According to the World Economic Forum Global Competitiveness Report 2010-2011, Kazakhstan is one of the most competitive economies in Central Asia. President Nazarbayev has repeatedly stressed economic reforms over political reforms, and in this climate, trade liberalisation and privatisation of former state assets have progressed relatively far. In principle, foreign trade and ownership have been liberalised, but there are some exceptions in industries of strategic importance, such as media, telecommunications and oil. Moreover, foreign investors have reported feeling increasingly threatened over the past year as the President made public his complaints that previous privatisations were executed too quickly and by-passed domestic companies.

Business surveys generally indicate that corruption in Kazakhstan is a major obstacle for conducting business in the country. For instance, in the World Economic Forum Global Competitiveness Report 2010-2011, companies rank corruption as the greatest constraint on business operations in Kazakhstan, and companies still consider the occurrence of irregular payments and bribes in the country as fairly common. Similarly, two-thirds of the companies surveyed in the EBRD & World Bank BEEPS Kazakhstan 2008 state that corruption constitutes a problem for conducting business in Kazakhstan - an increase from a quarter in 2005. In addition, the World Bank & IFC Enterprise Surveys 2009 report that more than 23% of companies expect to make informal payments 'to get things done' in Kazakhstan. In 2006 alone, SMEs in the country spent between USD 1.3 billion and USD 2 billion on corruption. Victims of corruption in Kazakhstan have very little means for effective recourse, as state and local elite interests are given de facto precedence in courts. Foreign investors can complain to the Ombudsman, but this office has limited power. The US Department of State 2011 reports that, in some cases during the previous few years, Kazakhstan has legislated to the benefit of domestic companies and has challenged contractual rights, raising questions concerning the government's respect of contract sanctity. Global Integrity 2007 reports that 72% of companies resorted to corruption to settle their conflicts. Tax evasion is common and the informal economy in Kazakhstan is substantial. Freedom House 2007 reports that the most widespread form of corruption in Kazakhstan is administrative, including routine extortions and shadow control of companies by officials, which is believed to have fuelled inflation. The President has denounced corruption in the government administration and has instructed lower level officials not to obstruct the operations of SMEs, but little in this regard has translated into practice. Based on the above, companies are recommended to develop, implement and strengthen integrity systems and to conduct extensive due diligence when planning to do or are already doing business in Kazakhstan. 

In some economic sectors deemed of 'strategic importance', such as oil and gas, and electricity and railroads, state companies still play an important role, making frequent purchases of initial public offerings and receiving preferential treatment from anti-monopoly authorities. State-owned companies are rife with corruption and their finances are subject to much less scrutiny than those of foreign investors, according to the US Department of State 2011 and Global Integrity 2010. Nevertheless, the conditions for developing transparent relations between companies and the government are slowly improving. Public officials are trained in anti-corruption, and a code of ethics exists for public officials. On another positive note, competitive examinations are being held for lower and middle-ranking officials that are more frequently in contact with companies. Furthermore, in the early 2009, an anti-corruption policy was adopted by the Kazakhstani government, which includes salary increases of 15% for public servants, according to the Bertelsmann Foundation 2010. However, positions in the higher levels of government are still not awarded on merit-based criteria. As emphasised by Global Integrity 2010, companies continue to report that bribes are frequently required in relations with state officials. However, foreign direct investment flows have remained strong over the recent years, highlighting the fact that Kazakhstan is still an attractive destination for investment country, despite the risk of corruption.

Despite Kazakhstan's competitive edge over other countries in the region, the regulatory burden on companies operating in Kazakhstan is considerable. The business licensing, customs and tax authorities reportedly pose the greatest problems for companies. Starting a company entails 6 procedures and takes an average of 19 days, according to the World Bank & IFC Doing Business 2011. The same source reports that obtaining the licences and permits required by law can take 219 days and cost approximately 120% of the income per capita. Kazakhstan continues to perform poorly in relation to customs, despite efforts to increase transparency and simplify procedures. The average costs of importing and exporting are twice as high as the other countries in the region, making Kazakhstan one of the worst performing countries in the world in relation to customs. Kazakhstan has been in the process of reforming and simplifying the administrative procedural burden of tax compliance. According to the World Bank & IFC Doing Business 2011, Kazakhstan performs well in relation to the ease of paying taxes compared to other countries in the region. However, the time required to comply with tax regulations still poses a significant burden for companies.

In the World Economic Forum Global Competitiveness Report 2010-2011, business executives surveyed perceive government administrative requirements to be quite burdensome. Moreover, business executives also report that government policy-making is fairly opaque and that government officials usually favour well-connected companies and individuals when deciding on policies and contracts. Commercial regulations can be ambiguous and inconsistent, and the lack of transparency increases start-up and overall operational costs. According to the World Bank & IFC Enterprise Surveys 2009, senior management can expect to spend 4.7% of its time dealing with the requirements of government regulation. In addition, the US Department of State 2011 reports that government officials sometimes interfere in business decisions, or use governmental powers to exert pressure on companies for personal or political reasons.

Kazakhstan passed a new Investment Law in 2003 that superseded and consolidated past legislation governing foreign investment. The law provides for dispute settlement through negotiation, Kazakhstan's judicial process, and international arbitration. However, according to companies and investors, the law has not improved on previous laws. There are concerns regarding the law's narrow definition of investment disputes that ignores disputes between private entities, a lack of contract and property rights protection, and a lack of clear provisions for access to international arbitration dispute resolution. Kazakhstan is party to several conventions and treaties on international commercial arbitration and its arbitration law gives precedence to international arbitration agreements. Hence, the US Department of State 2011 indicates that all awards rendered by a foreign or international arbitral tribunal (e.g. the International Centre for the Settlement of Investment Disputes, etc.) should be recognised and enforced in Kazakhstan. The Committee on Investments of the Ministry of Industry and Trade should be consulted before entering into any contract with government bodies as the agencies authorised to act on the government's behalf may change. It is important for foreign companies to do so - for a dispute to be considered an investment dispute, and hence qualify for international arbitration, the contracting state entity itself must have been authorised to act or contract.

A new Land Code came into effect in 2003, allowing Kazakhstani citizens for the first time to privately own agricultural, industrial, commercial and residential land. However, foreign individuals and companies may still only lease agricultural land for up to 10 years, although the wording of the law is unclear regarding the purchase of agricultural land by locally registered entities that can be wholly foreign-owned or joint ventures. Reportedly, Kazakhstani authorities often require that a foreign company agrees in its ownership contract with the government to contribute to social programmes for local communities. Critics have complained that the state will violate property rights to pursue a political agenda and that the Land Code primarily benefits wealthy Kazakhstanis with close ties to public officials, according to Freedom House 2011.