Kazakhstan's civil law does not recognise the trust as a legal form. For German-resident clients holding or acquiring assets in Kazakhstan — whether real property, shareholdings in Kazakhstani entities, or investment positions — this creates a structural gap that requires careful navigation before any wealth planning arrangement is put in place. The Astana International Financial Centre (AIFC) offers a meaningful but bounded exception. Understanding the limits of that exception, and the procedural steps involved in working within or around it, is the practical starting point for any cross-border structuring mandate that touches Kazakhstan.
Kazakhstan's civil legislation is modelled on the continental European tradition and does not include a trust chapter. Foreign trusts — including common law discretionary trusts, Liechtenstein Anstalten, and German-law foundations (Stiftungen) — are not recognised as legal personalities or enforceable property-holding arrangements by Kazakhstani state courts or the notarial system. A foreign trust deed presented to a Kazakhstani registry or enforcement body will not be given effect in its own terms.
The AIFC is a distinct jurisdiction within Kazakhstan, operating under its own legal framework derived from English common law. Within the AIFC, trust and foundation structures can be established, registered, and administered under AIFC rules. The AIFC Courts apply English law principles and recognise trust relationships in proceedings before them. This is a genuine and functioning exception — but it is territorially and institutionally constrained. Assets outside the AIFC perimeter (including real property registered under Kazakhstani civil law, shares in Kazakhstani LLPs registered with the state registry, and bank accounts at non-AIFC institutions) remain governed by Kazakhstani civil law, and the AIFC's recognition of a trust relationship does not automatically extend to those assets.
Note: A German-resident settlor who transfers Kazakhstani-registered assets into an AIFC trust must address the property transfer step as a matter of Kazakhstani civil law — including applicable transfer tax treatment and registration formalities — before the AIFC trust structure can hold those assets effectively. Failure to complete this step means the trust deed exists but the asset does not follow it.
For German-resident clients, the structuring analysis typically proceeds in three layers.
The first layer concerns the nature of the Kazakhstan-side assets. AIFC-regulated investments — securities held through an AIFC broker, participations in AIFC-registered funds, or contractual rights under AIFC-governed agreements — can generally be held within an AIFC trust or AIFC private fund structure without the property transfer problem described above. The AIFC framework governs both the holding vehicle and the underlying asset, and the recognition gap does not arise in the same way.
Where the assets are outside the AIFC perimeter, the more common approach is to interpose a Kazakhstani legal entity — typically a limited liability partnership (LLP) — as the direct holder of the underlying assets, with the LLP interest then held by the trust or foundation structure. This does not eliminate the continental civil law layer, but it concentrates the Kazakhstani law exposure at the LLP level, where it is more manageable procedurally. The trust or foundation sits above the LLP and governs beneficial entitlement and succession in terms that can be recognised in a German probate or succession context.
The second layer concerns German tax residence. German-resident settlors and beneficiaries are subject to German tax law on worldwide income and assets, including assets held through foreign trusts and foundations. The German fiscal treatment of an AIFC trust or foundation depends on its classification under German rules — in particular, whether the structure is treated as transparent (income attributed to the settlor or beneficiaries) or opaque (the trust entity itself is the taxpayer). This classification analysis is a matter of German law and falls outside the scope of this note; German tax counsel should be engaged in parallel with any Kazakhstan structuring work.
The third layer is succession. A German-resident settlor's death engages German succession law in respect of assets that German law treats as part of the estate. Whether assets in an AIFC trust are treated as outside the estate for German succession purposes depends on the structure of the trust and the applicable bilateral frameworks between Germany and Kazakhstan. The position is not straightforward and should be confirmed before the structure is put in place rather than assumed to be resolved by the AIFC trust deed alone.
For German-resident clients with existing or anticipated Kazakhstan-side assets, the recommended sequence is as follows.
First, map the assets by legal category: AIFC-perimeter assets, Kazakhstani civil law assets, and any contractual rights that may straddle both. The structuring approach differs materially depending on this mapping, and conflating the categories is a common source of procedural difficulty later.
Second, engage Kazakhstan-qualified counsel (or AIFC-qualified counsel, depending on the asset category) at the outset — not after the structure has been documented. AIFC trust or foundation formation requires AIFC-registered service providers; the formation documents must comply with AIFC trust law requirements; and any property transfer into the structure from the Kazakhstani civil law perimeter requires separate conveyancing or registry steps.
Third, engage German tax and succession counsel in parallel. The Kazakhstan structure cannot be finalised without understanding its German tax classification and succession treatment. A structure that works efficiently under AIFC law but creates an adverse German tax position or an unintended succession outcome is not a completed mandate — it is a deferred problem.
Vetrov & Partners coordinates cross-border structuring mandates involving Russia and the wider CIS region, including matters with a Kazakhstan dimension. For mandates where AIFC or Kazakhstani civil law elements require local qualified counsel, the firm refers or co-instructs accordingly and can facilitate introductions to AIFC-registered practitioners.
For German-resident clients exploring Kazakhstan-side asset structuring — or where an existing arrangement requires review — an initial discussion with the team can clarify the procedural landscape before commitments are made.
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Vetrov & Partners is a Russian boutique law firm established in 2009, recognised by Pravo-300 for eight consecutive years. The firm advises foreign clients — including German-resident individuals and family offices — on cross-border structuring matters involving Russia and the wider CIS region, including mandates with a Kazakhstan dimension. Where local or AIFC-qualified counsel is required, the firm coordinates the engagement accordingly.
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This publication is provided for informational purposes only and does not constitute legal advice under Russian or any other applicable law. The information herein should not be relied upon as a substitute for professional legal counsel tailored to your specific circumstances. Vetrov & Partners is a Russian-qualified law firm. For matters governed by foreign law or requiring local admission in another jurisdiction, we collaborate with trusted counsel in the relevant jurisdiction. For advice regarding your particular situation, please contact info@vetrovpartners.com.
We are a Russian-qualified law firm. This note addresses Kazakhstani and AIFC legal frameworks, on which we coordinate with locally qualified counsel. It does not address German law, on which German-qualified counsel should be engaged separately.
— Daniyar Abenov Contributing Regional Analyst — Kazakhstan · Enforcement, Asset Recovery and AIFC Procedure vetrovpartners.com/contributions/