Hiring in Kazakhstan: A Comprehensive Guide for Global Employers

Kazakhstan is emerging as a strategic destination for international hiring, thanks to its robust economy, skilled workforce, and unique position bridging Europe and Asia. The country’s growing sectors—ranging from energy and mining to IT and finance—offer a deep pool of talent for foreign companies. 

With a stable business environment, competitive labor costs, and government support for foreign investment, Kazakhstan is an attractive choice for US-based companies looking to expand globally. 

By hiring in Kazakhstan, organizations gain access to multilingual professionals, a well-educated workforce, and a gateway to markets across Central Asia and beyond.

How to Hire Employees in Kazakhstan

Assess Your Hiring Needs

Before entering the Kazakhstani market, define your workforce strategy:

• Full-time vs. Project-Based Support: Decide if you need permanent staff or short-term project teams. Full-time employees offer stability, while contractors provide flexibility for specialized tasks.

• Local Compliance Requirements: Understand Kazakhstan’s labor laws, including mandatory contracts, minimum wage, and statutory benefits. Compliance is essential to avoid legal risks.

• Onboarding Speed vs. Long-Term Control: Weigh the benefits of rapid onboarding (using an EOR) against the control of having your own local entity. Each approach impacts how quickly you can scale and how much oversight you retain.

Hiring Options in Kazakhstan

You have two main approaches:

• Set Up a Legal Entity: Establishing your own local company gives you full control but requires significant time, investment, and ongoing compliance management.

• Partner with an Employer of Record (EOR): An EOR handles local employment, payroll, and compliance, allowing you to hire quickly without setting up a legal entity.

EOR vs. Legal Entity: Side-by-Side Comparison

Feature	Employer of Record (EOR)	Setting Up a Legal Entity
Setup Speed	Fast (days to weeks)	Slow (months)
Compliance Management	Handled by EOR	Your responsibility
Cost	Predictable monthly fee	High initial and ongoing costs
Local Presence Needed	No	Yes
Control Over HR Policies	Limited (within EOR framework)	Full
Scalability	Easy to scale up or down	More complex, especially for downsizing
Risk of Permanent Establishment	Low	Higher

Ready to expand into Kazakhstan without the hassle? Discover how Tarmack’s EOR solutions can simplify your global hiring.

Understanding Worker Classification

Employees vs. Contractors in Kazakhstan

Proper worker classification is crucial for compliance. Here’s how employees and contractors differ:

Aspect	Employee	Contractor
Legal Relationship	Direct employment contract	Service/freelance agreement
Supervision	Employer controls work, schedule, and duties	Contractor controls how and when work is done
Benefits	Entitled to statutory benefits and protections	Not entitled to employee benefits
Tax Withholding	Employer withholds and remits taxes	Contractor manages own taxes
Termination	Subject to labor code protections	Governed by contract terms

Legal Implications and Risks of Misclassification

Misclassifying employees as contractors can lead to:

• Fines and Penalties: Authorities may impose significant penalties for non-compliance.
• Back Payments: Employers may be liable for unpaid taxes, benefits, and social contributions.
• Legal Disputes: Misclassification can result in lawsuits or labor disputes.
• Reputational Damage: Non-compliance can harm your brand and hinder future hiring.

Kazakhstan’s labor code is strict—ensure you classify workers correctly to avoid costly mistakes. For more on global classification, see W-2 and 1099 Forms: Differences, Usage, and Classification Regulations.

Hiring Costs and Payroll

Hiring Costs Overview

Hiring in Kazakhstan involves several direct and indirect costs:

• Salaries and Wages: Competitive salaries depend on industry and role.
• Social Contributions: Employers must contribute to pensions, healthcare, and unemployment funds.
• Taxes: Personal income tax is withheld from employee pay.
• Recruitment and Training: Costs include advertising, onboarding, and training.
• Benefits: Health insurance, paid leave, and other perks may be standard.

For a deeper dive into global cost structures, check out Understanding the Total Cost of Employees: Calculation & Management Factors.

Payroll Setup Steps

Setting up payroll in Kazakhstan typically involves:

• Registering as an Employer: Required for both local entities and EORs.
• Collecting Employee Data: Securely gather tax IDs, bank details, and contract information.
• Calculating Deductions: Include income tax, social security, and other mandatory contributions.
• Issuing Payslips: Provide documentation for each pay period.
• Filing Reports: Submit payroll and tax reports to authorities as required.

Income Tax Rates

• Personal Income Tax: Progressive, up to 20% for higher earners.
• Corporate Income Tax: Standard rate is 20%.
• Social Security Contributions: Both employer and employee contribute; rates may vary by policy.

Payment Methods

• Direct Deposit: The most common and efficient method.
• Bank Transfers: Widely used for both salaries and contractor payments.
• EOR Payroll: EORs handle all payments, deductions, and reporting on your behalf.

Using Global Payroll Services

Global payroll platforms simplify multi-country payroll by:

• Ensuring Compliance: Stay up-to-date with local tax and labor laws.
• Centralizing Management: One dashboard for all payroll activities.
• Reducing Errors: Automated calculations and filings.
• Integrating Benefits: Manage benefits and deductions seamlessly.

Learn more about how Tarmack streamlines global payroll and compliance.

How to Properly Hire and Pay Contractors

• Draft a Clear Service Agreement: Outline scope, deliverables, and payment terms.
• Verify Contractor Status: Ensure the relationship meets legal criteria for independent contracting.
• Choose Payment Method: Use international wire transfers or global payment platforms.
• Comply with Tax Laws: Contractors are responsible for their own taxes, but confirm local requirements.

These are the Best Ways to Pay International Independent Contractors: Challenges and Solutions.

Compliance Risks

Incorrect Payroll Contributions

Failing to remit the correct social security or tax contributions can result in:

• Penalties and Fines: Non-compliance is strictly enforced.
• Back Payments: You may owe retroactive contributions.
• Audits: Authorities may audit your payroll records.

Permanent Establishment Risk

Operating in Kazakhstan without proper registration can trigger “permanent establishment” status, leading to:

• Corporate Tax Liability: Your business may owe local corporate taxes.
• Legal Exposure: Increased scrutiny and potential penalties.

Here are Compliance Challenges in Establishing an Entity Overseas: Tips to Overcome.

Statutory Benefits

Employers must provide:

• Paid Annual Leave
• Sick Leave
• Maternity/Paternity Leave
• Health and Safety Protections

Failure to provide statutory benefits can result in legal claims and fines.

Misclassification Risks

Improperly classifying workers as contractors to avoid benefits or taxes is illegal and can lead to:

• Government Investigations
• Back Payments and Penalties
• Reclassification of Workers

Provincial/Regional Law Variances

While Kazakhstan has national labor laws, always check for any local or regional requirements that may apply to your business or sector.

Overview of Intellectual Property Rights

Employers should secure:

• Copyrights: For creative works produced by employees.
• Patents: For inventions or technical solutions.
• Trademarks: For brand assets.
• Confidentiality Agreements: To protect trade secrets and sensitive information.

For more on managing IP in global teams, see Managing Intellectual Property (IP) Through EOR: Key Considerations for Businesses.

Onboarding Process

Before Their First Day

• Complete Legal Documentation: Ensure employment contracts and work permits are signed.
• Collect Personal Data: Gather necessary IDs, tax information, and bank details.
• Prepare Equipment: Arrange for laptops, software, and access credentials.

On Day 1

• Orientation Session: Introduce company policies, culture, and team members.
• Workplace Tour: For on-site employees, provide a tour and safety briefing.
• Issue Equipment: Distribute devices and explain IT protocols.

During Their First 90 Days

• Probation Period: Monitor performance and provide feedback.
• Training: Offer job-specific and compliance training.
• Regular Check-Ins: Schedule meetings to address questions and support integration.

Here are Top Eight Best Practices for Onboarding International Employees.

Offer Letter Essentials

Include:

• Job Title and Description
• Compensation Details
• Benefits and Leave Entitlements
• Probation Period Terms
• Start Date and Reporting Structure

NDAs and Confidentiality

• Non-Disclosure Agreements: Protect sensitive company information.
• Confidentiality Clauses: Include in employment contracts for added protection.

Running Background Checks

• Verify Education and Experience: Confirm credentials and prior employment.
• Criminal Record Check: Where permitted by law.
• Reference Checks: Contact previous employers to assess reliability and fit.

Remote Employee Management

Managing remote employees in Kazakhstan requires clear processes and robust systems:

• Computer and App Access: Provide secure laptops and use cloud-based collaboration tools.
• IP Protection: Use NDAs, access controls, and regular audits to safeguard intellectual property.
• Clear Communication: Schedule regular video calls and use instant messaging for quick updates.
• Performance Tracking: Set measurable goals and use project management software.
• Cultural Sensitivity: Foster inclusivity and respect local customs.

For more tips, explore How to Manage Employees Remotely and Globally and Building Organizational Culture in Remote Teams.

Labor Law Compliance

Kazakhstan’s labor code sets clear standards:

• Working Hours: Standard is 40 hours per week, usually over five days.
• Leave Entitlements: Includes paid annual leave, sick leave, and family-related leave.
• Health and Safety: Employers must ensure a safe working environment.
• No At-Will Employment: Termination must follow legal procedures; at-will dismissal is not permitted.
• Trade Unions and Collective Bargaining: Employees have the right to unionize and negotiate collectively.

For a broader perspective, go through Employment Compliance and Its Importance.

Termination Guidelines

Acceptable Termination Reasons

Employment can be terminated for:

• Mutual Agreement: Both parties consent to end employment.
• Contract Expiry: End of a fixed-term contract.
• Redundancy: Role is no longer needed.
• Misconduct: Breach of company policy or law.
• Incapacity: Employee unable to perform duties.

Employers must document reasons and follow due process.

Notice Periods and Legal Protections

• Notice Periods: Typically range from two to three months for redundancy; specified in the labor code or contract.
• Written Notice: Required for all terminations, stating reasons and effective date.
• Severance Pay: May be due, depending on reason and length of service.
• Appeal Rights: Employees can challenge dismissals they believe are unjust.
• Legal Compliance: Strict adherence to labor code is mandatory; non-compliance can result in reinstatement or compensation.

For severance details, check out Severance Regulations Across Countries.

Benefits of Hiring in Kazakhstan

Foreign companies gain several strategic advantages:

• Skilled Talent Pool: Well-educated, multilingual professionals in key sectors.
• Cost Efficiency: Lower labor costs compared to Western markets.
• Time Zone Benefits: Overlaps with both European and Asian business hours.
• Business-Friendly Environment: Government incentives and support for foreign investment.
• Strategic Location: Gateway to Central Asia, Russia, and China.
• Modern Infrastructure: Growing IT, transport, and business services sectors.
• Cultural Compatibility: Professional norms align well with Western practices.

Kazakhstan, the Next Frontier for Global Talent and Growth

Kazakhstan offers a compelling blend of skilled talent, cost advantages, and strategic location for international employers. 

By understanding local labor laws, compliance requirements, and best practices for onboarding and managing employees, foreign companies can build successful teams and drive growth in this dynamic market. Whether you choose to set up a legal entity or partner with an EOR, careful planning and compliance are key to unlocking the full potential of Kazakhstan’s workforce.

Looking to hire in Kazakhstan? See how Tarmack can help you build and manage your global team with ease.