Civil legislation of the Republic of Kazakhstan

The civil legislation of the Republic of Kazakhstan shall consist of the Civil Code, laws of the Republic of Kazakhstan adopted in accordance with it, other laws of the Republic of Kazakhstan, edicts of the President of the Republic of Kazakhstan having the force of laws, decrees of the Parliament, and decrees of the Senate and Mazhilis (legislative acts), as well as edicts of the President of the Republic of Kazakhstan, decrees of the Government of the Republic of Kazakhstan which regulate civil relations.

The Civil Code of the Republic of Kazakhstan (General Part), dated 27 December 1994, and the Civil Code of the Republic of Kazakhstan (Special Part), dated 1 July 1999, as amended. The Civil Code is the foundation of civil legislation in Kazakhstan. The Civil Code (which consist of both a General Part and a Special Part), is the systemized and codified law that is used as the legal basis for regulating all types of property-related and personal non-property-related between citizens, legal entities and the state.

The General Part of the Civil Code sets out the basis for the regulation of corporate entities. Ownership rights, transactions, securities and obligations. It also guarantees the right to freedom of contract, and grants guarantees against arbitrary interference in private matters and freedom of entrepreneurial activity. Under the Civil Code, foreign investors enjoy the same rights and obligations as citizens and legal entities of Kazakhstan, unless otherwise provided by legislative acts.

The Special Part of the Civil Code contains provisions governing certain types of contracts; defining contractual relations for particular types of agreements such as agreements for sale and purchase, leases, loans, commissions’ agreements, agency agreements, insurance agreements, intellectual property rights, inheritance as well as agreements on transportation and storage, etc. In addition, the Special Part regulates non-contractual damages and sets out conflict-of-laws rules.

In addition to the Civil Code, Kazakhstan has specific laws regulating different types of civil-law relation (e.g. the Financial Lease Law, the Bankruptcy Law). However, in the event of any discrepancies between such laws and the Civil Code, the latter will prevail except for regulation in the areas of employment, subsoil use and environment.

With certain limited exceptions, the Civil Code permits a contract between a Kazakhstani company and its foreign counterparty to be foreign law. Nonetheless, contracts between two Kazakhstani companies must be governed by Kazakhstan law.

The relations associated with the formation, reorganization, bankruptcy and liquidation of banks and grain procurement enterprises, supervision of banking activities and their auditing, supervision of activities of grain procurement enterprises, licensing of certain types of banking transactions performance of transactions in warehouse warrants of grain procurement enterprises, shall be regulated by Civil Code inasmuch as this does not contradict the legislative acts that regulate the banking business and activities of grain procurement enterprises.

Civil relations may be regulated by tradition, including the tradition of business operation, unless those contradict the civil legislation which is effective in the territory of the Republic of Kazakhstan.

Ministries and other central executive bodies, local representative and executive bodies, may issue acts which regulate civil relations, in the cases and within the limits provided for by the Civil Code, and by other acts of civil legislation.

Foreign individuals and legal entities and also stateless persons shall have the right to acquire the same rights and they shall be obliged to fulfill the same obligations which are provided for by civil legislation for the citizens and legal entities of the Republic of Kazakhstan, unless legislative acts stipulate otherwise.

When an international treaty, to which the Republic of Kazakhstan is a signatory, establishes different rules than those contained in the civil legislation of the Republic of Kazakhstan, the rules of the indicated treaty shall apply. The international treaties to which the Republic of Kazakhstan is a signatory, shall apply to civil relations directly, except for the cases where it ensues from a treaty that its application requires the issuing of a domestic act of the Republic.

Civil legislation acts shall not have retroactive force and they shall apply to relations which arise after their entering into force. The legal force of a civil legislation act shall apply to relations which arose prior to its enactment in the cases where it is directly provided for by it.

Civil rights and obligations shall arise on the fundamentals which are specified in legislation and also from actions of citizens and legal entities which, although not specified in it, but by virtue of the general fundamentals and the spirit of civil legislation, give rise to civil rights and obligations.

In accordance with this, civil rights and obligations shall arise as follows:

1) out of agreements and any other transactions provided for by legislation, and also from transactions which although are not specified in it, do not contradict legislation;

2) form the administrative acts which give rise to civil rights consequences by virtue of legislation;

3) from court decisions which establish civil rights and obligations;

4) as a result of creating or acquiring assets on the bases which are not prohibited by legislative acts;

5) as a result of creating inventions, industrial samples, works of science, literature and art and any other results of intellectual activity;

6) as a result of causing harm to any other person, and equally as a result of the unfair acquisition or saving of assets at the expense of another person (unfair enrichment);

7) as a result of any other acts of citizens and legal entities;

8) as a result of events to which legislation conditions the emergence of civil rights.

6.3 The entities of civil law

Citizens of the Republic of Kazakhstan and other physical persons.

The capacity to have civil rights and bear obligations (civil rights capacity) shall be recognized as equal in all citizens. The legal capacity of a citizen shall arise at the moment of his birth and it shall cease with his demise.

A citizen may have, under his right of ownership, properties including foreign currency, both within the boundaries of the Republic of Kazakhstan and beyond its boundaries; inherit and bequest property; move freely in the territory of the Republic and select the place of residence; freely leave the boundaries of the Republic and return to its territory; engage in any activities which are not prohibited by legislative acts; create legal entities independently or with other citizens and legal entities, enter into any transactions which are not prohibited by legislative acts and participate in obligations; have the right to intellectual property with regard to inventions, works of science, literature and art and any other results of intellectual activity; claim the compensation for financial and moral damage; have any other property rights and personal rights.

The capacity of a citizen by his deeds to acquire and exercise civil rights, create for himself civil obligations and execute them (citizen's deed capacity) shall arise in their entire volume when the citizen reaches the age of majority, that is, upon reaching eighteen years of age.

In the case where legislative acts allow for the entering into marriage prior to reaching eighteen years of age, a citizen who has not reached 18 years of age shall acquire deed capacity in its entire volume from the moment of entering marriage.

All citizens shall have equal deed capacity, unless it is otherwise provided for by legislative acts.

No one may be restricted in legal capacity and deed capacity otherwise than in the cases and in accordance with the procedure provided for by legislative acts.

A citizen, who, as a result of psychic disease or mental weakness, cannot understand the meaning of his acts or direct them, may be recognized by the court as incapable, and in this connection, guardianship shall be established over him.

On behalf of citizens recognized as incapable, the transactions shall be carried out by a guardian.

In the case of a recovery or a significant improvement of the health of the incapable person, the court shall recognize him as capable, after which guardianship over him shall be alleviated.

A citizen who consequential to the abuse of alcoholic drinks or narcotic substances puts his family into a difficult financial position my be restricted by the court with regard to his deed capacity in accordance with the procedure established by the Civil Procedural Code of the Republic of Kazakhstan. Tutorship shall be established over him. He shall have the right to independently enter into small day-to-day transactions. He may commit any other transactions, receive wages, pensions and any other income, and he may dispose of them [but] only with the consent of the tutor. Where a citizen severs the abuse of alcoholic drinks or narcotic substances, the court shall abolish restrictions of his capacity. On the basis of the court decision the tutorship established over the citizen shall be abolished.

The legal entities.

An organization which has under the right of ownership, the right of business authority or operational management, its separate assets and which is liable with this property for its obligations, which may, in its name, acquire and exercise property rights and personal non-property rights and obligations, and may be the plaintiff or defendant in the court of law, shall be recognized as a legal entity. A legal entity must have its independent balance-sheet or budget. A legal entity shall have a seal with its name.

A legal entity may be an organization which pursues the extraction of income as the principal purpose of its activities (commercial organization), or which does not have the extraction of income as such a goal and which does not distribute earned net income between its participants (non-commercial organization). A legal entity which is a commercial organization (enterprise) may be created solely in the form of a state-owned enterprise, business partnership, joint-stock company or production cooperative.

A legal entity, which is a non-commercial organization, may be created in the form of an institution, public association, joint-stock company consumer co-operative, public foundation, religions association and any other form which is provided for by legislative acts. A non-commercial organization may engage in entrepreneurial activity only for as long as it is consistent with the objectives of its charter.

A legal entity that is a non-commercial organization and maintained at the expense of the state budget may be formed exclusively in the form of a state-owned institution.

Legal entities may create associations.

A legal entity may have civil rights and bear obligations associated with its activity in accordance with the Civil Code. Commercial organizations, except for state-owned enterprises, may have civil rights and bear civil obligations, which are necessary for the exercise of any type’s activity which is not prohibited by legislative acts or their foundation documents.

In the cases stipulated by legislative acts, for legal entities carrying out certain types of activity, a possibility may be excluded or restricted to engage in another activity.

A legal entity may engage in certain types of activities, the list of which is defined by legislative acts, only on the basis of a license.

The legal capacity of a legal entity shall arise at the moment of its creation and it shall cease at the time of completion of its liquidation. The legal capacity of a legal entity in a sphere of activities which requires a license shall arise from the moment of the procurement of such a license and it shall cease at the moment of its revocation, expiry of the term of its validity, or recognition of it as invalid in accordance with the procedure established by legislative acts. The legal capacity of a legal entity who is a non-commercial organization and maintained solely at the expense of the state budget (state institution) shall be defined by the Civil Code and other legislative acts of the Republic of Kazakhstan.

A legal entity shall be subject to state registration by the bodies of Justice. The procedure for the state registration shall be defined by legislation. Information concerning state registration, in particular, the business names of commercial organizations, shall be included in the Single State Register of Legal Entities.

A legal entity shall be deemed to be created from the moment of its state registration. Affiliates and representations shall be registered in accordance with the procedure established by legislative acts.

A business partnership shall be recognized to be a commercial organization with its authorized capital divided into shares (contributions) of the foundation parties (participants). Properties created at the expense of the investments of the foundation parties (participants) and also produced and acquired by the business partnership in the course of its activities shall belong to it under the right of ownership. Business partnerships may be created in the form of a general partnership, limited partnership, limited liability partnership, partnership with additional liability.

6.4 The items in civil rights

The property and the personal non-property privileges and rights may be items in civil rights. Objects, money, including foreign currency, securities, work, services, and the objectivized results of creative and intellectual activities, commercial names, trademarks, commercial names and trademarks and any other means of individualization of products, property rights and any other assets, shall be recognized as property privileges and rights (property). Life, health, the dignity of a person, honor, good name, business reputation, inviolability of private life, personal and family secrets, the right to name, the right to be an author, the right to inviolability of production and any other intangible privileges and rights shall be referred to the personal non-property privileges and rights.

Items of the civil rights may be freely alienated or transferred from one person to another in the course of the universal legal successor ship (inheritance, reorganization of a legal entity) or by any other method, unless they are exempt from circulation or restricted in their turnover.

The real estate (immovable assets, immovable) shall comprise the following: land plots, buildings, structures, perennial plantations, and other property, which is firmly associated with land, i. e. items the transportation of which is impossible without infliction of unreasonable damage to their designation. Also, air and sea vessels, vessels of domestic water travel, vessels of river and sea sailing, and cosmic facilities, shall be equated to immovable objects which are subject to state registration. Any other assets may be recognized as immovable objects by legislative acts.

Assets which are not recognized as immovable, including money and securities, shall be recognized as movable assets.

Property may be divisible and indivisible. Divisible property shall be assets, parts whereof do not lose their designation (function) as result of division.

Indivisible property shall be property which may not be divided without changing its economic designation (function), or which is not to be subdivided by virtue of a prescription in a legislative act.

When heterogeneous items form a single unit which permits the use in accordance with its designation, determined by the nature of their combination, they shall be deemed to be one item (compound item).

Income obtained as a result of using assets (fruit, production, income), shall belong to the person who uses those assets on a legal basis, unless it is otherwise stipulated in legislation or in the agreement concerning the use of that asset.

General rules concerning objects shall apply to animals in so far as legislation does not stipulate otherwise.

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