Kazakhstan

When using an Employer of Record (EOR) like Rivermate in Kazakhstan, the EOR handles the filing and payment of employees' taxes and social insurance contributions. This includes the calculation, withholding, and remittance of income taxes, as well as contributions to social insurance programs such as pension funds, social security, and health insurance. The EOR ensures compliance with local tax laws and regulations, thereby relieving the client company of the administrative burden and complexities associated with payroll and tax compliance in Kazakhstan. This allows the client company to focus on its core business activities while ensuring that all legal obligations related to employee compensation are met accurately and on time.

Setting up a company in Kazakhstan involves several steps and can take a varying amount of time depending on the efficiency of the processes and the preparedness of the applicant. Here is a detailed timeline for setting up a company in Kazakhstan:

1. Name Reservation (1-2 days):

   • The first step is to reserve a unique company name. This can be done online through the Ministry of Justice's website or in person at the Public Service Center. The process typically takes 1-2 days.

2. Preparation of Documents (2-5 days):

   • Prepare the necessary documents, including the charter (articles of association), the decision of the founder(s) to establish the company, and other required forms. This step can take between 2 to 5 days depending on the complexity and the number of founders.

3. Notarization of Documents (1-2 days):

   • The prepared documents need to be notarized. This can be done at a local notary office and usually takes 1-2 days.

4. State Registration (5-7 days):

   • Submit the notarized documents to the Public Service Center for state registration. The registration process typically takes 5-7 business days. Upon completion, you will receive a certificate of state registration and a business identification number (BIN).

5. Tax Registration (1-2 days):

   • Register the company with the tax authorities to obtain a taxpayer identification number (TIN). This process usually takes 1-2 days and can often be done simultaneously with the state registration.

6. Opening a Bank Account (1-3 days):

   • Open a corporate bank account in a local bank. This process can take between 1 to 3 days, depending on the bank's requirements and procedures.

7. Social Security and Pension Fund Registration (1-2 days):

   • Register the company with the social security and pension fund authorities. This step typically takes 1-2 days and is necessary for compliance with local labor laws.

8. Obtaining Necessary Licenses and Permits (Variable):

   • Depending on the nature of your business, you may need to obtain additional licenses or permits. The time required for this step can vary widely based on the specific industry and regulatory requirements.

In summary, the entire process of setting up a company in Kazakhstan can take approximately 2 to 4 weeks, assuming there are no significant delays or complications. However, this timeline can be extended if additional licenses or permits are required or if there are issues with document preparation or submission.

Using an Employer of Record (EOR) service like Rivermate can significantly streamline this process. An EOR can handle many of these steps on your behalf, ensuring compliance with local laws and regulations, and allowing you to focus on your core business activities. This can be particularly beneficial for companies looking to enter the Kazakh market quickly and efficiently.

In Kazakhstan, employers have several options for hiring workers, each with its own set of legal, administrative, and financial implications. Here are the primary methods:

1. Direct Employment:

   • Local Entity Establishment: This involves setting up a local subsidiary or branch office in Kazakhstan. This option requires navigating the local business registration process, understanding tax obligations, and complying with Kazakhstani labor laws. It provides full control over the hiring process and employee management but can be time-consuming and costly.
   • Compliance with Local Labor Laws: Employers must adhere to Kazakhstan's labor code, which includes regulations on employment contracts, working hours, minimum wage, social security contributions, and employee benefits.

2. Independent Contractors:

   • Freelancers and Consultants: Hiring independent contractors can be a flexible and cost-effective option. However, it is crucial to ensure that the relationship is genuinely that of an independent contractor and not an employee to avoid misclassification risks. Misclassification can lead to legal and financial penalties.
   • Contractual Agreements: Clear, well-drafted contracts are essential to define the scope of work, payment terms, and other conditions to avoid disputes and ensure compliance with local laws.

3. Employer of Record (EOR) Services:

   • Using an EOR like Rivermate: An EOR can simplify the process of hiring employees in Kazakhstan by acting as the legal employer on behalf of the client company. This allows businesses to hire local talent without establishing a legal entity in Kazakhstan.
   • Compliance and Administration: The EOR handles all aspects of employment, including payroll, tax withholding, social security contributions, benefits administration, and compliance with local labor laws. This reduces the administrative burden and ensures compliance with local regulations.
   • Risk Mitigation: By using an EOR, companies can mitigate risks associated with employment law compliance, such as wrongful termination claims, misclassification issues, and other legal disputes.

4. Staffing Agencies:

   • Temporary and Contract Staffing: Staffing agencies can provide temporary or contract workers for short-term projects or to meet seasonal demand. This can be a flexible solution for businesses needing to scale their workforce quickly.
   • Agency Compliance: The staffing agency is responsible for ensuring compliance with local labor laws, including payroll, taxes, and benefits. However, the client company should still perform due diligence to ensure the agency's compliance practices are robust.

5. Outsourcing:

   • Business Process Outsourcing (BPO): Companies can outsource specific business functions, such as customer service, IT support, or accounting, to third-party providers in Kazakhstan. This can be a cost-effective way to access specialized skills and services.
   • Service Level Agreements (SLAs): Clear SLAs should be established to define the scope of services, performance metrics, and other terms to ensure the outsourcing arrangement meets business needs.

Each of these options has its advantages and considerations. For companies looking to expand into Kazakhstan without the complexities of establishing a local entity, using an Employer of Record like Rivermate can be an efficient and compliant solution. It allows businesses to focus on their core operations while the EOR manages the intricacies of local employment laws and administrative tasks.

Yes, it is possible to hire independent contractors in Kazakhstan. However, there are several important considerations and legal nuances to keep in mind:

1. Legal Framework: Independent contractors in Kazakhstan are governed by the Civil Code rather than the Labor Code. This means that the relationship is based on a civil contract (service agreement) rather than an employment contract. The terms and conditions of the engagement, including payment, scope of work, and duration, are outlined in this civil contract.

2. Taxation: Independent contractors are responsible for their own tax filings and social contributions. They must register with the tax authorities and pay individual income tax, which is typically 10% of their income. Additionally, they may be required to make social security contributions.

3. Employment Misclassification: One of the risks of hiring independent contractors is the potential for misclassification. If the relationship between the company and the contractor resembles that of an employer-employee relationship (e.g., fixed working hours, direct supervision, provision of tools and equipment), the authorities may reclassify the contractor as an employee. This can lead to penalties, back taxes, and social contributions.

4. Benefits and Protections: Unlike employees, independent contractors are not entitled to benefits such as paid leave, health insurance, or severance pay. They also do not have the same protections under labor laws, such as protection against unfair dismissal.

5. Compliance and Documentation: It is crucial to have a well-drafted service agreement that clearly defines the nature of the relationship, the scope of work, payment terms, and other relevant conditions. Proper documentation helps mitigate the risk of reclassification and ensures compliance with local laws.

6. Employer of Record (EOR) Services: To navigate the complexities of hiring in Kazakhstan, many companies opt to use an Employer of Record (EOR) service like Rivermate. An EOR can handle all aspects of employment, including payroll, tax compliance, and benefits administration, ensuring that the company remains compliant with local laws. This can be particularly beneficial for companies that do not have a legal entity in Kazakhstan or are unfamiliar with local regulations.

In summary, while it is possible to hire independent contractors in Kazakhstan, it is essential to understand the legal and tax implications and ensure proper documentation to avoid potential issues. Using an EOR service can simplify the process and provide peace of mind by ensuring compliance with local laws.

Employing someone in Kazakhstan involves several costs that employers need to consider. These costs can be broadly categorized into direct compensation, statutory contributions, and administrative expenses. Here is a detailed breakdown:

1. Direct Compensation:

   • Gross Salary: This is the primary cost and includes the agreed-upon salary between the employer and the employee. Salaries in Kazakhstan can vary widely depending on the industry, role, and experience level.
   • Bonuses and Incentives: Depending on the employment contract and company policy, employers may also need to budget for performance bonuses, annual bonuses, and other incentive payments.

2. Statutory Contributions:

   • Social Tax: Employers in Kazakhstan are required to pay a social tax, which is calculated at a rate of 9.5% of the employee's gross salary.
   • Pension Contributions: Employers must contribute 10% of the employee's gross salary to the Unified Accumulative Pension Fund.
   • Social Insurance: Employers are also required to contribute to social insurance, which covers various social benefits. The rate is 3.5% of the employee's gross salary.
   • Mandatory Health Insurance: Employers must contribute to the mandatory health insurance system, which is 2% of the employee's gross salary.

3. Administrative Expenses:

   • Recruitment Costs: These include expenses related to advertising job openings, conducting interviews, and possibly using recruitment agencies.
   • Onboarding and Training: Costs associated with onboarding new employees, including training programs, orientation sessions, and any necessary certifications.
   • HR Management: Ongoing HR management costs, including payroll processing, compliance management, and employee relations.
   • Legal and Compliance Costs: Ensuring compliance with local labor laws and regulations may require legal consultations and regular audits.

4. Other Benefits and Allowances:

   • Health and Safety: Employers may need to provide additional health and safety measures, especially in industries with higher risks.
   • Transportation and Housing Allowances: Depending on the location and industry, employers might offer transportation or housing allowances to attract talent.
   • Meal Allowances: Some employers provide meal allowances or subsidized meals as part of the employment package.

Using an Employer of Record (EOR) like Rivermate can help manage these costs more efficiently. An EOR handles all aspects of employment, including payroll, tax compliance, and benefits administration, ensuring that all statutory contributions and legal requirements are met. This can significantly reduce the administrative burden and potential risks associated with employing staff directly in Kazakhstan.

Yes, employees in Kazakhstan can receive all their rights and benefits when employed through an Employer of Record (EOR) like Rivermate. An EOR ensures compliance with local labor laws and regulations, which is crucial for protecting employee rights and benefits. Here are some key points to consider:

1. Compliance with Labor Laws: An EOR in Kazakhstan ensures that employment contracts, payroll, and benefits administration comply with the country's labor laws. This includes adhering to regulations regarding working hours, overtime, minimum wage, and termination procedures.

2. Social Security and Taxes: The EOR is responsible for managing social security contributions and tax withholdings. In Kazakhstan, this includes contributions to the State Social Insurance Fund, the Pension Fund, and mandatory health insurance. The EOR ensures that these contributions are made accurately and on time, safeguarding employees' social security rights.

3. Employee Benefits: Employees are entitled to statutory benefits such as paid annual leave, sick leave, and maternity/paternity leave. An EOR like Rivermate ensures that these benefits are provided in accordance with Kazakhstani law. Additionally, the EOR can offer supplementary benefits such as private health insurance or additional leave, depending on the employer's policies.

4. Work Permits and Visas: For foreign employees, an EOR handles the complexities of obtaining work permits and visas, ensuring that all legal requirements are met. This is particularly important in Kazakhstan, where immigration laws can be stringent.

5. Local Expertise: An EOR has in-depth knowledge of local employment practices and cultural nuances. This expertise helps in creating a positive work environment and addressing any issues that may arise, ensuring that employees feel supported and valued.

6. Risk Mitigation: By using an EOR, companies mitigate the risks associated with non-compliance, such as fines or legal disputes. This protection extends to employees, who can be confident that their employment is legally sound and their rights are protected.

In summary, an Employer of Record like Rivermate ensures that employees in Kazakhstan receive all their rights and benefits by maintaining strict compliance with local labor laws, managing social security and tax obligations, providing statutory and supplementary benefits, handling work permits and visas, leveraging local expertise, and mitigating legal risks.

Rivermate, as an Employer of Record (EOR) in Kazakhstan, ensures HR compliance through several key mechanisms:

1. Local Expertise and Knowledge: Rivermate employs local HR professionals who are well-versed in Kazakhstan's labor laws, regulations, and cultural nuances. This local expertise ensures that all employment practices are compliant with national legislation, including hiring, contracts, benefits, and terminations.

2. Employment Contracts: Rivermate prepares and manages employment contracts that comply with Kazakhstan's legal requirements. This includes ensuring that contracts are written in the local language, contain all mandatory clauses, and adhere to the standards set by Kazakh labor laws.

3. Payroll Management: Rivermate handles payroll processing in accordance with Kazakhstan's tax laws and social security regulations. This includes accurate calculation of wages, tax withholdings, and contributions to social insurance funds, ensuring timely and correct payments to employees and government authorities.

4. Tax Compliance: Rivermate ensures that all tax obligations are met, including income tax, social security contributions, and any other mandatory deductions. They stay updated on any changes in tax legislation to ensure ongoing compliance.

5. Employee Benefits Administration: Rivermate manages statutory benefits such as health insurance, pension contributions, and other mandatory employee benefits. They also offer additional benefits that align with local market practices, ensuring competitive and compliant compensation packages.

6. Labor Law Adherence: Rivermate ensures compliance with Kazakhstan's labor laws, including working hours, overtime regulations, leave entitlements, and occupational health and safety standards. They monitor and implement any changes in labor legislation to maintain compliance.

7. Termination and Severance: Rivermate manages the termination process in accordance with Kazakh labor laws, ensuring that all legal requirements are met, including notice periods, severance pay, and proper documentation. This minimizes the risk of legal disputes and ensures fair treatment of employees.

8. Data Protection and Privacy: Rivermate adheres to Kazakhstan's data protection laws, ensuring that employee data is handled securely and confidentially. They implement robust data protection measures to safeguard personal information and comply with local privacy regulations.

9. Regular Audits and Reporting: Rivermate conducts regular audits and provides detailed reporting to ensure ongoing compliance with all HR and employment regulations. This proactive approach helps identify and address any potential compliance issues before they become problematic.

By leveraging these mechanisms, Rivermate ensures that companies operating in Kazakhstan can focus on their core business activities while maintaining full compliance with local HR and employment laws.

When a company uses an Employer of Record (EOR) service like Rivermate in Kazakhstan, the EOR assumes many of the legal responsibilities associated with employment. Here are the key legal responsibilities that the EOR handles:

1. Employment Contracts: The EOR is responsible for drafting and maintaining compliant employment contracts in accordance with Kazakh labor laws. This includes ensuring that contracts include all necessary terms and conditions, such as job description, salary, working hours, and termination clauses.

2. Payroll Management: The EOR manages payroll processing, ensuring that employees are paid accurately and on time. This includes calculating wages, withholding taxes, and making necessary deductions for social security and other contributions.

3. Tax Compliance: The EOR ensures compliance with Kazakh tax laws by withholding the appropriate amount of income tax from employees' salaries and remitting these taxes to the relevant authorities. They also handle the filing of necessary tax returns and reports.

4. Social Security Contributions: The EOR is responsible for making contributions to Kazakhstan's social security system on behalf of both the employer and the employee. This includes contributions to pension funds, health insurance, and other mandatory social security programs.

5. Labor Law Compliance: The EOR ensures that all employment practices comply with Kazakh labor laws, including regulations on working hours, overtime, rest periods, and leave entitlements. They also ensure compliance with laws related to workplace safety and anti-discrimination.

6. Employee Benefits: The EOR manages employee benefits as required by Kazakh law, such as paid leave, maternity/paternity leave, and any other statutory benefits. They may also administer additional benefits provided by the employer, such as health insurance or retirement plans.

7. Termination and Severance: The EOR handles the legal aspects of employee termination, ensuring that terminations are conducted in compliance with Kazakh labor laws. This includes providing the appropriate notice period, calculating severance pay, and managing any disputes that may arise.

8. Record Keeping: The EOR maintains accurate and up-to-date employment records as required by Kazakh law. This includes records of employment contracts, payroll, tax filings, and any other relevant documentation.

9. Legal Representation: In the event of a labor dispute or legal issue, the EOR may represent the employer in dealings with Kazakh labor authorities or in court. They ensure that the employer's interests are protected and that any legal proceedings are handled in compliance with local laws.

By using an EOR service like Rivermate in Kazakhstan, companies can significantly reduce their administrative burden and ensure full compliance with local employment laws. This allows them to focus on their core business activities while mitigating the risks associated with international employment.

HR compliance in Kazakhstan refers to the adherence to the country's labor laws, regulations, and standards that govern employment practices. This includes compliance with the Labor Code of Kazakhstan, which outlines the rights and obligations of employers and employees, as well as other relevant legislation such as tax laws, social security regulations, and occupational health and safety standards.

Key aspects of HR compliance in Kazakhstan include:

1. Employment Contracts: Employers must provide written employment contracts that specify the terms and conditions of employment, including job duties, working hours, salary, and other benefits. These contracts must comply with the Labor Code and other relevant laws.

2. Working Hours and Overtime: The standard working week in Kazakhstan is 40 hours. Any work beyond this must be compensated as overtime, with specific rates and conditions outlined in the Labor Code.

3. Minimum Wage: Employers must adhere to the national minimum wage, which is periodically adjusted by the government. This ensures that employees receive fair compensation for their work.

4. Leave Entitlements: Employees are entitled to various types of leave, including annual paid leave, sick leave, maternity and paternity leave, and other statutory leave. Employers must ensure that these entitlements are granted in accordance with the law.

5. Health and Safety: Employers are required to provide a safe working environment and comply with occupational health and safety regulations. This includes conducting regular risk assessments, providing necessary safety equipment, and ensuring that employees are trained in safety procedures.

6. Social Security Contributions: Employers must make contributions to the state social security system on behalf of their employees. This includes contributions for pensions, health insurance, and other social benefits.

7. Termination and Severance: The Labor Code outlines the procedures for terminating employment, including notice periods, valid reasons for termination, and severance pay. Employers must follow these procedures to avoid legal disputes.

Importance of HR Compliance in Kazakhstan:

1. Legal Protection: Compliance with HR laws protects employers from legal disputes and potential penalties. Non-compliance can result in fines, legal action, and damage to the company's reputation.

2. Employee Rights: Ensuring compliance helps protect the rights of employees, fostering a fair and equitable work environment. This can lead to higher employee satisfaction and retention.

3. Business Reputation: Companies that adhere to HR compliance standards are viewed more favorably by employees, customers, and business partners. This can enhance the company's reputation and competitiveness in the market.

4. Operational Efficiency: Proper HR compliance ensures that employment practices are standardized and transparent, leading to more efficient and effective HR management.

5. Risk Management: By adhering to HR compliance, companies can mitigate risks associated with labor disputes, workplace accidents, and other employment-related issues.

Using an Employer of Record (EOR) like Rivermate can significantly simplify HR compliance in Kazakhstan. An EOR takes on the responsibility of ensuring that all employment practices comply with local laws and regulations. This includes managing payroll, tax filings, social security contributions, and other administrative tasks. By partnering with an EOR, companies can focus on their core business activities while ensuring that they remain compliant with Kazakhstan's HR laws.