[Last updated: 1 January 2025, unless otherwise noted]

2.1 Main Legal Framework

There is no unified takeover code in Kazakhstan. Regulations concerning the acquisition of companies whose shares are listed on a stock exchange can be found in several laws and regulations, including the following:

• the Law of the Republic of Kazakhstan on Securities Market, dated 2 July 2003;
• the Law of the Republic of Kazakhstan on Joint Stock Companies, dated 13 May 2003;
• the rules relating to insider dealing and market manipulation;
• the rules relating to disclosure and transparency of listed companies;
• the rules of the KASE and the AIX relating to securities trading on a stock exchange; and
• the rules regarding merger control. These rules are not further discussed herein.

The rules and regulations that contain provisions on the acquisition of public companies are discussed below.

The Agency of the Republic of Kazakhstan for Regulation and Development of the Financial Market ("Agency") is the principal securities regulator in Kazakhstan. The Agency has certain legal tools that it can use to supervise and enforce compliance with the relevant rules, including imposition of administrative fines. In certain aggravated cases, criminal liability may be imposed by the court. Additionally, the court may invalidate a transaction that contravenes legal requirements.

As there is no unified regulation of public takeovers, the relevant laws and regulations do not expressly state the principles on which they are based, i.e., there is no formal set of regulated principles such as equivalent treatment of all shareholders found in certain other jurisdictions.

2.2 Foreign investments

Kazakhstani law imposes certain limited foreign ownership restrictions that apply to companies operating in particular industries. Thus, for example, Kazakhstan's Law on National Security restricts foreign ownership in certain Kazakhstani telecom service providers. Namely, foreign individuals and legal entities are prohibited from managing and/or operating any trunk lines in Kazakhstan without setting up a legal entity in Kazakhstan. Similarly, foreign entities are prohibited from owning, directly or indirectly, 20% or more of the shares in Kazakhstani mass media companies.

Any acquisition of 10% of the voting shares in a Kazakhstani bank requires prior approval by the Agency. Foreign shareholders holding 10% or more of a bank's shares must meet a required minimum rating. Companies established in certain listed jurisdictions, e.g., the British Virgin Islands, are prohibited from owning any shares in Kazakhstani banks. Similar restrictions apply to certain other regulated Kazakhstani financial institutions, such as insurance/reinsurance firms and investment portfolio managers.

Restricted/sensitive activities also include activities operated by a company included in the list of "strategic objects" approved by the Government of Kazakhstan, as well as gas, hydrocarbons and other sources of energy. As a result, acquisition of shares in such companies operating in such areas is subject to prior Government consent requirements.

Different types of entities are subject to their own set of rules governing the process and timing for obtaining the required government consent.