National Plan - 100 concrete steps

Kazakh PM: AIFC to be established as financial hub of new generation

The AIFC is being established as a financial hub of new generation, Prime Minister of Kazakhstan Bakytzhan Sagintayev said at the plenary session of the "Astana Finance Day" forum.
Astana city04 July , 11:06

Welcoming the guests and participants of the session B. Sagintayev started his speech congratulating Astana on its 20th anniversary.

"The young capital represents the birth of sovereign Kazakhstan, our victories and achievements, future of the country aimed at joining the ranks of TOP-30 economies of the world", the Prime Minister said.

According to Bakytzhan Saginatayev, the AIFC is being established as a financial hub of new generation.

"It will not only fulfill traditional functions of the world financial centers, but also provide services in the most promising development directions of global finance. We consider the AIFC as a fintech-stepping stone to create and develop solutions in the field of financial technologies. Such work has already been started in partnership with Mastercard and Visa, Microsoft and Tai Cloud Corp", Sagintayev stated.

In his words, the AIFC became a member of the R3 international consortium, which includes more than 60 major financial institutions, as well as the Global Federation of fintech-hubs.

Also the Astana International Financial Centre could become an effective platform for introduction of tools, mechanisms and standards of “green” financing.

"In the field of cleantech the AIFC already hosts the Competence Centre of green finances, as well as the International Centre for green technologies and investment projects under the auspices of the UN", the Kazakh Prime Minister said.

Another feature of the AIFC financial services is promotion of the Islamic financing market.

"The necessary legal and regulatory environment has already been created within the AIFC in cooperation with the Asian Development Bank and the Islamic Development Bank. By the end of this year, the public issue of Islamic securities - sukuk - will be accomplished. In the long term, we see the AIFC as a regional hub for Islamic financing", the head of the Government said.

Thus, the Astana International Financial Center is going to provide a fairly wide range of financial services.

According to Bakytzhan Sagintayev, this is an advantage, but not the only one.

Firstly, the AIFC expands opportunities to enter the promising markets of Eurasia.

"Kazakhstan views the AIFC as part of the global financial system. The global chain of financial centers, that manage world money flows, stretches almost across the globe - from Toronto to Sydney and from Tokyo to New York. Each of them has their own unique niche. The Astana International Financial Centre with its unique geographical location will provide access to the Central Asian markets, the EEU, the Transcaucasus, the countries of the Middle East", the Prime Minister told.

Therefore, the AIFC will become a natural financial and economic bridge between Western China, Mongolia and European countries.

In addition, all of this opens access to a gigantic market of more than 1 billion people.

Secondly, independent jurisdiction of the AIFC.

The legal and judicial system, as well as in all financial centers of the world, is based on English common law. The Arbitration Center, the International Financial Court and an independent financial regulator represented by the Astana Financial Services Authority have been established. All these structures are headed by world-renowned
and experienced lawyers.

"I sincerely thank you, dear Sir Woolf and distinguished members of the Court, Lady Judge, Ms. Dohmann, for accepting the invitation of the Republic of Kazakhstan and, in fact, for being the first team of the managers of the Astana International Financial Center as a new element of the world financial system", B. Sagintayev said.

It should be noted that geographic and legal advantages of the AIFC are reinforced by tax incentives, simplified currency, visa and labor regimes and transport accessibility. The AIFC bodies and participants, as well as their employees, are exempted from tax payments for 50 years. This includes corporate income tax for incomes from financial and ancillary services, individual income tax, and land tax and property tax. The AIFC participants are free to use any currency provided for in the agreement and rules of the AIFC Stock Exchange.

On top of all that a visa-free entry is established for citizens of 65 countries, including all OECD countries. A special visa regime for up to 5 years is provided for employees of the AIFC Bodies, participants of it and their families.

Transport accessibility has been expanded. Today Astana is connected by direct flights with 9 global financial centers. In the next year to year and a half, flights from other international locations will begin to become available: Singapore, Tokyo, New York, etc.

Thus, for today a unique mechanism of the International Financial Center has been built.

"Our first major step will be the public offering of shares of our largest national companies at the AIFC Stock Exchange. The giants of the national economy "Air Astana", "Kazatomprom", "Kazakhtelecom" are going to submitan IPO". Sagintayev said.

By the end of 2020, shares of other major companies of our country - "Kazakhstan Temir Zholy", "KazMunayGaz", "Samruk-Energo", "KazPost", "Tau-Ken Samruk", and "Kazakh Air" are also going to submitan IPO. This is a unique opportunity for business and investors.

Saltanat Suraganova