Trade between UAE & Kazakhstan – Ship Cargo to Kazakhstan
The UAE-Kazakhstan trade lane is one of the busiest lanes between Middle East and Central Asia. It has bolstered the overall relationships between both nations as they peacefully engage in other activities as well. A deep dive into this trade lane shows that it is more than cargo shipping to Kazakhstan but includes the investment opportunities and the economic evaluation of both nations.
Understanding and exploring the UAE- Kazakhstan trade lane will give you an opportunity to tap from the growing market and expand your reach as a business between these two regions.
We will get to know the state of the economy of both nations, their major imports and exports, and challenges, and definitely show you how to fly past them in this post.
Overview of Trade Lane Between UAE and Kazakhstan
Trade activities between UAE and Kazakhstan have gone from being basic to something with economic benefits and business progress. The lenient policies, political, and economic stability has been the major trigger to the progressive records of this trade lane. Little wonder we can move cargo from Dubai to Kazakhstan with less governmental constraint now.
To go further on this solid relationship, UAE and Kazakhstan have had 25 projects in the last 10 years which amounts to 5.3 billion USD. UAE made exports to Kazakhstan worth 54.8 million USD, while Kazakhstan’s exports to UAE hit 632 million USD in 2022.
See the images below for a breakdown of the exports.
From the images, it’s clear that pharmaceutical products were UAE’s top export to Kazakhstan, while Copper was Kazakhstan’s top export to UAE. A rundown of the key industries in the trade between these two nations will be;
- Health industry
- Petroleum/Energy industry
- Manufacturing industry
- Mining and minerals
A good starting point will be to split up and consider each nation’s economy separately. This will give the productive stance of both UAE and Kazakhstan.
The UAE gets its fame as an oil-producing nation; however, its economy thrives with the contribution of other industries that are doing great, including
- The retail industry
- The logistics and transportation industry
- The Manufacturing industry
- The e-commerce industry
- Oil and gas/ energy industries
UAE’s top exports include crude oil, machine parts, copper, precious metals, vehicles, fabrics, and food materials.
Major Trading Partners
Several countries find it easy to trade with UAE, and as a result, its trading partners are quite a number. Currently, UAE trades with over 32 countries but the major partners are China, Iran, the USA, Turkey, Japan, Kazakhstan, Oman, the United Kingdom, Vietnam, and Germany.
Kazakhstan has grown to establish an appealing market. As a result, several countries have strengthened their trade relationship with them. No doubt, the Kazakhstan market has now become one of the best-performing markets in Central Asia.
Kazakhstan has a population of 19.4 million people, which is a good number to produce a formidable labor force. Aside from the labor force, that’s a good number of potential consumers for businesses. In recent years, the inflow of investors and migrants also helps boost the nation’s market size.
Kazakhstan is the largest country in Central Asia in terms of available natural resources. These resources are well exploited for the growth and sustenance of the economy. Kazakhstan contributes up to 44% of Central Asia’s nominal GDP which is the highest.
Kazakhstan has a GDP of over 197 billion USD and a GDP per capita of $11,591.
Why Choose Kazakhstan for Investment?
The GDP and economic activities of Kazakhstan show that it is an attractive market zone. We can solidify the claims by looking at the foreign direct investment (FDI) in the nation.
Between 2017 to 2022, $125 billion has been invested in Kazakhstan’s economy by foreign investors with a 14.5 % increase in investment experienced in 2022. Over time, investment has gone into sectors such as Agriculture, Petrochemicals, Trade, Engineering, Infrastructure, Mining, and Metallurgy.
The activities of previous and present investors show that Kazakhstan’s market offers good business returns. However, lets look at other reasons why investing in Kazakhstan is a good idea.
- Entrepreneurs and investors can defer taxes for up to 3 years.
- Kazakhstan can play as an alternative market to Russia.
- Kazakhstan gives access to markets of over 500 million customers.
- Kazakhstan is moving away from monopolistic market structures.
- A visa-free regime that started in 2022 and is available to citizens from 54 countries.
Kazakhstan’s key industries include
- Oil and gas
- Mining and Metallurgy
Top Exports and Imports
With several trade partners available, Kazakhstan exports and imports a wide variety of goods. However, let’s focus on the leading exports.
- Oil and gas
- Food materials/products
- Metals and Minerals
- Chemical related products such as pharmaceuticals, plastics, etc.
On the other hand, the country’s major imports include;
- Consumer goods such as electronics, clothing, appliances, etc.
- Machinery and equipment
- Food products
Major Trading Partners
China tops the list with a 17% share in the total trade. Other major trade partners are Turkey, Russia, the USA, UAE, Japan, and South Korea.
Shipping Routes and Mode of Transportation
The shipping and freight services between UAE and Kazakhstan are pivot activities that occur in the trade lane. Going beyond the skeletal frame of cargo transport, we will now discuss the available routes between UAE and Kazakhstan and the freight services offered on this route.
For instance, if you need to move cargo from Dubai to Almaty, your logistics or freight service providers will have to determine the available and best transport network to get it done in the safest way and best possible transit time. This transport network can include rail systems, road networks, waterways, airways, and even a combination of these avenues. So, a well-denoted transport corridor gives a clear path of movement between UAE and Kazakhstan.
Shipment moves from the port in the UAE taking the eastern black seacoast to the port in Poti Georgia. The shipment is then transported to the port of Aktau in Kazakhstan.
This corridor gives access to Kazakhstan from UAE through China. Shipment will first get to China before moving to Kazakhstan.
Shipment will pass through Iran or Karachi (Pakistan) en route to the port of Aktau.
Here you have one of the dominant shipping methods– loading cargo into ships and making a delivery from UAE to Kazakhstan by sea. Of course, this method is facilitated by the use of ports, so we take a dive into the major ports in UAE and Kazakhstan.
Major Ports in UAE and Kazakhstan
In UAE, you’ll find the following ports:
- Port of Fujairah, which is located in Fujairah.
- Port of Jebel Ali, which you’ll find in Dubai.
- Port of Khalifa, which is located in UAE’s capital city (Abu Dhabi).
- Port of Sharjah, which is located in Sharjah.
In Kazakhstan, you’ll find the following ports:
- Port of Aktau, which is a major seaport that accesses Central Asia.
- Port of Kuryk
- The port of Atyrau and the port of Bautino – both used for oil and gas transportation.
Sea freight is not the fastest but can move and deliver cargo between 10-20 days.
Now, this is the opposite of sea freight and the fastest means of cargo transport available. Let’s see the airports available in these nations.
Airports in UAE and Kazakhstan
In UAE, we have the following airports:
- Fujairah International Airport
- Dubai International Airport
- Sharjah International Airport
- Abu Dhabi International Airport
- Al Maktoum International Airport
- Ras Al Khaimah International Airport
In Kazakhstan, we have the following airports:
- Almaty International Airport
- Nursultan Nazarbayev International Airport
- Shymkent International Airport
- Aktau International Airport
Airlines that Operate on the Route
- Etihad Cargo
- Cargolux Airlines
- Emirate SkyCargo
- Air Astana Cargo
- Turkish Airlines Cargo
- Aeroflot Cargo
- Lufthansa Cargo
Shipping from Almaty to Dubai by air freight can take up to 4 to 5 hours. This time is not so different when shipping between other cities in UAE and Kazakhstan.
Customs and Regulations
Imports and exports are huge deals with delicate documentation in compliance with regulations set by the customs of both nations. So, we will dive into the documents for imports and exports, and then touch on tariffs and rules for both UAE and Kazakhstan.
UAE Customs and Regulations
Documentation Required for Exports and Imports
- Custom Declaration – This document is used for determining the custom duties as it states the goods, their quantity, and value.
- Health Certificate – This document is unique to pharmaceutical and food products showing that they meet health and safety standards.
- Packing List – The packing list gives a description of the goods such as quantity, dimensions, characteristics, and weight.
- Certificate of Conformity – Certifies that the goods exported or imported meet the standards.
- Bill of lading – This document is prepared by the shipping company stating that the goods have been loaded and are ready for shipment.
- Insurance Certificate- This document shows that the goods exported or imported have been insured.
- Export License – May be needed as specified with special goods. Showing that the exporter is licensed for such operations.
- Import License – May be needed in the case of imports of special goods.
- Commercial Invoice- This will show the price of the goods, payment methods, and terms of sale.
UAE Export Regulation
To export goods from UAE, following are some of the regulations that one must follow:
- Acquire relevant custom documentation for imports.
- Adhere to the regulations regarding embargoed goods.
- Obtain an export permit.
- Obey the intellectual property law.
UAE Import Regulation
To successfully import goods into the UAE without constraints and breaking the rules, one must adhere to the following regulations:
- Register with the UAE custom authorities.
- Obtain a trade license.
- Adhere strictly to UAE packaging regulations.
- Comply with regulations on restricted items.
- Pay import duties and taxes.
Tariff and Taxes
The UAE imposes a fair 5% import duty. However, there are other taxes beyond the import duty, including
- Custom Fees – These are not constant as they are placed on a a few goods, for example, luxury goods.
- Value Added Tax – UAE places a VAT of 5% on goods. However, some goods are exempt from VAT.
- Excise Tax- The rate varies, and it is placed on goods thought to be harmful.
Kazakhstan Customs Regulation
The customs authority of Kazakhstan has the following regulations for trade in the country:
Documentation for Import and Export
The following documents are required:
- Purchase order (for imports)
- Certificate of origin
- Import license
- Export license
- Commercial invoice
- Bill of lading
- Packing list
- Custom declaration
Kazakhstan has a set of rules that must be obeyed before granting entry to any goods, including
- All import duties must be fully settled.
- Import license must be in place for goods specified by Kazakhstan’s customs.
- Phytosanitary clearance for food products is compulsory.
- Customs declaration is compulsory, and it covers every imported good.
- 100% adherence to the import of restricted goods, e.g., firearms, narcotics, etc.
- Labeling requirements should be met.
The export regulations include:
- Carrying out complete customs procedures.
- Paying all due tariffs and taxes.
- Obtaining an export license.
Tariff and Taxes
Goods imported into Kazakhstan are charged 12% VAT. However, this rate can be reduced depending on the type of good. Other tariffs that are charged by Kazakhstan are in line with the Eurasian Economic Union.
Trade Opportunities and Challenges
This is the part where it gets more interesting. A time to identify opportunities and hit the ground running as a business or brand. Let’s look deeper into the UAE-Kazakhstan trade lane to spot the opportunities and challenges.
The following opportunities are available for this trade lane:
Key Industries with Growth Potential
You have a chance to explore investments and establish your brand in Kazakhstan’s economy. The country boasts several industries with impressive growth potential. Let’s see some of these key industries.
Agriculture and Food industry
Kazakhstan has about 220 million hectares of land for agricultural productivity. In 2020, the industry yielded $20.8 billion in production volume. Then went further to attain $3.2 billion in exports and $4 billion in imports. This shows a 52% growth in exports and 37% in imports since 2015. Kazakhstan continues to receive investment proposals for this industry, which are projected to continue on a positive stride.
This is another booming industry in Kazakhstan. The hotspots are oil and gas equipment, electric equipment, and motor vehicle parts. The industry experienced 47% of imports in 2020, a production volume of $4.4 billion, an import volume of $18 billion, and an export volume of $1.3 billion. With over 123,000 qualified workers, the industry continues to thrive and is expected to keep up the positive trend.
Mining and Metallurgy
Kazakhstan is ranked 6th in the world regarding estimated mineral resources. With so many mineral resources, it boasts a $3 trillion gross value reserve. Kazakhstan‘s doors are open and offer the opportunity without a competitive process, which is based on a first come- first serve system. Mineral resources such as gold, copper, uranium, iron ore, lead, zinc, manganese, etc. are available in the region in abundance.
Kazakhstan has the highest pharmaceutical sales volume in Central Asia, which hits $1.8 billion. Its share of domestic production is expected to grow by 50% by 2025.
Other key industries include,
- Construction industry
- Information and communication technology
- Chemical industry
Trade Agreement Between UAE and Kazakhstan
- UAE and Kazakhstan are in a very healthy relationship as they signed a memorandum of understanding in 2018. This memorandum was signed to strengthen trade, economy, and investment.
- The tax barrier has been significantly reduced due to the Double Taxation Avoidance Agreement signed in 2012.
- Agricultural development and food security were scattered for by the memorandum of understanding on food security signed in 2019.
- Several investment agreements have been signed by the two nations in recent years.
Emerging Markets in Kazakhstan
With the increasing population and labor force, other sectors of Kazakhstan’s economy have begun to pick up positive strides as well. There are emerging markets in the light industry, information and communication technology, tourism, and logistics.
Despite all things looking rosy, there are a few hiccups identified on this trade lane.
Language and Cultural Barriers
The official language in Kazakhstan is Kazakh and Russian as opposed to UAE’s Arabic. From a business perspective, UAE speaks English as opposed to Kazakhstan which speaks Russian. This causes some challenges in communication.
Although both nations share some cultural norms, they differ in some aspects. Kazakhstan is influenced by Russian and Turkish culture, but UAE is basically Arabic. This will cause a few discrepancies in values and modes of dealings.
This covers the areas of inconsistent government regulations towards trade. So, changes in policies by one nation tend to affect the trade relationship. This will cover signed agreements, tariffs, duties, etc.
Every industry needs working infrastructure. While some industries show strength, other sectors lack the infrastructures to boost market activities.
Value Addition from Al Sharqi
Do you know that Al Sharqi can break the complexities in the UAE- Kazakhstan trade lane, creating a seamless cargo shipment in Kazakhstan? With several years of experience and the adoption of modern technology, we can help handle logistics and forwarding services in Kazakhstan and UAE.
We will facilitate this process;
- By ocean: We will provide exclusive sea freight packages such as FCL and LCL to move your cargo from UAE to Kazakhstan. We have a mapped-out route which can be via China or Iran.
- By air to the destination airport for faster transit time and delivery.
Get started with us now!! Ship cargo to Kazakhstan from Dubai or any emirate in the UAE.
It’s possible to explore the UAE- Kazakhstan trade lane; for example, you can ship cars from Dubai to Kazakhstan thriving on the knowledge and resource in this post. Both nations have a growing economy that continues to attract Foreign Direct Investment. As a result, you have a chance to explore the emerging markets in this lane. It’s all promising, looking at the future of the trade lane. The economy is growing, and so marketing activities are expected to grow.
Frequently Asked Questions
There is no free trade agreement between the two nations. However, both nations have signed other agreements such as the memorandum of understanding on food security in 2019.
The volume of trade between UAE and Kazakhstan is over $518 million. This is a fair number for both nations.
We have the port of Jebel Ali in Dubai and the port of Aktau in Kazakhstan. Cargo is loaded into ships in the port and then transported via the available corridors or routes. The destination point is the port of Aktau.
Copper, iron, chemicals, and fuels. Kazakhstan is known to be rich in natural resources, and it accounts for its exports of copper and iron to the UAE and other trade partners.
Electrical equipment, plastics, and machinery. These are the goods lacking in Kazakhstan and this trade has to happen to meet consumer needs in Kazakhstan.