The Astana International Financial Centre (“AIFC”) was established based on the experience of international centres in New York, London, Dubai, Hong Kong, and Singapore. The AIFC offers a number of attractive conditions to business entities, including a legal regime based on the law of England and Wales.
This article will consider the legal regime of the AIFC, as well as the formation of legal entities under AIFC rules.
A special legal regime operates in the AIFC, established by the Constitutional Law of the Republic of Kazakhstan “On the Astana International Financial Centre” (“AIFC Constitutional Law”). According to Article 4 of the AIFC Constitutional Law, the applicable law of the AIFC is based on the Constitution of the Republic of Kazakhstan and consists of:
Among others, the following acts regulate the formation of legal entities and their activities within the AIFC:
Thus, first, the AIFC operates under a special legal regime governed by the AIFC Constitutional Law, and second, activities of participants in the AIFC are regulated by AIFC acts.
An AIFC Court also operates within the AIFC under the AIFC Court Regulations. The Court consists of two levels: (1) the Court of First Instance, which includes a specialised division — the Small Claims Tribunal, and (2) the Court of Appeal. Additionally, an International Arbitration Centre operates within the AIFC.
The AIFC Company Regulations prohibit engaging in any activity by persons not registered in the AIFC, except where a person has established or registered a company as an AIFC participant. A legal entity duly registered by the AIFC Registrar of Companies is entitled to conduct activities within the AIFC.
The AIFC Company Regulations establish the principle of separate legal personality for a company, according to which a company registered under the AIFC Company Regulations has a legal personality separate from its participants. This means that obligations of the company arising in connection with contracts, violations, or other matters are obligations of the company, not personal obligations of a participant or officer, unless otherwise provided by the AIFC Company Regulations.
Accordingly, a company registered in the AIFC has a separate legal personality and bears obligations related to its activities independently, with liability limited to the amount of its authorised capital.
Under the AIFC Company Rules, the following types of companies may be established within the AIFC:
For example, a limited liability partnership (“LLP”) may be formed by two or more persons. Two or more persons may submit an application for registration of an LLP, having first executed a partnership agreement. In submitting the application for LLP registration, the following must be stated:
To register a legal entity in the AIFC, a registration fee of USD 300 must be paid. The registration period depends on the form of legal entity chosen and the time needed to prepare the constituent documents.
Regarding authorised capital, the AIFC rules set different minimum capital requirements depending on the form of the legal entity. For example, the minimum authorised capital for a public company must be at least USD 100,000, while there is no minimum authorised capital requirement for a private company.
Notably, under the AIFC Company Regulations, any company in other jurisdictions may be accredited as a recognised company in the AIFC without creating a new company. To register as a recognised company, one must apply to the AIFC Registrar of Companies in accordance with the relevant rules.
Upon registration as a recognised company, the AIFC Registrar of Companies issues a certificate of recognition and assigns a business identification number (“BIN”), which grants official status as an AIFC participant and the right to conduct business within the AIFC. As a general rule, companies registered in the AIFC benefit from the principle of separate legal personality and limited liability.
All legal entities established in the AIFC (except for special purpose companies) must carry out activities within the AIFC unless the AIFC Registrar permits activities outside the AIFC.
This article will consider the legal regime of the AIFC, as well as the formation of legal entities under AIFC rules.
- AIFC Legal Regime and Court System
A special legal regime operates in the AIFC, established by the Constitutional Law of the Republic of Kazakhstan “On the Astana International Financial Centre” (“AIFC Constitutional Law”). According to Article 4 of the AIFC Constitutional Law, the applicable law of the AIFC is based on the Constitution of the Republic of Kazakhstan and consists of:
- the AIFC Constitutional Law;
- AIFC acts that do not contradict the AIFC Constitutional Law.
Among others, the following acts regulate the formation of legal entities and their activities within the AIFC:
- the AIFC Company Regulations;
- the AIFC Company Rules;
- the AIFC Partnership Regulations;
- the AIFC Limited Partnership Regulations;
- the AIFC Non-Profit Organizations Regulations; and other acts.
Thus, first, the AIFC operates under a special legal regime governed by the AIFC Constitutional Law, and second, activities of participants in the AIFC are regulated by AIFC acts.
An AIFC Court also operates within the AIFC under the AIFC Court Regulations. The Court consists of two levels: (1) the Court of First Instance, which includes a specialised division — the Small Claims Tribunal, and (2) the Court of Appeal. Additionally, an International Arbitration Centre operates within the AIFC.
- Formation of Legal Entities under AIFC Rules
The AIFC Company Regulations prohibit engaging in any activity by persons not registered in the AIFC, except where a person has established or registered a company as an AIFC participant. A legal entity duly registered by the AIFC Registrar of Companies is entitled to conduct activities within the AIFC.
The AIFC Company Regulations establish the principle of separate legal personality for a company, according to which a company registered under the AIFC Company Regulations has a legal personality separate from its participants. This means that obligations of the company arising in connection with contracts, violations, or other matters are obligations of the company, not personal obligations of a participant or officer, unless otherwise provided by the AIFC Company Regulations.
Accordingly, a company registered in the AIFC has a separate legal personality and bears obligations related to its activities independently, with liability limited to the amount of its authorised capital.
Under the AIFC Company Rules, the following types of companies may be established within the AIFC:
- private companies;
- public companies;
- foreign companies recognised as a recognised company;
- investment companies;
- closed-ended companies;
- special purpose companies; and
- limited liability partnerships;
- private funds;
- non-profit organisations.
For example, a limited liability partnership (“LLP”) may be formed by two or more persons. Two or more persons may submit an application for registration of an LLP, having first executed a partnership agreement. In submitting the application for LLP registration, the following must be stated:
- the proposed name of the LLP, which must end with the words “limited liability partnership”;
- the proposed address of the LLP’s registered office;
- the nature of the business, objectives, or activities of the partnership;
- the name and address of each person who is to be a member of the LLP upon registration;
- and other information (if any) required by the AIFC Registrar of Companies or the AIFC Rules.
To register a legal entity in the AIFC, a registration fee of USD 300 must be paid. The registration period depends on the form of legal entity chosen and the time needed to prepare the constituent documents.
Regarding authorised capital, the AIFC rules set different minimum capital requirements depending on the form of the legal entity. For example, the minimum authorised capital for a public company must be at least USD 100,000, while there is no minimum authorised capital requirement for a private company.
Notably, under the AIFC Company Regulations, any company in other jurisdictions may be accredited as a recognised company in the AIFC without creating a new company. To register as a recognised company, one must apply to the AIFC Registrar of Companies in accordance with the relevant rules.
Upon registration as a recognised company, the AIFC Registrar of Companies issues a certificate of recognition and assigns a business identification number (“BIN”), which grants official status as an AIFC participant and the right to conduct business within the AIFC. As a general rule, companies registered in the AIFC benefit from the principle of separate legal personality and limited liability.
All legal entities established in the AIFC (except for special purpose companies) must carry out activities within the AIFC unless the AIFC Registrar permits activities outside the AIFC.