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March 6, 2021
WORLD

Astana Int’l Financial Centre to boost investments and economic prosperity of Kazakhstan

On January 1, Kazakhstan launched an experiment unusual for the post-Soviet space. The International Financial Center began to operate in the republic – the fruit of a seemingly Utopian idea, which today retrieves more and more precise and quite real outlines, provoking the interest of neighbouring countries and those to whom it was, in fact, addressed – the investors.

The speed of the project implementation is impressive and has a clear message to the International business community – it is a very important direction for Kazakhstan, where it creates ideal conditions for its partners. The seriousness of the events is fixed by personal supervision of the President of Kazakhstan Nursultan Nazarbayev. What other guarantees are needed?!

“Ideal conditions” for partners here is by no means a formal speech pattern. You be the judge. Especially for work with foreign investors the Kazakh Invest national company was created in Kazakhstan which helps businessmen, wishing to work in the country, to choose the best niche. No bureaucratic delays and language barriers. The company takes over almost all paper procedures, and it communicates with potential investors in their language – all consulting services, tax, customs procedures are translated into English.

Moreover, an Investor Service Center operates in Kazakhstan. It works on a one-stop principle. That is, the person may come and get all the paperwork done in one place. The investment ombudsman protects the rights of foreign entrepreneurs. Moreover, various preferences and tax privileges are provided to investors, for example, exemption from the VAT at import of raw materials, and quotas for import of own labour force.

The list is very long. The investment policy of Kazakhstan was formed throughout the 26 years of independence by trial and error. Therefore, now it is carefully thought out and as detailed as possible. Whether it is necessary to enumerate when Kazakhstan’s position in the international rating reflecting the comfort of conditions for entrepreneurship in the world speaks for itself. Doing Business. It ranks 36th among 190 states. Along with Russia, it has the best indicators in the post-Soviet space. At the same time, Kazakhstan has overtaken not only the countries of the former USSR but also many developed States on separate positions. For example, in terms of protection of minority investors, Kazakhstan is in the first place in the world, and in the performance of contracts – at the sixth.

All conditions created for investors have a real reflection in the figures of foreign capital inflow. For example, only in the first quarter of 2017 investors invested in Kazakhstan by almost 19% more than the year before. According to the results of January-March 2017, the total gross inflow of foreign direct investments amounted to 5.381 billion (data of the National Bank of Kazakhstan). This is almost 19% (or $ 857.2 million) more than in the first quarter of 2016. Holland is the largest foreign investor, followed by the US, Switzerland, China and Russia.

In the context of the above, there is no reason to believe that the project of the International Financial Center launched by Kazakhstan will remain a utopian idea. Astana has every chance to become the second Dubai or Singapore but in Central Asia. To become a regional hub for attracting investments, using modern financial technologies and a special justice system based on English law. Its own independent Court, separate from the judicial system of Kazakhstan, operates in the Astana International Financial Centre Foreign judges of international level work there. They have already sworn an oath to the President of Kazakhstan. All this guarantees the complete impartiality of the process and the rule of law.

Summing up, we would like to note that by studying in detail the investment opportunities of Kazakhstan and the conditions created for them, it is not difficult to understand why the country attracts foreign capital even in conditions when the state of the world economy does not contributes to it at all. With a minimum level of confidence in the financial sphere and volatility of markets, Kazakhstan remains a safe haven for investors with many untapped areas and opportunities. In addition to the traditional raw materials sector, in Kazakhstan with its huge fertile areas, the agricultural sector looks promising and the Chinese investor is already actively coming there. The sphere of transport and logistics causes interest in the foreign business environment. Still, the convenient location of the country between Europe and Asia and the presence of virtually all the necessary infrastructure for transshipment of goods play a very important role.

If all these arguments are still not enough to assess the extent to which Kazakhstan has bypassed partners in the race for investment, I would add that right at the end of 2017, Kazakhstan adopted a new tax code, as well as a code “On subsoil and subsoil use,” significantly expanding opportunities for investors. This year the Government of the republic is preparing another package of legislative amendments to improve the business environment at the national and subnational levels.

 

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