Kazakhstan plans to launch Investment Residency Program at AIFC
On 30 December 2019, the Head of State signed the Law “On Amendments and Additions to Some Constitutional Laws of the Republic of Kazakhstan”, according to which amendments are made to the Law on the Astana International Financial Center.
Amendments are made in order to launch the investment tax residency programme at the AIFC. It is worth noting that many countries seeking to attract investments into the country adopt such draft legislation.
The purpose of the programme is to attract investments to Kazakhstan by granting investors and their family members entry visas for a period of up to 5 years as well as exemption from payment of PIT on income from sources outside Kazakhstan (upon the mandatory payment to the state budget).
The following aspects should be taken into account:
Firstly, the AIFC will conduct an inspection for a potential investor’s reliability and compliance with the requirements established by the laws of the Republic of Kazakhstan. According to the requirements, the potential investor should not be a citizen of the Republic of Kazakhstan for the past 20 years, and should not be a resident of the Republic of Kazakhstan for tax purposes for the past 20 years preceding the initial application.
Secondly, upon passing the inspection, a potential foreign investor has to invest in securities on the AIFC exchange, AIFC investment funds, the charter capital of AIFC participants (the size of the investment will be established by the Investment Residency Program) and become an AIFC investment resident.
The AIFC investment resident is entitled to obtain an entry visa for a period of up to 5 years at the request of the AIFC. The authorized body will issue visa in the manner stipulated by the law.
After 90 days of being in Kazakhstan, the AIFC investment resident has the right to receive exemption from payment of PIT on income from sources outside the Republic of Kazakhstan. To do this, he must contact the tax authorities, having paid a mandatory annual payment to the state budget (the amount is established by the Tax Code).
It should be noted that in this case, income generated in the Republic of Kazakhstan will be taxed in accordance with the Tax Code, and income of foreign origin will not be taxed.
This measure is aimed at investors who seek to optimize their tax expenses.