With the right approach, the principles of the Entrepreneurial Code facilitate development of small and medium business in the country

On 1^st of January 2016 entered into force Entrepreneurial Code of the Republic of Kazakhstan. As the preamble of the document states, the Code defines the legal, economic and social conditions and safeguards to ensure the freedom of entrepreneurship in the Republic of Kazakhstan, regulates public relations arising in connection with the interaction of businesses and the state, including government regulation and support for entrepreneurship.

Ildar Dzhumiyan His – the member of the expert group under the curator of the party within the direction "Support for small and medium-sized businesses” of the pre-election platform "Nur Otan", the partner of the consulting firm KLAS shared his opinion about the new Code.

"Many lawyers, both theoreticians and practitioners, widely covered the problems and disadvantages of the new Code. I absolutely agree with some of them. In recent years, the legislation of the Republic of Kazakhstan on private enterprises, gradually developing, has become so cumbersome that not every entrepreneur can master it. The massive volume of laws and regulatory acts, sometimes outdated, and sometimes conflicting, of course, inhibits the development of small and medium-sized businesses in the country. In my opinion, the authors of the document set a goal not only to organize entrepreneurial legislation, but also to eliminate all sorts of gaps and inconsistencies in the regulation of social relations between government and business", - said Ildar Dzhumiyan.

The Entrepreneurial Code consists of 324 articles and is based on sixth laws, which lost their force "On private entrepreneurship" (2006.); "On peasant or husbandry farms" (1998.); "On investments" (2003.); "On Competition" (2008.); "On State Control and Supervision in the Republic of Kazakhstan" (2011.); "On state support of industrial-innovative activity" (2012).

"Having established and defined the basic principles of the Code, the basic "rules of the game", the authors of the Code and experts expressed the need to introduce changes and additions to more than a hundred legal acts. Thus, entrepreneurial law would acquire a clear structure and consistency ", - said the businessman.

Was there a need to unite such different, at first glance, laws and adjust them to the rest of the legislation? Undoubtedly, yes, said Ildar Dzhumiyan.

"First of all, codification allowed to combine disparate rules, governing similar relationships of business entities and the state: public law, private law, internal and corporate laws. There was formed a certain system. This will greatly simplify the work of entrepreneurs, many of which can’t always afford qualified legal aid in a given situation. Second of all, according to the hierarchy of legal acts, the Code prevails over the laws. In addition to the above mentioned six laws, there are a number of laws related to a greater or a lesser degree to entrepreneurial activities, thus, the Code allows, if not eliminate, at least to resolve possible conflicts", - said I. Dzhumiyan.

He stressed that we should not forget that at the time of the foundation of the first Labour Code a number of previous laws were also taken as a basis ( "On labor in the Republic of Kazakhstan", "On Collective Agreements" and so on.). As a result the adoption of the Labour Code allowed to make a qualitative leap in the development of labor relations.

Of course, the area of ​​business relationship is so broad and the Code will not be able to cover all areas, said the businessman. According to him, there will remain industry laws and regulations, international treaties, etc. Although it is possible that some of them will be included in the Code in the process of its finalization.

"Article 3 of the Code lists 19 principles on which will be build relations between the state and business. With the right approach, these principles will ensure the development of small and medium-sized businesses in the country, they will simplify the work of large, established companies", - said Ildar Dzhumiyan.

In his opinion, declared principles that give businesses greater freedom of action are of particular interest. These include, among others, the principle of limited involvement of the state in business and the principle of self-regulation.

"Extreme regulation", stringent laws and administrative regulations, state intervention in the distribution of material, natural and financial resources doesn’t facilitate the development of business in the country, the basis of which is enshrined in the Constitution of Kazakhstan in the right on private property. In turn, this creates the prerequisites for the growth of corruption, as there are always people wishing to circumvent the law and those who are willing to help them do that. In countries with developed market economies, the degree of state intervention in economic activities of business is only indirect and is manifested to a lesser extent, - said the businessman. - in The principles listed in the Code are not new and were declared previously. But it should be noted, how in difficult economic conditions, the government decided to limit itself in the management of business entities and give them freedom of self-regulation. The main thing is that the declared principles have not remained on paper, and will be implemented as soon as possible in the form of concrete actions".

"Most likely, the Entrepreneurial Code will not last long in the form in which it was adopted. It certainly will be updated, supplemented, brought into line with current economic realities. But its adoption should give a new impetus to the development of all categories of business entities in the country ", - concluded Ildar Dzhumiyan.