Singapore and Kazakhstan aim to strengthen their economic partnership, Emeritus Senior Minister Goh Chok Tong said yesterday as the two countries signed a bilateral investment treaty (BIT).
It was signed by Senior Minister of State for Trade and Industry Koh Poh Koon and Kazakhstan's Minister for Investment and Development Zhenis Kassymbek in the presence of Prime Minister Lee Hsien Loong and Kazakhstan Prime Minister Bakytzhan Sagintayev at the Istana.
The treaty will support greater investment flows between both countries through protecting the interests of investors and providing them with more confidence to seize opportunities.
Among other things, investors from both countries will now enjoy non-discriminatory treatment, fair and equitable treatment and full protection and security based on customary international law, protection from illegal expropriation, as well as freedom to transfer capital and returns in and out of either country.
Both PM Lee and Mr Sagintayev also witnessed the signing of an agreement for the mutual exemption of visa requirements for holders of diplomatic, service or official passports from both countries.
At the Kazakhstan-Singapore Business Forum at Shangri-La Hotel yesterday, Mr Goh said: "The BIT will complement the existing Avoidance of Double Taxation Agreement, which reduces the tax burden for companies and relieves double taxation of income earned by our citizens.
"We should continue to work on establishing government-to-government agreements to strengthen the bilateral economic infrastructure. This would help to facilitate companies venturing into our respective markets and further strengthen regional cooperation."
He was speaking at a plenary session, together with Mr Sagintayev.
Another 12 agreements were signed at the business forum to establish partnerships in areas such as information and communication technology, food and education.
Kazakhstan is a key player in the Eurasian region, connecting the East and West. Last year, total bilateral trade in goods between Singapore and Kazakhstan reached $133.6 million. Singapore's imports from Kazakhstan amounted to $110.7 million, while Singapore's exports to the country stood at $23 million. Trade in services between the two amounted to $40 million in 2016.
As of 2016, Kazakhstan's cumulative foreign direct investment in Singapore amounted to $2.5 billion, mainly in the financial and insurance services sector, while Singapore has invested $180 million there.
Mr Goh said that Singapore companies could contribute niche expertise to key Kazakh industries, while Kazakh businesses could use Singapore as a launchpad into the rest of Asia.
Mr Sagintayev suggested that Singapore businesses could look at sectors such as information technology, transport and logistics and housing and construction.
One business that has ventured into Kazakhstan is engineering consultancy Meinhardt. In June, it agreed to provide a technical review of the systems for the Astana LRT project. The company has set up a branch office in Astana, capital of Kazakhstan.
Meinhardt Group chief executive officer Omar Shahzad said: "Given Kazakhstan's strategic location, strong infrastructure and political stability over the years, we saw the country as an ideal location for our 48th regional office to participate in the economic development of the country and to unlock the untapped potential in Central Asia."
He said that one challenge businesses might face is understanding how things are done in Kazakhstan.
"Perhaps the best advice we can offer to Singapore companies looking to enter Kazakhstan is to not get too entrenched in how things are done in Singapore, and to be flexible enough to adapt quickly to how things are done in Kazakhstan," he said.