Introduction
Yet to be discovered as an international financial hub is the Astana International Financial Centre (AIFC) in Kazakhstan. In my opinion the current financial bubble in Western Europe and the crypto currency developments, make it almost impossible to ignore this opportunity to develop business and to diversify portfolios.
The Centre is the upcoming financial hub for Central Asia, the Caucasus, EAEU, the Middle East, West China, Mongolia and Europe. It is a fresh, new initiative and officially launched on 5 July 2018. The AIFC plays the main roles in attracting financial resources for the mentioned region. Apart from that, it can be a very important hub for establishing strategic business partnerships between European and Eurasian companies as well. Britain already has taken the lead in this respect, considering their impact on the AIFC Court and AIFC International Arbitration Centre. Both are crucial in fulfilling the role as an international financial hub. The AIFC is backed by the Kazakhstan government to ensure a solid legal and political position.
The most important features of AIFC
Although the Centre offers a number of important features, for western businesses AIFC offers two major benefits to take into account, when deciding to use the Centre as a gateway to further business development.
- The applicable law of the AIFC is guided by principles, norms and precedents of England and Wales`s law and standards of the leading international financial centers.
- Exemption from payment of corporate, individual income, land tax and property tax for a period of 50 years (until the end of 2065).
Some important bodies of AIFC
Although the AIFC has several important (internal) bodies, the most important bodies of AIFC in the business spectrum are the following.
The Astana Financial Services Authority was registered on 30 January 2017 as an AIFC body and regulates the financial services and related operations of the AIFC. The core functions of the AFSA include:
- Registration. Registration of legal entities, subsidiaries and representative offices on AIFC territory.
- Accreditation and Licensing. Issuance of permits to operate on AIFC territory requiring a license.
- Regulation. Elaboration of acts in the form of regulatory provisions related to financial services regulation.
- Control and Supervision. Supervision of audited entities compliance with approved acts of AIFC.
- Law Enforcement. Conducting investigations in cases of violations of AIFC acts and ensuring enforcement of AIFC rules.
A regulatory regime consistent with recognized international standards (IOSCO, Basel, IAIS, FATF, etc.) has been introduced in the AIFC.
The AIFC Court will have its own legal system based on the principles and rules of English law. The AIFC Court is independent in its activity and separable from the judicial system of the Republic of Kazakhstan. It shall have no jurisdiction in respect of criminal and administrative proceedings and have an exclusive jurisdiction in relation to:
- hearing and adjudicating on any disputes between the AIFC participants, AIFC bodies and/or their foreign employees.
- hearing and adjudicating on any disputes relating to operations carried out in the AIFC and regulated by the law of the AIFC.
- hearing and adjudicating on any disputes transferred to the AIFC Court by agreement of the parties.
The AIFC International Arbitration Centre reviews disputes which the parties have agreed to be settled by arbitration.
Conclusions
If you consider business development in the Eurasia region, AIFC is a major player. It is advisable to use an expert to guide you to the regulations. When the normal regulatory hurdles have been taken, AIFC opens an enormous potential for international business development in a market that practically has no limits.