Kazakhstan
Shared Construction in Kazakhstan
Kazakhstan's off-plan residential market — centred on high-rise developments in Almaty and Astana that target both local and international buyers — operates under a specialised legal framework: the Law on Equity Participation in Housing Construction No. 486-V of 7 April 2016 (as amended). The 2016 law restructured the sector in response to widespread developer insolvency and stranded buyers in the pre-reform period. It allows buyers' money to be raised in only three ways: under a guarantee from the state-owned Unified Housing Construction Operator (Kazakhstan Housing Company), through a second-tier bank's project, or after the building frame is complete. Substantial amendments took effect on 31 August 2025.
Bond Stone advises foreign investors purchasing residential units off-plan in Kazakhstan, residential developers structuring compliant shared construction programmes, and buyers whose developers have defaulted or become insolvent.
Primary authority: Law No. 486-V of 7 April 2016 (Equity Participation in Housing Construction); Civil Code No. 409-I Arts. 651–666; Law on Rehabilitation and Bankruptcy No. 176-V of 7 March 2014, Art. 100 — adilet.zan.kz
Sectors: Residential Development · Off-Plan Property · Foreign Investment · Developer Finance
What Is Shared Construction? Definition and Legal Basis
Shared construction is a system under which a buyer (the equity holder) enters into an agreement with the developer's authorised company for the purchase of a residential unit that does not yet physically exist. The buyer acquires a contractual right to receive the completed unit, not a property right in the legal sense. The property right arises only upon completion and state registration in the Real Estate Rights Register.
Equity Participation Agreement
The core instrument is the equity participation agreement, on the standard form approved by the authorised state body. Under Arts. 11 and 12 of Law No. 486-V, it is made electronically with digital signatures and must be registered with the local executive authority where the building stands, through the unified information system for equity participation. The agreement is treated as concluded only from the moment of that registration, so registration is the buyer's primary legal protection at the contracting stage.
Governing Legal Framework
The primary statute is the Law on Equity Participation in Housing Construction No. 486-V of 7 April 2016. Civil Code Articles 651–666 govern the underlying construction contract. Developer insolvency and creditor priority are governed by the Law on Rehabilitation and Bankruptcy No. 176-V of 7 March 2014. Article 100 of that law sets the order of creditors' claims and gives buyers no priority class of their own.
Distinction from a Standard Sale
A shared construction agreement is not a sale of existing property. The buyer acquires a contractual right to receive a future asset — the completed unit — rather than acquiring an existing title. This distinction is legally significant: the buyer bears completion risk (mitigated by the statutory controls on buyers' money and, where one was issued, the Unified Operator's guarantee). Until title is registered the buyer holds rights under the agreement, not the unit. Those rights may be assigned once the price is paid, or earlier with the authorised company's consent to the transfer of the debt, and the buyer's share may be pledged (Arts. 13 and 14).
Developer Eligibility
Not every developer may raise buyers' money. The developer must act through an authorised company, a wholly owned subsidiary confined to the project, and must meet the statutory tests for the chosen route. For a guarantee these include at least two years' experience, with at least 10,000 sq m built in the capital and cities of republican significance or 5,000 sq m elsewhere (Art. 8). Raising money in any way the law does not allow is prohibited, and such a transaction is invalid (Arts. 3 and 7). Since 1 July 2026 local executive authorities also keep a register of unscrupulous developers, who are barred from raising buyers' money for three years (Art. 12-1). Bond Stone checks the guarantee agreement or permit, and the developer's standing, as a first step in any due diligence instruction for off-plan residential purchases.
The Three Permitted Ways of Raising Buyers' Money
The 2016 law addressed the core failure of the pre-reform system — developers freely commingling buyer funds with operating capital, then becoming insolvent. Under Art. 7, a developer may raise buyers' money in only one of three ways:
ROUTE 1
Unified Operator Guarantee
The authorised company signs a guarantee agreement with the Unified Housing Construction Operator, Kazakhstan Housing Company (KHC), a subsidiary of the state holding Baiterek (Art. 8). The guarantee is an obligation to organise completion of construction. No local authority permit is needed once the guarantee agreement is in place.
ROUTE 2
Second-Tier Bank Project
A second-tier bank finances the project (Art. 9). This route requires the bank's financing decision, a loan agreement, and a tripartite agreement with an engineering company, and the developer needs at least three years' experience. Buyers' money may be used only after the local executive authority has issued a permit to raise money. The authority must issue the permit or a reasoned refusal within eight working days (Art. 18).
ROUTE 3
After the Frame Is Built
Money may be raised once the frame of the building is complete, as confirmed by an engineering company's report (Art. 10). The developer needs a much larger record: 36,000 sq m built in the last three years in the capital and cities of republican significance, or 18,000 sq m elsewhere. A local executive authority permit is required, and the property may not be pledged.
Controls on buyers' money. On every route, buyers pay by bank transfer into the authorised company's account, never in cash (Arts. 15 and 16). The company may hold only one current account in national currency, at a single second-tier bank, and from August 2025 may also hold one foreign-currency current account and one savings account at that bank (Art. 20). Spending is tied to the project and to acts confirmed by the engineering company.
Recent amendments. Law No. 204-VIII of 30 June 2025, in force from 31 August 2025, extended KHC guarantees to low-rise buildings of up to five floors and cottage settlements of 50 or more houses, and reduced the developer experience required for a guarantee. According to KHC, it also banned preliminary reservation and investment agreements, barred banks from issuing mortgages for housing under construction without a KHC guarantee or local authority permit, required all payments to be non-cash, limited any extension of the construction deadline to five months, and barred a new guarantee for three years after a guarantee case. Law No. 254-VIII of 9 January 2026 extended the guarantee to renovation projects and added the register of unscrupulous developers. Advertising must now state the permit or guarantee agreement number and date (Art. 23).
Foreign Buyer Considerations
Foreign legal entities may purchase residential units under an equity participation agreement in Kazakhstan. Foreign individuals face a limit: Art. 1(19) of Law No. 486-V excludes foreigners temporarily staying in Kazakhstan from the definition of equity holder, and Art. 9 of the Law on the Legal Status of Foreign Citizens No. 2337 of 19 June 1995 allows foreign citizens to own housing, except those temporarily staying. Under Art. 4 of that law, a foreign citizen in Kazakhstan without a permanent residence permit is treated as temporarily staying, including the holder of a temporary residence permit. In practice, therefore, a foreign individual needs a permanent residence permit to sign an equity participation agreement, and a permanent resident buys on the same terms as a Kazakhstani citizen. For the separate rules on land, see Foreign Land Ownership in Kazakhstan.
Currency Control & Payment Risk
The authorised company's main account for buyers' money is in national currency. Whether the price may be stated in foreign currency depends on the buyer's currency status: between residents, monetary obligations must be expressed in tenge (Civil Code Art. 282(1)) and currency operations are prohibited unless an exception applies, while operations between a resident and a non-resident may be in tenge or foreign currency (Law No. 167-VI, Art. 6(1), (2)). A buyer paying from foreign currency bears conversion timing risk. Payments from foreign buyers must comply with the Law on Currency Regulation and Currency Control. Bond Stone advises on structuring payment obligations to manage this risk and on any currency control steps.
Tax Exposure for Non-Residents
Non-resident buyers face 20% withholding tax on rental income from Kazakhstan property and 15% tax on capital gains on disposal (Tax Code No. 214-VIII, Arts. 679, 682(1)). Double taxation treaty review is recommended before purchase — Kazakhstan has active double taxation treaties with the UAE, China, the UK, Russia, and several EU member states that may reduce or eliminate the withholding obligation. Bond Stone coordinates with the client's home-jurisdiction tax advisers to structure the holding appropriately.
Title Registration by Proxy
On completion the authorised company transfers the unit after the acceptance act is signed (Law No. 486-V, Art. 17), and title is registered by the State Corporation "Government for Citizens". Where the documents are not notarised, the application is made by all parties (Law No. 310-III, Art. 22), in person or through a duly authorised representative. A foreign buyer who cannot attend in person needs a notarised power of attorney. If signed abroad, it should be apostilled or legalised as applicable and accompanied by a notarised Kazakh translation.
Corporate Buyer Structure
Foreign legal entities purchasing residential units must demonstrate the authority of their signing representative (apostilled charter extract or power of attorney), provide notarised translations of all corporate documents, and comply with Kazakhstan's AML/KYC requirements applicable to non-resident purchasers. Where multiple units are purchased as an investment portfolio, Bond Stone advises on whether a Kazakhstani SPV holding structure is more efficient for ongoing tax reporting and management.
What Happens If the Developer Defaults?
Guarantee case. Where the project has a Unified Operator guarantee, Art. 37 lists the guarantee cases. They include missing the commissioning deadline, which may be extended by no more than five months, misuse of money not repaid within 15 working days, and the developer's bankruptcy on grounds unrelated to the project. KHC then takes steps to complete the building, including replacing the contractor and financing completion if the authorised company's own funds fall short (Art. 38). The guarantee is therefore first a promise of completion, not of a refund.
Refund on a guarantee case. If a guarantee case occurs and the buyer demands the money back, the authorised company must reimburse the share, up to the amount the buyer actually paid (Art. 16). Projects on the bank and frame routes have no Unified Operator guarantee, so the buyer's protection there rests on the controls on the money and on claims against the authorised company and developer.
Insolvency proceedings. The Law on Rehabilitation and Bankruptcy No. 176-V gives buyers no special priority. Under Article 100, an unsecured buyer's money claim ranks in the fourth class with other civil creditors, after personal injury, employment and alimony claims, certain secured creditors, and tax. Claims are filed with the temporary manager within one month of the published notice (Article 90). Bond Stone has experience representing buyers in developer insolvency proceedings and advising on the interaction between refund claims, guarantee cases, and insolvency distributions.
Frequently Asked Questions — Shared Construction in Kazakhstan
Is it safe to buy off-plan in Kazakhstan?
The 2016 law reduced the risk of buying off-plan, but did not remove it. Buyers' money may be raised only under a Unified Operator guarantee, through a bank project, or after the frame is complete, and it must go through a controlled account of the developer's authorised company. A principal remaining risk is a developer raising money outside these routes, so confirm the guarantee agreement or local authority permit, and that the agreement will be registered in the unified information system, before signing or transferring funds.
Can a foreign national buy a shared construction unit in Kazakhstan?
It depends on status. Foreign legal entities may purchase residential units under an equity participation agreement. Foreign individuals who are temporarily staying in Kazakhstan are excluded from the statutory definition of equity holder and from owning housing. In practice a foreign citizen needs a permanent residence permit, and a temporary residence permit is not enough. Payments from foreign buyers must comply with Kazakhstan's Law on Currency Regulation; the authorised company's main account is in national currency, exposing foreign buyers to forex conversion timing risk that should be managed in the agreement.
What is the Unified Operator guarantee in Kazakhstan construction?
It is an obligation of the Unified Housing Construction Operator, Kazakhstan Housing Company, to organise completion of a building if a guarantee case occurs. It is one of the three permitted ways of raising buyers' money under Law No. 486-V, and it replaces the need for a local authority permit. Developers must meet statutory tests and pay a guarantee fee. Raising buyers' money outside the three permitted routes is prohibited, and such a transaction is invalid.
What happens to my deposit if the developer goes bankrupt?
It depends on the route. Where the project has a Unified Operator guarantee, the operator organises completion, and on a guarantee case a buyer who demands repayment is entitled to reimbursement up to the amount paid. Without a guarantee, the buyer relies on claims against the authorised company and developer. In insolvency, the Law on Rehabilitation and Bankruptcy No. 176-V, Article 100, gives buyers no special priority, so an unsecured money claim ranks with other civil creditors in the fourth class. Confirm the route and review the guarantee agreement or permit before signing.
Related Practice Areas
Real Estate & Construction → Property Registration → Foreign Land Ownership → Construction Licensing →
Discuss your Kazakhstan off-plan property or shared construction matter
Contact Bond Stone for a confidential discussion about your off-plan purchase or development.
Request a Confidential Consultation
Dispute Resolution → Construction Licensing → Foreign Land Ownership → Property Registration → Investment in Kazakhstan →
Primary authority: adilet.zan.kz — Law No. 486-V of 7 April 2016 on Equity Participation in Housing Construction; Civil Code No. 409-I Arts. 651–666; Law on Rehabilitation and Bankruptcy No. 176-V Art. 100; Law on the Legal Status of Foreign Citizens No. 2337 Arts. 4, 9