2015 KHORGOS - EASTERN GATE Special Economic Zone

Legal base for SEZ establishment SUMMARY Law of the RK «On special economic zones in the Republic of Kazakhstan» dated from , 469-IV Presidential Decree «On establishment of SEZ «Khorgos-Eastern Gate» dated from , 187 Initiator of establishment National Company Kazakhstan Temir Zholy JSC (SWF «Samruk-Kazyna» JSC, the sole shareholder) Operator KTZ Express JSC (Kazakhstan Temir Zholy National Company JSC, the sole shareholder ) Management Khorgos - Eastern Gate SEZ Management Company JSC (KTZ Express JSC, the sole shareholder) SEZ objectives Establishment of the efficient transport & logistics hub, industrial zone, realization of transit potential of the Republic of Kazakhstan

EXTERNAL INFRASTRUCTURE OF KHORGOS – EASTERN GATE SEZ On 25 th December, 2014 in a telebridge with the participation of the President Nursultan Nazarbayev, there were commissioned a 1 st start-up facility of the Dry Port. Construction of infrastructure in Logistics and Industrial zones of SEZ will be completed in The planned cargo traffic by 2030 – 4,8 million tons.

GENERAL PLAN OF DRY PORT AND LOGISTICS AREA

REDIRECTION OF TRADITIONAL CARGO TRAFFICS BY USING MULTIMODAL TRANSPORTATION PATTERN THROUGH KAZAKHSTAN Стамбул Достык Санкт-Петербург Гамбург Рига Баку Дубаи Бендер-Аббас Горган Тегеран Серахс Илецк Актау АСТАНА Москва Гуанжоу Шанхай АЛМАТЫ Брест Абу-Даби Санкт-Петербург Урумчи Амстердам Чунцин Дуйсбург Transportation typeDaysCost (1 FEU) Rail16$9 000 Rail-Air12$ Ocean-Air36$ Rail-Sea-Road45/50$5 600 Air5-6$ Exploitation of Khorgos – Eastern Gate SEZ as an intermodal hub for further distribution to Europe, CIS and Central Asia СЭЗ Хоргос

Khorgos - Eastern Gate SEZ Management, partnership Khorgos - Eastern Gate SEZ Management Company JSC Khorgos - Eastern Gate SEZ Concept, Master Plan, TES & Business Plan developing April 15 th, 2013 KTZ National Railways Company and DP World signed Terminal Service Agreement for Aktau seaport and Khorgos - Eastern Gate SEZ; November 7 th, 2013 Khorgos - Eastern Gate SEZ Management company and DP World signed Terminal Service Agreement for Khorgos - Eastern Gate SEZ

Priority economic activities Storage facility and related additional transport activities; Construction of buildings for exhibitions, museums, storage and administrative buildings Production: - food production; - manufacture of textile products; - manufacture of leather and relevant products; - manufacture of chemical industry products; - manufacture of other non-metal mineral products; - manufacture of finished metal products, except machines and equipment; - manufacture of machines and equipment omitted from other categories;

Package of fiscal incentives/preferences for of «Khorgos-Eastern Gate» SEZ participants CIT reduction by 100% on income from the activities corresponding to the SEZ priorities Property tax at zero rate VAT at zero rate with the condition of the goods sold and consumed by the SEZ participants in SEZ territory Exemption from land rent for the medium term period within SEZ territory a free customs zone procedure/regime applied; The commodities produced of imported goods, to which is free customs zone procedure applied, by the residents registered in SEZ before 01/01/12 are treated as Customs Union commodities till 01/01/2017

Requirements to the potential participants of Khorgos - Eastern Gate SEZ Resident and non-resident participant has to be registered as a legal entity Participant has to posses funds or other liquid assets, not taken out of circulation in the amount not less than the Project cost according to TES Participant has to be engaged in the activities in accordance with the SEZ priorities and only in the SEZ territory Participant is not permitted/allowed to have separate divisions outside of the SEZ territory Application with all required documents in accordance with the article 10 of the Law of the Republic of Kazakhstan On SEZ in the Republic of Kazakhstan dated from г. 469-IV ЗРК has to be submitted for a company to be registered as a SEZ participant Potential participant can not be a legal entity – a subsoil user, organization, producing excise goods, the organization subject to special tax regimes, organizations subject to the investment tax preferences, the organizers of gambling.

Khorgos - Eastern Gate SEZ Management Company JSC Sak Nurlan Ibadullauly, Project Manager Web: Contact Information