In this article will be described the procedure of changing the founder in a company (LLP) to a foreign citizen or a foreign legal entity. In other words, we will discuss the purchase of a share in a LLP by a foreign citizen or a non-resident legal entity.
In practice, entrepreneurs need to acquire an already registered company, for example, due to the fact that the registered company has received licenses or a change of founder is taking place within a group of companies, or a business is being acquired, etc.
Who can be a founder of a legal entity?
The founder of a Kazakhstani company (LLP) can be a foreign citizen or a foreign legal entity. However, it should be taken into account that an LLP cannot have another company consisting of one person as its sole participant. [1] In other words, if the founder of an LLP is a foreign company whose sole founder is a foreign citizen or another company, then in the registration of the LLP will be refused. One solution is to introduce a founder with a minority share into the company (LLP).
It should be noted that there are restrictions on types of activities for foreigners, for example, in such areas as security activities, media, communications, ownership of land intended for agriculture, subsoil use, etc.
Migration requirements for a founder-foreign citizen
Participation in the authorized capital of commercial organizations by becoming members of legal entities is prohibited for foreigners who have not received visa C5 or temporary residence permit as business immigrants.[2]
Therefore, before purchasing a company (LLP), a foreign citizen must obtain a temporary residence permit for a business immigrant (citizens of the EAEU countries, Azerbaijan, Uzbekistan and Turkmenistan) or visa C5.
Who is a business immigrant?
A business immigrant is a person who will carry out entrepreneurial activity in Kazakhstan, in this case, through a company.
A mandatory condition for the stay of business immigrants in the territory of Kazakhstan is the implementation of entrepreneurial activity.[3]
Business activity can be carried out by creating commercial legal entities that pursue the generation of income as the main goal of their activities.[4]
Thus, a foreign citizen who is the founder of a company for the purpose of making a profit carries out entrepreneurial activity on the territory of Kazakhstan.
Temporary residence permit for business immigrants
To obtain a temporary residence permit, citizens of the EAEU countries, Azerbaijan, Uzbekistan, and Turkmenistan must come to Kazakhstan.
To obtain an initial temporary residence permit, which is issued for a period of 3 months, the following package of documents should be provided [5]:
- Application form;
2 IIN;
- An identity document of a foreigner or stateless person with whom agreements on visa-free stay have been ratified;
- Medical insurance covering primary health care and specialized medical care in hospital conditions in an emergency under the conditions determined by agreement of the parties, in compliance with the minimum requirements established by the law of the Republic of Kazakhstan, with the exception of citizens of the EAEU countries;
- Notarized consent from the owner of the property for the immigrant to reside;
- A certificate of fingerprinting (carried out at the Public Service Center free of charge; it is necessary to have a notarized consent for residence from the owner of the apartment);[6]
- A medical certificate confirming the absence (presence) of diseases that interfere with work activity, i.e. medical certificate form 028/u.
- A document confirming the presence or absence of a criminal record and a ban on entrepreneurial activity based on a court decision, issued by a competent authority in the state of citizenship and/or permanent residence. It is necessary to obtain the original documents with the seal of the authority that issued the certificate; certificates in electronic form will not be accepted.
Visa C5 for business immigrant
The primary C5 visa is issued at the Kazakh embassy abroad for a period of 90 days based on an invitation from a company registered in Kazakhstan.[7] In practice such invitation can be issued by a law firm.
Requirements for Visa C5 receiving:
- invitation from a local company;
- the applicant is of legal age;
- provision of a medical certificate confirming the absence of diseases that interfere with work activity;
- medical insurance;
- certificate of presence/absence of a criminal record;
- provision of a certificate of the presence/absence of a ban on carrying out entrepreneurial activity, issued in the country of citizenship;
- Payment of consular fee 80 USD.
What are the requirements for a legal entity founder?
Is it necessary to obtain a business identification number (BIN) for a foreign company, so that the company can became a founder in Kazakhstan? In practice, many foreign companies which became a founder of an LLP are applying for BIN. However, there is no such requirement stipulated by the legislation. You can read more about the procedure for obtaining a BIN in another article by the author here .
Transaction on acquisition of a share in the authorized capital of a legal entity (LLP)
The company (LLP) can be checked for trustworthiness via https://kompra.kz/ . By the consent between the buyer and seller, a financial audit can be carried out by a licensed audit company before the purchasing of the LLP.
The purchase and sale agreement for a share in the authorized capital of a company (LLP) must be notarized by a notary.
To acquire a share in the authorized capital of the LLP, the consent of other participants to the transaction is required, which is formalized in the form of a decision of the sole participant or the minutes of the general meeting. Please note that if at the time of the transaction there are more than two participants in the company and one of the participants sells a share to a third party (a foreign citizen), then the second founder has the preemptive right to purchase the share. [8]Therefore, the second founder must renounce the preemptive share of the purchase of a share from a founder who has expressed a desire to sell his share to a third party. Moreover, if the buyer and seller are individuals, then the notarized consent of the spouses is required. The cost of notary services is paid by agreement of the parties.
A transaction at a notary's office can be completed under a power of attorney from the seller and/or buyer.
Re-registration of the company with the authorized body
After concluding a contract for the sale and purchase of a share in the authorized capital of a company (LLP), it is necessary to register the transaction with the authorized body - the Public Service Center at the place of registration of the company. This procedure is called re-registration of a legal entity. Simultaneously with the registration of a change of founder, it is possible to change the legal address of the company, the director of the company. The presence of the buyer and/or seller in the Public Service Center is not required; re-registration of the company can be carried out on the basis of a power of attorney from the buyer.
After re-registration, if there is a change of director, it is necessary to change the signatory in the bank servicing the company. The presence of the new director is mandatory if he has the right of the first signature in the bank.
In fact, the migration requirements for a foreign citizen when registering and acquiring a share in the authorized capital of an already registered company are the same - in both cases it is necessary to obtain a Visa C5 or a temporary residence permit for a business immigrant
All conclusions and proposals reflected in this article are of a purely advisory nature and do not entail obligations for any specific actions by a third party. If you have any questions, please contact (WhatsApp: +77715804141, email: This email address is being protected from spambots. You need JavaScript enabled to view it.).
Aigerim Massatbaeva,
Legal consultant
law firm Qazlegal Consult
LLM University of Vienna
[1] Article 10 of the Law of the Republic of Kazakhstan “On limited liability companies and additional liability companies”, 22 of April 1998 year № 220-I.
[2]Article 39 of the Law of the Republic of Kazakhstan “On Migration” dated July 22, 2011 No. 477-IV.
[3]Clause 1 of Article 40 of the Law of the Republic of Kazakhstan “On Migration of the Population” dated July 22, 2011 No. 477-IV,.
[4]Art. 50 of the Entrepreneurial Code of the Republic of Kazakhstan dated October 29, 2015 No. 375-V ЗРК.
[5]Appendix 1-1 of the Order of the Minister of Internal Affairs of the Republic of Kazakhstan dated December 4, 2015 No. 992. Registered in the Ministry of Justice of the Republic of Kazakhstan on January 20, 2016 No. 12880.
"On approval of the Rules for issuing temporary and permanent residence permits in the Republic of Kazakhstan to foreigners and stateless persons."
[6]Art. 10 of the Law of the Republic of Kazakhstan dated December 30, 2016 No. 40-VI ZRK “On fingerprinting and genomic registration”.
[7]Appendix 1 to the Rules for issuing invitations, coordinating invitations for entry of foreigners and stateless persons into the Republic of Kazakhstan, issuing, canceling, restoring visas of the Republic of Kazakhstan, as well as extending and reducing their validity, Joint Order of the Acting Minister of Foreign Affairs of the Republic of Kazakhstan dated November 24, 2016 No. 11-1-2/555 and the Minister of Internal Affairs of the Republic of Kazakhstan dated November 28, 2016 No. 1100. Registered with the Ministry of Justice of the Republic of Kazakhstan on December 15, 2016 No. 14531.
[8]Article 31 of the Law of the Republic of Kazakhstan dated April 22, 1998 No. 220-I “On Limited and Additional Liability Partnerships”.
