Azerbaijani companies to access new markets through AIFC

By  Trend

Azerbaijani companies will get access to foreign investors at the platform of the new Astana International Finance Center (AIFC), Aidar Kazybaev, managing director of the AIFC Administration, said in an exclusive interview with Trend.

During the conference titled “Astana International Finance Center: new opportunities for financing and business growth” held in Baku with the support of the National Confederation of Entrepreneurs (Employers’) Organizations of Azerbaijan, the country’s entrepreneurs were presented new opportunities for reaching international investors and attracting financing from them at the platform of the AIFC recently opened in Kazakhstan.

The conference brought together more than a hundred representatives of Azerbaijani business from the real sectors of the economy, officials, financial experts and representatives of banking associations.

Kazybaev reminded that international presentation of the AIFC was held July this year. He said that 100 companies are registered in the AIFC, among which there are major companies as the China Development Bank, the Silk Road Foundation and LUKOIL.

On Nov.16, at a meeting with Chinese businessmen at the platform of the Shanghai Stock Exchange (a shareholder of the AIFC), Chinese companies expressed great interest in investing in businesses of companies from the Eurasian region, including Azerbaijani companies.

For Azerbaijani companies, the AIFC is a new platform for meeting with international investors and attracting external financing, in particular at the platform of the Astana International Exchange (AIX).

"AIFC participants are major companies that have the opportunity to invest in various projects through our platform," said Kazybaev. "Azerbaijani companies and banks, becoming residents of AIFC, can get access not only to capital, but also the opportunity to cooperate with participants registered here. Their business contracts won’t be taxed and will be protected by the arbitration center of the court of the AIFC."

Naturally, the AIFC is a young organization that is gaining momentum, he noted.

"As many as 100 companies are registered in the AIFC, but in the next 2-3 years we will bring this figure to 500 and higher," he said. "On Nov. 14, we conducted the first initial public offering (IPO) of Kazatomprom, the world’s largest uranium company. Market participants are very pleased with the quality of the trading."

He added that the trading at the AIFC is conducted through the mediation of 25 brokers.

The interests of investors in the AIFC are protected by English law, an independent court and arbitration center, where the UK judges with extensive experience in other international financial centers (those in Hong Kong, Dubai and London) work, he said.

In order to create a territory within Kazakhstan, where English law would be in force, President of Kazakhstan Nursultan Nazarbayev amended the country’s constitution, and the legislators of Kazakhstan adopted about 50 legislative acts.

The Expat Center of the Astana International Financial Centre (AIFC) renders assistance in obtaining a wide range of state and other services upon the "single window" principle to ensure favorable conditions for foreign employees within the AIFC jurisdiction.

AIFC residents may also take advantage of a zero tax rate on corporate and individual income, as well as on profit obtained from the sale of securities, dividends and fees on the listed securities during 50 years (until the end of 2065).

Kazybayev thinks that the advantage of an IPO is that in case of proper investment, it can bring much more and steady income than bank deposits.

“National or central banks may reduce interest rates on deposits or banks can go bankrupt,” he said. “Of course, there are risks while holding an IPO, but a person gets much more profit. This is a very important segment.”

Kazybayev also added that in such countries as Belarus and Russia, in conditions when funding by the West, in particular, the US, is limited, everyone understands that the century of total lending is ending.

“Presently, there is a century of Initial coin offering (ICO) and IPO and any citizen may become the owner of a certain share in the company,” he added.

“Therefore, I was surprised that in Belarus even small hotels want to hold an IPO,” he said. “Presently, we are discussing the possibility of conducting an IPO for small and medium-sized companies in the AIFC,” said Kazybayev.