February 2020 – This article discusses the successful redomiciliation of Kazakhstan Energy Reinsurance Company Ltd from the Islands of Bermuda to the Astana International Financial Centre and the main procedural steps required for the redomiciliation under the Acting Law of the AIFC. Our note is intended to be a helpful guide – it is not comprehensive and does not constitute legal advice.
On 24 December 2019 the Astana Financial Services Authority ("AFSA") completed registration of Kazakhstan Energy Reinsurance Company Ltd. ("KERC"), an affiliated company of JSC NC "KazMunayGas" in the Astana International Financial Centre ("AIFC") by way of a 'Transfer of Incorporation'.
'Transfer of Incorporation' is one of the options prescribed by the AIFC acts to register a Foreign Company in the AIFC. The main feature of this option of registration is that it allows redomiciliation of an entity from one jurisdiction to the AIFC and vice versa 'as is' without conducting liquidation of that entity in its original jurisdiction, if authorisated by the laws of the jurisdiction in which it is incorporated1 .
Foreign investors generally consider 'Transfer of Incorporation' as an alternative solution for setting up a presence in the AIFC, however, despite continuous interest in redomiciliation such option was never tested before. KERC is the first and the only entity which completed its redomiciliation to the AIFC from Bermuda, where it had been operating since 2004. Kinstellar LLP acted as Kazakhstan legal counsel to KERC in connection with all aspects of its redomiciliation.
What is 'Transfer of Incorporation'?
The AIFC acts prescribe the ability of an entity incorporated in a foreign jurisdiction to be registered in the AIFC as a new legal entity, whereas it continues to be the same legal person having all the property, rights and privileges, and being subject to all the liabilities, restrictions and debts, and remaining to be a party to any agreements entered into and legal proceedings commenced before its registration in the AIFC.2
The procedure of registration of an entity by way of 'Transfer of Incorporation' consists of several steps and depends on the types of companies. The registration of a Foreign Company as a 'continued' entity is performed by the Registrar of Companies based on the Foreign Company's application for continuation.
Issues to be considered by a Foreign Company seeking its 'continuation' in the AIFC
(a) permitted jurisdictions
'Transfer of Incorporation' should be authorised by the laws of the jurisdiction in which a Foreign Company is incorporated. This means, that if the 'Transfer of Incorporation' to the AIFC is not allowed by the laws of the Foreign Company's incorporation, then its registration in the AIFC using such option will not be possible. For these purposes, during the redomiciliation process a Foreign Company submits to the AFSA a legal opinion of a law firm in its original jurisdiction based on which the Registrar of Companies decides whether redomiciliation of such Foregin Company to the AIFC will be possible. A list of jurisdictions, which allow 'Transfer of Incorporation' is posted on publicly available sources. The list includes Antigua and Barbuda, Bahamas, Barbados, Bermuda, British Virgin Islands, Cayman Islands, Seychelles and other jurisdictions. The full list of permitted jurisdictions is set out in the table below.
(b) types of business to be conducted in the AIFC
A Foreign Company should consider if the activities which will be conducted in the AIFC are subject to obtaining a licence from the AFSA. In such case, the registration process for 'continuation' shall include the 'authorisation' step. The 'authorisation' step does not apply to a Foreign Company which will conduct non-licensed activities in the AIFC.3
(c) registration (redomiciliation) step for Licensed Activities
The filing package for registration of a Foreign Company undertaking Licensed Activities should be prepared in parallel with the 'authorisation' step and submitted immediately after completion of the 'authorisation' step.
(d) timing for completion of redomiciliation process for:
Given that the entire redomiciliation process for a Foreign Company applying to conduct Licensed Activities in the AIFC encompasses completion of two steps, namely 'authorisation' and 'registration', therefore, the overall timing for completion of redomiciliation of such entities may take up to 2-3 months.
The redomiciliation completes following obtaining by the Foreign Company of (i) a Certificate of Continuation issued by the Registrar of Companies and (ii) a licence for the Licensed Activities issued by the AFSA.
The redomiciliation process for a Foreign Company seeking to conduct non-licensed activities may take four to six weeks and completes following obtaining by the Foreign Company of a Certificate of Continuation issued by the Registrar of Companies.
AIFC means the Astana International Financial Centre;
AFSA means the Astana Financial Services Authority;
Acting Law of the AIFC has the meaning given to it by article 4 of the Constitutional Statute "On the Astana International Financial Centre" dated 7 December 2015, as amended;
Ancillary Services means the activities specified in Schedule 2 of the AIFC General Rules;
Foreign Company means a body corporate incorporated in any jurisdiction other than the AIFC;
Licensed Activities means Regulated Activities, Ancillary Services or Market Activities which are subject to obtaining a licence from the AFSA;
Market Activities means the activities specified in Schedule 3 of the AIFC Financial Services Framework Regulations;
Registrar of Companies means an individual appointed as the Registrar of Companies under section 9 (Appointment of Registrar) of the AIFC Companies Regulations;
Regulated Activities means the activities specified in Schedule 1 of the AIFC General Rules.
 AIFC Companies Regulations 2017, section 151.
 AIFC Companies Regulations 2017, section 155.
 AIFC General Rules 2017, Rule 1.1.1
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.