Corporate transfer – A simplified procedure for receiving work permits

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Due to the accession of Kazakhstan into the WTO, a number of amendments have been introduced to Kazakhstani legislation, including amendments related to the corporate transfer of foreign employees to Kazakhstan (i.e. the intra- company transfer of a foreign employee from a foreign company to the subsidiary, representative or branch office located in Kazakhstan).

Although corporate transfer of Kazakhstani employees was introduced to the Law “On Migration of People” and the Law “On Occupation of People” in December 2015, the procedure for corporate transfer of foreign employees to Kazakhstan was not clarified since no changes were introduced to the main act regulating the issuance of work permits. This main act, outlining the rules “On terms and conditions for issuing permits to foreign workers for employment and to employers for attracting foreign labour”, was approved by the Decree of the Government of Kazakhstan as of 13 January 2012 No.45 (hereinafter: the “Rules”).

However, on 31 March 2016, the Government of Kazakhstan adopted Decree No. 173 (the “Decree”) that amended the Rules and set forth the procedure of corporate transfer of foreign employees to Kazakhstan. The Decree has been in effect since 19 April 2016.

Below we provided the major amendments concerning corporate transfer of foreign employees to Kazakhstan in a Q&A format.

1) Which foreigners are eligible for corporate transfer?

Directors, managers and specialists working in the head office of a branch/representative office located in Kazakhstan and/or in the mother company of a local legal entity are eligible for corporate transfer. The head office or mother company must be incorporated in a country that is a member of the WTO.

The Decree sets out the list of economic sectors within which the employer must operate in order to be eligible to apply for corporate transfer. We would note that the list is quite vague and includes a wide range of economic activities.

2) What is the term of a corporate transfer?

The work permit is issued for the term of the corporate transfer, but not for more than 3 years. It can be prolonged for another 1 year.

3) Is the application for a quota necessary?

No quota is required for work permits issued in relation to corporate transfer procedures.

4) What proportion of local and foreign employees must be maintained prior to application for the work permit?

If a foreign employee is transferred from the head office for the position of director, the employer is not required to maintain the proportion of local and foreign employees before applying for the work permit. However, the proportion of local and foreign employees must be maintained by the employer in a case of corporate transfer of employees for the positions of managers and specialists. The exact proportion of local and foreign employees for the position of managers/specialists will be determined by the labour authorities.

5) Is it required to conduct a search for employees on the local market prior to applying for the work permit?

It is not required to conduct a search for employees on the local market in case the corporate transfer is for the position of a director. However, a search on the local market (for up to 60 calendar days) is required in case of corporate transfer for the positions of managers and/or specialists.

6) What special conditions must be fulfilled in case of corporate transfer?

The corporate transfer of managers and specialists requires the employer to comply with so-called “special conditions”. The Decree fails to mention whether compliance with the special conditions is required in case a director is being transferred.

If a manager is employed, the employer is provided with the right to choose one of the following special conditions;

1. retraining of a Kazakhstani citizen to match the skills/position of the foreign employee;

2. qualification upgrade of a Kazakhstani citizen to match the skills/position of the foreign employee;

3. creation of additional employment for a Kazakhstani citizen matching the skills/position of a foreign employee.

If a specialist is employed, the employer may choose either option 1 or option 3 of the above special conditions.

We hope you find our newsletter useful. Should you have any questions or require our assistance with respect to the above, please contact the following specialists:

Dina Jazylbekova

Legal Team Leader

Tel. + 7 (727) 355 4448

JazylbekovaDN@schneider-group.com

www.schneider-group.com