The Global Guide to Fund Jurisdictions: Why AIFC Stands Out for Tax Efficiency and Investment Potential
In the world of international finance, selecting the right jurisdiction for establishing an investment fund is a decision that influences both returns and operational efficiency. Among the primary choices are traditional strongholds like the UK, USA, Cayman Islands, and Singapore. But the Astana International Financial Centre (AIFC) in Kazakhstan is emerging as a competitive alternative, offering robust tax incentives and access to a high-growth region.
In this guide, we compare some of the world’s leading financial jurisdictions and explain why AIFC is becoming an attractive option for global investors, including institutional investors, family offices, and private equity funds.
1. Astana International Financial Centre (AIFC) – Kazakhstan’s Strategic Advantage
Located at the heart of Eurasia, the AIFC offers a unique regulatory environment modeled on English common law, ensuring investor protections and transparency. AIFC’s tax benefits include exemptions from Corporate Income Tax (CIT), Dividend Tax, and Capital Gains Tax—powerful incentives that allow funds and investors to optimize their tax positions significantly.
AIFC’s tax treaties with major economies, including the UK and USA, offer further tax efficiency by reducing the potential for double taxation. Since AIFC’s jurisdiction is relatively new, regulatory scrutiny on its transactions may be lighter than in long-established financial centers, easing compliance while offering strong investor protections.
These tax benefits also extend to individuals, including foreign specialists and investors, making the AIFC attractive to a wide range of financial professionals.
2. Miami (USA) – Gateway to American Markets
Funds established in Miami gain access to U.S. markets but face federal taxation on worldwide income. While Florida has no personal state income tax, corporate income tax does apply. Additionally, distributions to non-U.S. investors are subject to withholding taxes, depending on the recipient’s residency and relevant tax treaties. While Miami offers access to robust infrastructure, the tax implications for foreign investors can be significant.
3. United Kingdom – Trusted for Real Estate Funds and REITs
For investors targeting real estate in the UK, the country’s Real Estate Investment Trust (REIT) framework offers compelling tax advantages, exempting REITs from corporation tax on rental income and capital gains, provided they distribute 90% of their taxable income. The UK’s extensive tax treaty network and reputable regulatory environment make it attractive, but higher operational costs and tax implications for international investors should be considered.
4. Ireland – Ideal for Transparent Fund Structures
Ireland’s Investment Limited Partnerships (ILPs) are tax-transparent, meaning income and gains are taxed only at the investor level, offering greater tax efficiency for many foreign investors. Ireland’s tax treaties enable efficient investments into the UK and USA, making it an ideal domicile for funds focused on transatlantic real estate assets.
5. Cayman Islands – Tax-Neutral but with Reputation Risks
The Cayman Islands remain a leading choice for offshore funds due to their tax-neutral status. However, while free from corporate income tax, capital gains tax, or withholding tax, Cayman funds may encounter increased regulatory scrutiny from tax authorities in onshore jurisdictions, including the UK and USA.
6. Singapore – Favorable for Private Equity and VC Funds
Singapore’s Variable Capital Company (VCC) structure and tax exemptions for qualifying funds make it a favorable jurisdiction for private equity and venture capital funds. Singapore’s tax treaties enable efficient international investments, though set-up and compliance costs can be higher than in emerging markets like the AIFC.
7. Dubai – Middle Eastern Hub with New Real Estate Incentives
Dubai has introduced incentives for real estate investment funds under Decree No. 22 of 2022, allowing foreign ownership in previously restricted areas and reduced property transfer fees. With zero tax on rental yields and capital gains, Dubai’s real estate sector appeals to investors focused on high-yielding property assets.
Why AIFC May Be the Best Choice for Your Next Fund
For institutional investors seeking favorable tax structures, the AIFC’s exemptions from CIT, Dividend Tax, and Capital Gains Tax offer clear advantages. Additionally, AIFC has provisions for flexible, BEPS-compliant tax regimes, appealing to a diverse range of investors and financial professionals. For instance:
AIFC also offers an Investment Tax Residency Programme with a low minimum investment threshold of $60,000, making it accessible for a wider range of investors. By establishing tax residency in Kazakhstan, investors enjoy additional tax benefits and a fast-growing economy strategically positioned along the Belt and Road Initiative.
Key Takeaways
Each jurisdiction brings unique benefits to the table, from tax exemptions and regulatory transparency to network and investor protection. While traditional hubs like London, Singapore, and Cayman Islands remain highly regarded, AIFC’s combination of tax efficiency, strategic location, and legal structure makes it a compelling choice for forward-thinking investors.
As Carl Icahn once said, “In life and business, there are two cardinal sins… The first is to act precipitously without thought and the second is to not act at all.” If you’re exploring new avenues to enhance returns while managing risks, the AIFC offers a balanced solution for today’s global investment landscape.
Here are some useful resources and official links where you can find detailed information on the tax benefits offered by the Astana International Financial Centre (AIFC):
These sources will provide comprehensive information on AIFC’s tax advantages, including exemptions on Corporate Income Tax, Dividend Tax, and Capital Gains Tax. Let me know if you’d like further assistance exploring these options!
About Me
I'm Anthony Chernykh, Chief Business Officer at Neomarkets Group Ltd. , an AIFC-licensed broker offering over 15,000 financial instruments and direct market access globally, with minimum tariff rates. At Neomarkets Group , we offer Uber-type solutions for fund setups, enabling you to benefit from the AIFC’s robust tax regime and regulatory advantages. Let’s discuss how we can structure a fund to meet your objectives and maximize your returns.
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Anthony Chernykh
Chief Business Officer at Neomarkets Group
Investor Relations Head | Fiduciary in Capital Raising | Network Expansion for Family Offices and Funds
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