Crypto License in Kazakhstan

Crypto businesses operating in Kazakhstan can benefit significantly from obtaining a cryptocurrency license. Kazakhstan’s regulatory framework for cryptocurrencies is overseen by the AFSA, which aims to create a favorable environment for the development of virtual resources. This section will explore the advantages of possessing a cryptocurrency license in Kazakhstan.

Legitimate Operations

One of the main benefits of obtaining a crypto license in Kazakhstan is the ability to operate worldwide legally and comply with the country’s laws and statutes. This can help businesses build trust with customers and investors and mitigate legal risks and potential penalties or fines for non-compliance.

Access to a Growing Market

Kazakhstan is located at the intersection of Europe and Asia, making it an attractive location for businesses looking to expand their reach in these regions. Additionally, the country has a relatively high level of digital literacy. It actively promotes the development of a digital economy, providing businesses access to a growing market for virtual resources.

Access to Financial Services and Infrastructure

Obtaining a crypto license in Kazakhstan can provide businesses access to various economic services and infrastructure, including banking services, payment processing, and custody solutions. This can help businesses streamline their operations and reduce costs associated with accessing these services from third-party providers.

Access to the Astana International Financial Centre

Obtaining a crypto license can also provide businesses access to the Astana International Financial Centre (AIFC), a monetary hub located in the capital city of Nur-Sultan. The AIFC provides businesses with various monetary and legal services, including a court system based on English common law, making it an attractive location for multinational businesses looking to expand into the Central Asian region.

Obtaining a cryptocurrency license in Kazakhstan requires compliance with the country’s laws and statutes governing virtual resources. The Astana Financial Services Authority (AFSA) oversees the regulatory framework for cryptos.

• Establish a Legal Entity: To obtain a crypto license in Kazakhstan, the applicant must first establish a legal entity within the country and obtain a certificate of incorporation. The legal entity can be a limited liability company, joint-stock company, or partnership.
• Compliance with AML/CFT statutes: The applicant must comply with anti-money laundering (AML) and counter-terrorist financing (CFT) statutes. This includes implementing Know Your Customer (KYC) procedures, conducting customer due diligence, and reporting suspicious transactions to the AFSA.
• Detailed Application: The applicant must submit a detailed application to the AFSA, which includes data about the proposed business actions, compliance policies and procedures, risk management strategies, and economic projections.
• Cybersecurity Requirements: The applicant must have appropriate cybersecurity measures to protect against hacking, theft, and other cyber threats.
• Reporting and Auditing: The licensee must regularly report to the AFSA and undergo annual audits to ensure compliance with all applicable laws and statutes.
• Approval by AFSA: The AFSA will review the application and may request additional data or documentation before granting a license. The license may be subject to certain conditions, such as minimum capital conditions, adherence with AML/CFT statutes, and regular reporting to the AFSA.

The regulatory framework for cryptocurrencies in Kazakhstan is aimed at creating a favorable environment for the development of virtual resources while ensuring the protection of investors and compliance with international standards. Here are some critical aspects of crypto licensing legislation in Kazakhstan.

• Cryptocurrency License Types: The AFSA issues many types of crypto licenses in Kazakhstan, but the most popular are a license for cryptocurrency exchange actions and a license for crypto mining actions. The licenses are issued for a term of up to five years.
• Application Process: To obtain a crypto license in Kazakhstan, the applicant must establish a legal entity within the country and obtain a certificate of incorporation. The applicant must then submit a detailed application to the AFSA, which includes data about the proposed business actions, compliance policies and procedures, risk management strategies, and monetary projections.
  An Authorised Market Institution must hold the following minimum capital: An amount equal to 6 months’ operational expenses; plus, unless the AFSA directs otherwise, an additional amount of up to 6 months of operating expenses. (Starting from $10000)
• AML/CFT Procedures: The applicant is required to adhere to the statutes pertaining to anti-money laundering (AML) and counter-terrorist financing (CFT). This entails the implementation of Know Your Customer (KYC) protocols, performing customer due diligence, and promptly reporting any suspicious transactions to the AFSA.
• Cybersecurity: The applicant is obligated to possess adequate cybersecurity protocols in place to safeguard against hacking, theft, and other cyber-related risks.
• Reporting: The licensee is required to consistently provide reports to the AFSA and undergo annual audits as a means to verify compliance with relevant laws and regulations.
• Penalties and Fines: Non-compliance with cryptocurrency licensing legislation may result in penalties, fines, or license revocation.

The Tax Code governs the tax regime within the AIFC except for certain deletions outlined in Article 6 of the Constitutional Law. These deletions refer to 0% tax benefits available to AIFC participants:

• Corporate income tax or value-added tax

  (CIT or VAT) applies to income earned from the provision of financial services within the AIFC, provided that the service provider holds a license from the AIFC Committee for Financial Services Regulations.

• Corporate income tax (CIT) is levied on income earned from legal, auditing, accounting, and consulting services provided to AIFC bodies and on income earned by AIFC participants providing financial services, as listed in paragraph 3 of Article 6 of the Constitutional Law.

To be exempt from Corporate income tax (CIT), AIFC participants must maintain separate records in accordance with the Regulations on Keeping Separate Accounting of Income Subject to Exemption of Corporate Income Tax and Subject to Taxation, as well as Expenses Subject to Allocation to Deductions by the Participants of AIFC.

• AIFC participants who provide financial and support services are subject to property tax and land tax on objects located within the AIFC, as listed in paragraphs 3 and 4 of Article 6 of the Constitutional Law.
• Foreign individuals employed by an AIFC participant providing financial and support services are not subject to individual income tax on income earned from activities within the AIFC under an employment contract concluded with an AIFC participant. The list of financial and support services AIFC participants provide is specified in paragraphs 3 and 4 of Article 6 of the Constitutional Law.