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Employer of Record (EOR) in Kazakhstan

Employer of Record in Kazakhstan

Skuad’s Kazakhstan Employer of Record (EOR) solution provides an integrated, tech-enriched HR platform to help companies expand their business operations in Kazakhstan. The platform is a unified interface for the onboarding and management of remote teams in over 150 countries globally.

Whether it is recruitment and hiring or setting up payroll to manage employee compensations and benefits, Skuad’s Kazakhstan EOR solution will ensure 100% compliance with the local labor and employment laws. Contact us to know more about our customized EOR solutions.

Kazakhstan at a Glance

Population: 18.7 million people (2020)

Currency: Kazakhstani tenge (KZT)

Capital city: Nur-Sultan

Languages spoken: Kazakh and Russian

Gross Domestic Product (GDP): 4.5% growth; USD 159.8 billion (2020)

Employment in Kazakhstan

What Should You Know Before Employing in Kazakhstan?

To commence business operations in Kazakhstan, you should be aware of the several facets of the local labor laws and regulations. Understanding and penetrating the Kazakhstani culture will also increase your reach in getting potential candidates for employment. This process of researching can be excruciating, as it is an intensive task.

You might even struggle to get the right employees for your preferred venture. Skuad’s EOR solutions in Kazakhstan can come to your aid by providing the best recruitment services while putting you at ease. The table below lists some of the mandatory labor entitlements that you must keep in mind while employing in Kazakhstan.

Entitlements Explanation
Working Hours Adult workers can work up to 40 hours per week. Workers between the age of 16 and18 are restricted from working more than 36 hours a week.
Overtime eligibility Article 41 of Kazakhstan states that overtime is only applicable to the employees who give their consent. A maximum of two hours of overtime work is legal on a single calendar day in Kazakhstan. It is remunerated at 150% of the original payment.
Paid Public Holidays The public holidays in Kazakhstan are as follows.
  • New Year’s Day (January 1 and 2)
  • Orthodox Christmas Day (January 7)
  • International Women’s Day (March 8)
  • Nauryz Celebration (March 21 to 24)
  • Unity Day (May 3)
  • Defender’s Day (May 7)
  • Victory Day (May 10)
  • Capital City Day (July 5 and 6)
  • Kurban Ait (July 20)
  • Constitution Day (August 30)
  • First President’s Day (December 1)
  • Independence Day (December 16 and 17)
Holiday pay Generally, all the employees working in Kazakhstan have the right to claim 24 days of annual leave. Employees can also get additional holidays if there’s an emergency but have to contact the employer first.
Medical leave Three days of sick leave are allocated to every employee (six days for chronic illness). The sickness allowance rate is based on the monthly reimbursement rate.
Maternity Leave Article 99 of the labor laws in Kazakhstan has allotted a total of 126 days of maternity leave (70 days before and 56 days after the delivery of the baby). Additional leave without pay can also be granted.
Annual leave accrual entitlement Normally, all the employees tend to use all of their leave. They’re entitled to full payment or another holiday, depending on the occasion.
Leave Cash Out Compensation is given if any employee has to work on a holiday. Unused holidays can be cashed out.
Employee Protection and Anti-discrimination Rights According to the labor rules of Kazakhstan, no employee can be discriminated against based on race, job, status, sex, origin, religion, nationality, age, and beliefs.
Confidentiality of Personal Information The 2020 personal protection law in Kazakhstan guarantees protection of the information held by companies. All the citizens are entitled to privacy in their communication as well.

Learn more about local employment laws and how you can outsource a payroll provider to manage your HR responsibilities.

Contractors vs. Full-time Employees

In Kazakhstan, employment contracts can be,

  • Indefinite 
  • For a definite period 
  • To fill in for temporarily absent employees

Workers who work on different contracts independently are known as contractors. Contractual workers pay their taxes and manage their work independently. Full-time employees receive orders and instructions from the employer and are entitled to different perks for working full time.

Accounting and promoting departments are important functions that require regular supervision. So, it is better to employ full-time employees in these departments. On the other hand, it’s cheaper to employ contractors as they are more spontaneous, and the work is defined in the contract.

Advantages of Hiring Contractors

  • Flexibility: Since contractors are hired on a short-term basis, you are free to determine the scope of their work temporarily. If new needs arise, new contracts can be drafted in the short term.
  • Independence: Short-term contractors usually work independently and on their own timeline. They do not require close supervision, and your resources can be transferred elsewhere, as needed.
  • Cost: Hiring contractors may be cheaper in the long run, although their individual rates are higher than those of full-time employees. This is because such employees are not entitled to employment benefits such as bonuses and tax compensations.

Advantages of Hiring Full-time Employees

  • Loyalty and organizational commitment: Full-time employees are likely to be more loyal as they exclusively work for your company. As their individual success depends on the performance of your firm, they are likely to invest more effort into their work.
  • Knowledge: All employees undergo training when they join a firm. The skills and knowledge gained by a full-time employee, however, stay within the organization.
  • Legal freedom: Since full-time employees are defined as such in their contracts from the outset, misclassifications, and the repercussions thereof, can be avoided completely. When hiring full-time employees, you determine the terms of the contract and entitlements, and these are not liable to change unless mutually decided by both parties.

Book a demo with us to make the best decisions on whether to hire contractors or full-time employees in Kazakhstan.

Hiring in Kazakhstan

An employer must enter into an employment contract, which can either be for an indefinite period or temporary. Contracts must be written in the Kazakh language and state the responsibilities, benefits, salary, working time, and immunities. All money-related details must be listed in Tenga Currency. Skuad’s team of experts can aid you in hiring the perfect employees for your company with the help of local contacts. All the labor laws are based on the constitution of Kazakhstan. Important hiring laws are as follows.

  • The Law on the Occupation of the Population (1998)
  • The Law on the State Service (1999) 
  • The Law on Collective Labor Disputes and Strikes (1996)
  • The Law on Employment of Population (2001)

The portals through which you can search for employees in Kazakhstan are,

  1. Jobboardfinder.com
  2. Hirebee.kz
  3. Jobisisland.com

For ensuring that your hiring process is compliant with the local laws, speak to Skuad experts today.

Probation & Termination

Probation in Kazakhstan

Article 15 of the labor laws in Kazakhstan mentions the probation period to test employee’s dedication and conformance to the organization. This period, however, cannot exceed three months and must be stated in the employment contract. The employer can terminate the employee with a written application stating a proper reason during the probation period. Connect with us to know more about the probation laws in Kazakhstan.

Termination in Kazakhstan

Topic Explanation
Notice for termination of employment Article 54 of the Labor Laws states that employers must provide at least one month’s notice before termination of the employment contract. An employee can also choose to cancel the employment contract with a written notice. An employee is also entitled to all the allowance under articles 73 and 74 of the labor laws.

Know more about the termination laws in Kazakhstan from Skuad experts.

EOR Solutions in Kazakhstan

Skuad’s EOR solution for Kazakhstan will assist your business in expanding and getting traction quickly. We will ensure the smooth processing of salaries and benefits of your remote team without requiring an entity setup. Skuad’s unified employment platform enables seamless management of payrolls, work permits, taxes, employment contracts for your employees, and also ensures maximum compliance with the Kazakhstani taxes and employment laws in Kazakhstan. To learn more, Book a demo today.

General Employer of Record Service Terms

Taxes that apply to invoices All the values of work, services, and goods are taxed at a rate of 12% VAT.
Minimum duration of service It depends on the nature of the work. There is no minimum duration of service in Kazakhstan.
Currency accepted Tenga (KZT)
Required details and documents Important personal information, passport copy, bank-related details, and a passport size photo are required for residents. For outsiders, personal details, a letter of employment from the employer, payment proof, duty and responsibilities within the organization, educational and technical qualifications, curriculum vitae, passport copy, bank details, passport-size photos, medical report, and police verification are needed.

Outsourcing employment through an Employer of Record

It is vital to understand the path you’re choosing to grow your business in Kazakhstan. You may opt to find and train your local team and work with them to manage your day-to-day operations or decide to collaborate with an EOR partner that will manage end-to-end HR operations for you. Book a demo today to understand how Skuad’s bespoke EOR solution for Kazakhstan can scale up your business.

Types of Visas in Kazakhstan

The main types of visas in Kazakhstan are tabulated below.

Category Explanation
Work visa An M1 visa is mandatory for any foreign individual to work in Kazakhstan. A certified letter of employment from the employer is also required. The M1 visa is generally issued within four to six months of application. Other work visas are,
  • M1, for foreign workers who have been granted a work permit from a Kazakhstani employer;
  • M3, for foreign workers who need to go to Kazakhstan to get a work permit;
  • M4, for foreign workers classified as business immigrants;
  • M5, for seasonal employees.
Criteria to get a work visa Any international employee who wants to work in Kazakhstan needs the following things.
  1. Invitation from the employer in Kazakhstan
  2. Notarized copy of the employer’s charter
  3. Employer’s power of attorney
  4. Notarized copy of employee’s work permit
  5. Proof that the employer does not have outstanding taxes
  6. Proof of payment of the consular fees
  7. Specific documents for an M1 visa are,
    • Filled and signed visa application
    • Copy of the employee’s passport
    • Passport-size photo
    • Certificate of receipt of the consular fees
Tourist visa Documents required for a tourist visa in Kazakhstan are:
  1. A finished visa form
  2. A request of visa issue to the consular services department
  3. A legitimate passport with a validity of more than six months
  4. A receipt of the hotel booking
  5. A passport-size picture of the employee

Skuad can help you with visa processing and related formalities. Contact us now to know more.

Work Permits

Work Permit Explanation
Can Skuad sponsor work permits in Kazakhstan? Yes, Skuad can do that for you.
Processing time Two to three months
Work permit process

Step 1: Skuad will find the best-suited candidates for your business and have them apply for work permits.

Step 2: Skuad’s contacts in Kazakhstan will apply for a health checkup and a verified health certificate will be produced.

Step 3: An application will have to be sent to the Ministry of Foreign Affairs for a working permit. All the required documents must also be sent.

Step 4: An employment contract must be established between the employer and the employee, which will be required for the visa procedure for traveling to Kazakhstan.

Step 5: The work permit will have to be supplied to the employee once all the necessary documents are submitted.

Passport submission The employee will have to submit their passport to the ministry of Foreign affairs before entering Kazakhstan.
Work permit validity Work Permit Restrictions Depending on the type of work, there are three classes of work permits. The maximum validity is three years, renewable up to three years.
The work permit process for different nationalities Most of the countries’ citizens need a work permit to work in Kazakhstan.
Change of sponsor Within Kazakhstan The candidate will need to apply to the ministry of foreign affairs to change the sponsor.
Where is the application processed? Applications are now being processed at different official websites of Kazakhstan.
Work permit criteria
  1. The employee cannot have a criminal history record.
  2. The employee must have good intentions to bring forth.
When can the employee travel to Kazakhstan? The employee will be able to visit Kazakhstan once a work visa has been issued.
What’s the cost of a business visa? The cost of a business visa in Kazakhstan is KZT 30,636, which is equivalent to USD 80.
Duration of business visa processing It generally takes five to 10 days for a business visa to be issued in Kazakhstan. It can get extended to 15 days.
Can you switch from a business visa to a work permit? No, visas cannot be converted; however, a new visa can be made or extended.
Termination of work permit The work permit is nullified as soon as the accepted terms are fulfilled; however, the permit can be extended within 30 days of issuance.
Special requirements for work permit cancellation Work permits can be canceled by either party if there’s a mutual understanding

Find out more about obtaining work permits in Kazakhstan through Skuad’s EOR services. Book a demo with us today!

Payroll & Taxes in Kazakhstan

How to Set Up Payroll in Kazakhstan

You will need to acquire a basic understanding of the Kazakhstani rules and regulations to set up and keep the flow of payroll and taxes going. Even though Kazakhstan is a great place for a new business venture, you might get confused. There are two ways you can tackle this.

  1. You can find and train your team to administer taxes and payroll.
  2.  You can partner with Skuad’s EOR services for administering payroll and taxation.

Taxes in Kazakhstan

Tax Explanation
Income Tax All the citizens of the country need to pay a minimum income tax percentage of 10%, and foreigners pay a sum ranging from 10 to 20%.
Income tax returns Yes, it must be filed.
Financial year-end date March 31 every year
Corporate tax The tax levied to the companies working in Kazakhstan is 20%. All forms of companies and industries are obliged to pay the administration.
Withholding tax (for non-residents)

Interest income: 15%

Dividends percentage: 15%

Payroll tax Kazakhstan levies a social tax of 11% and property tax of 1.5% which is calculated and paid yearly
Sales tax All the consumers living in the country of Kazakhstan have to pay a minimum sales tax of 12% for most of the products and services available.
Employers’ Social Security and statutory contributions All the employers working in the jurisdiction of Kazakhstan have to pay taxes to the Social Security fund ranging from 3% to 5% and social insurance fund at 3.5% at the end of every fiscal year.
Employees’ Social Security and statutory contributions Employees in Kazakhstan don’t have to make any contribution to the social security fund as Employers have already allotted a certain sum for social security in the contract agreement.
Reimbursements The concept of reimbursement does not exist in Kazakhstan as there is no law related to it.
Medical insurance Medical insurance is branched further into three sectors, and most of them are owned by the Ministry of Health.

Primary sector

Secondary sector

Tertiary sector

To ensure absolute compliance with the Kazakhstani taxes and employment laws, Connect with Skuad today.

Incorporation: How to Set Up a Subsidiary in Kazakhstan

You must consider three factors before opening up your subsidiary in Kazakhstan.

  1. Business determinants: Kazakhstan has implemented several laws to encourage more businesses by eliminating restrictions on business laws. The administration has reduced the minimum capital required to start a business to KZT 100. Furthermore, the payment of minimum capital can be done within three months of incorporating any subsidiary.
  2. Intellectual property rights: Your ideas and plans should be registered under the market, as intellectual property rights differ from one place to another.
  3. Human rights: The corruption rate in Kazakhstan is high. Intricate laws for the business sector tend to restrict real market freedom.

You might face difficulties while dealing with banking and other institutions whose laws may be complex compared to the global standards. Working with Skuad’s EOR services can simplify the incorporation process for you.

A limited liability company (LLC) is the most popular form of business organization. It is a separate legal body with a set of rules, regulations, and responsibilities. To establish an LLC, an opening document must be written where the basic duties and the purpose of the organization are laid out clearly. A charter agreement must also be established among the founding members. The company can start functioning in Kazakhstan once it has been registered in the state records. However, the major drawbacks of LLC are the taxes imposed and currency legislation.

The steps for the incorporation of an LLC are as follows.

1. Registration of the subsidiary and obtaining the online signature and tax registration

All the required documents should be sent to the administration of Kazakhstan with a legal name. A certificate will soon be issued to the employer and an electronic signature will be provided in two or three days.

2. Obtaining verified certificate and other required documents

Foreign employees will have to apply for work permits at this point and the employer will also need to obtain all the necessary licenses and permits to set up a subsidiary.

3. Opening a bank account

The employer will have to create a current account bank in the country of Kazakhstan from any recognized banking institution. All the necessary documents must also be provided.

4. Registration of health insurances for employees

The employer must ensure that no employee is exempt from health other benefits before the operations of the subsidiary begin.

The entire process takes up to four weeks and the minimum capital required differs depending on the scale of the enterprise. Medium and Large enterprises need to have a minimum capital investment of KZT 161,800.

You can also choose to open up a joint-stock company. However, it is more complex and less independent. If you want to open up your subsidiary in Kazakhstan, trust Skuad to streamline the entire process of incorporation. Partner with us to learn more about Skuad’s services for incorporating a company in Kazakhstan.

Professional Employer Organization (PEO)

Hiring the right employees and compensating them properly forms an integral part of your business expansion in Kazakhstan. However, unawareness of the local law leaves a lot of room for error, which can result in heavy penalties.

To safeguard from this, companies can opt to engage the services of a professional employer organization (PEO). Even though you can outsource your HR requirements to both PEO and EOR organizations, understanding the minor differences between the two will help you choose better.

  • A PEO acts as a co-employer, wherein it manages all the HR-related functions such as setting up the payroll, processing the compensation and other benefits, and handling all the tax-related compliances. However, your company will hold the allied liabilities and responsibilities.
  • On the other hand, an EOR provider is a complete payroll outsourcing partner that provides all the services offered by a PEO, and in addition, becomes the legal employer of all the employees on your payroll. This means that they are responsible for compliance with the regulations and liable for non-compliance as well.

PEOs are suitable for companies looking for a long-term payroll partner, whereas EOR services are more suitable for companies looking for HR solutions for a quick international expansion. Further, while PEOs can only operate if you have an entity established in the country, EOR services have no such requirements.

Skuad provides EOR solutions for companies. Hire Skuad’s EOR solution for Kazakhstan to take care of all the compliance and HR-related tasks, from onboarding to training. Talk to Skuad experts to learn more.

Conclusion: What Gives Skuad’s Kazakhstan Solutions an Edge?

If your business is ready to benefit from lucrative business opportunities in Kazakhstan’s growing economy, collaborating with Skuad’s Kazakhstan EOR services can cater to all your expansion-related HR requirements.

Further, our tech-enriched, unified HR platform works with the help of our extensive network of experts from over 150 countries. We can ensure full compliance with the local laws in the country of your choice.

Want to know more about how Skuad can help your business? Get in touch with us today!

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