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Kazakhstan intends to launch Investment Residency Program at AIFC

On December 30, 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 to launch the investment tax residency program at the AIFC. It’s worth noting that many countries seeking to attract investment into the country adopt such bills.

The purpose of the program is to attract investment in return for the right to receive entry visas to the Republic of Kazakhstan by investors and members of their families for a period of up to 5 years, as well as exemption from payment of PIT on income from sources outside the Republic of Kazakhstan, subject to payment of the mandatory payment to the state budget.

Here it is worth paying attention to such aspects:

First, a potential foreign investor (individual) must pass an audit at the AIFC office for 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 during the previous 20 years, and should not be a resident of the Republic of Kazakhstan for tax purposes during the 20 years preceding the initial application.

Second, after passing the audit, the potential foreign investor makes investments (the amount will be established by the Investment Residency Program) in securities on the AIFC exchange, AIFC investment funds, the charter capital of AIFC participants and becomes 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 decision to issue or refuse to issue a visa will be taken by the authorized body in the manner prescribed by 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 being established by the Tax Code).

It should be noted that in this case, income arising within 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 intend to optimize their tax expenses.