Starting from 2000 Kazakhstan has been leading policy towards stage-by-stage transfer to full convertibility of national currency tenge by 2007. The first stage resulted in softening of currency regulation regime related to non-residents' investments into securities and direct investments of residents abroad, which broaden production potential of the republic and create conditions for entering new promising markets.

Entering into force of the Law on Currency Regulation and Currency Control (the "Law") in December 2005 started the second stage of liberalization of the currency regime. The currency restrictions, which created administrative barriers in conducting currency operations by commercial banks and professional participants of capital market, were cancelled. In addition, the requirement to license a number of operations connected with investments abroad was abolished. Consequently, previously existed licensing regime for conducting currency operations was completely changed to a system where only registration or notification is required. The above innovations have considerably simplified conducting currency operations and reduced expenses of the foreign trade participants related to meeting requirements of the currency legislation.

The Law, however, still includes a number of restrictions. One of such main restrictions is that currency transactions (operations) between residents (i.e. citizens of Kazakhstan, foreigners and stateless persons with the status of permanent residency and legal entities (their branches and representative offices) incorporated under Kazakhstani law; other individuals and legal entities are considered as non-residents) are prohibited, except a limited number of cases (for example, when one of the parties of the transaction is the National Bank or the Ministry of Finance of Kazakhstan, payment for banking services for conducting currency operations and in some other cases). Meanwhile, residents are entitled to transact with non-residents in national and / or foreign currency and currency transactions in foreign currency between non-residents are permitted.

The Law starting from January 1, 2007 cancels licensing of currency operations, so that regimes of currency regulation now include registration and notification remain for certain types of currency operations for the purposes of monitoring of unwarranted foreign debt, statistics of payment balance and replenishment of information database on the currency operations.

Generally, financial and commercial loans between residents and non-residents for the period exceeding 180 days require registration with the National Bank of Kazakhstan. This regime includes registration of the contract and subsequent reporting to the National Bank on payments made under the contract. The notification means giving a notice to the National Bank in a set form and subsequent reporting by the resident counterparty to the National Bank. Direct investment (purchase of 10 or more percent of equity) of the non-residents into Kazakhstan and residents' direct investment abroad is subject to registration as well. Meanwhile, the regime of registration applies only if the amount of a currency transaction exceeds the equivalent of US $300,000 (in case of currency incoming into Kazakhstan) and US $ 50,000 (in case of currency transfer out of Kazakhstan). Payments between residents and non-residents relating to acquisition of title to immovables are subject to notification. In general, residents have to notify the National Bank of currency transactions related to acquisition of financial instruments.

Residents and non-residents are entitled to open bank accounts in Kazakhstan both in national and foreign currencies without restrictions. Residents have to notify the National Bank not later than in 30 days upon opening a bank account in a foreign bank.

Import in the Republic of Kazakhstan and export from the republic of national or foreign currency (cash), exceeding equivalent of US $3,000 requires mandatory written declaration with the customs bodies of Kazakhstan. The mandatory written declaration is effected when filling and submitting passenger's customs declaration to all amount of importing/exporting of cash.

Individuals are entitled to import cash foreign currency in amount not exceeding equivalent of US $10,000, without documents evidencing legality of origin. Export of cash foreign currency exceeding the above amount requires presenting by the individuals of custom and tax declarations.

In October, Majlis (Lower Chamber of Kazakhstani Parliament) held a presentation of the amendments to the currency legislation. The draft law continues the state policy of liberalization of the currency regulations and further softens and simplifies related administrative procedures.