Subsoil and mining licensing in Kazakhstan under the Entrepreneurial Code: what in-house counsel need to know

Unlike common law jurisdictions, which often separate mineral title from surface ownership into a single transferable property right, Kazakhstan vests all subsurface resources in the state and permits access only through a structured licensing framework set out principally in the Entrepreneurial Code. For in-house counsel at foreign companies entering Kazakhstan's extractive sector — whether in hard rock mining, coal, or industrial minerals — that framework is the starting point for every corporate decision, from entity structuring through to operational compliance. The consequences of misreading the applicable licence category, filing at the wrong authority, or overlooking the mandatory Kazakhstani content obligations can delay project entry by twelve months or more and, in the most serious cases, result in licence revocation.

This guide sets out the core procedural steps for obtaining and maintaining subsoil use rights in Kazakhstan under the Entrepreneurial Code, with a focus on the practical issues that arise most frequently for inbound foreign investors.

What to prepare before you begin

Before any application is submitted, in-house counsel should verify the following:

• The target subsoil area has been formally delimited and assigned a cadastral identifier in the State Subsoil Cadastre. Applications referencing unregistered areas are returned without substantive review.
• The intended activity category is identified precisely: exploration, extraction, combined exploration and extraction, or general geological survey. Each category carries a different licensing track, competent authority, and fee schedule.
• The corporate vehicle for the licence is established in Kazakhstan as a legal entity. Foreign companies cannot hold subsoil use rights directly — the licence must be held by a Kazakhstani-registered entity.
• The proposed entity's constituent documents include a stated object of subsoil use activity. Discrepancy between corporate objects and the licence applied for is among the most common procedural grounds for rejection.
• Initial financing confirmation is prepared. Applicants for extraction licences must demonstrate financial capacity adequate to the planned programme of work.

Kazakhstan's subsoil licensing regime was substantially consolidated under the Entrepreneurial Code, which came into force in 2015 and has since been amended on multiple occasions. The Code distinguishes between licensing for solid minerals — which falls under the jurisdiction of the competent authority for solid minerals within the Ministry of Industry and Infrastructure Development — and licensing for hydrocarbons and uranium, which is administered by separate bodies. This guide addresses solid minerals, as that is the category most frequently encountered by inbound industrial and mining investors.

Within solid minerals, the Entrepreneurial Code establishes two principal rights instruments: the exploration licence and the extraction licence. A combined licence covering both stages is available for certain deposit categories.

Counsel should confirm at the outset whether the target deposit has previously been the subject of an exploration or extraction licence and whether any residual rights, encumbrances, or priority claims remain registered in the cadastre. This review is distinct from standard due diligence on the corporate seller and is frequently overlooked in cross-border acquisitions of Kazakhstani mining assets — particularly where the acquisition is structured as a share transfer rather than a direct licence assignment.

The competent authority administers licensing through a single-window state service portal. Preliminary engagement with the authority — to confirm cadastral status, review any competing applications, and clarify current fee schedules — is strongly advisable before formal submission.

Exploration licences for solid minerals are granted on a first-come, first-served basis in areas not subject to a tender. The application package typically includes: a completed application form on the approved form; corporate registration documents for the Kazakhstani entity; a draft work programme covering the exploration period; technical justification of the proposed exploration methodology; and the applicable state fee payment confirmation.

The Entrepreneurial Code sets a statutory maximum review period for the competent authority, but counsel should treat published timelines as indicative rather than guaranteed. In practice, requests for additional documentation — issued during the review period and which suspend the clock — mean that first-time applicants frequently experience a period of four to six months from submission to licence issuance, even where the initial package is complete.

A critical procedural point: the exploration licence confers the right to conduct exploration work within the licensed area but does not automatically confer any priority right to an extraction licence. Priority for extraction must be separately established during or at the conclusion of exploration, subject to a positive appraisal report confirming commercial viability.

Under the Entrepreneurial Code, licence holders must also comply with mandatory annual reporting obligations to the competent authority, covering expenditure against programme commitments, environmental monitoring results, and workforce data including Kazakhstani content metrics.

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An extraction licence for solid minerals requires, in addition to the standard corporate package, a positive state geological appraisal of the deposit confirming the reserve classification and commercial viability. The applicant must submit an approved mine development project or, for smaller deposits, a simplified technical scheme. Where environmental legislation requires a mandatory environmental impact assessment prior to commencement of extraction activity, that assessment must be completed and approved before the extraction licence becomes operative.

Extraction licences are issued for terms ranging from ten to twenty-five years depending on deposit category, with extension available subject to continued performance against work programme commitments and environmental obligations.

The Kazakhstani content obligation is one of the most operationally significant requirements for foreign companies. Under the Entrepreneurial Code and the related regulatory framework, subsoil users are required to procure goods, works, and services from Kazakhstani suppliers at defined minimum thresholds, to employ Kazakhstani nationals at prescribed staffing levels in certain categories, and to report KC compliance to the competent authority annually. Non-compliance with KC obligations is an independent ground for licence suspension or revocation — separate from any failure to meet work programme commitments — and is actively monitored.

In-house counsel should ensure that the KC plan is prepared with appropriate commercial input before licence application, not treated as a post-licence administrative task.

Subsoil use licences in Kazakhstan are not freely transferable. The Entrepreneurial Code imposes a mandatory consent regime for any transaction that results in a change of direct or indirect control over a licence-holding entity. The definition of change of control is broad and has been applied by the competent authority to include: direct assignment of the licence; sale of shares in the licence-holding entity; group-level restructurings that alter the ultimate beneficial owner; and certain pledge enforcement scenarios.

The consent requirement is one of the most frequently overlooked issues in cross-border M&A involving Kazakhstani subsoil assets. Foreign acquirers accustomed to other jurisdictions where licence transfer is notified rather than pre-approved will find that closing a Kazakhstan mining acquisition without prior competent authority consent is not merely a technical breach — it can result in the licence being treated as void. The competent authority's review of a transfer consent application typically takes two to four months.

For EAEU-based transactions — where a Russian, Belarusian, Armenian, or Kyrgyz entity is the proposed acquirer or ultimate owner — EAEU treaty framework does not override Kazakhstan's domestic subsoil licensing consent requirements. Counsel advising EAEU-based investors should not assume that free movement of investment provisions affect the competent authority's discretion on consent applications.

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Licence maintenance under the Entrepreneurial Code is not passive. Subsoil users must meet cumulative obligations across at least five distinct compliance streams: work programme milestones, expenditure obligations, annual reporting, environmental monitoring and remediation contributions, and KC thresholds. Failure in any stream can trigger a warning notice, which if unresolved within the statutory cure period may escalate to suspension or revocation.

Licence renewal applications should be filed well in advance of the expiry date. For large extraction licences, competent authority review of a renewal application can extend to six months or beyond. In-house teams that manage licence expiry dates alongside other corporate calendar items — rather than as a standalone regulatory matter with its own early-warning trigger — are materially more likely to arrive at renewal proceedings with adequate preparation time.

Environmental obligations deserve particular attention. Subsoil users are required to establish and maintain a liquidation fund — a dedicated reserve for future environmental remediation — at levels specified in the approved mine development project. Funding gaps in the liquidation fund are a source of compliance risk that is not always visible in financial statements prepared under IFRS, particularly for companies that consolidate Kazakhstani operations into a larger group.

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Q: Can a foreign company hold a Kazakhstan subsoil use licence directly, without a local entity?

A: No. Under Kazakhstan's Entrepreneurial Code, subsoil use licences for solid minerals must be held by a legal entity registered in Kazakhstan. A foreign parent company cannot hold the licence in its own name. The Kazakhstani entity may be a wholly owned subsidiary, a joint venture, or a project company, but it must be incorporated and registered before the licence application is submitted. Counsel should factor the entity formation timeline — typically four to eight weeks for a standard limited liability partnership — into the overall project schedule and confirm that the entity's stated corporate objects expressly cover subsoil use activity.

Q: What documents does a foreign investor typically need for an extraction licence application in Kazakhstan?

A: An extraction licence application for solid minerals requires: the corporate registration documents of the Kazakhstani applicant entity; an approved or draft mine development project; a positive state geological appraisal confirming reserve classification; evidence of financial capacity; a Kazakhstani content plan; and payment confirmation for the applicable state fee. Where an environmental impact assessment is required, the approved EIA must accompany the application. The competent authority may issue a request for additional documents during review, which suspends the statutory review clock. First-time applicants are advised to submit a complete package rather than rely on supplemental submissions to correct initial gaps.

Q: Does Kazakhstan's EAEU membership give Russian or other EAEU-based investors preferential access to subsoil licences?

A: EAEU membership creates a general framework of investment protection and non-discrimination among member states, but it does not override Kazakhstan's domestic subsoil licensing requirements. Russian and other EAEU-based investors are subject to the same licensing procedure, Kazakhstani content obligations, competent authority consent requirements for licence transfers, and entity registration requirements as investors from non-EAEU jurisdictions. The EAEU framework provides some procedural facilitation — for example, in the mutual recognition of certain documents — but the substantive licensing conditions under the Entrepreneurial Code apply equally.

Vetrov & Partners is a Russian boutique law firm established in 2009, recognised by Pravo-300 for eight consecutive years and listed as a trusted adviser by the German Consulate General in Novosibirsk.

The firm's Regulatory & Licensing practice advises foreign companies on licensing and regulatory compliance matters across Russia and, through its network of regional analysts, in Kazakhstan and other EAEU jurisdictions. We act as co-ordinating counsel for cross-border matters requiring local licensed counsel in Kazakhstan, and maintain working relationships with qualified Kazakhstani practitioners to support cross-border advisory.

We are a Russian-qualified law firm. For matters governed by Kazakhstani law or requiring local admission in Kazakhstan, we collaborate with trusted counsel in the relevant jurisdiction.

Enquiries: info@vetrovpartners.com | WhatsApp / Telegram: +7 (983) 510-38-76 | t.me/vitvetcom

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This publication is provided for informational purposes only and does not constitute legal advice under Russian or any other applicable law. The information herein should not be relied upon as a substitute for professional legal counsel tailored to your specific circumstances. Vetrov & Partners is a Russian-qualified law firm. For matters governed by foreign law or requiring local admission in another jurisdiction, we collaborate with trusted counsel in the relevant jurisdiction. For advice regarding your particular situation, please contact info@vetrovpartners.com.

— Aigerim Serikbayeva Contributing Regional Analyst — Kazakhstan, Vetrov & Partners vetrovpartners.com/contributions/

Aigerim Serikbayeva is a Kazakhstan-qualified lawyer advising on regulatory licensing, EAEU trade, and market entry for foreign companies operating in Central Asia. She contributes regional analysis to Vetrov & Partners on Kazakhstan and EAEU matters.