Relocating a tech holding structure to Kazakhstan's Astana International Financial Centre (AIFC) involves navigating a distinctive legal framework that operates partly under English common law principles, alongside Kazakhstan's evolving national tax and corporate rules. This illustrative scenario – based on patterns typical of cross-border restructuring matters handled in this jurisdiction – sets out the strategic logic, key milestones, complications encountered and lessons that transfer to comparable projects. It is presented as an illustrative scenario only; no specific client, transaction amount or outcome is represented as real.
Client Profile and the Challenge
The hypothetical group in this scenario is a mid-sized technology holding with operating subsidiaries across Central Asia and the Caucasus. Its existing holding structure – incorporated in a Western European jurisdiction – was generating friction: withholding tax costs on dividend flows from Kazakhstan-source subsidiaries, limited access to AIFC Court dispute resolution, and growing compliance exposure as international reporting frameworks tightened. Management was also aware that the group's digital asset treasury activities were drawing increasing regulatory attention under emerging crypto-asset reporting standards.
Two structural pressures made the timing of a potential relocation acute. First, the group needed to assess its position under Pillar Two global minimum tax rules, given that several of its subsidiaries were approaching the consolidated revenue thresholds that trigger top-up tax obligations. Second, international automatic exchange frameworks – including measures analogous to DAC8 and DAC9 in the EU context – were signalling a direction of travel for crypto-asset reporting that the group's existing holding jurisdiction was implementing aggressively. The question was whether the AIFC offered a more predictable environment for managing these intersecting obligations.
If your group is weighing a similar structural review, our team is available to discuss the key decision points. You can reach us at info@ferrazwhitmore.com or via our contacts page.
Strategy and Rationale
The strategic case for the AIFC rested on several pillars. The AIFC operates as a separate jurisdiction within Kazakhstan, with its own legal system administered by the AIFC Court and arbitration through the IAC (International Arbitration Centre). Corporate entities are regulated by AFSA (the Astana Financial Services Authority). This separation from the general Kazakhstan court system was significant for a group whose counterparties required predictable, English-language contract enforcement.
On the tax side, the AIFC's incentive regime offered relevant structural advantages, including exemptions or reduced rates applicable to qualifying participants – details of which are examined in our analysis of AIFC tax incentives for 2026. The introduction of Kazakhstan's new Tax Code (Code No. 214-VIII of 18 July 2025, in force from 1 January 2026) was a pivotal factor: the new Code brought changes affecting non-residents, revised the treatment of certain income streams, and introduced a 25% corporate income tax rate for banks and gambling sector entities – confirming that the standard rate environment for holding companies outside those sectors remained more favourable. The group needed to model its exposure under the new Code before committing to the structure.
The Kazakhstan Digital Code (No. 255-VIII, signed 9 January 2026, taking effect in July 2026) was also material. The group's digital asset activities fell within its scope, and understanding how the Digital Code interacted with AFSA licensing requirements for digital asset service providers formed a distinct workstream within the project.
The rationale for choosing the AIFC over alternative jurisdictions – rather than, for example, Dubai DIFC or Singapore – came down to three factors: geographical proximity to the group's operational base, the ability to obtain tax residency in Kazakhstan through the AIFC participant status, and the group's assessment that the AIFC Court's track record for commercial disputes was sufficient for its counterparty requirements.
Key Milestones
The project unfolded across several distinct phases:
- Pre-move tax modelling (months 1–2): The group's advisers mapped dividend flows, assessed applicable withholding tax rates under Kazakhstan's double tax treaties, and modelled Pillar Two top-up exposure. The new Tax Code's provisions affecting non-residents were central to this analysis, given that the old regime's treatment of certain intercompany charges was being amended.
- AIFC incorporation and AFSA engagement (months 2–4): The new holding company was incorporated under AIFC rules. Simultaneously, the group engaged AFSA regarding the licensing category applicable to its digital asset treasury function. This workstream was more time-intensive than anticipated because the Digital Code – having taken effect in July 2026 – introduced regulatory definitions that were still being interpreted by AFSA in terms of implementation guidance.
- Tax residency confirmation (months 4–5): The group applied for confirmation of tax residency status for the AIFC holding entity. At the time of the project, a proposal was under consultation (draft amendments discussed in July 2026) that would abolish the fee associated with confirming tax residency for AIFC residents. However, as this remained a proposal and not enacted law at the project's relevant date, the group proceeded on the basis of existing fee requirements.
- Subsidiary restructuring and transfer of participations (months 5–8): Ownership of the Kazakhstan-operating subsidiaries was transferred to the new AIFC holding company. This step required careful sequencing to avoid triggering adverse tax events under both the old and new Tax Codes, particularly in relation to indirect transfers of assets and the treatment of unrealised gains.
- Governing law and dispute resolution alignment (months 7–9): Key intercompany agreements and shareholder arrangements were updated to provide for AIFC Court jurisdiction and, where appropriate, IAC arbitration. This aligned the group's contractual framework with its new holding seat.
Complications Encountered
Three categories of complication arose during the project, each of which has transferable relevance.
Regulatory interpretation lag: The Digital Code took effect in July 2026, but secondary implementing rules and AFSA guidance on digital asset service providers were not yet fully published when the group was completing its licensing analysis. Advisers had to work with the primary text and engage directly with AFSA to obtain informal confirmation of the applicable licensing pathway. Groups with significant digital asset activity should build regulatory engagement time into their project timeline, not treat it as a parallel administrative step.
New Tax Code transitional questions: The new Tax Code (in force from 1 January 2026) introduced changes for non-residents that interacted with transactions completed under the old regime. Specifically, certain intercompany loan arrangements that had been structured under prior rules required review to confirm their treatment under the new Code. Where the new Code's provisions for non-residents altered the characterisation of income, the group needed to assess whether transitional provisions applied or whether re-documentation was required.
Pillar Two interaction with AIFC incentives: The group's revenue profile meant that Pillar Two was a live issue. The key question was whether the AIFC tax incentives available to the holding entity would be treated as qualified refundable tax credits or as reductions in covered taxes under the GloBE rules – a question with significant top-up tax implications. This analysis required specialist input and, in the scenario, resulted in a structural adjustment to how certain incentives were claimed.
Outcome Category
Without representing any specific outcome, the scenario illustrates a category of result common to well-prepared AIFC relocations: the group achieved a holding structure that was operationally coherent, aligned with AIFC Court and IAC dispute resolution, and positioned to engage with Kazakhstan's new Tax Code framework from a more defensible starting point than the prior European holding structure. The digital asset licensing question remained subject to ongoing AFSA engagement at the scenario's close, reflecting a realistic completion state for projects of this kind.
Three Transferable Lessons
Practitioners and in-house counsel advising on comparable projects may find the following observations useful:
- Sequence tax residency confirmation early. Tax residency confirmation is a prerequisite for accessing treaty benefits and AIFC-specific exemptions. Delays in this step can create gaps in the holding structure's intended tax efficiency. While a proposal to abolish the associated fee was under consultation in July 2026, groups should not plan around proposals that have not been enacted – treat current law as the operative framework until amendment is confirmed.
- Model the new Tax Code before signing any transfer documents. Kazakhstan's Tax Code (No. 214-VIII of 18 July 2025) introduced material changes affecting non-residents and certain income categories with effect from 1 January 2026. Any AIFC relocation project that involves transferring participations in Kazakhstan-resident entities needs to model its exposure under the new Code, not the old one, and consider whether transitional provisions are relevant to historical arrangements.
- Do not treat the Digital Code as a future risk. The Digital Code (No. 255-VIII) took effect in July 2026. Groups with digital asset activities – including treasury management, tokenised instruments or crypto-asset reporting obligations – are already within its scope. The interaction between the Digital Code and AFSA's licensing framework is an active compliance question, not a horizon issue.
For groups considering a relocation to the AIFC or assessing their position under Kazakhstan's updated tax and digital frameworks, our corporate law practice in Kazakhstan works alongside our tax law team to advise on structure, sequencing and regulatory engagement. We would be glad to discuss the specifics of your situation – contact us at info@ferrazwhitmore.com or through our contacts page.
Why the AIFC Continues to Draw Holding Structures
The scenario above reflects a broader pattern. The AIFC's combination of English common law, AFSA oversight, a dedicated court (AIFC Court) and arbitration centre (IAC), and Kazakhstan's network of double tax treaties makes it a structurally distinctive option for groups with Central Asian operational exposure. The new Tax Code and the Digital Code together represent a significant updating of the legal environment, one that creates both new compliance obligations and, in some cases, new planning opportunities for properly structured AIFC participants.
International frameworks such as Pillar Two and crypto-asset reporting standards modelled on DAC8 and DAC9 are also reshaping the calculus for holding location decisions globally. Groups that approached the AIFC primarily as a low-tax jurisdiction need to reassess their structures against these international norms. The AIFC's attraction for sophisticated groups increasingly lies in its governance quality and dispute resolution infrastructure as much as its tax incentive regime.
If you are at the stage of evaluating whether an AIFC relocation or restructuring makes sense for your group, we are available for an initial discussion of the key legal and tax considerations. Please reach out to info@ferrazwhitmore.com or visit our contacts page.
Disclaimer: This publication is provided for informational purposes only and does not constitute legal advice. The information herein should not be relied upon as a substitute for professional legal counsel tailored to your specific circumstances. Ferraz & Whitmore assumes no liability for actions taken or not taken based on the contents of this material. For advice regarding your particular situation, please contact info@ferrazwhitmore.com.