NEWS

On May 21, Kazakhstan’s Mazhilis approved in the first reading a draft law introducing amendments to several legislative acts related to the development of the machinery and manufacturing sectors. The bill proposes changes to the Entrepreneurial and Environmental Codes, as well as laws governing industrial policy, special economic and industrial zones, and local self-government.

The amendments affect the broader manufacturing sector and continue Kazakhstan’s policy course toward import substitution and increasing domestic value creation. At the same time, the government is seeking to strengthen oversight of obligations undertaken by participants in special economic zones (SEZs).

One of the key areas of reform concerns the operation of SEZs. The draft law introduces priority areas of activity focused on medium- and high-value-added production. Additional selection criteria for potential residents are also being proposed to prevent the creation of duplicate manufacturing facilities and production of goods with limited market demand.

The bill also shortens the period for remedying significant violations by SEZ participants from six months to three months. In addition, investors applying for residency status will have to confirm financing equal to at least 10% of the project’s total value.

Another section of the amendments deals with industrial clusters. The existing concept of a “territorial cluster” would be replaced with that of an “industrial cluster.” According to deputy Aituar Koshmambetov, the change would remove the requirement for geographic concentration and allow companies from different regions to cooperate within unified production chains.

The powers of local representative bodies, or maslikhats, would also be expanded. They would be authorized to monitor the use of Kazakhstani construction materials and equipment in projects financed through state investment or quasi-public sector funds. The measure is intended to reduce cases where contractors replace local products with imported alternatives.

The draft law also introduces reciprocal obligations for manufacturers benefiting from procurement preferences or participating in long-term supply agreements and offtake contracts. These obligations are aimed at the gradual deepening of localization and increasing the share of Kazakhstani content in production.

Another area covered by the amendments is the regulation of the collection and sale of ferrous and non-ferrous scrap metal. Additional obligations would be established for companies involved in the collection, storage, processing, and sale of scrap in an effort to retain industrial raw materials within the country.

The amendments continue policies Kazakhstan has been pursuing in recent years to support domestic production. The country has already expanded procurement preferences for local manufacturers, introduced long-term contract and offtake mechanisms, tightened requirements for confirming Kazakhstani origin of goods, and increased oversight over the use of domestic materials in construction projects. Since 2026, inclusion in the Register of Kazakhstani Producers has also become a mandatory condition for receiving state support measures.

As Kazakhstan’s manufacturing sector develops further, the regulatory focus may gradually shift toward stricter evaluation of support measures and their contribution to domestic value creation.