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 the 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.
Mistake 2: Assuming AIFC Court Jurisdiction Follows Automatically
AIFC Court jurisdiction is limited to the heads in Article 13 of the Constitutional Statute: disputes between AIFC Participants, AIFC Bodies and their foreign employees; disputes about activities carried out in the AIFC and governed by AIFC law; disputes transferred to the Court by agreement of the parties; and the interpretation of AIFC Acts. For a foreign investor contracting with a Kazakhstani counterparty that is not an AIFC Participant, agreement is usually the only gateway, and it must be properly invoked. Any party can opt in, before or after a dispute arises. 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.
The Court’s published judgments show how this plays out:
- A reference to AIFC law is not a jurisdiction clause. In Modtech Group Teknoloji Sistemleri Ltd v Mosston Engineering Ltd and Kaztechnology JSC (Case No. AIFC-C/CFI/2020/0010, 22 February 2021), an assignment agreement said only that the parties’ actions complied with, and that gaps would be filled by, Kazakhstani and AIFC legislation. The Court found no agreement transferring the dispute to it and dismissed the claims for lack of jurisdiction.
- Related contracts need matching clauses. In Yeleussizov v Zhumyshy Ltd (Case No. AIFC-C/SCC/2025/0045, 14 May 2026), the bond agreements chose the AIFC Court but the guarantees chose arbitration at the AIFC International Arbitration Centre, so the Court had no jurisdiction over the guarantors.
- An express clause is not the last word. In TethysAralGas LLP v KUL-BAS LLP (Case No. AIFC-C/CFI/2026/0015, 12 June 2026), the contract gave the AIFC Court exclusive jurisdiction, but the Court declined it under Article 26(10) of the AIFC Court Regulations. The sale in dispute was part of a bailiff’s enforcement process, and the Court held that the ordinary courts of Kazakhstan were the appropriate forum.
- Not every route is contractual. In Ligay v Hefi Labs Ltd and others (Case No. AIFC-C/CFI/2026/0014, 28 October 2026), the Court took jurisdiction over a dispute about a director’s resignation from AIFC-registered companies without relying on any jurisdiction clause, because the claim required the interpretation of an AIFC Act and related to operations in the AIFC regulated by AIFC law.
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 regulated activity — brokerage, payment processing, fund management, digital asset services — must be covered by a licence from the AIFC’s regulatory body, the AFSA, and one licence can authorise one or more activities. Investors who enter before the licence is in place cannot start: carrying on a regulated activity without a licence breaches the General Prohibition, and a firm in breach generally cannot enforce the agreements it makes (AIFC Financial Services Framework Regulations, sections 24 and 28). 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 exemption is narrower than many investors assume. Article 5(4) of the Constitutional Statute disapplies three requirements of the Law on Currency Regulation and Currency Control: registration of currency contracts for capital transactions, assignment of a registration number to an account in a foreign bank, and notification of currency transactions. It covers only currency transactions that AIFC Participants carry out in the AIFC, and Participants still report information on those transactions under AIFC Acts agreed with the National Bank (Article 5(5)). 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.
The AIFC’s own Currency Rules add a further limit: Participants may serve Kazakhstani residents that are not Participants only within a fixed list of services. In Cashdrive Ltd v Astana Financial Services Authority (Case No. AIFC-C/CFI/2023/0035, 25 April 2024), a licensed AIFC lender argued that the Rules did not bind it because its licence predated them. The Court dismissed its appeal against the AFSA’s directive: the Rules barred loans to individuals resident in Kazakhstan, and a licence holder must comply with AIFC legislation as it stands from time to time.
Where the AIFC Works Well
None of this is an argument against AIFC structuring. Used correctly, the AIFC offers real advantages: English-language contracts and proceedings, a court system whose judgments are enforced in Kazakhstan on the same terms as Kazakhstani court judgments, tax exemptions running to 1 January 2066 for qualifying activities and income, and a regulatory environment designed for cross-border financial activity. For multinationals entering Kazakhstan and Central Asia, it is often the right tool, provided the structure is designed with both the AIFC framework and the surrounding Kazakhstani law in view.
Bond Stone’s AIFC Practice
Bond Stone's partners hold AIFC Registered Legal Adviser status and are on the AIFC Court Registry, which is the source of rights of audience before the AIFC Court. Our AIFC practice covers:
- AIFC entity formation — company incorporation, governance, and constitutional documents
- AFSA licensing — digital assets, payment services, investment management, banking, insurance, Islamic finance, capital markets
- AIFC Court proceedings — commercial disputes, enforcement, and interim relief
- AIFC regulatory compliance — ongoing AFSA obligations, conduct of business rules, AML/CFT frameworks
- Investment Tax Residency Programme — exemption from individual income tax, until 1 January 2066, on income from outside Kazakhstan for qualifying investment residents
- Cross-border M&A and AIFC structuring — dual-layer advice on Kazakhstani law and AIFC/English common law on a single mandate
If you are evaluating Kazakhstan market entry or reviewing an existing AIFC structure, I am available for a direct conversation. Contact us at [email protected] or through our offices. All communications are confidential.
Related reading: AIFC Kazakhstan Overview • AFSA Licensing Hub • AIFC Court Proceedings • M&A in Kazakhstan • Foreign Investment in Kazakhstan