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Fiscal Policy

Kazakhstan Bond Market Proposed Tax Changes Aim to Attract $3 Billion in Foreign Investment

Kazakhstan is preparing tax changes to make it easier for foreign investors to trade bonds issued by quasi-state entities through international depository systems. The authorities estimate potential foreign investment in the market at around $3 billion. The problem currently arises after the securities have been purchased. If a foreign investor sells the bonds on a Kazakh stock exchange, capital gains are exempt from tax. But if the same securities are sold outside a local exchange, that exemption does not apply. For international investors, this is an important distinction. Kazakhstan wants to make quasi-state sector bonds accessible through Euroclear and Clearstream, international central securities depositories and settlement systems through which major banks and funds hold and trade securities from different countries. Transactions within these systems can take place without going through a Kazakh stock exchange. National Bank Deputy Governor Aliya Moldabekova said capital gains from non-residents’ sales of quasi-public sector bonds on the Kazakhstan Stock Exchange were exempt from tax. However, the legislation did not provide the same treatment when those securities were subsequently sold outside Kazakhstani stock exchanges. The authorities propose eliminating this discrepancy by extending the tax exemption to relevant off-exchange transactions. The approach was backed on September 7 by the government’s Project Office for the implementation of the Tax Code. The Ministry of National Economy and the Ministry of Finance will now work on the necessary legislative amendments. This is a sizable market. There are currently around 17.6 trillion tenge, or roughly $39 billion, in outstanding tenge-denominated bonds issued by Kazakhstan’s quasi-public sector entities. The government estimates potential demand from non-residents at around 1.4 trillion tenge, or about $3 billion. The calculation is based on the average 8.1% share held by non-residents in Kazakhstan’s government securities market during the first eight months of 2026. It is a benchmark rather than a forecast of actual capital inflows. Expanding access to quasi-state company bonds is part of a broader overhaul of Kazakhstan’s domestic debt market. In April, the National Bank announced that Euroclear had begun a project to make Kazakhstan’s government bonds eligible for settlement through its international system. A direct link with Euroclear is planned for 2027, while an international link with Clearstream is already operating. A primary dealer system for government securities also began operating on May 4. Five banks were appointed to support demand and provide two-way quotes for selected securities on the secondary market. The National Bank expects the system to broaden the investor base and help create conditions for Kazakhstan’s government bonds eventually to be included in global debt benchmarks, including the JPMorgan GBI-EM Index. Major Kazakh borrowers, meanwhile, are already looking beyond the domestic market for financing. In August, KazMunayGas raised 3.5 billion yuan, around $490 million, through a yuan-denominated bond offering. The final issue was nearly three times the size of the company’s first yuan bond offering a year earlier.

Finance

Kazakhstan Binance Plan Regional Settlement Hub

Kazakhstan plans to host a regional settlement hub for the Binance group, serving clients across Central Asia, the Commonwealth of Independent States (CIS), and Eastern Europe. If the project secures regulatory approval, some of the cross-border payments and settlement operations of the world’s largest cryptocurrency exchange could be handled through Kazakhstan’s jurisdiction. The National Bank of Kazakhstan announced on September 7 that it had signed a memorandum of understanding with Binance Investments Co. The project calls for the creation of a Binance group entity in Kazakhstan and the localization of some of the group’s regional operations and infrastructure. The new entity would seek a National Bank license as a Category I payment organization. According to the regulator, the hub will handle international payments and money transfers, including settlements related to digital asset transactions for clients of the global Binance group from Central Asia, the CIS, and Eastern Europe. Binance said the parties have prepared a roadmap covering the development of payment infrastructure, licensing, and the launch of new products. Kazakhstan has spent several years building a regulated digital asset market. The new project would use that framework to serve clients beyond the country’s borders. Binance already operates in Kazakhstan through its subsidiary Binance Kazakhstan. The company is licensed by the Astana Financial Services Authority (AFSA), the regulator of the Astana International Financial Centre (AIFC), to operate a digital asset trading facility and provide custody and other regulated financial services. For the settlement hub, the National Bank says a Binance group entity and supporting infrastructure would be established in Kazakhstan and licensed by the central bank. The payment operation would therefore sit alongside Binance Kazakhstan’s existing AFSA-regulated digital asset platform under a different regulatory framework. “The development of digital financial technologies and modern payment solutions is one of the important areas in the transformation of Kazakhstan’s financial sector,” National Bank Deputy Governor Binur Zhalenov said. According to him, the regulator is interested in fostering innovation while maintaining the reliability of payment infrastructure and the stability of the financial system. Kazakhstan already has several building blocks for developing such services: a regulated digital asset market within the AIFC, the digital tenge, and the National Bank’s payment infrastructure. Binance would gain a jurisdiction with an established digital asset regulatory framework, while Kazakhstan aims to attract technological expertise and develop the export potential of its financial services. The settlement hub is one of several projects Binance is discussing with Kazakh authorities. On September 4, the company announced three memorandums – with the National Bank, the Ministry of Artificial Intelligence and Digital Development, and the AIFC. The agreements cover payment infrastructure, digital assets, and investment instruments, including exploration of a potential stablecoin. The Ministry of Artificial Intelligence and Digital Development said the parties plan to explore the issuance of a stablecoin in Kazakhstan, develop payments involving digital assets, and improve the tax and judicial framework governing the market. The parameters of a potential stablecoin have not yet been disclosed. The prospective issuer, reserve mechanism, and...

Foreign Investment

Tashkent’s Rise Reshapes Central Asia’s Business Landscape

Tashkent is changing faster than it can adjust to its own growth. The city is already pressing against the limits of its existing airport; a vast new city designed for up to two million people is being built alongside it, and a separate financial jurisdiction drawing on English common law is being created. Uzbekistan is opening up further to foreign investment, and nearly two-thirds of the country’s foreign-invested enterprises are already concentrated in the capital. But being the leading business city in your own country and becoming a regional hub are not the same thing. Tashkent already has strong competitors in Central Asia. Given that competition, it is more useful to examine why companies are choosing Tashkent now and what the city still lacks than to declare it the region’s new business capital. As of July 1, 2026, Uzbekistan had 20,502 operating enterprises with foreign investment. Their number had increased about 1.4 times over five years. China accounted for the largest number, with 6,060 companies, followed by Russia with 3,454, Turkey with 2,293, and Kazakhstan with 1,307. As of June 1, 12,480 of the 19,921 enterprises with foreign investment then operating in Uzbekistan were located in Tashkent. That was almost 63%. Why Tashkent? Part of the answer is obvious: the institutions and services businesses rely on are concentrated there, from government and finance to professional services, technology firms, and skilled workers. That creates a network effect: companies come because partners, clients, and suppliers are already there. But the capital had roughly the same administrative advantages ten years ago without attracting business on anything like the current scale. What changed first was Uzbekistan’s economy itself. After 2016, the country began moving away from its previous closed economic model. One of the first major steps was currency liberalization in 2017. Changes followed in trade, taxation, privatization, and the treatment of foreign investors. The state still plays an enormous role in the economy, but it has become considerably easier for foreign private businesses to operate. Uzbekistan’s GDP grew by 7.7% in 2025. The IMF expects growth of about 6.8% in 2026, while pointing to a longstanding problem: the state’s large footprint in the economy, including major state-owned enterprises and banks, continues to constrain competition and private-sector development. The combination of rapid growth and a gradually more open economy has benefited Tashkent more than any other city in the country. Uzbekistan also has an advantage that cannot be created by government decree. With a population of about 38.5 million, it is Central Asia’s most populous country and has a large domestic consumer base. It is also the region’s only country that borders all four other Central Asian republics. For an international company, Tashkent can serve both as an office for the Uzbek market and as a gateway to neighboring countries. Now, Tashkent is entering territory long occupied by others. For decades, Almaty has concentrated banks, international representative offices, private companies, and professional talent. In 2018, the Astana International Financial Centre began operations, with a...

Investment

Kazakhstan Strengthens Position as Central Asia’s Investment Hub, AIFC Head Says

Central Asia is moving beyond its traditional role as a transit corridor and emerging as an investment destination in its own right, according to Renat Bekturov, Governor of the Astana International Financial Centre. He said investors increasingly value transparent institutions, predictable law and capital protection alongside geography and natural resources. Bekturov noted that Kazakhstan remains the European Union’s largest partner in Central Asia, accounting for more than 80% of the EU’s trade with the region. In 2025, trade turnover between Kazakhstan and the European Union reached $45.1 billion, while cumulative European investment since 2005 exceeded $200 billion. More than 4,000 companies with European participation operate in the country, including TotalEnergies, Siemens, Airbus and Schneider Electric. The AIFC chief stressed that an important element of this transformation has been Kazakhstan’s new financial infrastructure. Established in 2018 and operating under the principles of English common law, the AIFC, as of 2026, brings together more than 5,600 companies from 90 countries, including more than 730 from Europe. According to the AIFC, more than $21.8 billion in investment has been raised through its platform, and its ecosystem has created more than 10,000 jobs. Bekturov also highlighted the development of the Astana International Exchange, which he said has become a platform for launching new financial instruments, including the region’s first IPO in Chinese yuan, Kazakhstan’s first spot Bitcoin ETF, and what AIX describes as the world’s first spot Solana ETF with staking. Bekturov also emphasized the AIFC’s role in advancing sustainable finance. Through the AIFC Green Finance Centre, Kazakhstan introduced Central Asia’s first national green taxonomy, while about 70% of the country’s green bonds and loans are verified within the center’s ecosystem. Beyond the traditional financial sector, the AIFC is also developing initiatives in mining, Islamic finance, aircraft leasing, digital assets and the creative economy. In Bekturov’s view, Kazakhstan could become a key link between European capital and Central Asia’s growing opportunities in the coming years, particularly in critical minerals, clean energy, logistics and digital infrastructure. “In a world where uncertainty has become part of every deal, trust is becoming one of the most valuable assets,” Bekturov concluded.

Sanctions

Kyrgyzstan Orders 50 Companies to Cease Activity Over Sanctions Risks

Kyrgyzstan has ordered 50 companies to cease activity after state agencies flagged them for sanctions risks, as Bishkek faces growing pressure over Russia-linked trade and payment channels. The move follows months of pressure from Western governments, which say some routes through Central Asia can be used to bypass sanctions imposed over the war in Ukraine. The Ministry of Justice did not name the companies, their owners, or their sectors. It also did not say whether any of them had direct links to Russia. The list was prepared by the Ministry of Economy and Commerce and other state bodies after checks into possible attempts to evade sanctions restrictions. The order was issued under an interagency mechanism for identifying dishonest participants in foreign economic activity and transactions with increased sanctions risks. The mechanism allows state bodies to use a simplified procedure to terminate the activity of legal entities after a formal submission. The Justice Ministry linked the move to efforts to protect the national economy from possible secondary sanctions. The European Union adopted its 20th sanctions package against Russia on April 23, less than a month before the Ministry of Justice order. The package added measures on energy, finance, trade, and crypto channels. It also used the EU’s anti-circumvention tool against Kyrgyzstan for the first time. Under that measure, the EU banned exports of computer numerical control machines and radios to Kyrgyzstan when there is a high risk that the goods will be re-exported to Russia. The Council of the EU said trade data showed a sharp rise in re-exports of common high-priority items through Kyrgyzstan to Russia. The EU treats the goods as sensitive because they can support industrial production, communications, and military-linked supply chains. The financial aspect of the sanctions has also reached Kyrgyzstan. The EU said it was targeting four financial institutions in third countries for circumventing sanctions or connecting to Russia’s financial messaging system. Local media identified Keremet Bank and Capital Bank as the Kyrgyz banks included in the package. The EU also designated a Kyrgyz entity that operates a platform where significant amounts of the A7A5 stablecoin are traded. Local outlets identified the entity as TengriCoin, registered in Bishkek, and linked it to the Meer platform. The pressure on Kyrgyz banks and crypto companies has been growing. The U.S. Treasury designated Keremet Bank in January 2025, saying the bank had coordinated with Russian officials and Promsvyazbank, a sanctioned Russian state defense lender, to support cross-border transfers. In August 2025, the UK government sanctioned Capital Bank of Central Asia, its director Kantemir Chalbayev, Grinex, Meer, TengriCoin, Old Vector, and other targets linked to Russian payment and crypto channels. London said the ruble-backed A7A5 token had moved $9.3 billion on a dedicated crypto exchange in four months. Kyrgyz officials have rejected the broader claim that the country helps Russia evade sanctions. The Foreign Ministry said on April 28 that Kyrgyzstan acts within national laws and its international obligations. It said Bishkek had supplied the requested documents to European partners...

Foreign Investment

Kazakhstan Finance Day in New York Showcases Market Reform, IPO Ambitions, and Alatau City Pitch

At Kazakhstan Finance Day in New York, officials and executives used the panel “Investment Opportunities in Kazakhstan” to present the country as entering a new phase of market development, citing macroeconomic stability, capital-market reform, potential initial and secondary public offerings, and infrastructure tied to the Alatau City project. The panel session was held at Citigroup headquarters in Manhattan and was moderated by Stephanie von Friedeburg, global head of Citi’s Public Sector Group. Speakers included Timur Suleimenov, governor of the National Bank of Kazakhstan; Adil Mukhamejanov, chairperson of the management board of the Kazakhstan Stock Exchange (KASE); Zhandos Shaikhy, deputy chairman of the management board of Baiterek National Managing Holding; Aidar Ryskulov, managing director for economics and finance at Samruk-Kazyna; and Bayan Konirbayev, deputy CEO and chief digital officer of the Alatau City Authority. Opening the event, von Friedeburg noted that the forum’s return to Citigroup headquarters for a third time reflected the continued engagement between Kazakhstan and U.S. investors. Kazakhstan’s ambassador to the United States, Magzhan Ilyassov, linked the event to growth in bilateral economic ties, citing more than $17 billion in commercial agreements signed during President Kassym-Jomart Tokayev’s November 2025 visit to Washington, and adding that further agreements were under consideration. The first financial presentation came from Suleimenov, who reported that Kazakhstan’s economy grew 6.5% in 2025, inflation had eased to 11%, and the National Bank remained committed to returning inflation to its 5% target. He framed the country’s investment case around tighter macroeconomic coordination, fiscal discipline, and financial-sector development. “We’re also exploring the development of a national crypto reserve framework, where digital assets will gradually be accumulated and managed as part of a sovereign reserve diversification strategy,” Suleimenov explained. He also pointed to continued work on the digital tenge and national digital financial infrastructure. Suleimenov connected that financial agenda to the investment case, arguing that Kazakhstan was reducing its structural dependence on oil revenue and moving ahead with legal and tax changes aimed at improving the investment climate. He described the Middle Corridor as increasingly important and called the route through Kazakhstan, the Caspian, and the Caucasus “the only viable, reliable route” between the East and West. [caption id="attachment_47460" align="aligncenter" width="1258"] Kazakhstan Finance Day in New York; image: K. Krombie[/caption] The discussion then moved to Samruk-Kazyna’s finances and privatization plans. Aidar Ryskulov put the fund’s assets under management at $88 billion and EBITDA at $10.8 billion. He indicated that the fund intended to remain active in international debt markets this year. Ryskulov stated that Samruk-Kazyna was targeting a public-market transaction this year, with London, Hong Kong, and Astana under consideration, although timing would depend on macroeconomic conditions. He later pointed to IPO plans for the national railway company, Kazakhstan Temir Zholy (KTZ). "Our capacity is roughly 55 million tons, and we’re going to double this capacity in five to seven years,” he said. Ryskulov also characterized Kazatomprom as “one of the best assets” and presented it as undervalued and a high-dividend company. Zhandos Shaikhy focused on Baiterek’s scale and...