16.09.2026
Special Financial Centers as Laboratories for National Legal Development
Aigoul Kenjebayeva[1]
Abai Shaikenov[2]
Why does a state create a special financial center with its own legal and regulatory regime?
The immediate answer seems obvious. Such centers are created to attract investment, capital, financial institutions and international business by offering legal certainty, predictable regulation, efficient institutions and reliable dispute resolution. Their success is therefore naturally measured by the number of participants and transactions, capital raised and investments attracted.
All of this is important. But there is a broader question which deserves attention, particularly as new financial centers and special investment jurisdictions are being created in different countries.
What should such a center ultimately give to the country which created it?
In our view, the objective should be broader than creating a successful financial marketplace within a specially designated territory or legal regime. A financial center should contribute to the national economy, including by helping to attract foreign and domestic investment into the real economy. But it can do something else as well: it can provide a country with a place in which new legal and institutional solutions are tested in practice before some of them are considered for wider use.
In this sense, a special financial center can become a legal and institutional laboratory.
The experience of the Astana International Financial Centre (AIFC) provides a useful example. The AIFC has established within Kazakhstan a special legal and regulatory environment drawing on the principles of English law and the experience of leading international financial centers. It has its own regulator, its own system of corporate and financial regulation, an independent court and an international arbitration center.
After several years of its operation, Kazakhstan therefore possesses something which it did not have before: practical experience of a different legal and institutional model operating within the country itself.
Similar questions will arise elsewhere. New models are now developing in the region, including the Tashkent International Financial Centre and the Special Financial Investment Territory Tamchy in Kyrgyzstan. Their structures and objectives will not necessarily be identical to those of the AIFC. But precisely because these systems are still being developed, it may be useful to consider from the outset not only how they will function internally, but also what the countries creating them may eventually learn from them.
More than attracting financial transactions
The first broader function of a financial center concerns its relationship with the national economy.
An investor may incorporate a company, arrange financing or issue securities within a financial center, while the factory, infrastructure project, employees, land, licenses, suppliers and customers are outside it. The relationship between the special regime and the national legal system therefore becomes critically important.
A sophisticated financial center cannot fulfil its wider economic function if investors encounter unnecessary legal difficulties as soon as their activities cross its boundaries. The center and national authorities need to work continuously together so that the special regime facilitates, rather than complicates, investment into the national economy.
There is, however, a second broader function. A financial center creates an unusual opportunity for legal experimentation. Instead of studying only what works in London, Singapore, Dubai or elsewhere, a country can observe how alternative legal mechanisms operate in its own economic, institutional and social environment.
This is where the idea of the financial center as a laboratory becomes particularly useful.
Learning from a legal laboratory
When Kazakhstan reforms its corporate, civil or procedural law, we naturally study foreign experience. We compare different models and try to predict whether particular institutions could work in our legal system.
The AIFC gives us another source of knowledge. Rules are being used by real businesses and investors, interpreted by lawyers and judges and tested through actual transactions and disputes. Regulators receive feedback and amend the regulatory framework. Difficulties emerge at the interface between AIFC law and Kazakhstan law.
This accumulated experience should itself become an object of study.
This does not mean that AIFC law should simply be transplanted into Kazakhstan's national legislation. Nor does the laboratory concept imply that one legal tradition is superior to another. Kazakhstan's legal system has its own history, structure and logic. A laboratory allows us to do something more careful: to observe how a particular mechanism works, understand why it works or does not work, and then decide whether anything from that experience may be adapted to the national system.
Failure or regulatory friction can therefore be as instructive as success.
Three directions of learning
If a financial center is viewed in this broader way, work should proceed continuously in three directions.
The first is the improvement of the center itself. Its law and institutions should remain capable of learning from experience and responding when rules do not operate as intended or business requires new solutions. Consultation with participants and practitioners is particularly important here.
The first question is: what should we change within the financial center?
The second direction concerns the interface with national law. Participants in a financial center inevitably encounter national rules on taxation, customs, currency regulation, land, employment, licensing, competition and many other matters. More complex transactions may involve dual listings, infrastructure financing, assets outside the center or recognition and enforcement of judgments and awards.
This requires continuous cooperation between the center and national authorities. The second question is: how can the special regime and the national legal system work together more effectively?
The third direction looks outward from the center. There should be a systematic process for examining which rules, institutions and practices tested within it may be useful for national legal development. Some will remain specific to the financial center; some will prove unsuitable; others may be capable of adaptation.
The third question is: what have we learned from the financial center that may be useful for the country?
The AIFC Court as an example
The potential for such learning is not confined to corporate or financial regulation. The experience of the AIFC Court provides a concrete example.
Kazakhstan's procedural legislation formally recognizes the adversarial principle, yet its practical operation remains imperfect and certain features of civil procedure continue to reflect a more inquisitorial approach. The AIFC Court allows us to observe a different procedural model operating not somewhere abroad, but within Kazakhstan itself.
Its procedural rules contain mechanisms intended to make adversarial proceedings work in practice: structured presentation of the parties' cases and evidence, disclosure of documents, clearer allocation of responsibility between the parties and the judge, active case management and procedural discipline.
The point is not to transplant English civil procedure into Kazakhstan. The more practical possibility is to study the procedural law already operating in the AIFC Court, identify mechanisms which have proved effective, understand why they work and consider whether appropriately adapted versions could improve national civil procedure.
This is, in our view, one of the clearest examples of what the laboratory approach can mean in practice. We do not need to choose between preserving our legal tradition and importing another one. We can study solutions already being tested within our own country and decide, carefully and selectively, whether some of them can be adapted to our national system.
The same approach can be applied to other aspects of the AIFC experience: corporate regulation, the drafting and revision of rules, consultation with market participants, institutional responsiveness, case management and the interaction between different legal regimes.
From an island to a bridge
Without such a process, a successful special jurisdiction may become an island of excellence: a well-functioning legal and institutional environment which serves its participants effectively but changes little around it.
That would still have value. But it would leave part of the potential return on the state's investment unrealized.
A financial center can instead become a bridge between international capital and the national economy, between different legal traditions, and between legal experimentation and national reform.
This requires more than the work of the financial center itself. Ministries, regulators, the judiciary, legislators, business, investors, academics and practicing lawyers all have a role. A regular process of joint review could examine the experience accumulated within the center not only to improve the center, but also to identify lessons relevant to national legal development.
This becomes particularly important when major legislative reform is under way. Kazakhstan, for example, is discussing further modernization of its civil legislation, including the possibility of developing a new Civil Code. It would be unfortunate to undertake such a project as though the considerable legal and institutional experience accumulated within the AIFC did not exist.
This does not mean that AIFC solutions should be preferred. It simply means that this experience should be among the experience considered.
Designing new centers with the broader purpose in mind
For countries now establishing financial centers or special investment jurisdictions, there is an opportunity to go one step further.
When such a center is being designed, attention understandably focuses on its immediate architecture: applicable law, regulator, court or dispute resolution mechanism, corporate structures, taxation, licensing and investor protection. But another question could be asked at the same time:
What should this center eventually contribute outside its own boundaries?
If this broader objective is recognized from the beginning, the center can be designed not merely as a special regime but also as a learning institution. Mechanisms for collecting experience, receiving feedback, identifying regulatory friction, cooperating with national authorities and periodically evaluating potentially transferable solutions can form part of its architecture from the outset.
The success of a financial center can then be understood more broadly. Investment, capital and transactions will remain essential measures. But we may also ask whether investment reaches the real economy, whether the interaction between the center and national law improves, whether useful legal and institutional solutions are being tested, and whether the knowledge gained contributes to the development of the country's wider legal system.
The AIFC has accumulated enough experience for Kazakhstan to begin asking these questions seriously. Countries creating new centers have the opportunity to ask them from the beginning.
A special financial center need not remain an island of different law within a national legal system. It can also become a place where the country learns — from what works, from what does not, and from the interaction between the two — and uses that knowledge for its own legal and institutional development.
[1] Aigoul Kenjebayeva - Partner Dentons Kazakhstan, member of the AIFC Legal Advisory Council
[2] Abai Shaikenov - Managing Partner, Dentons Kazakhstan