Self-Employment in Kazakhstan

How to register self-employment in Kazakhstan? How much tax should be paid? What nuances should be kept in mind?

Who is Self-Employment Suitable For?

To register as self-employed, an individual must meet several criteria simultaneously:

• Not to have an official job (based on a contract with an employer).
• Not to be registered as an individual entrepreneur (IE).
• Not to be registered as unemployed with the labor exchange.
• Not to hire employees.

As mentioned earlier, a self-employed person can sell their own products or provide services, but not in all areas.

Self-employment is suitable if you produce and sell agricultural products yourself. These can be vegetables or fruits, eggs, dairy products, or honey. However, selling other handmade goods is prohibited. For example, if you make handmade jewelry, you need to open an IE to legally sell them.

Self-employment is also relevant for specialists providing services in tutoring or tailoring. Additionally, as a self-employed person, you can work as a nanny, perform loading or unloading jobs, repair equipment or housing, and assemble furniture.

Renting out residential property is also included in the list of activities available to the self-employed.

An important note: a self-employed person can sell goods, rent out housing, and provide services to individuals only.

You can check your status at any time to ensure you are registered as self-employed. To do this, visit the e-government website Egov.kz – all information is available in your personal account. It’s also worth visiting it if you’re planning to start working as self-employed to check if you are listed in the database as unemployed.

Pitfalls of Self-Employment

There are other nuances:

1. You can sell self-produced goods and provide services but cannot do this on commercial territory.
   

For example, you cannot take home-grown apples, tomatoes, or potatoes to a market or a store – self-employed individuals can sell them only from home. You can arrange to meet customers on a neutral territory, i.e. somewhere in the street, but you cannot set up a sales point.

If you repair irons or laptops, or mend clothes, you can provide these services only at home; the self-employed are not allowed to have their own workshop or service point in shopping centers.

2. You can rent out housing, but not property.
   

You can offer an apartment for rent that you do not live in (for example, one inherited or an investment property). However, you cannot provide services for renting out household appliances or power tools.

3. You can only provide services that do not fall under private practice.
   

A self-employed person cannot be a lawyer, mediator, or notary. To work in these fields, you will need to become an IE.

Also note that in Kazakhstan, self-employment is not available to non-citizens. But there is an exception: this rule does not apply to oralmans, ethnic Kazakh repatriates who have relocated to Kazakhstan from other countries.

How to Register as Self-Employed?

Self-employed persons do not need to go through a special registration procedure or submit reports to the tax committee. To start working as self-employed, you only need to pay the Unified Aggregate Payment (EAP). This payment is made once a month –you can officially work until the end of the paid month. You can also pay the EAP for several months in advance – the choice of payment format is up to you.

To stop working as self-employed (for example, if you no longer have income), you just need to stop paying the EAP – the system will automatically deregister you.

Everything is as simple and quick as possible.

What Does the EAP Include and How to Make the Payment?

The unified aggregate payment got its name because it combines four payments:

• 10% of the amount goes to individual income tax.
• 30% goes to the pension fund.
• 40% goes to health insurance.
• 20% are social contributions.

You do not have to calculate the percentages yourself: an individual pays one amount, which is automatically distributed among the four categories.

Exception: self-employed pensioners – all their contributions go to one category only – income tax.

The EAP amount is set by the state:

• Self-employed individuals living in regional centers and cities of republican significance pay 1 MCI. In 2024, this is KZT 3,692.
• Residents of other settlements pay half – 0.5 MCI, i.e. KZT1,846.

You can make the EAP payment in any convenient way. Transactions are available through:

• Second-tier banks. Payments can be made in cash or by card through the cashdesk. You do not need to open a bank account.
• Kazpost and other organizations where you can make such a transaction.
• Bank apps. The most convenient option is bank apps. They already have a section of payments for self-employed, so you don’t even need to enter the recipient's details. Another convenient option with payment through the app: you can pay the EAP for another person – you only need to specify his or her IIN.

What Are the Advantages of Self-Employment?

This method of legalizing work has many advantages:

• You can receive free medical care since you participate in the state insurance system along with individual entrepreneurs and hired workers.
• Pension savings increase.
• Years of pensionable service increase. It determines the amount of payments when you retire. For example, if a worker has 10 years of service, such worker will receive a pension of 54% of the minimum living wage. With each additional year after 10 years of service, the payment amount increases by 2%. To receive a pension equal to the minimum living wage, the length of service must be 33 years.
• You can count on social assistance. For example, on unemployment allowance or assistance when adopting a child, and childcare allowance for a child up to one year old.

Disadvantages

Freelancers are attracted by the simplicity and clarity of the system, but it also has disadvantages. The main one is that there is no link to income. On one hand, this is good: you make a small payment and spend the rest of the money at your discretion. At the same time, you can use medical services and “build up” pensionable service. However, since the self-employed do not pay taxes, the pension will be basic, and social benefits will be minimal. This will not suit everyone, of course.

Also, keep in mind that self-employed individuals are usually denied large loans by banks, which means that difficulties may arise with mortgages – the most popular type of loan.

Experts believe that self-employment is an optimal solution for those specialists for whom freelancing is a side job, for example, during university studies. Such a system will also be suitable for rural residents engaged in growing agricultural products and who cannot “accumulate” service record in any other way.

Can You Be an IE and Self-Employed Simultaneously?

In Kazakhstan, self-employment cannot be combined with individual entrepreneurship or hired work. IE and hired work contradict the very conditions for registering an individual as self-employed.

Open an account for a IE at Bank CenterCredit

Self-employment is a way to earn income while avoiding the risks of being held accountable for illegal entrepreneurship. The advantages of the system include maximum simplicity and clarity, no need for complex administrative procedures and reporting. Self-employment allows free use of medical services and “accumulation” of service record but is not suitable for everyone. Therefore, it is important to familiarize yourself with the nuances before starting activities. важно ознакомиться с нюансами.