The Kazakh Parliament is considering a draft law that will prohibit activities of foreign social networks and messenger applications in the country, unless they have a registered business entity in the state of Kazakhstan.

Under this initiative, foreign IT companies owning social networks, messenger apps or other user communication websites (foreign IT companies) will be obliged to establish a legal entity, branch or representative office in Kazakhstan. The current draft law obliges companies to register in Kazakhstan regardless of number of Kazakhstani users. However, websites that provide financial and e-commerce services will be exempt from the requirement to register a local entity.

Further, the draft law establishes certain rules with which foreign IT companies must comply.  For example, it prohibits appointing foreign citizens (and stateless persons) as directors of their local offices.

Following the registration, the local offices of foreign IT companies will be obliged to comply with all regulatory requirements applicable to companies in Kazakhstan, including taxation, accounting and other administrative matters.

The draft law also grants the authorities the right to demand a local office of a foreign IT company to delete certain information (prohibited for dissemination in Kazakhstan, e.g. information related to terrorism, extremism, copyright infringement) from its website within 24 hours.

If adopted, the law will prohibit activities of foreign IT companies that fail to provide physical presence in Kazakhstan within 6 months after the law becomes effective.

We are actively monitoring the status of this initiative and will keep you updated. If you have any questions about this alert, please contact us.