Introduction
Over the last decade, a new generation of special economic and financial jurisdictions has been emerging across Central Asia and the Caucasus. These jurisdictions are no longer competing solely on the basis of tax incentives, customs exemptions or access to land and infrastructure. Increasingly, they seek to offer investors something more fundamental: a different legal environment.
Different legal environments are fundamental because investors find insurance in legislation which aims to protect investment.
“To attract foreign investment to Singapore, our strategy wasto make Singapore a First World oasis in a then Third World region. We had to distinguish ourselves from our neighbours by being more stable and secure, with a sound legal system and the rule of law, impartially administered; we were more predictable in our policies and regulations.” — Lee Kuan Yew, founding Prime Minister of Singapore.[1]
However, legislation is not the only mechanism which works standalone although very strong basis for a foundation of “investment building”. Stable legislation should be accompanied with facilitated approach of administration. There were a lot of free zones/special economic zones (SEZ) in history and hundreds of them are still emerging and operating all over the world.[2] However, not all of them are successful. But this is another topic to write about. This blog will discuss how Turkic region follow the path of special economic and financial jurisdictions success in order to reach economic boom. This establishment is particularly visible in four jurisdictions in the Turkic region: the Astana International Financial Centre (AIFC) [3] in Kazakhstan, the Tashkent International Financial Centre (TIFC)[4] in Uzbekistan, the Tamchy Special Financial Investment Territory (Tamchy SFIT)[5] in Kyrgyzstan, and the Alat Free Economic Zone (AFEZ)[6] in Azerbaijan.
Although these regimes differ considerably in their legal status, economic objectives and stages of development, they share an important feature. Each seeks to provide investors with a special legal regime which somehow might be called extraterritorial jurisdiction. Specifically, those special economic and financial jurisdictions provide dispute-resolution framework that is more internationally oriented than the traditional domestic framework of the host State. The question is whether this is enough.
Creating an arbitration centre is relatively easy. Creating an arbitration centre that international investors and counsel actually trust is much harder. This trust building is tensely related to reputation of the country (jurisdiction) where the arbitration centre is established. Investors assess whether the legal regime is investor friendly and how stable the legal environment is in that jurisdiction.
A modern arbitration institution needs more than sophisticated rules. It needs independence, experienced arbitrators, efficient administration, qualified judicial support, predictable enforcement and, ultimately, a reputation developed through actual cases. This raises a broader question for the region: can special legal regimes become genuine regional arbitration hubs, or will they remain primarily dispute-resolution mechanisms for businesses operating within their own territories?
This piece compares the four regimes and argues that the next stage of development should move beyond the creation of arbitration rules towards the construction of complete dispute-resolution ecosystems. All this serves only one purpose: to attract investment and drive economic growth.
AIFC provides the most mature example. TIFC represents an ambitious new entrant that is still being established. Tamchy SFIT has created a particularly distinctive dispute-resolution architecture from the outset. AFEZ is developing a bespoke arbitration framework within a free economic zone.
Together, they provide a useful laboratory for examining how legal innovation can influence investor confidence.
Why Arbitration
Special economic zone (SEZ) is an area where investors can benefit from advantages. This is a regulatory regime that differs from, and is generally more favourable than, that applicable in the broader national economy that is not generally available elsewhere. States create such zones in a geographically delimited area.[7] SEZ regime governs taxation, administration, investment, finance, immigration, employment and other aspects in order to create favourable conditions for investors and entrepreneurs. While SEZs traditionally focus on facilitating industrial, commercial and export-oriented activities, some jurisdictions have developed specialised financial centres with distinct legal and regulatory frameworks. AIFC, TIFC and Tamchy SFIT represent such financial-centre models, whereas AFEZ represents a broader special economic zone model.
International investors focus both on fiscal and non-fiscal incentives. Investors do not make money overnight. The profit generated from business is the result of hard work, commitment, and perseverance for years. The investor therefore needs to assess not only the benefits available on the day of entry, but also the legal risks that could arise during the lifetime of the investment. Thus, most asked questions during investment negotiations are “what happens if the relationship breaks down?”; “which law governs the investment?”; “which court has jurisdiction?”; “can disputes be referred to arbitration?”, “can the State or a SEZ authority be a party to arbitration?”; “how will the award be enforced?” and etc. By this way, investor assesses not only legal risks, but all possible risks in investment.
A credible arbitration framework can therefore have a preventive function. Because investors seek neutrality where state’s interference is minimized or, ideally, eliminated. By providing legal certainty, reliable dispute-resolution institutions may help prevent disputes from arising or escalating in the first place. [8]
This is why arbitration should be regarded as part of the investment infrastructure of a special economic and financial jurisdiction.
AIFC: the established benchmark
AIFC provides the most developed example of a special legal regime in the region incorporating international dispute resolution into its institutional structure.
The AIFC combines a specialised legal framework with two principal dispute-resolution institutions: the AIFC Court and the International Arbitration Centre (IAC).
The AIFC Court operates independently from the ordinary courts of Kazakhstan and has a two-tier structure. Its procedures are based on English common-law procedures and international practice.[9] The IAC, meanwhile, is an independent legal entity with its own procedural rules and an international panel of arbitrators and mediators. So, if look closer AIFC provides investors with a wide range of dispute system design: a specialised court; international arbitration; mediation; digital proceedings and so on. AIFC is the leading for now not for the legislations, but for its experience. By the end of 2025, the AIFC Court and IAC reported that their case values had exceeded USD 2.5 billion for the first time,[10] while the institutions continued to position themselves as a major dispute-resolution platform for Eurasia.
Earlier published statistics also demonstrate the rapid development of the institutions. By June 2023, the AIFC Court and IAC had completed and enforced more than 2,174 cases, including 415 arbitration awards and 1,695 mediation settlements.[11] AIFC also increasingly positions itself as a Eurasian dispute-resolution centre rather than a purely domestic one. The IAC cooperates with institutions across Uzbekistan, Azerbaijan, Kyrgyzstan, Türkiye and Turkmenistan, and its annual IAC Eurasia Arbitration Week (held in Astana in June–July 2026) brings together policymakers, academics and arbitrators. An arbitration hub is ultimately a network — it needs practitioners, arbitrators, academics, professional associations, training, conferences and international relationships, not just cases. In this respect AIFC holds a significant first-mover advantage.
TIFC: Uzbekistan's New Model
TIFC is a new project, not an established institution. Presidential Decree No. PF-48 (30 March 2026) established TIFC, and Uzbekistan's Ministry of Investment, Industry and Trade has since published a draft Constitutional Law proposing a territory governed by English common law and equity, with an independent international commercial court (first instance and appellate) and arbitration through the Tashkent International Arbitration Centre (TIAC). This is more than another special jurisdiction — it is an attempt to build a financial and legal jurisdiction from scratch. The draft framework includes English common law and equity principles; a specialised international commercial court; international arbitration through TIAC, Islamic and green finance; Fintech and digital assets, etc.
The Uzbek Government has described the proposed court as designed to the standards of leading international financial centres, with proceedings conducted in English and international judges expected to handle complex commercial disputes. These are all nearly identical to AIFC regime.
TIFC's advantage is that it can design its architecture with the benefit of AIFC's experience; its disadvantage is that it has no institutional track record yet. This is the distinction between legal credibility, which legislation can create, and institutional credibility, which must be earned.
Tamchy SFIT: Kyrgyzstan's Experiment
Kyrgyzstan's Tamchy Special Financial Investment Territory is arguably the most distinctive of the newer models. Its Arbitration Centre operates under the Tamchy SFIT International Dispute Resolution Centre and Arbitration Regulations 2026,[12] providing institutional arbitration alongside expedited and emergency mechanisms, and accommodating UNCITRAL and ad hoc arbitration as well.
This matters for two reasons: Tamchy is not simply relying on Kyrgyzstan's ordinary arbitration infrastructure, and its dispute-resolution framework is being built at the same time as the investment regime itself. This raises a broader question for all special regimes: how far should a special jurisdiction separate itself from the ordinary legal system of its host state? Integration offers an existing judicial and enforcement infrastructure; autonomy offers English-language proceedings, internationally familiar procedures, specialised rules and international arbitrators. Tamchy’s success will depend on whether international users see its dispute-resolution system as independent and enforceable.
AFEZ: Azerbaijan's Free-Zone Model
Unlike AIFC and TIFC, which are built around the international financial-centre model, the Alat Free Economic Zone is an industrial and logistics-oriented free zone with a meaningful degree of regulatory autonomy. Its legal framework includes a dedicated Arbitration Centre governed by separate Arbitration Rules, Expedited Arbitration Rules and Emergency Arbitration Rules.
Three procedural tracks matter here because disputes involving manufacturing or logistics operations can have immediate operational consequences — an investor may need urgent interim relief, an emergency arbitrator, a fast-track procedure, or full arbitration for a complex dispute. AFEZ's location on the Caspian and its regional trade and transport connections give it a genuine strategic opportunity to become more than an industrial destination. AFEZ, like TIFC and Tamchy, must build international credibility through international arbitrator participation, institutional cooperation before it has accumulated a substantial caseload.
Cooperation or Competition
It is worth noting that AIFC's regional strategy already treats arbitration hub-building as a network effort rather than a purely national one. Its cooperation with institutions in Uzbekistan and other Central Asian and Caucasus jurisdictions, show that even the most established player in the region recognizes that no single institution builds a hub alone.
This matters because an arbitration hub is ultimately a network. It requires not only cases but also practitioners, arbitrators, academics, institutions, professional associations, training programmes, conferences, legal publications and more events. Building that surrounding ecosystem is arguably as important as the arbitration rules themselves.
Because for all special economic and financial jurisdictions the main purpose is to attract investment rather than establishing an arbitration institution. But when will the investor come? When the investor feels confident. For instance, investors rarely choose jurisdiction simply because it offers emergency arbitration. Because they view it as one element of a broader ecosystem. And this ecosystem should be investor friendly. So, not only investment incentives attract capital, but legal certainty also both attracts and keeps investors. Predictability of legislation is crucial for investors. This matters most when the counterparty is a state-owned entity or the authority administering the zone itself, since investors need confidence that the dispute-resolution mechanism will stay independent even in all kinds of disputes.
So, for the question can the Turkic region build its own hub is in looking to the question from another angle. London, Paris, Geneva, Singapore, Hong Kong and Vienna have accumulated something that cannot be replicated quickly. The emerging Turkic institutions must convince users to choose them voluntarily when established alternatives already exist. Their advantage is timing — arbitration itself is changing. Virtual hearings are now normal, and users increasingly care about efficiency, cost, transparency, technology, diversity, environmental impact and procedural flexibility. A new institution does not have to reproduce a 100-year-old model; it can build a next-generation one. Rather than asking “How can we become another London?”, TIFC, Tamchy and AFEZ might instead ask what an international arbitration centre should look like in 2030 — a question that opens far more room for innovation.
Conclusion
The emergence of AIFC, TIFC, Tamchy SFIT and AFEZ reflects a shift in how the Turkic region approaches investment promotion. The shift is from “what incentives can we offer?” to “what legal environment can we offer?” and it should be at the centre for them. Adopted arbitration rules alone do not create an arbitration hub. A regional centre becomes credible when investors trust it, counsels recommend it, arbitrators want to sit on its tribunals, courts support its proceedings, awards are enforced, institutions cooperate with it, academics study it, and parties choose it even when not required to. All mentioned special economic and financial jurisdictions’ success should not be measured by which one attracts the most arbitrations, but by whether they collectively build a trusted regional dispute-resolution market.
As investment, transport corridors, energy projects and cross-border commerce expand across the Turkic region, disputes will inevitably follow. The region can keep treating international arbitration as a service obtained elsewhere, or it can build institutions capable of resolving a growing share of those disputes itself. The real question is whether these jurisdictions can convert legal innovation into institutional trust. If they succeed, the next generation of special legal regimes may do more than attract investment — they may put the Turkic region on the international arbitration map.
Ultimately, the most competitive, special economic and financial jurisdiction may not be the one offering the lowest tax rate. It may be the one where an investor can confidently say: if something goes wrong, I know exactly where my dispute will be resolved and I know that the institution will be independent, efficient and internationally respected.
Besides incentives and appropriate legal environment, the basic approach should change. There can be fiscal and non-fiscal incentives for investors, and they could be properly written in legislation, but if it is not implemented and approach to investors has not changed, then there is no outcome to wait for.
References
1 Lee Kuan Yew, “The Role of Singapore in the Asian Boom”, Speech to the IESE (International Graduate School of Management) (13 September 2005). Available at: https://www.nas.gov.sg/archivesonline/data/pdfdoc/2005091301.htm , accessed on 28 august 2026.
2 1. Bolwijn R, Li J. Special Economic Zones and Investment Facilitation. In: Berger A, Chi M, eds. The Making of an International Investment Facilitation Framework: Legal, Political and Economic Perspectives. Cambridge International Trade and Economic Law. Cambridge University Press; 2025:239-260. p.4. available at: https://www.cambridge.org/core/books/making-of-an-international-investment-facilitation-framework/special-economic-zones-and-investment-facilitation/24F0922BF83CDF856976508AFC60D06A
3 The Astana International Financial Centre, https://aifc.kz/
4 Constitutional Law of the Republic of Uzbekistan No. LRU-1158 of 13 July 2026, “On Tashkent International Financial Centre. Available at: https://lex.uz/ru/docs/8325847
5 The Tamchy Special Financial Investment Territory, https://tamchysfit.com/
6 The Alat Free Economic Zone, https://afez.az/
7 UNCTAD, World Investment Report 2019: Special Economic Zones, Chapter IV, p. 128. Available at: https://unctad.org/publication/world-investment-report-2019
8 Saltanat Imanova,‘Dispute Prevention Mechanisms in Central Asia: Institutional Innovations and Regional Practices’ (TDM, forthcoming 2026), Section IV.B.3 (‘Tamchy SFIT within ISDS and Dispute Prevention’); Section IV.C.1, page 18 (‘The Tashkent International Financial Centre and Preventive Dispute Governance’).
9 Available at: https://court.aifc.kz/about-aifc-court/
10 https://iac.aifc.kz/news/aifc-court-iac-present-2025-results-future-plans/
11 https://aifc.kz/news/more-than-2-100-cases-resolved-and-enforced-by-the-aifc-court-and-iac/