Kazakhstan tightens rules for foreign executives

Ministry of Labor says that fake companies have been created in Kazakhstan to legalize migrant workers / Photo: Shutterstock, photo editor: Dastan Shanay

Kazakhstan’s Ministry of Labor has been working to close loopholes in the country’s migration legislation. From now on, local companies will only be allowed to employ one foreign executive or deputy without a work permit.

The ministry has also updated the list of foreign workers exempt from work permit requirements in Kazakhstan. The revised draft regulation is now available for public comment on the Legalacts.egov.kz portal.

The authors of the amendments argue that foreign nationals in Kazakhstan often establish fictitious companies to legalize migrant workers. These companies may have a single foreign director and numerous foreign deputies, who do not require work permits under existing laws.

By exploiting this loophole, migrants are often hired for managerial positions on paper, when reality, they work as laborers in unrelated industries.

«Foreigners (from migration-risk countries) often set up limited liability partnerships (LLPs), appointing one manager and up to ten deputies. In practice, they work as laborers in other sectors. This loophole creates conditions for establishing fictitious legal entities to legalize the presence of migrants in Kazakhstan,» the draft regulation stated.

The Ministry of Labor aims to close this loophole in the legislation. Hereafter, only one individual will be allowed to hold the position of head or deputy head of an LLP. Additionally, the authorized capital of a legal entity must be at least $300,000, making it impossible to create a fictitious LLP to employ foreign nationals.

«The proposed amendments have been developed in line with the president’s state-of-the-nation address to stimulate the development of entrepreneurship with foreign participation in Kazakhstan,» the ministry emphasized.

Last week, Kursiv.media reported that Kazakhstan plans to further reduce the number of foreign workers in the country. By 2025, the quota for hiring migrant workers will be cut to 3%. However, this restriction will not apply to citizens of Eurasian Economic Union (EEU) countries, who are not required to obtain a work permit.