Re-domiciliation under AIFC jurisdiction
Doing business in the market of the Astana International Financial Center (AIFC) requires knowledge of the AIFC legislation and the peculiarities of its market. WE Legal not only possesses this knowledge but also has extensive practical experience in implementing different issues under the AIFC market. Thus, WE always try to be as efficient as possible in our activities and have prepared the key aspects of the procedure for “re-domiciliating” a legal entity of a foreign state to the jurisdiction of the AIFC.
The re-domiciliation procedure is quite widespread in developed countries and countries that seek to create favorable financial conditions for the activities of international companies.
The AIFC today provides progressive opportunities for companies to develop their activities, including through re-domiciliation (Transfer of Incorporation). It should be noted the possibility of re-domiciliation to the AIFC without any minimum investment from any jurisdiction, which also provides for provisions on re-domiciliation.
The list of countries with the possibility of re-domiciliation are next:
| 1. Andorra
2. Anguilla 3. Antigua and Barbuda 4. Aruba 5. Austria 6. Bahamas 7. Bahrain 8. Barbados 9. Belgium 10. Belize 11. Bermuda 12. British Virgin Islands 13. Brunei 14. Cayman Islands 15. Cook Islands 16. Costa Rica 17. Cyprus 18. Dominica 19. Gibraltar |
20. Grenada
21. Guernsey 22. Hungary 23. Ireland 24. Isle of Man 25. Israel 26. Jersey Island 27. Latvia 28. Lebanon 29. Liberia 30. Liechtenstein 31. Luxembourg 32. Macau 33. Malaysia 34. Maldives 35. Malta 36. Marshall Islands 37. Mauritius 38. Montserrat |
39. Nauru
40. Netherlands Antilles 41. Panama 42. Philippines 43. Portugal (Madeira) 44. Samoa 45. Seychelles 46. Saint Kitts and Nevis 47. Saint Lucia 48. Saint Vincent and the Grenadines 49. Switzerland 50. Turks and Caicos Islands 51. United Arab Emirates 52. Uruguay 53. US Virgin Islands 54. USA (Delaware) 55. Vanuatu |
Thus, in accordance with paragraph 151 of the AIFC Companies Regulations, a Foreign Company may apply to the AIFC for the continuation of its activities (further application). Further, in accordance with paragraph 152 of the AIFC Companies Regulations, if the Registrar approves the application for continuation made by a Foreign Company, the Registrar must provide (1) a certificate of continuation, (2) assign an identification number to the Company, and (3) enter the name of the Company in the Register of AIFC.
According to the AIFC Companies Rules, submitting the application for a Foreign Company must include providing next documents:
(a) a copy of the current Certificate of Incorporation or registration of the Foreign Company in the jurisdiction in which it is registered;
(b) a certified copy by the secretary or director of the Foreign Company’s current Articles Of Association;
(c) evidence to the satisfaction of the Registrar that the Foreign Company is authorized by the laws of the relevant jurisdiction to continue in business under the laws of the other jurisdiction and that it has complied with all relevant requirements under the laws of the relevant jurisdiction;
(d) evidence to the satisfaction of the Registrar that all necessary consents in the relevant jurisdiction have been obtained and validated by the appropriate authorities in that jurisdiction;
(e) a copy of the Foreign Company’s most recent tax returns;
(f) a copy of the Foreign Company’s financial soundness certificate or a document of equivalent validity issued by the appropriate authority in the relevant jurisdiction;
(h) a statement by the Director of the Foreign Company that the Company is in positive financial standing has no litigation, is in liquidation or bankruptcy.
The term of the re-domiciliation procedure for activities that don’t require a license under AIFC is up to 4 weeks.
Submitting an application simultaneously shall include checking whether a Foreign Company’s activity carried out in the AIFC market is subject to licensing. If so, the registration process will be followed by an authorization/licenses process at the AIFC. The list of documents for the authorization process will depend on the type of activity and the type of license that must be submitted after the completion of the company registration stage. In this case, the term of the re-domiciliation procedure for licensed AIFC activities may take up to 2-3 months.
As of December 30, 2021, 1155 companies from 60 countries of the world are already AIFC participants. However, according to the AIFC Participants portal, only one company is currently on the list of those transferred to the AIFC jurisdiction through the re-domiciliation procedure, and this is Kazakhstan Energy Reinsurance Company Ltd. (“KERC”) (affiliated with JSC “KazMunayGas”), which was previously registered in the jurisdiction of Bermuda. Today, “KERC” has received the status of the AIFC participant/resident of the Republic of Kazakhstan and uses the advantages of the AIFC, such as:
- Opportunity to use the AIFC privileges in terms of access to management companies and the capital market;
- Preservation of obligations and contracts;
- Possibility to preserve the organizational legal form and name;
- Possibility to retain the license to conduct regulated activities.
It should be summarized that the re-domiciliation procedure is very convenient for companies that would like to change jurisdiction for one reason or another while maintaining the current portfolio of companies. In this direction, the AIFC is a rather attractive jurisdiction, taking into account the existing preferences, in addition, they provide services according to international standards, at a lower cost of financial resources.
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