Launch of an Investment Project in AIFC Kazakhstan

Launch of an Investment Project in AIFC Kazakhstan

The Astana International Financial Center stands as a beacon of economic progress, officially inaugurated in 2018 within Kazakhstan's borders. It represents a remarkable endeavor, meticulously designed to invigorate investments, foster financial market development, and enhance the nation's global stature. 

The government meticulously crafts a conducive environment for the operations of financial institutions and investors in the AIFC's jurisdiction. This encompasses the formulation of precise rules and regulations, along with the development of infrastructure capable of upholding the highest standards in financial transactions and service provision.

The Significance of the Astana IFC in Kazakhstan's Economy

The Astana International Financial Center plays a pivotal role in Kazakhstan's economic advancement. Its resources and capabilities exert a positive influence on economic development and investment attraction across multiple sectors of the nation. There are four key facets that underscore the significance of the AIFC within the economic framework:

Business Advantages in the Astana IFC

Economic and Customs Incentives

The IFC “Astana” extends an array of favorable tax and customs benefits to companies operating in its precincts, fostering an environment conducive to investment and business development. 

• Zero Income Tax: Enterprises registered in the AIFC enjoy income tax exemptions, thereby fueling their robust expansion.
• VAT Discounts: Organizations within the AIFC benefit from reduced VAT rates, enhancing their competitiveness.
• VAT Exemption on Exports: Participants in the AIFC can export goods and services without incurring VAT, further elevating the appeal of this business environment.
• VAT Waiver on Imports: VAT is not levied on imports of goods and services within the AIFC, amplifying the attractiveness of this jurisdiction.

Infrastructure and Resource Support for Companies in the Astana IFC

The Astana International Financial Center extends comprehensive infrastructure and resource support to companies in its jurisdiction, nurturing sustainable operations and fostering innovative growth. Here are the key facets of this support:

• Cutting-edge Business Zones: The IFC “Astana” provides contemporary workspaces designed for entrepreneurial comfort. These spaces feature high-speed internet connectivity, state-of-the-art communication systems, and well-appointed meeting facilities.
• Technological Advancements: Companies operating in the AIFC gain access to a spectrum of IT solutions, encompassing cloud services and expert information security consulting.
• Financial Instruments: The IFC “Astana” forges strategic partnerships with banks and financial institutions, granting enterprises access to financing and a range of credit programs.
• Educational Initiatives: The IFC “Astana” organizes numerous educational events, including seminars and masterclasses, designed to enhance the skills of business professionals and investors.
• Expert Consultations: At the Astana IFC, companies can readily seek professional counsel from experts across diverse fields, enabling them to make well-informed decisions.

Streamlined Registration and Business Launch in the Astana IFC

The IFC “Astana” offers entrepreneurs streamlined and efficient registration procedures and business launch processes. These simplifications expedite the commencement of operations, saving businesses valuable time and effort. The key aspects of this streamlined approach include:

• Express Registration: Enterprise registration within the Astana IFC is characterized by speed and minimal bureaucratic formalities, resulting in reduced paperwork and swift approvals.
• Minimal Formalities: IFC Astana is committed to minimizing the standard procedures typically associated with commencing and managing a business, allowing entrepreneurs to focus more on their core endeavors.
• Digital Solutions: The Astana IFC facilitates electronic submission of applications and documents for company registration, eliminating the need for physical visits and long waiting times. This enhances productivity and simplifies administrative processes.
• “Single Window” System: The AIFC operates a “single window” system where entrepreneurs can access all necessary information and assistance related to registration, licensing, and other aspects of business management.
• Transparency and Oversight: The IFC “Astana” guarantees transparency and the ability to monitor every stage of registration and business management. Business professionals can track their requests and stay updated on all developments through an online platform.

Launching a Startup at IFC Astana, Kazakhstan

 Stages of Creating a Startup

Setting up a startup in the Astana International Financial Center entails a structured progression through various stages, each with its own unique significance. These stages provide a logical sequence of actions, culminating in the scaling of the business. Notably, the simplified registration procedures offered by AIFC allow entrepreneurs to channel their efforts towards vital facets of enterprise development:

• Idea: The inception of a startup begins with the identification of a unique business idea that aligns with market needs.
• Planning: Entrepreneurs craft a comprehensive business plan encompassing defined objectives, target demographics, a marketing strategy, and financial projections.
• Market Research: Before launching a startup in Kazakhstan, conducting meticulous market research is essential. This involves analyzing competitors and understanding potential audiences.
• Registration: Registering a company within the Astana IFC is streamlined, ensuring that entrepreneurs can initiate operations promptly.
• Prototyping: The development of a prototype of the product or service follows, allowing for testing and the collection of valuable feedback.
• First Clients: Attracting the first customers or users serves to gauge demand and refine the product or service.
• Financing: Entrepreneurs explore various avenues for obtaining financing, such as investments, loans, equity, or other sources.
• Development: The startup officially launches, with ongoing efforts to develop the product or service, enhance functionality, and refine design.
• Marketing and Sales: A comprehensive marketing strategy is devised to promote the product or service and attract a growing customer base.
• Growth and Scaling: The objective is to expand the business both nationally and internationally, introduce new products or services, and establish collaborations with other enterprises.

Financial Instruments and Investment Attraction in the Astana IFC

The Astana International Financial Center is dedicated to empowering entrepreneurs and fledgling companies by offering an array of financial mechanisms designed to expedite their growth. Beyond direct financing, these instruments are instrumental in unlocking the innovative potential of enterprises. Noteworthy financial opportunities accessible to companies registered through the Astana IFC include:

• Venture Investment: Young enterprises can harness the support of the IFC Astana in attracting venture capital, providing initial financing for the realization of their innovative concepts.
• Grant Support: The AIFC has curated grant programs specifically designed to foster innovation. These may encompass backing for research initiatives, innovation implementation, and more.
• Collaboration with Leading Companies: The IFC “Astana” proactively facilitates connections between startup companies and prominent industry players. This synergy creates a platform for joint investments, knowledge exchange, and professional-level interactions.
• Global Cooperation: Beyond domestic markets, the Astana IFC dedicates efforts to forging international partnerships, enabling startups to seamlessly integrate into the global economy, secure foreign investments, and expand their global footprint.

Mentoring and Educational Programs at the Astana IFC

Beyond providing financial resources, the Astana International Financial Center extends its commitment to nurturing startup success by offering invaluable access to knowledge and mentoring. These thoughtfully curated programs are designed to support and educate aspiring entrepreneurs, equipping them with the essential tools needed for triumph. Within these initiatives, the following components play a pivotal role:

Through the dynamic synergy of these programs, the AIFC supports startup companies to ascend to new heights in their endeavors and unleash the full potential of their innovative aspirations. 

Management of Investment Activities in the AIFC, Kazakhstan

Regulation at the AIFC 

The primary AIFC regulator is the Financial Services Authority (AFSA). AFSA purview extends across a multitude of critical domains, encapsulating:

Principles of Investing in the AIFC

For participants engaged in investment activities in the Astana IFC, a set of meticulously crafted guidelines and standards govern their conduct. Key components of these principles encompass:

• Tax Compliance: Participants are mandated to scrupulously adhere to their tax obligations within the framework of prevailing legislation. This includes the judicious handling of corporate tax, Value Added Tax (VAT), and other fiscal commitments.
• Provision of Financial Data: Investors are obligated to furnish financial information consistently that adheres to regulatory specifications. This commitment to transparency and traceability is paramount in ensuring the integrity of the investment ecosystem.
• Regulatory Adherence: Participants are entrusted with the responsibility of unwaveringly conforming to regulations and standards governing investment, financial reporting, and other intricacies of business operations.

These principles guide participants in their investment activities in the AIFC, ensuring the highest standards of ethical conduct, accountability, and compliance with the law.

Permitted Areas of Activity in the Astana MFC

Main Sectors of the Astana IFC

For those contemplating the business registration in Astana IFC, an array of distinctive prospects beckon across various directions, all of which serve as catalysts for technological innovation and heightened economic activity. Each sector presents unique advantages, potential, and benefits:

1. Financial Management: This sector encompasses the organization of portfolio management, operation of pension funds, and the provision of investment consultations and recommendations.
2. Insurance Market: Enterprises within this sector specialize in offering insurance products that cover an array of risks, including life, property, vehicles, and more.
3. Auxiliary Services: Effective support services that bolster financial activities, such as auditing, consulting, and legal assistance, are integral components of this sector.
4. Capital Market: Entities within this sector are responsible for organizing and maintaining the activities of stock markets, managing securities, bonds, and other lucrative financial products.
5. Banking Sector: The banking services in AIFC encompass deposits, lending, and services catering to both private and corporate clients.
6. Fintech: In the AIFC this sector is characterized by the integration of cutting-edge technological solutions in finance, spanning electronic payments, remote banking services, home technologies, and more.
7. Brokerage Services: Intermediation and dealership services, as well as active participation in financial markets and the maintenance of asset liquidity, constitute the core activities within this sector.
8. Environmental Finance: Enterprises within this sector focus on financing environmentally sustainable projects, investing in environmental initiatives, and facilitating the issuance of green bonds.

Steps & Requirements for an IT Company License Obtaining in Astana IFC

The establishment of an IT company in the Astana International Financial Center entails a methodical process involving several stages and the fulfillment of specific requirements. Below is an exhaustive breakdown of the registration process and the requisite prerequisites:

• Preparation of a Business Plan: This document should encapsulate a detailed narrative of the company's goals, its overarching strategy, financial projections, and anticipated outcomes.
• Choosing a Legal Structure: The determination of the legal structure is paramount, encompassing considerations of organizational form such as partnership, joint-stock company, and more. This choice is guided by the inherent goals and unique requirements of the business.
• Company Registration: The formal initiation of the registration process entails the submission of an application for company registration at the Astana IFC. This application should be accompanied by all requisite documents and pertinent information.
• Obtaining Licenses and Permits: Ensuring compliance with regulatory mandates necessitates the acquisition of all necessary licenses for IT activities in Kazakhstan. The nature of these licenses should be tailored to the specifics of the company and its projects.
• Securing Finances and Resources: The execution of financing agreements and the procurement of essential resources constitute a critical phase. This encompasses arrangements to secure access to the infrastructure and facilities available within the Astana IFC.
• Launching Activity: The culmination of the registration process heralds the commencement of actual company activities. This phase entails the development and provision of IT products and services in alignment with the company's strategic vision.

The establishment of an IT company in Astana IFC necessitates not only the formalities of legal registration but also the formulation of a strategic blueprint, coupled with the procurement of requisite resources.

Resource and Infrastructure Support for IT Enterprises in Kazakhstan

In Kazakhstan, IT enterprises benefit from resource and infrastructure support. The AIFC plays a pivotal role in fostering the growth of the IT sector in Kazakhstan by:

• Attracting investment in advanced solutions and startups.
• Creating job opportunities in IT and related fields.
• Enhancing Kazakhstan's global standing in technological innovation.
• Contributing to economic progress and diversification.

Launch of a Fintech Project in the Astana IFC in Kazakhstan

Relevance of Fintech Projects in Kazakhstan

Fintech projects hold a paramount position in the context of innovative development. The initiation of a fintech project in Kazakhstan carries particular significance for a multitude of compelling reasons.

Fintech startups in the Astana IFC beckon young entrepreneurs and innovators, thereby fostering diversity and catalyzing the development of the local business ecosystem.

Both public and private entities in Kazakhstan support fintech projects through strategic investments, accelerator programs, and startup support initiatives.

The robust development of fintech projects in Kazakhstan augments the nation's financial system and facilitates its integration into the global economic framework.

Stages of Launching and Regulating a Fintech Project in the Astana IFC

The inception of a fintech project in Astana entails a meticulously orchestrated journey encompassing several pivotal stages, from ideation to full-fledged market presence. Below are the key stages and regulatory considerations integral to the launch of a fintech project:

• Idea and Concept: This phase involves the inception of an idea for a fintech product, the delineation of its concept, the identification of the potential target audience, and the formulation of a comprehensive business plan.
• Development: During this stage, a prototype of the fintech product is created, subjected to rigorous testing, and refined based on user feedback to optimize its functionality.
• Legalization: Registration of a fintech company in Astana for the provision of financial services takes center stage, with stringent adherence to regulatory requirements.
• Launch: The fintech product is officially introduced to the market, accompanied by a well-planned marketing campaign designed to attract users and clients.
• Expansion: Over time, the client base is progressively expanded, services are diversified, and new avenues for project development are sought.

 Launching a Crypto Startup in the Astana IFC

The launch of a crypto startup necessitates attention to legal and regulatory standards to ensure the legality and safety of operations. Key aspects encompass:

• Licensing: One of the fundamental steps for launching a crypto startup is the registration of a crypto license with the regulatory authorities in Astana. 
• AML Measures: Crypto startups must implement robust measures that include comprehensive customer verification procedures and continuous transaction monitoring to detect and prevent illicit financial activities.
• Confidentiality: Maintaining the confidentiality and security of customer data is of the utmost importance. Compliance with regulations related to the protection of personal information is mandatory to ensure data security and privacy.
• Investor Protection: Crypto startups are obliged to provide transparent information to investors regarding the risks and potential returns associated with cryptocurrencies. This disclosure is crucial to safeguarding the interests of investors who engage with the startup.

The government of Kazakhstan has expressed a commitment to the development of the cryptocurrency market in the Astana International Financial Center. Simultaneously, it has initiated efforts to establish comprehensive regulatory mechanisms to govern and oversee this sector. 

Fintech Sandbox Program in the AIFC

The Fintech Sandbox is a program initiated by regulators, including the Astana International Financial Center, designed to provide invaluable support and foster the development of fintech initiatives. 

The Astana International Financial Center harnesses the fintech sandbox mechanism as a catalyst to bolster innovative companies, thereby catalyzing growth and innovation within the flourishing fintech industry of Kazakhstan.

Specifics of Securities Trading at the Astana IFC in Kazakhstan

Securities trading at the Astana International Financial Center follows a well-regulated and structured framework designed to facilitate transparent and efficient trading activities. Here are some key specifics of securities trading at the AIFC:

• The AIFC operates under a distinct legal and regulatory framework that aligns with international best practices. It has its set of financial laws and regulations, including rules governing securities trading, which are designed to provide clarity and consistency to market participants.
• There is a securities exchange in the AIFC known as the AIX (Astana International Exchange). AIX serves as the primary platform for the listing and trading of securities in Kazakhstan. It operates in accordance with international standards and offers various financial instruments, including equities, bonds, and derivatives.
• Securities trading at the AIFC involves a wide range of market participants, including institutional investors, brokerage firms, market makers, and individual traders. The presence of international investors and companies adds to the diversity of market participants.
• Companies seeking to list securities on the AIX must meet specific listing requirements, which include financial disclosure, corporate governance standards, and compliance with AIFC regulations. These requirements ensure that listed companies adhere to high standards of transparency and accountability.
• The AIX follows trading hours that are aligned with global financial markets. Typically, trading sessions occur on weekdays during specified hours, with breaks for lunch and overnight.
• The AIFC places a strong emphasis on market surveillance and supervision to detect and prevent market abuse, insider trading, and other irregularities. This helps maintain market integrity and investor confidence.
• Securities trading at the AIFC involves a robust clearing and settlement system to ensure the timely and accurate settlement of trades. This system minimizes counterparty risk and enhances the efficiency of trading.
• The AIFC boasts a state-of-the-art technology infrastructure to support securities trading. This includes electronic trading platforms, real-time data dissemination, and connectivity to global financial networks.
• The AIFC prioritizes investor protection through regulatory measures, including mechanisms for resolving disputes and ensuring fair treatment of investors. These safeguards contribute to a secure and trustworthy trading environment.
• The AIFC is designed to be accessible to both domestic and international investors. It actively seeks to attract foreign investment by offering a business-friendly environment and adhering to international standards.

Licensing Process and Brokerage Requirements in Astana IFC

To engage in brokerage activities in AIFC, obtaining an initial license is a requisite step. This process is designed to uphold transaction security and transparency within financial markets. The licensing procedure encompasses the following stages:

• Financial Requirements: To secure a brokerage license within the AIFC, a firm must ensure its ongoing financial stability.
• Submission of Applications: Prospective brokerage entities submit license applications to the relevant regulatory body in the AIFC. These applications provide essential information about the company, its activities, and its founders.
• Application Review: The regulatory body conducts a thorough review of the applications, scrutinizing them for compliance with established requirements and standards. This evaluation encompasses an analysis of the financial stability of the company, the previous experiences of its founders, and other pertinent aspects.
• License Issuance: Upon the successful completion of all assessments and the fulfillment of requisite criteria, the company is granted a license to engage in brokerage activities in the Astana International Financial Center.

The Astana International Financial Center actively catalyzes the evolution of the brokerage market in Kazakhstan. Through its commitment to innovation, service quality, and market expansion, the AIFC contributes to the continued growth and development of brokerage activities within the region.

Payment operators in the AIFC

To establish a payment operator in the Astana IFC, the following steps and criteria must be followed

Licensing Process for Payment Operators in Astana:

Recommendations

Potential investors and businessmen looking to make the most of the opportunities in the Astana International Financial Center (AIFC) should follow these essential steps:

Step 1: Study

• Review AIFC information, including tax advantages, support services, requirements, and sectors of activity.

Step 2: Consultations

• Seek advice from Kazakhstan's investment and business experts for detailed insights into AIFC's processes.

Step 3: Preparation

• Develop a comprehensive business plan and strategy tailored to your investment project.

Step 4: Licenses

• Start the licensing process early if needed for legal compliance.

Step 5: Financing

• Explore the available financial instruments and investment opportunities within the AIFC.

Step 6: Expansion

• Assess opportunities for national and international business growth.