AIFC · AFSA LICENSING
AFSA Licensing — Islamic Finance
A firm may conduct Islamic finance in or from the Astana International Financial Centre (AIFC) only if its licence from the Astana Financial Services Authority (AFSA) carries a specific Shari'ah condition. There are two routes: an Islamic Financial Institution, whose whole business is Shari'ah compliant, or an Islamic Window inside a conventional firm. Both need a Shari'ah Supervisory Board (SSB) of at least three members. Base capital runs from USD 200,000 for managing restricted profit sharing accounts to USD 9 million for an Islamic Bank (USD 10 million from 1 May 2027), and AFSA states an average of about two to three months from a materially complete application.
Bond Stone advises foreign groups on licence scope, Shari'ah governance documents and the AFSA application.
Primary authority: AIFC Islamic Finance Rules (IFR), AIFC Rules No. FR0013 of 2017; AIFC Islamic Banking Business Prudential Rules (IBB); AIFC General Rules (GEN), Schedule 1. Authority: afsa.aifc.kz
Legal Framework
| Instrument | What it does here |
|---|---|
| Constitutional Statute No. 438-V of 7 December 2015 on the AIFC | Article 6 sets the tax exemptions. Under Article 13, AIFC Court decisions are enforced in Kazakhstan like Kazakhstan court acts. |
| AIFC Financial Services Framework Regulations, No. 18 of 2017 (FSFR) | Licensing criteria (section 34): adequate resources, fitness and propriety, capacity to be supervised, compliance arrangements. |
| AIFC General Rules, FR0001 of 2017 | Schedule 1 defines the Regulated Activities, including paragraphs 12 (Restricted Profit Sharing Investment Account), 13 (Islamic Banking Business), 14 (Providing Islamic Financing) and 25 (Takaful Business). |
| AIFC Islamic Finance Rules, FR0013 of 2017 | In force since 1 January 2018. Conduct, disclosure, SSB, Islamic Windows, funds and securities. Based on standards of the Islamic Financial Services Board and the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) (Rule 1.2). |
| AIFC Islamic Banking Business Prudential Rules, FR0014 of 2017 | Capital, liquidity and risk for Islamic Banks, Islamic Broker Dealers and Islamic Financing Companies. |
| AIFC Takaful and Retakaful Prudential Rules, FR0031 of 2018 | Capital, Takaful Funds and restrictions for Takaful Operators. |
| AIFC Prudential Rules for Investment Firms (PRU); Collective Investment Scheme Rules (CIS); Fees Rules (FEES) | Capital for restricted accounts; fund rules; fees as amended from 1 December 2025. |
AFSA may ask the AIFC Central Shari'ah Board for guidance (Guidance to Rule 5.1). Separately, the AIFC's Islamic Finance Advisory Board, with experts from the UAE, Saudi Arabia, Bahrain, Malaysia, Türkiye and Kazakhstan, first met on 10 December 2025. Its members backed a comprehensive Shari'ah governance policy at the AIFC, so requirements for Shari'ah bodies may change.
Who the Rules Apply To
The IFR apply to any person carrying on a Financial Service or making an offer of Securities in or from the AIFC in a Shari'ah-compliant manner, and to a Domestic Fund operated as an Islamic Fund (Rule 1.1).
An application may be made by a body corporate or a partnership, either with the original licence application or later (IFR 2.1(1)). An Islamic Bank must be an AIFC limited liability company, an AIFC limited liability partnership or a registered branch (IBB 1.8). A firm without the licence condition must not hold itself out as an Islamic Financial Institution or Islamic Window, or as conducting Islamic Financial Business (IFR 2.3).
Islamic Finance Regulated Activities
| Activity | Scope | Base capital | Application fee | Annual supervision fee |
|---|---|---|---|---|
| Islamic Banking Business | Financing or investing under Islamic Financial Contracts, funded by accepting funds or placements, by managing Unrestricted Profit Sharing Investment Accounts (UPSIAs), or both. | USD 9 million from 1 November 2026; USD 10 million from 1 May 2027 (IBB 4.7(a), as modified by AFSA Notice AFSA-Q-OA-2023-0007) | USD 21,000 | USD 14,000* |
| Providing Islamic Financing | Financing under any Islamic Financial Contract. An Islamic Financing Company must not manage UPSIAs (IBB 1.7(2)). | USD 2 million (IBB 4.7(c)); phased under AFSA Notice AFSA-Q-OA-2024-0019, see below | USD 14,000 | USD 9,800* |
| Dealing in Investments as Principal, Shari'ah compliant (Islamic Broker Dealer) | An Islamic Financial Institution or Window dealing as principal that is not an Islamic Bank (IBB 1.6). | USD 2 million (IBB 4.7(b)) | USD 14,000 | USD 11,200; USD 7,000 as matched principal |
| Managing a Restricted Profit Sharing Investment Account (RPSIA) | Managing an account or portfolio that is an RPSIA. | USD 200,000 (PRU Table 3.3) | USD 14,000 | USD 9,800 |
| Takaful Business | Effecting or carrying on Family or General Takaful Contracts as principal, as an Islamic Financial Institution or an AIFC-incorporated insurer with a window (Takaful Rules 1.1.5). | Capital Floor USD 7 million (Takaful Rules, Schedule 4, 1.1) | USD 14,000 | USD 9,800* |
* Under the note to Schedule 6 of the Fees Rules, these supervision fees apply from 1 January 2027.
Other Regulated Activities can also be carried on in a Shari'ah-compliant manner under the licence condition (IFR 1.5). Their capital, and that of an Islamic fund manager, is on our investment management page.
Capital modifications in force. AFSA's class modification for Islamic Banks (Notice AFSA-Q-OA-2023-0007) steps the base capital up to the USD 10 million in the rule on 1 May 2027, when the notice ends. For an Islamic Financing Company, Notice AFSA-Q-OA-2024-0019 (in force until 30 September 2029) phases the USD 2 million by time since authorisation: USD 100,000 if only own funds are used, or USD 500,000 if not; USD 500,000 or USD 1 million from month 18; USD 1 million or USD 1.5 million from month 24; and USD 2 million from month 36. Its closing paragraph refers to firms authorised before 1 October 2024, so confirm with AFSA whether a new applicant can use it. AFSA's 2020 modification for Takaful Operators has expired, so the Capital Floor is the USD 7 million in the rule. Takaful capital must also cover a Prescribed Capital Requirement of at least 150% of the minimum (Takaful Rules, Schedule 5, 1.1), which on our calculation is USD 10.5 million at the floor; the rules do not state that figure.
Islamic Financial Institution or Islamic Window
| Point | Islamic Financial Institution | Islamic Window |
|---|---|---|
| Business covered | The whole business, under a specific licence condition (IFR 1.7(1)) | Identified parts of a conventional firm (IFR 1.8, 6.1, 6.2(3)(a)) |
| Constitutional documents | Must state that the entire business will be fully Shari'ah compliant (IFR 1.7(2), 2.1(2)) | No equivalent rule; the firm must maintain policies, systems and controls for the window (IFR 6.2(3)(b)) |
| How to apply | State it in the licence application (IFR 2.1(2)) | State it in the application, or apply to vary the licence conditions (IFR 6.2(1), (2)) |
| SSB and governance | IFR Chapters 3, 4 and 5 | The same chapters, plus Chapter 6, for the window (IFR 6.2(4), (5)) |
| Client disclosure | Status, SSB members and, on request, manner and frequency of Shari'ah reviews (IFR 3.1) | The same, plus disclosures under AAOIFI FAS 18 (IFR 6.2(6)) |
A window suits a licensed firm: varying a condition on an existing activity costs 50% of that activity's application fee (FEES Schedule 1).
Shari'ah Supervisory Board Requirements
The SSB must ensure that the Islamic Financial Business is conducted in accordance with Shari'ah, and it expresses a binding opinion on how far operations, transactions and contracts comply (IFR 4.4).
- Composition: at least three members, competent by qualifications and experience. The Governing Body approves appointments, dismissals and changes. No member may be a director or controller of the firm (IFR 5.1).
- Independence: members must be independent and free of conflicts. If a conflict cannot be managed, the firm must dismiss or replace the member (IFR 5.3).
- Policy: a documented policy on appointment, suitability and remuneration (IFR 5.2). AFSA may ask for members' qualifications and independence (IFR 5.4).
- Products and promotions: the SSB reviews every service or product that is the subject of a financial communication before it is issued (IFR 4.4(1)(d)), and the material must disclose the identity of the reviewing SSB (IFR 5.10).
- Reviews: Shari'ah reviews follow AAOIFI GSIFI No. 2 (IFR 5.8). The internal audit or compliance function performs the internal review under GSIFI No. 3 (IFR 5.11); a window does so to the extent possible (IFR 6.3).
- Annual report: the SSB report follows GSIFI No. 1, and a copy reaches AFSA within three months after the financial year end (IFR 5.9).
- Records: competence assessments and terms of engagement are kept for at least six years after a member leaves (IFR 5.6, 5.7).
Capital, Staff and Substance
Capital. An Islamic Bank must hold CET 1 Capital at least equal to its Base Capital Requirement at authorisation and at all times after (IBB 4.8). Its ongoing Capital Requirement is the higher of base capital and its Risk Capital Requirement (IBB 4.9). Minimum ratios are 4.5% CET 1, 6% Tier 1 and 8% total capital (IBB 4.11), with a 2.5% Capital Conservation Buffer where the risk-based requirement is higher (IBB 5.2). A Takaful Operator must maintain paid-up share capital of at least the Capital Floor and shareholders' funds of at least 75% of it, and its Minimum Capital Requirement can exceed the floor as business grows.
Staff. Every Authorised Person must have a Senior Executive Officer, Finance Officer, Compliance Officer and Money Laundering Reporting Officer who are Approved Individuals (GEN 2.1.1). AFSA's activity pages add a deputy MLRO, a Board of Directors and committees, and for Takaful a Risk Officer, Internal Auditor and Approved Actuary. The MLRO must generally be ordinarily resident in Kazakhstan. The Senior Executive Officer has no strict residence requirement but must spend an appropriate amount of time there.
Documents. The Islamic Financial Business manual must cover Shari'ah oversight, how fatwas and rulings are recorded and implemented, disputes with the SSB, and conflicts (IFR 4.5). AFSA also expects anti-money laundering, compliance, risk, outsourcing, business continuity and internal audit policies, and banks add credit and market risk policies. External and internal auditors are required (FSFR section 109; GEN 5.5.1).
Licensing Procedure and Timeline
- Scope. Fix the activity, the route and the entity form. AFSA does not advise on an application.
- Governance. Identify the SSB members and Approved Individuals, and draft the constitution so that it states the Shari'ah commitment. The entity is registered after In-Principle Approval and before the Licence; AFSA's FAQ says registration may not come first.
- Application. File the standard form with the Islamic Business supplement (and Banking Business supplement for a bank), individual applications, financial projections, the Controllers' questionnaire and policies. It is not treated as submitted until the fee is paid in full.
- First review. AFSA acknowledges within 2 working days, assigns a case officer and sends an Initial Review Letter within 4 weeks. The applicant has up to 2 months to answer, and candidates for key functions may be interviewed.
- Further reviews. Second-round comments follow within 2 weeks, and a third draft may attract a supplementary fee.
- Decision. The FSFR sets no deadline for a licence decision. AFSA states an average of about two to three months from a materially complete application, excluding time spent waiting for the applicant. AFSA may attach conditions, and a rejection may be appealed to the AIFC Court (FSFR section 35).
- Registration and first fee. Register the entity (USD 500 online or USD 1,500 on paper for a private company) and pay the first supervision fee within 21 days of the grant, pro-rated by whole months to the year end.
Fees. With several activities the applicant pays the highest fee plus 50% of the fee for each additional activity, and USD 500 per Approved Individual. Application fees are non-refundable. The eligible activities AFSA lists for its Fast-Track regime (Notice of 20 August 2026) do not include Islamic Banking Business, Providing Islamic Financing or Takaful Business.
Islamic Contracts, Funds and Sukuk
An Islamic Financial Contract may include murabahah, salam, tawarruq, istisna, ijarah, musharakah, mudarabah, qard and any other contract approved by the firm's SSB (IFR 1.12).
| Structure | Meaning |
|---|---|
| Murabahah | Sale of goods at cost plus a mark-up. |
| Ijarah | Islamic leasing. |
| Mudarabah | One party provides capital and the other runs the business for an agreed share of the profit. |
| Musharakah | Partnership in which two or more parties provide capital and share management. |
Islamic funds. An Islamic Investment Fund is a Specialist Fund whose entire operations are Shari'ah compliant (CIS 2.4(b)(i)). The manager of a Domestic Non-Exempt Fund must appoint an SSB of at least three members, unless it relies on a widely accepted Shari'ah screening process such as an Islamic index (IFR 7.5). The SSB approves the constitution and prospectus and reviews them at least annually (IFR 7.3). Exempt Funds have no fund-level SSB requirement but must still meet Shari'ah requirements. Takaful, sukuk and profit sharing accounts fall outside the fund regime (IFR Chapter 7 guidance; CIS 3.15, 3.18).
Sukuk. Issuing securities is not itself a Regulated Activity, but an offer in or from the AIFC falls under the FSFR and the AIFC Market Rules. A sukuk prospectus must include the SSB's members and qualifications, its opinion on compliance, the transaction structure and flow of funds, and the AAOIFI disclosures (IFR 8.2). Changes to the SSB must be disclosed (IFR 8.3). The Astana International Exchange (AIX) listed its first sukuk in March 2020 and cross-listed Islamic Development Bank green, sustainable and traditional sukuk that December.
Tax Position
AIFC tax exemptions depend on the activity. They do not attach to every AIFC entity. Under Article 6 of the Constitutional Statute, until 1 January 2066:
- Corporate income tax and VAT: listed financial services provided in the AIFC are exempt (Article 6(3), (8-2)). The statute names Islamic banking services. The 2020 Joint Order approving the List of financial services adds Managing an RPSIA, Providing Islamic Financing and Takaful and Retakaful business. It remains in place: Article 6(3), last amended on 30 December 2022, still refers the list to a joint act, and we found no amendment to the Order at November 2026.
- Property and land tax: participants providing those services are exempt on objects in the AIFC (Article 6(8)).
- Foreign employees of such a participant are exempt from individual income tax on their AIFC employment income (Article 6(6)).
- Shareholders: any person is exempt on dividends and gains on shares of AIFC-registered participants (Article 6(7)).
Other income follows the Tax Code No. 214-VIII of 18 July 2025. Income must be accounted for separately (Article 6(5)). Since 1 January 2022 the Rules on Substantial Presence require core income generating activities in the AIFC, adequate operating expenses and adequate qualified full-time staff. The participant submits an economic study to the state revenue authority, core work may not be outsourced outside Kazakhstan, and a participant that fails is taxed under the Tax Code.
Serving Clients in Kazakhstan
The AIFC Rules on Currency Regulation and Provision of Information on Currency Transactions (No. 6 of 2021, amended 15 February 2024) list what AIFC Participants may provide to Kazakhstan residents outside the AIFC. The list includes Islamic banking by Islamic banks, Islamic financing by Islamic banks and Islamic financial organisations, Islamic insurance, and managing an RPSIA, in any currency. Islamic banks may not, among other things, carry out residents' export or import transactions, or make client payments unrelated to Islamic financing or the financed project (Rule 3.1.5).
Ongoing Obligations
| Obligation | Requirement |
|---|---|
| Annual SSB report | To AFSA within 3 months after the financial year end (IFR 5.9) |
| Policy review | Governing Body reviews significant policies at intervals of no more than 12 months (IFR 4.3(3)) |
| Prudential returns | Filed on AFSA's instructions, signed by the Finance Officer and Chief Executive Officer (IBB) |
| Accounts and records | IFRS financial statements; accounting records kept for at least six years (GEN 6.3) |
| Supervision fees | Due by 1 January. From 1 January 2027: highest fixed fee plus 50% of the fixed fee for each additional activity (FEES 3.1.5, 3.1.6) |
Common Mistakes by Foreign Investors
- Marketing before the condition is granted. Describing a product as Islamic without the licence condition breaches IFR 2.3.
- Appointing a director or controller to the SSB. IFR 5.1 bars both.
- Choosing the USD 2 million route for a deposit-style model. An Islamic Financing Company must not manage UPSIAs.
- Treating a window as a product line. IFR Chapters 3 to 6 apply to it, including an SSB and FAS 18 disclosure.
- Combining Takaful lines. A Takaful Operator may not carry on both Family and General Takaful, unless General Takaful is limited to accident and sickness. Managing Investments is not treated as connected business (Takaful Rules 1.4).
Frequently Asked Questions
Can a conventional AIFC firm offer Islamic products without a new licence?
It needs a variation of its licence conditions to operate an Islamic Window (IFR 6.2(2)), with controls and an SSB. A new Regulated Activity must also be added to the licence.
Must SSB members live in Kazakhstan?
The IFR set no residence or nationality test. They require at least three competent, independent members, none of them a director or controller.
Is a sukuk issuer licensed by AFSA?
Issuing securities is not a Regulated Activity, so an issuer does not need a licence for that reason alone. The offer is subject to the FSFR, the AIFC Market Rules and IFR Chapter 8, including the SSB opinion in the prospectus.
Is all income of an AIFC Islamic bank tax exempt?
No. The exemption until 1 January 2066 covers income from qualifying services provided in the AIFC, on condition of substantial presence. Other income is taxed under the Tax Code.
Can an AIFC Islamic bank serve Kazakhstan residents?
Yes, within Schedule 2 of the AIFC currency rules, which lists Islamic banking and Islamic financing in any currency, and subject to the prohibitions in Rule 3.1.5.
Discuss your Islamic finance licence
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Related Pages
AFSA Investment Management Licensing · AFSA Banking & Credit Licensing · AFSA Insurance Licensing · AIFC Entity Formation · AIFC Tax and Residency
Primary sources: AIFC Islamic Finance Rules; Islamic Banking Business Prudential Rules; Takaful and Retakaful Prudential Rules; AFSA Notice Register; AIFC General Rules; AIFC Fees Rules; AFSA Authorisation FAQs; Constitutional Statute No. 438-V; List of exempt financial services; Rules on Substantial Presence; AIFC currency rules.