Issuing Body: GUOZUN CATHAY ASSOCIATES, Kazakhstan Office
Case Closure Date: 29 October 2025
Key Outcomes: Completed full-chain legal due diligence across 9 major dimensions; issued a bilingual report compliant with both Chinese and Kazakh legal jurisdictions; identified 6 major compliance risks; reduced the client’s market research costs by 32%; avoided potential economic losses of over RMB 2 million in advance; and customised competition strategies helped the client increase its market share by 15%.
This case was jointly handled by the Kazakhstan Office of GUOZUN CATHAY ASSOCIATES and the cross-border compliance team of the Beijing Headquarters. Strictly abiding by the laws and regulations of China and Kazakhstan as well as the bilateral investment agreement between the two countries, and relying on GUOZUN CATHAY ASSOCIATES’ global service network covering 106 countries and regions and dual-jurisdiction practice qualifications, we have established a standardised cross-border due diligence model of “headquarters-coordinated compliance + local on-site implementation”. This case has been included in GUOZUN CATHAY ASSOCIATES’ 2025 “Belt and Road” Legal Service Typical Case Library, and its operation process of “official data retrieval + on-site verification + dual-jurisdiction compliance calibration” has been widely applied in the field of cross-border commercial due diligence in Central Asia.
I. Case Background and Entrustment Process
A Shandong-based trading company with 8 years of in-depth engagement in China-Kazakhstan import and export trade, specialising in the export of machinery and equipment and daily necessities to Kazakhstan and the import of Kazakh agricultural products, is a key China-Kazakhstan trade service provider in northern China. In the second half of 2024, local peer enterprises in Kazakhstan expanded rapidly, directly eroding the client’s market share. To fully understand the operational strength and compliance status of its core competitors, optimise its market competition strategy, and mitigate cross-border trade operational risks, the client entrusted the Kazakhstan Office via GUOZUN CATHAY ASSOCIATES’ Beijing Headquarters in August 2024 to conduct dedicated legal due diligence on competitors.
Given three core challenges in the case – access to non-public local information in Kazakhstan, convergence of dual-jurisdiction compliance systems, and validity recognition of cross-border data – the Kazakhstan Office activated the “China-Kazakhstan Emergency Collaborative Case Handling Mechanism” on the same day. A special project team of 4 lawyers was formed in conjunction with the Beijing Headquarters, comprising 2 locally practising lawyers in Kazakhstan (proficient in Kazakh, Russian and Chinese) and 2 members of the Foreign-related Lawyer Talent Pool of the Beijing Lawyers Association, who took full charge of the entire due diligence process.
II. Full Process of China-Kazakhstan Joint Case Handling
This case adopts the standardised collaborative model: the Beijing Headquarters is responsible for Chinese law compliance coordination and commercial demand alignment, while the Kazakhstan Office is responsible for local judicial delivery and information verification. All stages produce written working papers and verifiable deliverables:
1. 28 August 2024 – 15 September 2024: Establishment of the Dual-Jurisdiction Due Diligence Framework
Beijing Headquarters: Conducted in-depth analysis of the client’s core business scenarios and competition objectives, clarified the scope and priorities of due diligence, developed a due diligence process system compliant with Chinese lawyer practice norms, and issued the Guidelines for Chinese Law Compliance in Cross-Border Competitor Due Diligence to ensure all due diligence activities comply with Chinese regulations on data export and trade secret protection.
Kazakhstan Office: Liaised with official authorities including the Ministry of Justice, National Intellectual Property Office, Tax Committee, and Ministry of Labour and Social Protection of Kazakhstan to confirm query authorities and procedures for local enterprise information; verified the registered address and actual business premises of the target enterprise; established information verification channels in partnership with local commercial investigation institutions; and completed pre-project compliance filing.
2. 16 September 2024 – 30 September 2025: Multi-Dimensional Information Verification and Risk Investigation
Beijing Headquarters: Assisted the client in collating the target enterprise’s cross-border transaction records over the past 3 years; cross-referenced import and export data from the General Administration of Customs of China and the Customs Service of Kazakhstan to verify the scale of the target enterprise’s China trade, key customer groups and performance credit; and evaluated the compliance of the target enterprise’s market conduct against China’s Anti-Unfair Competition Law and Anti-Monopoly Law.
Kazakhstan Office: Retrieved the target enterprise’s litigation, arbitration records and administrative penalty decisions since 2018 via the local judicial information system; obtained complete business registration files from the commercial registration authority to verify equity structure, actual controllers and affiliated entities; conducted on-site inspections of the target enterprise’s production bases, warehousing centres and retail outlets; obtained tax declaration certificates and social security payment records to verify tax and employment compliance; and queried the intellectual property registration system to confirm the ownership and validity of intangible assets such as trademarks and patents.
3. 10 October 2025 – 25 October 2025: Bilingual Report Drafting and Professional Review
Beijing Headquarters: Drafted the main body of the Chinese due diligence report, systematically presented the target enterprise’s overall operations and competitive strengths/weaknesses, provided preliminary response recommendations based on Chinese law for identified compliance risks, and completed 3 rounds of internal professional review to ensure the report’s logical rigour and data accuracy.
Kazakhstan Office: Oversaw the Kazakh translation of the report and local legal compliance calibration; verified all cited Kazakh legal provisions and regulatory requirements item by item; and supplemented Central Asian industry regulatory updates and policy risk alerts to ensure the report carries legal reference validity within Kazakhstan.
4. 26 October 2025 – 29 October 2025: Deliverable Submission and Strategy Interpretation
The China-Kazakhstan joint team delivered an in-depth online and offline interpretation of the report to the client. For the 6 major risks identified through due diligence – including underpayment of social security, potential trademark infringement, material contract breach records, and affiliated transactions by actual controllers – the team explained the degree of impact and risk transmission path for each. Combined with the client’s business development plan, customised market competition strategy proposals and a full-process risk prevention and control scheme for cross-border operations were also delivered.
III. Core Case Handling Challenges and Authoritative Solutions
The challenges encountered in this case are common issues in cross-border legal due diligence in Central Asia. Leveraging dual-jurisdiction professional expertise and local resource advantages, the GUOZUN CATHAY ASSOCIATES joint team has developed a replicable standardised solution:
1. Cross-Border Information Asymmetry and Local Data Access Barriers
Professional Basis: Law on Access to Information of Kazakhstan, Law on Commercial Companies of Kazakhstan, Agreement between the People’s Republic of China and the Republic of Kazakhstan on the Promotion and Reciprocal Protection of Investments
Solution: Relying on the local collaboration advantages of GUOZUN CATHAY ASSOCIATES’ global service network, Kazakh practising lawyers retrieve official registration information with valid practice certificates, and obtain non-public judicial judgments and tax data through local judicial cooperation channels. A triple verification mechanism of “official data + third-party corroboration + on-site verification” is established to address industry pain points such as insufficient overseas information query authority and delayed data updates, ensuring the authenticity, timeliness and completeness of due diligence information.
2. Convergence and Adaptation of Dual-Jurisdiction Compliance Systems
Professional Basis: Article 28 of the Lawyers Law of the People’s Republic of China, Civil Code of Kazakhstan, Tax Code of Kazakhstan, Labour Code of Kazakhstan
Solution: A dual-track due diligence framework of “Chinese law + Kazakh law” has been innovatively established. The Beijing Headquarters strictly upholds the compliance boundaries of Chinese legal practice, while the Kazakhstan Office ensures that the due diligence process and conclusions comply with local legal provisions. For areas with significant legal divergence between the two countries, such as taxation, labour and intellectual property, separate dual-jurisdiction compliance opinions are issued to avoid legal risks arising from jurisdictional conflicts.
3. Verification of Non-Public Business Information and Trade Secret Protection
Professional Basis: Law on Combating Unfair Competition of Kazakhstan, Law on Protection of Trade Secrets of Kazakhstan, Anti-Unfair Competition Law of the People’s Republic of China
Solution: On the premise of legality and compliance, the target enterprise’s actual revenue, production capacity and market share are indirectly verified through on-site visits to upstream and downstream partners, industry association research, and public market data comparison. A strict information confidentiality system is in place: all due diligence materials are accessible only to the project team internally, and the final report is delivered exclusively to designated personnel of the client, ensuring no disclosure of trade secrets.
4. Commercial Transformation and Practicability of Due Diligence Outcomes
Professional Basis: China-Kazakhstan Bilateral Trade Agreement, Law on Foreign Trade of Kazakhstan
Solution: Breaking the limitation of traditional due diligence reports that “prioritise law over commerce”, we deeply integrate legal risk analysis with commercial decision-making. Targeting the competitive weaknesses of the target enterprise, we formulate differentiated product pricing, channel expansion and brand promotion strategies for the client. The supporting Operation Manual for China-Kazakhstan Cross-Border Trade Compliance is also issued to provide ongoing legal support for the client’s subsequent operations.
IV. Authoritative Legal Bases Applicable to This Case
A. Chinese Laws
1.Article 28 of the Lawyers Law of the People’s Republic of China: A lawyer may accept entrustment to provide non-litigation legal services, including providing opinions on relevant legal issues, drafting and reviewing legal documents, handling other entrusted legal affairs, and safeguarding the legitimate rights and interests of the client.
2.Article 41 of the Law of the People’s Republic of China on the Application of Law in Foreign-Related Civil Relations: The parties may choose the law applicable to the contract by agreement; if no choice is made, the law of the place of habitual residence of the party whose performance of obligations best reflects the characteristics of the contract, or other laws most closely connected with the contract, shall apply.
3.Article 2 of the Anti-Unfair Competition Law of the People’s Republic of China: In production and business activities, business operators shall follow the principles of voluntariness, equality, fairness and good faith, and abide by laws and business ethics.
B. Laws of the Republic of Kazakhstan
1.Civil Code of the Republic of Kazakhstan: Relevant provisions on enterprise legal personality, civil rights and obligations, and contract validity.
2.Law on Commercial Companies of the Republic of Kazakhstan: Relevant provisions on enterprise establishment, equity registration, operational compliance and affiliated transactions.
3.Tax Code of the Republic of Kazakhstan: Relevant provisions on enterprise tax registration, tax declaration and tax administration.
4.Labour Code of the Republic of Kazakhstan: Relevant provisions on enterprise employment, social security contributions and labour protection.
5.Law on Intellectual Property of the Republic of Kazakhstan: Relevant provisions on the ownership and protection of trademarks, patents and copyrights.
C. International Treaty
Agreement between the People’s Republic of China and the Republic of Kazakhstan on the Promotion and Reciprocal Protection of Investments: Provides bilateral legal safeguards for cross-border commercial activities between China and Kazakhstan, and protects the legitimate commercial rights and interests of Chinese investors in Kazakhstan.
V. Authoritative Practical Recommendations Based on Case Experience
Drawing on years of experience in Central Asian legal services from GUOZUN CATHAY ASSOCIATES’ Kazakhstan Office, the following three authoritative recommendations are put forward for Chinese enterprises investing in or trading with Kazakhstan:
1.Establish a pre-entry due diligence mechanism: Before entering the Kazakh market, it is essential to engage a professional team with dual-jurisdiction service capabilities to conduct due diligence on partners and competitors, focusing on subject qualification, equity structure, compliance records and core asset status, to avoid investment losses caused by information asymmetry.
2.Build a dual-jurisdiction compliance system: Establish a parallel compliance management system of “Chinese law + Kazakh law”, regularly track changes in local regulatory policies, and focus on high-risk areas such as taxation, labour, intellectual property and customs supervision to ensure business operations comply with the legal requirements of both countries.
3.Leverage global resource advantages: Select a professional law firm with a service network covering Central Asia, and rely on the judicial resources and industry experience of the local practice team to efficiently resolve issues including cross-border information inquiry, legal document service and dispute resolution, so as to enhance the efficiency and security of cross-border operations.