Launching an Investment Venture at the AIFC in Kazakhstan

Launching an Investment Venture at the Astana International Financial Center (AIFC) in Kazakhstan

09.08.2023

For fast communication with a consultant

For investors seeking entry into the enticing financial markets of Central Asia, launching an investment venture at the Astana International Financial Center in Kazakhstan holds considerable merit. This domain in the Republic of Kazakhstan, extends an array of privileges to international corporations and individuals, encompassing tax advantages and streamlined registration protocols.

Astana International Financial Center in Kazakhstan

At its core, the IFC Astana serves as a specialized region, orchestrated with the primary objective of nurturing the growth of financial services in the locale while fostering integration with international capital markets. Astana IFC stands as an optimal launchpad for initiatives such as startups, blockchain ventures, and FinTech innovations. It is no exaggeration to affirm that the Astana IFC currently operates as the driving force propelling economic expansion, bolstering competitiveness, and heightening the investment allure of Kazakhstan.

This article aims to spotlight the investment prospects and procedural aspects of investment venture realization in the Astana International Financial Center in Kazakhstan.

Advantages of Engaging in Business at the Astana International Financial Center

The Astana International Financial Center occupies a pivotal role in advancing both the business sector and financial services within the Republic of Kazakhstan, resonating beyond its borders to influence Eurasia at large. This stature is attributed to factors such as:

Independent regulation of investment endeavors.
Cultivation of robust infrastructure.
Prospect of accessing international markets.

For those contemplating the establishment of a startup in Kazakhstan in the IFC Astana, a host of preferential conditions awaits:

A progressive economy fortified by political stability.
A robust legal system affording elevated levels of investor protection.
A geostrategic position facilitating connectivity to major markets spanning the region, Europe, and the Middle East.
Tax incentives and exemption from import and export levies.
Government-endorsed business support encompassing personnel aid, consultancy services, facilitation in procuring licenses and certifications, and entrepreneur-focused training programs.
Versatile provisions for the relocation of companies to the AIFC Kazakhstan (with no stipulated minimum investment requirements within the IFCA territory).

Highlighting the Significance of Taxation and Infrastructure Development at AIFC Kazakhstan

It is paramount to underscore the favorable taxation structure applicable to companies registered in AIFC Kazakhstan, featuring notably low income tax rates alongside specialized provisions tailored for financial, investment, technological, and related sectors. This deliberate state policy has a twofold purpose: fostering the growth of new entrants into the market and enticing substantial financial, industrial, and commercial giants to the fold.

Tax Incentives for Participants of IFC Astana

Income Tax:

Participants of AIFC are granted an exemption from income tax.

VAT (Value Added Tax):

Participants of AIFC are granted an exemption from VAT when exporting goods, rendering services, or conducting work from AIFC to destinations outside of Kazakhstan. For imports of goods, provision of services, or execution of work within AIFC's precincts, VAT is levied at a rate of 0%.

Property Tax:

AIFC participants are relieved from property tax for real estate situated within the International Financial Center's premises for a duration of 10 years, counted from the date of registration as a participant.

The unwavering evolution of the region's infrastructure positions IFCA at the forefront of the fintech services domain. The active hosting of industry-centric conferences and exhibitions endows companies of all calibers with an array of professional avenues. These platforms serve as catalysts for the establishment and maturation of business connections while facilitating the exchange of insights and expertise.

A myriad of global professional connections, stemming from international interactions, have firmly propelled IFCA-registered companies to the echelons of industry leadership. This resoundingly attests to IFCA's resolute commitment to championing global standards within the financial sector.

Regulation of Investment Activities in the Astana IFC (Kazakhstan)

AFSA (Financial Regulation and Development Agency) is an autonomous general regulator governing both financial and non-financial entities in the Astana Free Zone. This agency upholds comprehensive control over and advancement of the financial realm within the region. Equipped with authority in the realms of licensing, oversight, and regulation, AFSA oversees entities engaged in financial or non-financial pursuits in Astana. Aligned with globally acknowledged standards such as Basel, IOSCO, and FATF, AFSA ensures financial stability and the protection of consumer interests.

Permissible Business Activities at IFC Astana

IFC Astana presents a diverse spectrum of possibilities across varied business domains, alike:

Capital Market
Brokerage Activities
Asset Management
Banking Services
Insurance
Fintech
Information Technology
Green Finance
Ancillary Service Providers

Nevertheless, distinct requirements apply to each specific type of activity. We will delve into more detailed explanations regarding the intricacies of establishing business in the AIFC's most prominent industries in the following sections.

Should the aspiration involve establishing a venture in the free economic zone of Astana, harnessing the expertise of professionals adept in supporting investment endeavors in Kazakhstan. Engaging in a comprehensive legal audit of an investment project in Kazakhstan prior to its commencement is advisable, ensuring unwavering confidence in its subsequent seamless execution.

Initiating a Fintech Venture at Astana IFC in Kazakhstan

AIFC aspires to establish itself as a global front-runner in the realm of financial technology. The center provides an enabling environment and robust infrastructure for the initiating of a fintech venture at Astana IFC in Kazakhstan

Setting up a fintech startup in Kazakhstan within IFC Astana offers an array of advantages to companies, encompassing access to financial resources, regulatory support, engagement with proficient professionals, and the opportunity to extend business operations both regionally and internationally. AIFC actively collaborates with other global financial centers to foster knowledge exchange in the fintech domain.

A pioneering initiative in the region was the establishment of a “regulatory FinTech sandbox”. This dedicated platform empowers fintech enterprises to test their novel products and services within a controlled environment. Operating in such frameworks means that FinTech companies at the Astana International Financial Center operate under regulatory supervision while adhering to essential rules and requisites, all the while retaining the flexibility and latitude to innovate and implement novel technologies.

The FinTech regulatory sandbox framework allows

Significantly reduce the temporal and monetary expenditures
Launch and test of new offerings in live markets
Expedite the integration of new solutions
Mitigates potential risks for the financial ecosystem

Establishing an IT Company in Kazakhstan (Astana IFC)

The International Financial Center presents an inviting landscape for launching IT startups in Astana. The convergence of modern infrastructure and a conducive communication ecosystem has spurred the growth of an active IT community. Augmented by adaptable regulatory frameworks, the environment is ideal for business expansion and investment influx within the IT sector.

IFC Astana extends a gamut of favorable tax parameters, diverse investment initiatives, and a specialized visa and customs control structure tailored for foreign experts. Furthermore, a profusion of skilled IT professionals serves as a magnet for international IT enterprises. The locale boasts educational institutions and research hubs.

The IFC Regulator spearheads a series of initiatives and programs aligned with developmental aspirations within the IT domain:

Astana Hub an exclusively devised space catering to the growth of innovative firms, including those immersed in IT. This digital hub provisions contemporary office premises along with financial and marketing backing.
IFC Astana Incubation Programs bolster IT startups affording them access to funding, expertise, and business counsel.
Curriculums in universities and educational entities craft specialized training modules in the realm of IT, ensuring the cultivation of adept professionals.
IT Clusters provide fostering collaborative endeavors among diverse IT companies and startups for mutual problem-solving and knowledge sharing.
Collaborations with Leading IT Corporations that establish offices and developmental hubs in AIFC play a crucial role in driving the progress of the local IT sector.

These measures form an environment that facilitates the establishment of an IT company in IFC Astana (Kazakhstan). These collaborative initiatives are geared towards solving shared challenges and exchanging knowledge, thus fostering innovation and growth within the IT ecosystem.

International Trade Activity in AIFC

The logistics company registration in the Astana Financial Center is possible. Benefitting from its central position in Eurasia, Astana enjoys a strategic geographic edge, positioning it as a pivotal logistics and transport hub, facilitating seamless goods delivery to diverse regions.

Functioning as a financial epicenter, AIFC grants access to an array of financial services encompassing banking, financial analysis, insurance, and investments. This facilitates international companies in conducting business with greater ease and accessing essential financial resources.

A range of tax preferences and incentives are offered by the Astana International Financial Center for international logistics enterprises:

duty-free trade,
exemption from income tax,
lowered tax rates,
proficient workforce.

Crypto Startup in AIFC Kazakhstan

The establishment of crypto ventures in the Astana International Financial Center acts as a global magnet for investors. The robust infrastructure, encompassing high-speed internet and cutting-edge telecommunication systems, is ideally poised to accommodate the financial and technological services offered by crypto companies in Astana.

Kazakhstan lends legislative backing to entities operating in the realm of cryptocurrencies and blockchain. A prominent example is the enactment of a law in 2018, aimed at regulating activities linked to distributed ledger technology. The government, and specifically the IFC regulator, are ardent advocates of technological innovation and the growth of blockchain projects in Astana.

Nurturing Brokerage Activity in AIFC

Establishing a brokerage company in the Astana International Financial Center can yield lucrative outcomes. IFCA extends appealing terms for brokerage firms, including tax benefits, autonomous brokerage regulation, streamlined licensing procedures, and access to global markets. Leveraging its strategically advantageous location, the Center empowers brokers to cater to clients spanning diverse regions.

IFC Astana rolls out various programs aimed at enticing brokerage entities.

The Capital Markets Development Program conferrers assorted benefits upon registered brokerage firms such as tax benefits, simplified licensing protocols, and regulatory support in obtaining a license at IFC Astana. Participants gain elevated opportunities for participation in capital and securities markets.

Another noteworthy initiative is the Investment Promotion Program, catering to investors aspiring to establish a brokerage company in AIFC Kazakhstan. This program fosters investment inflow to brokerage-focused enterprises, enabling their expansion and growth.

Operations of Payment System Operators in AIFC

Astana IFC holds the potential to emerge as a pivotal player within the regional payment industry. Payment systems assume a pivotal role in facilitating and enhancing the process of financial transactions for both enterprises and individuals. The registration of a payment system in the Astana International Financial Center ushers in the possibility of furnishing technologically advanced and groundbreaking financial and electronic payment services.

The Astana Financial Center has instituted diverse programs and initiatives to allure payment system operators. A few of these include:

Organization of Conferences and Exhibitions:

Astana IFC orchestrates events such as conferences, seminars, and exhibitions to captivate the attention of payment operators.

Specialized Conditions:

Enterprises holding a payment system operator license in AIFC Kazakhstan are accorded benefits, subsidies, or specialized conditions for registration and operational pursuits.

Nurturing Innovative Projects and Startups:

The IFC Astana extends backing and funding for fledgling startups and innovative ventures in the realm of payment technologies. This practice effectively garners the interest of payment operators inclined towards collaboration with promising entities.

Collaboration with Government and Regulatory Authorities:

The IFC Astana actively interfaces with government and regulatory agencies involved in financial activities. This collaborative endeavor culminates in the creation of a favorable and stable investment milieu for payment operators, thus contributing to the holistic growth of the country's financial sector.

The aforementioned domains of commercial activity merely encapsulate a fraction of the opportunities available within the Astana International Financial Center. Depending on your unique interests and business blueprint, avenues to engage in other sectors might also be extended. For more nuanced insights and assistance in managing the investment project in AIFC Kazakhstan, it is recommended to engage directly with YB Case specialists.

Conclusion

The Astana International Financial Center is poised to evolve into a pivotal player in the regional financial landscape. By strategically positioning itself at the confluence of East and West, Astana IFC proactively attracts financial institutions, corporations, and investors from across the globe. The suite of benefits offered includes tax incentives, streamlined registration procedures, and access to international financial markets.

Nonetheless, it's crucial to acknowledge that the success of an investment project hinges on an array of factors. A comprehensive market analysis, assessment of potential risks, and the formulation of a detailed business plan are pivotal components. Throughout the entire trajectory of the investment project in the Astana IFC in Kazakhstan, the adept specialists at our firm stand poised to extend support and guidance.