Kazakhstan: When migration rules may harm business and why this will end in 2026
In 2024, Kazakhstan faced a telling situation: amendments to migration legislation that came into force on 28 May 2024 unexpectedly became a source of tax risks for foreign entrepreneurs. The problem was not the rules themselves, but how they were applied.
Where the breakdown occurred
Tax authorities began treating the absence of C5 business immigrant visa or temporary residence permit (TRP) held by a foreign founder as the absence of work permit. As a result, companies were removed from the VAT register — in some cases retroactively. In effect, entrepreneurship was equated with employment. This was the key mistake. Business founder is not an employee, entrepreneurial activity has a different legal nature and does not require a work permit.
Why this approach was unlawful
Court practice quickly clarified the legal position:
- new migration requirements have no retroactive effect;
- entrepreneurial activity is not employment;
- foreign founders, including those from EAEU countries, previously had the full legal right to register businesses without C5 business immigrant visas or TRPs.
In other words, tax authorities exceeded their powers by substituting the correct legal classification.
Systemic issue, not just isolated cases
This conflict exposed a weak point in administration: formal migration issues were used as a fiscal leverage. Such situations typically arise during transition periods, when regulations change faster than enforcement practices adapt. For the investment climate, however, this is one of the most damaging scenarios.
What changes are to come from 1 January 2026
New Tax Code takes an important step toward legal certainty:
- migration-related grounds are excluded from reasons for VAT deregistration;
- the procedure becomes notification-based, not punitive;
- the list of grounds is closed and exhaustive, preventing expansive interpretation.
In effect, the state acknowledges that migration control and tax administration operate in different domains. For foreign entrepreneurs and investors, this sends a clear signal:
- the system is capable of correcting its mistakes;
- courts perform a stabilizing role;
- the rules are becoming more predictable.
As we all know, for the economy, predictability is most valuable.
