By Sanat Ablakov · Managing Director, BOND STONE Law Firm · Almaty, Kazakhstan
Over 25 years advising multinationals entering Kazakhstan, I have watched the same expensive mistake made repeatedly. A company discovers the Astana International Financial Centre, assumes it operates like a standard offshore vehicle, and structures accordingly. It does not. The cost of that assumption ranges from delays to full restructuring.
The AIFC is frequently described in shorthand as “English law in Kazakhstan.” That description is accurate but incomplete — and the gap between the shorthand and the reality is where foreign investors lose time and money.
MISTAKE 1: TREATING AIFC AS A STANDALONE JURISDICTION
The AIFC operates under its own legal framework — based on English common law, with an independent court and arbitration centre. But it sits inside Kazakhstan. Most commercial activity, particularly involving local assets, counterparties, employees, and land, is still governed by Kazakhstani law. An AIFC holding structure does not insulate a transaction from local regulatory requirements. The two frameworks must be mapped against each other from day one, not reconciled after closing.
AIFC Court jurisdiction is contractual — it must be properly invoked. Agreements that reference “AIFC” without precise jurisdiction and governing law clauses create ambiguity that opposing counsel will exploit. I have seen contracts where the parties intended AIFC Court jurisdiction but drafted provisions that defaulted to Kazakhstani civil courts. In a dispute, that distinction is everything.
MISTAKE 3: UNDERESTIMATING THE LICENSING LAYER
AIFC status grants access to a progressive regulatory environment, particularly for financial services, FinTech, and digital assets. But access is not automatic authorisation. Each activity — brokerage, payment processing, fund management, digital asset services — requires its own licence from the AIFC’s regulatory body, the AFSA. Investors who enter before the licence is in place face operational paralysis. The sequencing of entity formation, regulatory approval, and commercial launch needs to be planned in advance.
MISTAKE 4: OVERLOOKING CURRENCY AND REPATRIATION MECHANICS
Kazakhstan imposes currency controls. The AIFC provides certain exemptions for AIFC participants, but those exemptions apply to specific transaction types and must be properly documented. Profit repatriation, intercompany loans, and dividend flows all carry their own requirements. Investors focused on entry structure often discover the repatriation question only when they want to move money out.
WHAT THE AIFC DOES EXCEPTIONALLY WELL
None of the above is an argument against AIFC structuring — quite the opposite. When structured correctly, the AIFC offers genuine advantages: English-language contracts and proceedings, a court system with international enforceability, a progressive tax regime, and a regulatory environment designed for cross-border financial activity. For multinationals entering Kazakhstan and Central Asia, it is frequently the right tool. The question is whether the team advising on the structure understands both the AIFC framework and the Kazakhstani legal environment that surrounds it.
That dual fluency is rare. It is also the difference between a structure that works and one that looks correct on paper until it meets reality.
If you are evaluating Kazakhstan market entry or reviewing an existing AIFC structure, I am available for a direct conversation. BOND STONE has advised on cross-border transactions in Kazakhstan, Uzbekistan, and Kyrgyzstan for over 15 years — including some of the region’s largest energy, M&A, and infrastructure mandates.
