Commercial Lease Agreements in Kazakhstan

Lease Term and Renewal

The lease must specify a defined start and end date, or be designated as open-term (indefinite). Leases of one year or more trigger the mandatory registration requirement under Arts. 5 and 8 of Law No. 310-III. Under Civil Code Art. 544, a lease must be in writing if its term exceeds one year or, whatever its term, if a party is a legal entity. Renewal provisions — automatic renewal, renewal notice periods, and conditions for landlord refusal — should be explicitly negotiated. Under Art. 557, a tenant who has performed properly has, on equal terms, a preferential right to a new lease unless legislation or the lease provides otherwise, and must give written notice within the period in the lease or, if none, a reasonable time before expiry. A renewal clause can give the tenant a defined window to renew before the landlord may offer the premises to third parties.

Rent, Currency, and Indexation

Market rents are often quoted in USD per square metre per month, but the legal position depends on who the parties are. Monetary obligations in Kazakhstan must be expressed in tenge unless a law provides otherwise, and foreign currency may be used in settlements only where the law allows (Civil Code Art. 282(1)). Currency operations between two residents are prohibited unless an exception applies, while those between a resident and a non-resident may be in tenge or foreign currency (Law on Currency Regulation and Currency Control No. 167-VI, Art. 6(1), (2)). So where landlord and tenant are both residents, state the base rent in tenge; in a long-term lease the parties may agree indexation of the payment (Civil Code Art. 282(3)). Where one party is a non-resident, rent may be stated and paid in foreign currency. The lease should specify: the base rent and its currency; payment currency; payment day; and the indexation mechanism for rent reviews. CPI-based indexation is the safer choice between residents; no rule expressly addresses an exchange-rate index between residents, so check such a clause before relying on it. Unless the parties agree otherwise, rent may change no more than once a year under Art. 546(3) — indexation clauses should either follow this or state the agreed frequency expressly.

Security Deposit

Kazakhstan law does not limit the amount of a commercial security deposit; one to three months' rent is standard market practice. The lease should specify: deposit amount; the conditions under which the landlord may apply the deposit; the timeline for deposit return at lease expiry (typically 30–60 days after premises handback); and interest (if any) on the deposit during the term. In the absence of explicit language, a landlord that keeps a deposit without a basis in the lease or legislation risks a claim for its return as unjust enrichment (Civil Code Art. 953).

Fit-Out, Improvements, and Reinstatement

Civil Code Art. 555 treats separable improvements as the tenant's property unless the lease provides otherwise. For inseparable improvements made with the landlord's consent at the tenant's cost, the tenant may claim their value after the lease ends unless the lease provides otherwise; if made without consent, their value is not reimbursed unless legislation or the lease provides otherwise. The lease should explicitly address: who funds fit-out works; whether the landlord provides a fit-out allowance; whether inseparable improvements are reimbursed by the landlord at lease expiry; and whether the tenant is required to reinstate the premises to their original condition. Landlord-drafted leases in Kazakhstan routinely omit these provisions or provide that all improvements revert to the landlord at no cost — a significant economic risk for tenants investing in substantial fit-out.

Assignment and Subletting

Under Civil Code Art. 551, a tenant may sublet or transfer the lease with the landlord's consent, unless legislation provides otherwise. On a sublease the tenant stays liable to the landlord. Art. 551 does not require the landlord to act reasonably, so a landlord may refuse, and a clause barring assignment altogether is consistent with that rule. Foreign companies operating through a local subsidiary should ensure the lease permits assignment to group companies without landlord consent — or at minimum that such consent may not be unreasonably withheld — to avoid triggering a landlord refusal upon internal corporate restructuring.

Break Clause and Early Termination

For fixed-term commercial leases, early termination on one party's demand without a contractual break clause goes through the court under Civil Code Art. 556, on grounds in the Code, other legislation or the lease. A break clause — exercisable on defined notice (typically 3–6 months), at specified anniversary dates — provides the tenant an exit mechanism that does not require litigation. Landlord break rights are less common in Kazakhstan commercial leases but should be addressed in negotiations where the landlord is seeking flexibility to redevelop.

Signed lease agreement (original); title document for the leased premises (electronic extract from the Real Estate Rights Register confirming landlord ownership); constitutional documents of both parties (charter, state registration certificate); authorisation documents of signing officers (power of attorney or board resolution); identification documents; fee payment receipt. The registration fee is a fixed price set by ministerial order, not a percentage of the rent. Order No. 212 of 9 April 2024 has no row for leases, so the row for other rights and encumbrances should apply (base price KZT 1,486.00 for legal entities, recalculated each year by the MCI change). GCC processing time is three working days standard (one working day expedited).

Open-Term Leases (Art. 545)

Either party to an indefinite-term commercial lease may terminate at any time by giving three months' notice, unless legislation or the lease provides otherwise. Shorter notice periods contracted by the parties are enforceable between themselves but cannot be used to override third-party registered rights (e.g. sub-tenant rights, registered charges).

Fixed-Term Leases — Tenant Default (Art. 556)

A landlord seeking court-ordered termination for tenant default must demonstrate that the tenant: (a) failed more than twice to pay rent after the due date; or (b) materially worsened the premises; or (c) used the premises in material breach of the lease or their purpose, despite a written warning; or (d) failed to carry out capital repairs that were the tenant's duty. The landlord may claim early termination only after giving the tenant a reasonable time to perform. Self-help remedies (padlocking, utility disconnection, removal of tenant's property) are unlawful and may expose the landlord to damages and to liability for arbitrary exercise of a right (Criminal Code, Art. 389).

Fixed-Term Leases — Landlord Default

Under Art. 556, a tenant may seek court-ordered termination where the landlord fails to provide the premises or obstructs their use, or fails to carry out capital repairs that are the landlord's duty, or where the premises have undisclosed defects preventing use, or become unfit for use through no fault of the tenant. Civil Code Art. 546(5) allows the tenant to demand a corresponding rent reduction where, for reasons outside the tenant's responsibility, the agreed conditions of use or the state of the premises have materially worsened.

One or both parties are AIFC-incorporated entities; the tenant is a foreign financial institution, fund, or fintech company operating under an AFSA licence; the lease value justifies the cost of AIFC Court dispute resolution; or the parties require English-language proceedings. Bond Stone's partners hold AIFC Legal Adviser status, draft AIFC-governed commercial lease agreements, and appear before the AIFC Court in lease disputes.

Can a commercial lease in Kazakhstan be denominated in USD?

Only where one party is a non-resident: currency operations between a resident and a non-resident may be in tenge or foreign currency (Law No. 167-VI, Art. 6(2)). Between two residents, monetary obligations must be expressed in tenge (Civil Code Art. 282(1)) and currency operations are prohibited unless an exception applies (Law No. 167-VI, Art. 6(1)), so the rent should be stated in tenge, with any agreed indexation in a long-term lease (Civil Code Art. 282(3)).

Does a commercial lease in Kazakhstan need to be registered?

Yes — a commercial lease of one year or more must be registered with the GCC under Arts. 5 and 8 of Law No. 310-III. An unregistered lease loses priority to registered rights and gives no assurance of tenancy rights against third parties (including a new owner of the premises).

What notice period is required to terminate a commercial lease in Kazakhstan?

For open-term (indefinite) commercial leases, Civil Code Art. 545 requires three months' notice by either party, unless legislation or the lease provides otherwise. Fixed-term leases require a court order for early termination on one party's demand unless a contractual break clause is included. Under Art. 556, landlord termination for non-payment requires the tenant to have failed more than twice to pay after the due date, and the landlord must first give the tenant a reasonable time to perform.

Can a landlord increase rent unilaterally in Kazakhstan?

Only as the lease allows. Under Civil Code Art. 546(3), rent may change no more than once a year unless the parties agree otherwise, and Art. 546(4) allows a revision on request where centrally set prices and tariffs change. Outside an agreed adjustment formula, a rent increase should be documented in a written addendum signed by both parties — a unilateral notice from the landlord is not sufficient to amend the agreed rent.

Related Bond Stone Guides

Commercial lease agreements in Kazakhstan operate within a broader framework of property rights, ownership rules, and construction regulation. See our related guides:

Property Registration in Kazakhstan → Foreign Land Ownership → Land Use Rights → AIFC Practice → Dispute Resolution →