China puts weight behind AIFC and Kazakh plans for regional financial hub

AIFCKazakhstan’s ambitions to establish the Astana International Financial Centre’s (AIFC) as a banking and investment hub for Central Asia, the Caucasus,the Eurasian Economic Union, the Middle East and western China received a boost this week when the Development Bank of China became the 10th financial institution to sign up. The tacit endorsement from Beijing that the bank’s participation implies is being seen in Astana as an important step towards the AIFC’s goal of attracting $40bn of investment by 2025 and the participation of 100 financial institutions by the end of the year.
Due to open for business on July 5, the AIFC expects to focus on capital markets, asset management, private banking, FinTech, Islamic Finance and Green finance. It is also intended to play a key role in Kazakhstan’s privatization program, with IPOs of Air Astana, Kazatomprom and KazMunayGaz and a secondary public offering of Kazakhtelecom top of the list.
The AIFC’s independent regulator was recently accepted as a full member of the Islamic Financial Services Board and Accounting and Auditing Organisation for Islamic Financial Institutions, and NASDAQ is reportedly interested in acquiring 7% of the financial centre. 
As well as foreign banks and financial institutions, the centre is hoping to attract business from high net worth individuals (HNWIs), particularly those in Russia and China who may have fallen foul of Western exchange’s stricter regulatory requirements and sanctions placed on citizens from these states. It is also hoping to encourage wealthy Kazakhs to repatriate some of the $170bn they are estimated to have lodged in overseas tax havens.
AIFC participants will be eligible for 50-year tax exemption, simplified currency arrangements; ands a relaxation of visa requirements. “All the necessary infrastructure and bodies of the AIFC have been created,” AIFC Governor Kairat Kelimbetov said yesterday.