Why investors shouldn’t ignore Astana’s allure

Astana, the capital of Kazakhstan, starts to make a convincing case as an attractive destination for Singaporean investors.

When Singaporean investors scan Asia for the cities that will bring them their next pot of gold, the glittering metros of Shanghai and Tokyo present themselves as obvious choices, but in the northwest lies Kazakhstan and its city of Astana, which proponents believe is an investment diamond in the making.

Brisk economic and infrastructure development, not to mention a strategic location in the crossroads of Europe and Asia are raising the status of Astana among investors. The government is also rolling out an assortment of investor perks to further boost confidence in Kazakhstan and Astana. “Kazakhstan is a country which creates the most favourable conditions for investors,” says Marat Tlubayev, director at the “Locomotive Kurastyruzauyty” JSC, a company operating a plant in Astana’s special economic zone and produces fifth generation diesel locomotives. One of main partners of Lokomotive Kurastyruzauyty is General Electric company.

“The stable political system makes doing business easy, protects investors and creates tax incentives. In Kazakhstan investors in priority sectors are exempt from corporate income tax, land tax for 10 years and property taxes,” adds Mr Tleubayev.

“The government has made a special decision to compensate for up to 30% of the capital costs after commissioning. You can also involve foreign labour force for the entire duration of the project without any quotas or permits. In our opinion, these are the best conditions that not every country can offer. That is why we can assure all foreign investors that doing business in Kazakhstan is profitable and enjoyable,” adds Mr Tleubayev.

Favourable investor conditions

The government also continues to listen to the needs of investors to make sure that their needs are met. “Every year the government of Kazakhstan improves the investment climate,” says Torres Duarte Pascal, director at “Tulpar-Talgo,” one of Kazakhstan’s main plants that produces high-speed trains.

“In my opinion, every investor, who is now working in Astana, can say with confidence that today there are all conditions necessary for new projects. The Government exempts investors from many taxes, thus they can use the saved money in production,” adds Pascal.

Investors looking into long-term plays in Kazakhstan should appreciate Astana’s strategic location in the middle of Kazakhstan, a vast land-locked territory that makes the country the 9th biggest in the world. “The perfect blend of political power, futuristic cityscape and growth outlooks of the nation concentrated in this once small provincial capital makes Astana the magnet for investors and entrepreneurs,” says Nurali Aliyev, Deputy Mayor of Astana.

The government is rolling out transportation upgrades to help Astana keep up with its exploding population and economic expansion, as seen in the city population’s eightfold growth in the last 15 years and nominal gross regional product expanding by 24 times in the same period.

Rising international financial center

Singapore investors looking to dip into the Astana market can ride along as the city transforms into the preeminent international financial center in Kazakhstan. Astana is attracting a host of heavyweights in the financial services industry, and will see a landmark building rise in its skyline.

“Astana is becoming the nation’s most important financial center as several major banks are moving their head offices from Almaty,” says Mr Aliyev. “This progress is going to be accelerated after the establishment of International Financial Center which will be founded in the way Dubai International Financial Center was created.”

Nurali Aliyev also reckons that Astana as an international financial center holds a special advantage for investors due to its time zone which offers a smoother handover of the global markets trading hours between Singapore and major Eastern European financial centres.