The Three Options — Stated Plainly
A European company hiring in Kazakhstan has three structural options. Here is what each one means in practice:
A: Direct contractor
Fast to start, no setup cost. Creates misclassification risk, 20% WHT on direct payments from your EU entity, and PE exposure — now harder to reset under the 2026 "similar contracts" rule.
B: Own Kazakhstani entity (TOO)
Full control. Legal registration 1 day; bank account and payroll operational readiness 4–8 weeks. Then: four contribution schemes, four portals, monthly accounting. Makes sense at 15–20+ developers.
C: Employer of Record via NexoStaff
Operational in 3–5 business days. No Kazakhstani entity required. All four contribution schemes handled by us. From €500/month per developer.
Option A: Why Civil Contracts Are Riskier Than They Appear
Kazakhstan's Labor Code sets clear employment criteria: personal performance, integration into the employer's operational structure, and periodic remuneration regardless of output. The Supreme Court added practical factors: income constitutes the developer's primary source, and the work is integral to the employer's core business.
From January 1, 2025, civil law contracts in Kazakhstan require mandatory social insurance contributions from tax agents — even for legitimate contractor arrangements. The cost arbitrage between contractor and employee has largely closed.
The 20% withholding tax problem: when a non-resident foreign company pays a Kazakhstani individual directly, Kazakhstan imposes 20% withholding tax on that income. DTTs with Germany, Spain, and the Netherlands may reduce this, but invoking them requires a Kazakhstani tax residency certificate and pre-approval procedures that became stricter under the 2026 Tax Code.
Option B: Registering a Kazakhstani TOO — The Real Costs
Online registration via egov.kz takes 1 business day. For a foreign-owned TOO: notarized and apostilled foreign shareholder documents, translation into Kazakh and Russian, bank account opening (the main bottleneck, typically 2–4 weeks for new international entities), and tax registration. Realistic timeline to first payroll: 4–8 weeks. Minimum authorized capital: approximately KZT 3,692,000 (~$8,000).
The four contribution schemes (2025–2026 rates):
| Contribution | Who pays | 2025 rate | Trajectory |
|---|---|---|---|
| IIT (income tax) | Employee (employer withholds) | 10% flat | Stable |
| OPV (mandatory pension) | Employee (employer withholds) | 10% | Stable |
| OPVR (employer pension) | Employer | 2.5% | → 3.5% (2026) → 5% (2028) |
| Social Tax | Employer | 11% (net ~6%)* | Increased from 9.5% in 2025 |
| SO (social insurance) | Employer | 5% | Increased from 3.5% in 2025 |
| OSMS medical (employer) | Employer | 3% | Stable |
| OSMS medical (employee) | Employee (employer withholds) | 2% | Stable |
* Social Insurance contributions (5%) offset against Social Tax. Net Social Tax burden after offset: ~6%.
Astana Hub
For IT companies registered as Astana Hub participants, a special regime applies through January 1, 2029: 0% CIT, 0% IIT on qualifying activities, 0% Social Tax for foreign specialists, 0% VAT. Astana Hub is extraterritorial — the company can be located anywhere in Kazakhstan. As of 2024, 1,600+ resident companies. Worth modeling at 15+ developers long-term.
Option C: How EOR Actually Works
EOR is not outsourcing. You find the developer, agree on the role and salary, manage day-to-day work. NexoStaff handles the legal and compliance structure.
You sign with NexoStaff
One standard B2B contract with NexoStaff's entity in Spain or Germany. EU law, EUR invoicing, standard GDPR terms. Nothing unusual for your legal team.
We handle Kazakhstani compliance
NexoStaff signs a services agreement with your developer as a registered individual entrepreneur (ИП). We run payroll calculation, handle IIT (10%) and applicable contributions, and ensure compliance with Kazakhstani law. The developer works under a civil contract with NexoStaff — no direct relationship with your company.
One monthly EUR invoice
You receive a single EUR invoice covering developer gross salary, employer-side contributions, and our management fee. No KZT transfers, no Kazakhstani bank account, no contribution portal access needed.
Total employer cost via EOR (mid-level, $2,000 gross):
- Developer gross compensation: $2,000/mo
- Contribution overhead: ~$330/mo (~16.5%)
- NexoStaff management fee: from €500/mo
- Total: ~$2,830–$3,000/mo
Permanent Establishment — The 183-Day Rule and the 2026 Change
Under Kazakhstani Tax Code, a non-resident company creates a PE if it provides services through its employees or personnel in Kazakhstan for more than 183 days within any consecutive 12-month period for the same or connected projects. Kazakhstan uses a rolling 12-month window, not a calendar year. A developer starting October 1 hits 183 days by late March of the following year.
New "similar contracts" rule — live from January 1, 2026
Kazakhstan's new Tax Code (adopted July 2025, effective January 1, 2026) introduced a PE aggregation rule for "similar contracts" — contracts with common nature and purpose, similar content, single technology, or shared resources. Previously, ending a contract before 183 days and restarting reset the PE clock. Under the new rule, both periods count together. If your German GmbH engaged a developer for 150 days, then renewed — both periods aggregate from the early days of the second contract. This rule is now live.
Creates PE
- Developer works exclusively for you 183+ days (rolling)
- "Similar contracts" aggregated under 2026 rule
- Dependent agent with authority to conclude contracts
- Fixed place of business in Kazakhstan
How EOR addresses it
- Developer is NexoStaff's employee — no EU employment relationship
- No direct relationship between your company and any Kazakhstani resident
- No registered presence, office, or bank account in Kazakhstan
- Payments flow EU→EU (your entity to NexoStaff)
If PE is triggered: mandatory registration with the State Revenue Committee, 20% CIT on attributed profits, 15% branch profit tax (combined effective rate ~32%), backdated assessments, 80% penalties, and interest.
What Kazakhstan Developers Cost
For detailed salary data by stack, level, and Almaty/Astana split, see our Kazakhstan Developer Salary Guide. Summary for planning purposes:
| Level | USD/month (international-facing) |
|---|---|
| Mid-level (2–5 years) | $1,500–$2,500 |
| Senior (5+ years) | $2,500–$4,000 |
| Lead/Principal | $4,000–$6,000 |
Almaty premium: ~20–25% above Astana for comparable profiles. Almaty has the deepest senior talent pool (Kaspi.kz, EPAM, Yandex KZ). Astana (Astana Hub) is growing faster but skews junior/middle.
Frequently Asked Questions
Related guides
- Employer of Record in Kazakhstan — compliance, contributions, EOR vs own entity
- Kazakhstan Developer Salary Guide 2026 — level ranges, Almaty vs Astana, total employer cost
- NexoStaff Pricing — management fee, one-time setup, team rates