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International Internet Magazine. Baltic States news & analytics Sunday, 24.03.2019, 03:21

International Financial Center in Astana - a unique project in Central Asia

Nataly Krumina, BC, Astana/Riga, 12.03.2019.Print version
Kazakhstan rapidly developing in recent decades is distinguished with the originality of initiatives. The issue of attracting foreign investments to the country was not an exception for the republic. Creation and development of Astana international Financial Center (AIFC) once again confirmed the established tradition. The uniqueness of this project lies in the fact that thanks to such tools as its own court, arbitration, stock exchanges and its own regulator, the Center is to become the "engine" of attracting investments in the economy of Kazakhstan.

The emergence of a financial hub in the post-Soviet space, based on the principles of English law, with a preferential tax regime and an independent financial court, demonstrates Kazakhstan's readiness for open and transparent cooperation with the foreign partners. It is worth noting that a few years ago such project caused serious doubts in international circles. However, Kazakhstan was able to prove the opposite in actual practice.

 

The initiator and the inspirer of AIFC was the President Nursultan Nazarbayev. During one of his public speeches, he voiced an extraordinary idea – to create AIFC in Astana on the basis of ASTANA EXPO 2017 infrastructure.  A similar center in Dubai has become a landmark here. At the same time, the head of the republic, having issued a relevant decree, outlined the following priorities: consolidation of the special legal status of the financial center in the Constitution of the country and the establishment of the center as a financial hub for the countries of the region.

An important issue was the creation of an independent judicial system with its own jurisdiction, which will operate on the principles of English law. The judicial staff is formed from among the foreign specialists. In future, the financial hub of Kazakhstan will have to enter the 20 leading financial centers of the world.

 

After the Kazakh Parliament codified the status of AIFC, in January 2018 the work of Astana international Financial Center received an official start.   

 

What is AIFC attractive by for foreign investors? First of all, by the most unprecedented preferential terms in the entire region, including independent financial regulation based on international standards. Key positions here are given to the British - the recognized experts in law and international law. English justice system is known all over the world, and official London is recognized as an international legal center. Thus, this aspect is a guarantee of an impartial and fair legal proceeding.

 

In addition, AIFC has a special legal regime that does not depend on the judicial system of Kazakhstan, based solely on the principles of English law. And English is recognized as the official language of workflow management on the territory of AIFC. The status of AIFC judges guaranteeing protection of the rights and interests of foreign investors is also noteworthy, which emphasizes the desire of Kazakhstan to obtain an impeccable image and to create favorable conditions for the work of large multinational companies.

 

The list of benefits for the investors can be listed for a long time. It is particularly worth noting that tax preferences to AIFC participants are given for a period of 50 years. Among other things, a simplified visa and labor regime is introduced. Foreign workers of AIFC, as well as the members of their families, receive an entry visa valid for up to 5 years. Citizens of OECD countries, UAE, Malaysia, Singapore and Monaco, as well as the countries determined by the government of Kazakhstan, have the right to visa-free entry for up to 30 calendar days. And a small but nice bonus - free rent of class "A" offices during the first two years of work.

 

Against the background of already loyal attitude of Kazakhstan to foreign investors, the creation of a favorable investment climate here has become one of the political and economic priorities. To solve the problems of foreign entrepreneurs in the country at the beginning, a special Ministry for Investment and Development was even created, thanks to the activities of which, the obtainment of public services for the investors was simplified as much as possible, and administrative barriers were reduced. It had worked successfully until the end of the last year, and, having fulfilled its task, it was reorganized. The remaining powers and authority were transferred to the Ministry of National Economy and the Ministry of Foreign Affairs of Kazakhstan. If we add here the diplomatic multi-vector policy, which the President Nazarbayev has been following all these years, it is by no means surprising that Kazakhstan's proposals are in great demand, and foreign visits and summit meetings in Astana are almost always accompanied by business forums and the conclusion of new contracts.

 

In general, Kazakhstan considers AIFC as part of the global financial system. Astana is one of the key elements of the new transcontinental routes of the global initiative "One Belt, One Road". Therefore, AIFC will become a natural financial and economic bridge between China and European countries. All this opens access to a giant market of more than one billion people.


Meanwhile, European expert circles believe that a new "financial bridge" between Europe and Asia has emerged in the world. According to tentative forecasts of the Kazakh authorities, AIFC will be able to attract billions of investments into the country's economy. Of course, Kazakhstan's plans are evaluated as ambitious, but taken the current conditions into account, they are feasible. Astana understands full well that the competition for the investors is increasing every day, and only a promising product that meets the requirements of modern realities of the world economy will be able to attract investments.






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