the following:

  • Quality of construction (compliance with the requirements established in the construction projects);
  • Quality of construction materials (compliance with the technical standards of the Republic of Kazakhstan);
  • Safety during the construction and operation of the facility, including carrying out of works and maintenance;
  • Compliance with occupational safety and health (compliance with the fire safety requirements, prevention of exposure of workers to occupational hazards);
  • Stability and reliability of operation;
  • Compliance with environmental requirements (land reclamation, preventing loss of natural resources, prevention or cleanup of harmful emissions into the soil, water and atmosphere).

4.3. Architectural and construction control and supervision

The construction process is accompanied by architectural and construction control and supervision as per the list of activities of private businesses that are subject to state control and supervision.

Architectural control and supervision over the quality of construction of facilities is performed by the State Architectural and Construction Inspectorate, which is a structural subdivision of the Committee for Construction of the Ministry of Economy and Trade of the Republic of Kazakhstan; it involves the national level body and its territorial structural subdivisions in the regions and cities of national status.

The State Architectural and Construction Inspectorate checks the customer (the project owner) for the availability of documentation required for the carrying out of construction. The inspectorate also monitors the quality of building materials, compliance of construction and assembling operations with the project and state regulations, as well as it monitors the implementation by the contractor of its own control of the construction quality, and the designer’s and technical supervision.

Whilst carrying out its activities the State Architectural and Construction Inspectorate has the right to request information about the facilities proposed for construction and those under construction, as well as request project documentation and visit and inspect the construction sites.

Based on the results of the inspection, a relevant statement and record sheet of the facilities is made. If any deviations from the government regulations or project documentation have been revealed, ythe State Architectural and Construction Inspectorate issues an instruction to remedy violations with indication of the deadlines.

4.4. Designer’s supervision

Author of architectural work (authors of the project and/or the developers of project documentation) are vested with an exclusive property right to use the design and implement it, the right to perform or authorize to perform the reproduction, distribution and treatment of the project, as well as the right to delegate these rights to others.

Powers to exercise designer’s supervision may be delegated to an expert who has a certificate to deliver engineering services in the field of architecture, urban planning and construction, or to the customer for its selection on its own of a supplier of engineering services for conducting designer’s supervision that has the appropriate certificate.

In addition to these exclusive rights, the author of the architectural work has the right to exercise control both over the development of construction documents, as well as their implementation, including designer’s supervision over the progress of construction and the photography (film or video). These powers are not absolute and may be limited by the design assignment or by the contractual provisions on the development of the design estimate documentation.

Designer’s supervision is carried out under  the contract on the development of the design estimate documentation. In the construction of facilities that are subject to the commissioning by the state acceptance commissions and acceptance commissions, it is necessary to make a contract for designer’s supervision. Designer’s supervision shall be implemented throughout the entire period of construction (renovation, restoration, expansion, technical re-equipping, modernization, capital repairs) of the facility or preservation of unfinished projects.

The contract for the designer’s supervision may include the following works, but not limited to:

  • Compliance management over actual performance of construction and assembling operations for their conformity to the working documents, as well as the designer’s supervision of the progress of construction;
  • Compliance management over executed documentation for its conformity due to the adopted standards of the Republic of Kazakhstan;
  • Keepingduring the construction and assembling operations of a designer’s supervision logand its submission to the customer upon completion of workunder the designer’s supervision.
  • Overseeing the development ofthe construction project,implemented bythe author(s) of the architecturaland urbanwork; implementation of the construction project, carried out by its developers, including the author(s)orurbanarchitecturalworks.

A designer’s supervision log is keep separately. It contains the instructions, identified deviations from the design estimates, violation of construction rules, regulations and specifications for the carrying out of construction and assembling operations, as well as instructions on elimination of revealed deviations and relevant time limits.

According to the valid amendments, the rights and obligations of designer's service directly set in the Law On architectural, urban planning and construction activities. These points were spelled out in contract for the designer’s supervision.

4.5. Technical supervision

Technical supervision is one of the forms of supervision over the construction. It is implemented either by the customer, or by an expert who has a relevant certificate to provide engineering services. The mark on the technical supervision, as well as data on the persons performing technical supervision, are entered in the log of the works.

Heretofore, technical supervision was compulsory only in the construction of facilities subject to acceptance in the operation of public acceptance and acceptance committee and the repair of roads. Now, due to the changes, which came into force on April 1, 2015, the technical supervision necessarily carried out at all construction sites with the exception of low-tech buildings. Technical supervision is carried out at all stages of the project, from the start of the construction and assembling operations to the acceptance and putting of the facility into operation. Technical supervision perform the quality of work, terms of their performance, and the value of work.

That said technical supervision of the requirement to inform the State Architectural and Construction Supervision Authority in the case of violations of the norms and requirements established by the legislation of the Republic of Kazakhstan.

Terms of conducting technical supervision are not specifically regulated by the law. The state regulations provide for particular cases where technical supervision is mandatory, and the procedure for its conduct. For example, to conduct checkup tests for the reliability of a brickwork or masonry on the construction site, a representative of the technical supervision is selected by relevant instruction. Carrying out of works to embed floor slabs shall also be carried out under strict technical control with the mandatory execution of a statement of acceptance of the quality of work performed.

Technical supervision is important in the identification and the examination of the hidden works, the result of which will not be visible at the end of construction. Acceptance of such work is carried out by a representative of technical supervision with the preparation of the relevant statement of the examination of the hidden works.

If technical supervision is carried out by an expert, the terms of its conducting may be specified in the contract for engineering services. After signing the contract, the contracted company shall provide to the customer for approval an organizational structure, created by it for the technical and designer’s supervision and project management, as well as the candidacy of a project manager from the company.

5. Completion of construction

5.1. Acceptance of the facility in operation (changed as from January 1, 2016)

Almost any built (renovated) facility in Kazakhstan is subject to acceptance into operation. Without this procedure, the facility cannot be registered as completed, and cannot be included in the relevant databases as a real estate. Prior to that, the facility is considered as a set of building materials.

Acceptance of a facility involves its the expert examination, which is carried out in order to determine the suitability of the facility for operation, to reveal and record any faults. Acceptance of the facility is ended by signing a statement of acceptance.

Acceptance of a facility gives rise to certain rights and obligations of the customer, thus, in the acceptance of the facility, it is important to notify the contractor of any shortcomings the facility has. Shortcomings are subsequently specified in the statement of acceptance of the facility. If the shortcomings are irremediable and prevent the use of the constructed facility for the designated purpose, the customer is entitled to refuse to accept the result of the work.

Construction contracts usually provide guarantee periods, during which the customer can make a claim to the contractor with respect to the shortcomings, including hidden ones. The law provides a guaranty period of 10 years, however, the contract can provide for a different term.

Acceptance of the facility is carried out by the acceptance commission, the state acceptance commission, or on its own by the customer. Appointment of the working commission is only necessary, if the acceptance of the facility is made by the state acceptance commission.

The statement of acceptance of the constructed facility in operation is signed by all members of the appointed commission, and is issued by the Administration for Architecture and Urban Planning at the location of the constructed facility.

The parties to delivery and acceptance of the constructed facilities, including the customers (investors, project owners), contracted companies responsible for the implementation of the contract development, design, construction and assembling operations, the manufacturers and suppliers of building materials, products, structures and equipment, as well as the services performing operational overseeing of the progress of construction and installation of equipment, members of the state acceptance commissions or acceptance and working commissions, other participants of the process bear liability, established by the laws of the Republic of Kazakhstan, for any threat to life or health, as well as damage (loss) to the state, public or private interests, caused as a result of violation of, or deviations from, the mandatory regulatory requirements (terms, restrictions).

5.1.1. Acceptance of a facility by a state acceptance commission (cease to have effect on January 1, 2016)

Any facilities that are constructed with the participation of state investment, as well as facilities affecting the state or public interests (the given condition is specified in the architectural and planning assignment) shall be accepted by the state acceptance commission.

In addition to the above conditions, the following facilities are subject to acceptance by the state acceptance commission:

  • Freestanding facilities for civil or communal purpose, related to technically complex facilities. Freestanding technically simple facilities, financed without the participation of state investment, are accepted in operation in accordance with the procedure established by Article 76 of the Law;
  • Industrial facilities, except for the facilities belonging to small businesses (sole entrepreneurs);
  • Residential buildings;
  • Roads and railways;
  • Bridges, overpasses, tunnels, product lines and power lines with engineering structures;
  • Space communications facilities;
  • Power generation facilities, including nuclear plants;
  • Water infrastructure, irrigation and/or hydraulic facilities;
  • Housing (living area and utility rooms) on railway and road junctions, in conservation areas, wildlife refuges, hatcheries, forestry, huntingand other

Procedure for acceptance of a facility by the state acceptance commission.

In order for the facility to be accepted by the state acceptance commission it is necessary to achieve two factors: the full readiness of the facility for operation and a positive opinion of the working commission.

The working commission makes a comprehensive assessment of complete readiness of the facility introduced into operation, conducts a checkup test of the process equipment, provides remarks to the customer on incomplete readiness of the facility, and makes proposals as to the bringing of persons who have committed the violations to liability.

The result of the activity of the working commission is its written statement about the readiness or unavailability of the facility for operation.

The State Acceptance Commission is a temporary or permanent collegial body, whose members are appointed by the appointing authority.

Depending on the importance or value of construction of the facility, the state acceptance commission may be appointed by the Government of the Republic of Kazakhstan, or central executive bodies, or local executive bodies (or by Akimats, or Akims).

The state acceptance commission is appointed not later than three months before the scheduled start date for the work of the acceptance commission on accepting production facilities in operation, and no later than thirty days before the scheduled start date for the work of the acceptance commission on accepting facilities (housing) for civil purpose and communal facilities into operation.

The State Acceptance Commission:

  • Determines the progress of elimination of defects, shortcomings and deviations from the project, construction rules and regulations, revealed by the working commission;
  • Determines the progress of architectural/construction and engineering and technological solutions, as well as the facility in general;
  • Determines whether the project capacity of the facility introduced into operation meets that set in the project;
  • Carries out, where appropriate, the test launch and testing of the process equipment and engineering systems.

According to the results, the State Acceptance Commission signs a statement of acceptance of the facility in operation, or produces to the body, which appointed by the Commission, reasonable opinion about the unsuitability of the facility for operation.

The statement of acceptance, signed by the state acceptance commission, is not subject to approval.

Composition of the state acceptance commission.

The composition of the state acceptance commission differs, depending on the type of the facility introduced into operation.

In the acceptance of an industrial facility in operation, the commission shall be composed of representatives of:

  • The body that appointed the Commission;
  • The general design company, the representatives of operators of the customer (enterprises, institutions), the general contractor;
  • Local executive bodies;
  • State Architecture and BuildingInspection;
  • State Sanitaryand Epidemiological Surveillance;
  • State Fire Service;
  • Authorized state body in the field of environmental protection.

In the acceptance of a facility for civil purpose or communal facility into operation, the state acceptance commission shall include representatives of:

  • Local executive bodies;
  • State BuildingInspector;
  • Customer (investor, project owner);
  • Operators (enterprises, institutions);
  • General contractor;
  • Generaldesign organization(including the authors of the project).

5.1.2. Acceptance of a facility by the customer

The legislation provides certain cases where a facility is accepted by the customer. It is possible, provided that the customer has on hand the decision of structural subdivisions of the relevant local executive bodies in the field of architecture and urban planning.

Such acceptance is related to the technically simple construction and installation works, such as the renovation of premises or temporary structures, household structures, parking lots or houses.

However, even such facilities cannot be accepted by the customer, if in the construction and operation of these facilities the rights of other citizens are violated, and there is a collision of state and public interests. Such facilities are also not subject to the acceptance by the customer, if their construction is funded by the state, or if they are located in earthquake-prone areas.

5.1.3. Acceptance of a facility by an acceptance commission (cease to have effect on January 1, 2015)

Facilities that are not subject to acceptance by the state commission, as well as the facilities that are not accepted by the customer, shall be accepted by the acceptance commission.

The facilities that are accepted by the acceptance commission are as follows:

  • Facilities in connection with residential and non-residential premises in the residential building have got their function changed (change in the function);
  • Facilities in connection with premises (parts of the building) undergo renovation (alterations, re-equipping), requiring a changeof supporting structures and/orbuilding envelopes,and engineering systems,and equipment;
  • If duringthe construction and/or operation of the building, the interestsof other owners are affected;
  • If facilities are constructed(built) in an earthquake-prone area or in an area having specific geological(hydrogeological) orgeotechnical conditions, as well as in otherareas that are subject to specific regulation;
  • If the constructionis associated with the productionprocesses that have a potential hazard on the people and the environment.

Procedure for acceptance of the facility by the acceptance commission:

The Acceptance Commission is established not later than five days after receipt of a written notice from the general contractor as to the readiness of the facility for the procedure of acceptance into operation.

The Acceptance Commission determines and confirms in a documentary form the readiness of the accomplished facility, determines whether the actions of the project owner meet the requirements set in the approved project, or there are any deviations from them, and further actions how to eliminate them, determines whether the project capacity of the facility introduced into operation meets the parameters set in the project, and returns the documents received from the customer.

Following the results of the acceptance commission, a statement of acceptance is signed, or a statement of unsuitability of the facility for operation is produced for the correction of inconsistencies.

Composition of the acceptance commission

The acceptance commission shall be mandatorily composed of:

  • The customer (investor, project owner), or a responsible representative of the customer (investor, project owner);
  • A representative of the body of state architectural and construction control and supervision;
  • Representatives of the general contractor, subcontractors, general designer or developer of the project documentation (design estimates), sub-designers (developers of sections of the project);
  • Representatives of thelocal executive bodiesof architectureand urban planning;
  • Representatives of the State Fire Service;
  • Representatives of the State Sanitary and Epidemiological Surveillance;
  • Representatives of operators (enterprises, institutions);
  • Representatives of other involved government agencies depending on the profile (designated purpose) of the facility introduced into operation.

5.2. Changing the order of facility acceptance from January 1, 2016

On January 1st, 2016 the order of facility acceptance is changed, legislator has abrogated state acceptance commission, acceptance and working commissions. Acceptance of the facility will be made only by the customer, contractor (general contractor), the technical supervision and supervision.

Under the changes, new documents introduced, which are required for the facility acceptance:

  • Declaration of compliance, which is issued to the customer upon completion of the construction by contractor;
  • Conclusion about the quality of construction and installation works, which should be issued to the customer by technical supervision;
  • Conclusion of the work performed under the project, which should be issued to the customer the supervision.

The procedure of the acceptance facilities into operation.

Acceptance of the contractor by the customer with the technical and architectural supervision.

The Contractor shall notify the customer of readiness facility to the operation, and after receiving notification from the contractor the customer requests a declaration of compliance, the conclusion the quality of construction and installation work from technical supervision, the conclusion of the work performed under the project at supervision.

Within three business days the contractor and the persons carrying out the technical and construction design supervision provided the abovementioned documents, based on which the customer is obliged to check the executive technical documentation for presence and completeness, to examine and take facility into operation under the relevant act.

5.3. Registering a constructed facility

The basis for the registration of the property in a state body is approved by an acceptance into operation act (commissioning act), registered in the departments of the appropriate local executive bodies.

After signing a statement of acceptance of the facility into operation, it is necessary within 6 months to apply for property right registration of rights to the facility. In case of violation of term, a fine will be charged in the amount of 20 MCI that is equal to about US$ 129 at the current exchange rate.

The property right registration of a construction facility is made within 15 business days since the receipt of the application. The fee for state registration of rights to the constructed facility for legal entities is from 0.5 MCI to 20 MCI, depending on the type of the constructed facility as per the rates established by Article 456 of the Tax Code of the Republic of Kazakhstan that at the current exchange rate is about US$ 3 to US$ 130.

With this, an expedited procedure for registration of real estate transactions is provided in Kazakhstan. In this case, the registration is made on the next day following the date of submission of the application. The registration fee for expedited state registration is 15 MCI to 45 MCI, depending on the type of the property, which at the current exchange rate is approximately US$ 97 to US$ 290.

5.3.1. Documents required for registration of the building (property)

Documents are filed to the PSC at the location of the constructed facility. The registering body is territorial bodies of Justice.

Documents required for registration of rights to constructed facility:

  • An identity documentof an individual(the applicant) or the constituent documents ofthe company (authorizedrepresentative of the applicant);
  • Application for state registrationof a standard form;
  • Documents confirming the rights, and other documents confirming, the registered facility with the attachment of a technical data sheet of the real estate and/or the document identifying the land;
  • A documentconfirming payment of a fee for thestate registration ofrights to immovable property;
  • Constituent documents,minutes of meetings(extracts from them) of the founders (participants, board of directors,board ofshareholders) as to theacquisition or alienation of real estate,incases provided for by the laws of the Republicof Kazakhstan orthe constituent documents;
  • Foreign companies produce legalized extractfrom the trade registeror otherlegalized document, certifyingthat theforeign companyis a legalentity registered under the lawsof the foreign country, with a notarizedtranslation into the state(Kazakh) andRussianlanguages;
  • Prior written consentof the antimonopoly body, if the application forregistrationcontains data thatthe aggregatebook value ofassetsacquiredorsoldexceeds the amountset bythe antimonopoly laws.

A record of the state registration of rights (title encumbrance) to the real estate is entered by the registering authority in the information system of the legal cadastre.

5.3.2. Technical inspection of a constructed facility

A mandatory provision for the state registration of a commissioned constructed facility is undergoing state technical inspection. The bodies that implement technical inspection of buildings and structures are the subdivisions of the National State-Run Budgetary Company Center for Real Estate of the regions and the cities of Almaty and Astana. Subsequent inspections are carried out in cases of changes in the of identity characteristics of the facility due to works on its renovation, alterations or re-equipping.

Based on the results of the inspection, the constructed facility is assigned a cadastral number, and is issued a technical passport. To be issued the technical passport, the following documents shall be provided:

  • A written application;
  • Document confirming the right to the real property;
  • Technical passport (if any);
  • Certificate for theland;
  • Document proving the payment of a fee for the issuance of technical passport.

To get a technical passport, the applicant should apply to a relevant subdivision of the National State-Run Budgetary Company Center for Real Estate or to the local PSC. We should note that in Almaty, starting from April 5, 2014, a person should apply for a technical passport only to the relevant PSC. The term of issue of technical passport is up to 20 business days, depending on the complexity of the facility. The procedure for expedited issue of technical passport takes up to 10 business days. The cost of this service is specified in the price list of state technical inspection services for immovable property and varies from about 5,000 tenge and over that amount, in the dollar equivalent the costs vary from about $ 16 and over. Payment for the manufacture of technical passport shall be made in two parts.

Whilst submitting the documents, the applicant first pays the basic cost of the service, and later pays the rest of the sum, depending on the type and the actual area of the facility, following the results of the technical inspection.

In the carrying out of technical inspection, the facility is assigned a cadastre number. If this building is in an inhabited locality, its cadastral number will be the cadastral number of the land and the address number of the building.

When submitting documents for the manufacture of technical passport, the applicant shall make sure that the data on the facility is contained in the Address Registry, otherwise the assigning of the number is required. This procedure is free of charge and takes 7 business days.

6. Applied law

  1. The Land Code ofthe Republic of Kazakhstan №442-II of June 20,2003 (as amended on 02.11.2015);
  2. The Code of the Republic of Kazakhstan On Taxes and Other Mandatory Payments to the Budget №99-IV of December 10, 2008 (as amended on 18.11.2015);
  3. The Law of the Republic of Kazakhstan №310-III On State Registration of Rights to Immovable Property of July 26, 2007 (as amended on 27.04.2015);
  4. The Law of the Republic of Kazakhstan №242 On Architectural, Urban Planning and Construction Activities in the Republic of Kazakhstan of July 16, 2001 (as amended on 28.10.2015);
  5. The Law of the Republic of Kazakhstan №202-V ZRK On Permits and Notices of May 16, 2014 (as amended on November 17, 2015);
  6. The Law ofthe Republic of Kazakhstan№149-II On Employment dated January 23,2001 (as amended on24.11.2015);
  7. The Law of the Republic of Kazakhstan №107-II On Administrative Procedures of November 27, 2000 (as amended on 26.11.2015);
  8. The Law of the Republic of Kazakhstan On State Control and Supervision in the Republic of Kazakhstan (as amended on 29.10.2015);
  9. The Law of the Republic of Kazakhstan №370-II On Electronic Document and Digital Signature of January 7, 2003 (as amended on 09.12.2014);
  10. The Law ofthe Republic of Kazakhstan № 269-V of December 29, 2014 On amendments and additions to some legislative acts of Kazakhstan on the radical improvement of the business environment in the Republic of Kazakhstan (as amended on12.11.2015);
  11. Resolution of the Government of the Republic of Kazakhstan №428 On Approval of the Fee for State Registration of Rights to Immovable Property in an Expedited Manner of March 30, 2009 (as amended on 18.07.2011);
  12. Resolution of the Governmentof the Republic ofKazakhstandated №836On Measures to Implement the Law ofthe Republic of Kazakhstan On Employment of January 23, 2001, dated June 19, 2001 (as amended on08.11.2013);
  13. Resolution of the Governmentof the Republic ofKazakhstanof January 13,2001, №45On Approval of Rules Establishing Quotasfor the Attraction of Foreign Labor Force inthe Republic of Kazakhstan, Rules and Conditions for Issuing Permitsto a Foreign Employer for Employmentand to Employersto Hire Foreign Labor datedJune 19,2001 andAmend the Resolution of the Governmentof the Republic ofKazakhstan №836On Measures to Implement the Law ofthe Republic of KazakhstanJanuary 23,2001 OnemploymentdatedJanuary 13, 2012 (as amended on 08.10.14);
  14. Resolution of the Governmentof the Republic ofKazakhstan №1328 On Certain Issues of Implementationof the Law ofthe Republic of KazakhstanOnArchitectural, Urban Planningand Construction Activitiesin the Republic ofKazakhstan, datedOctober 15,2001 (as amended on29.06.2012);
  15. Order of the Minister of National Economy of the Republic of Kazakhstan dated March 20, 2015 №238 On approval of the standard construction rules;
  16. Order ofthe Chairman of theRepublic of Kazakhstan Agencyfor Construction,Housing and Communal Services №356On Approval ofthe Rules of Carrying out State The expert examinationof Construction Projectsin the Manner of Expert Supportof July 23, 2012 (as amended on04.14.2014);
  17. Order of the Minister of Energy of the Republic of Kazakhstan dated February 16, 2015 №100 On approval of Rules of the state environmental review;
  18. Order of the Ministerof Justiceof the Republic ofKazakhstan №156On approval ofthe Rules of Carrying out State Technical Inspection of Immovable Property and the Rules of Assigning Cadastral Number to Primary and Secondary Real Estate FacilitiesofMay 6, 2013;
  19. Order of the Ministerof Justiceof the Republic ofKazakhstan №57On Approval of the Instructionon the Primaryand Subsequent State Technical Inspectionof Real Estate ofFebruary 13, 2014;
  20. Order of the Minister of National Economy of the Republic of Kazakhstan dated April 1, 2015 №299 On approval of Rules of the complex departmental the expert examination of feasibility and design estimates for construction of the new, as well as changes (reconstruction, expansion, technical re-equipment, modernization and overhaul repair) of existing buildings and structures and their complexes, engineering and transport communications, regardless of funding sources (as amended on 04.30.2015, the);
  21. Construction Rules and Regulations 1.02-03-2011 The order of development, coordination, approval and composition of the project documentation for construction (as amended on 12.05.2014);
  22. Construction Rules and Regulations 1.03-00-2011 The order of development, coordination, approval and composition of the project documentation for construction (as amended on 01.07.2013).

Prepared by Artyushenko & Partners lawyers,
December 2015


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