THE ASTANA INTERNATIONAL FINANCIAL CENTRE (AIFC)

The Astana International Financial Centre (the “AIFC”) is a unique hub for Central Asia enjoying a special legal status that endows the AIFC members with exclusive privileges and benefits.  The AIFC brings together the best practices and opportunities offered by similar institutions around the globe – from New York City and London to Dubai, Hong Kong and Singapore.

The AIFC occupies an area specifically allocated for its operations in Nur-Sultan, although it is open to foreign corporate members as well.

The AIFC applies the best international practices (e.g. Basel, IOSCO, FATF, BIS, FinCEN, IAIS, etc.) and seeks international recognition as a financial centre.

The AIFC is being developed in the following strategic directions:

1)        capital markets;

2)        assets and cash management;

3)        insurance and re-insurance;

4)        banking services;

5)        financial technologies;

6)        green finance; and

7)        Islamic finance.

General Advantages of the AIFC:

• The AIFC Members’ activities are regulated by specific AIFC Acts developed in accordance with the principles of the common law of England and Wales and the standards of leading global financial centres; [1]
• Independent and reputable AIFC Court and Arbitration Centre having distinguished judges and arbiters who have experience with various courts and tribunals, including Her Majesty’s High Courts of Justice of England and Wales;
• Exemption from corporate income tax on revenues from particular financial services, dividends and capital gains from securities listed on the AIFC Exchange until 1 January 2066;
• More opportunities (as compared to the general jurisdiction of Kazakhstan) to conduct foreign currency transactions;
• Special visa regime for foreigners and stateless persons; and
• Flexible approach to regulation, especially in relation to the companies engaged in financial technologies and activities not traditional in Kazakhstan.

Corporate Advantages of the AIFC:

• no minimum share capital requirement for most widely used forms of business organisation;
• flexibility in maintaining a record of rights to company shares (opportunity to maintain a register of shareholders of private companies independently);
• opportunity to issue different classes of shares;
• shareholders’ pre-emption rights to purchase company shares do not apply (determined by shareholders themselves), the possibility of concluding a shareholder agreement;
• no strict regulation of transactions approval, which allows a company to consider these issues independently (i.e. by reflecting relevant terms in Articles of Association); and
• flexible approach for identifying the powers of governing bodies of private companies (open list, freedom to define them in Articles of Association).

AIFC Structure

The AIFC structure comprises the following elements:

 There are a number of other more specific units providing support to the AIFC Members:

The AIFC Members

The AIFC Members are legal entities incorporated in accordance with the applicable laws of the AIFC and legal entities accredited by the AIFC as its participants.

Organisational-legal forms available in the AIFC:

• Private Company;
• Public Company;
• Investment Company;
• Restricted Scope Company)
• Special Purpose Company;
• Limited Partnership;
• General Partnership;
• Limited Liability Partnership;
• Foundation; and
• Non-Profit Incorporated Organisation.

Private company is the most widely used form of business organisation.                       

Any company incorporated in a foreign or national jurisdiction may be accredited as a member of the AIFC.

Incorporating a Company in the Jurisdiction of the AIFC

The general rule is that, before a company commences its operations as an AIFC Member, it has to pass through the following three stages:

1)  Preliminary Authorisation

At this stage, the company has to contact the relevant subdivision of the AIFC in order to find out business opportunities in the AIFC and to get preliminary authorisation therefor.

2)  Registration

Registration of the company in a particular organisational form.

3)  Final Authorisation

Getting a special permit from the AIFC to conduct the activities it applied for.

General Requirements:

• US$300 registration fee.
• Initial authorised capital varies depending on the form of the company organisation and may be as low as 1 US dollar.
• Certain forms of business organisation (e.g. a private company) are allowed to have just 1 shareholder and 1 director, where the director should meet a number of criteria (for example, a person disqualified from acting as a director or declared bankrupt may not be appointed as a director).

The entire process of incorporation takes about 3 or 4 weeks.

AIFC Court

The AIFC Court provides an independent common law court system to resolve civil and commercial disputes in Central Asia.

The Chief Justice is the Rt. Hon. the Lord Mance, a former Lord of Appeal in Ordinary in the House of Lords and the UK Supreme Court.

The AIFC Court has exclusive jurisdiction over:

1)    any disputes arising between AIFC Members, AIFC Bodies and/or their foreign employees;

2)    any disputes arising in relation to any transactions conducted in the AIFC and governed by the AIFC law; and

3)    any disputes referred to the AIFC Court by agreement between the parties.

The AIFC Court has exclusive jurisdiction to interpret AIFC Acts.

All applications, administration and hearings at the AIFC Court are free of charge until 31 December 2021.  All parties to a contract which is agreed before 31 December 2021 and includes the AIFC Court for dispute resolution will be eligible to receive free administration of any dispute resolution at the AIFC Court under that contract before and after 31 December 2021.

International Arbitration Centre (IAC)

The IAC is an independent and expeditious alternative to court litigation providing arbitration, mediation, and other dispute resolution methods.

Parties may agree for the IAC to:

1. Administer their arbitration according to the IAC Arbitration and Mediation Rules. These rules include procedures for expedited arbitrations, the appointment of emergency arbitrators, and resolution of investment treaty disputes.
2. Administer their arbitration according to UNCITRAL Arbitration Rules or ad hoc arbitration rules.
3. Administer mediations according to the IAC Arbitration and Mediation Rules or ad hoc mediation rules.
4. Provide other forms of alternative dispute resolution.

All applications, administration and hearings at the IAC are free of charge until 31 December 2021.  All parties to a contract which is agreed before 31 December 2021 and includes the IAC for dispute resolution will be eligible to receive free administration of any dispute resolution at the IAC under that contract before and after 31 December 2021.

The IAC is presided by Ms. Barbara Dohmann QcC.

The IAC awards are recognized and enforced in the Republic of Kazakhstan the same way as any awards issued by Kazakhstan arbitration tribunals.

Arbitration awards of the IAC are enforceable in the Republic of Kazakhstan as Orders of the AIFC Court, supported by a robust enforcement system.  They are also enforceable internationally under the New York Convention (1958). 

Astana International Exchange (AIX)

AIX Shareholders:

1)  AIFC;

2)  Goldman Sachs;

3)  Shanghai Stock Exchange;

4)  Silk Way Fund; and

5)  NASDAQ (the principal technology partner of the AIX). 

AIX is a new trading venue still gaining popularity which is promoted by the IPOs of major Kazakhstan quasi-government and private companies.

Since 2018 the AIX Issuers raised over $321 mln of equity capital ($104.7 mln in 2020); $8.6 bln of debt capital listed on the AIX ($3.7 bln in 2020).