ISTANBUL -- Central Asia's race for foreign investment is intensifying after Uzbekistan said it enlisted BlackRock to help establish its financial center, though weak governance and illiquid markets may keep some investors at bay, analysts say. The U.S. asset manager will assist in developing "the concept and structure" of the Tashkent International Financial Centre, Saida Mirziyoyeva, the Uzbek president's elder daughter who was appointed TIFC governor, was quoted as saying in a government statement.

Due to open in 2027, TIFC aims to attract $20 billion to $25 billion in new investment by 2030.

Uzbekistan's move comes after Kyrgyzstan, a much smaller country, opened its Special Financial Investment Territory in Tamchy (Tamchy SFIT) on the shore of Lake Issyk-Kul in July. But TIFC's closest competitor will be Kazakhstan's Astana International Financial Centre (AIFC), which opened in 2018 and has 6,300 companies from over 90 countriesed in its ecosystem.

These emerging economies are attracting investors as can be seen from the interest in Uzbekistan's sale of part of its national investment fund, UzNIF, in an initial public offering in May.

The IPO was oversubscribed and drew BlackRock, Franklin Resources and Redwheel as cornerstone investors. Yet the countries lack the legal frameworks and corporate governance processes to which institutional investors are accustomed.

Both Tashkent and Tamchy have said they will operate their special zones under English common law.

TIFC will even have its own court and regulator, albeit one likely to be recommended by Saida Mirziyoyeva, which is a duty of hers as governor. Rassul Rysmambetov, a financial analyst based in the Kazakh city of Almaty, calls such zones "inland offshore" jurisdictions.

Reforming an entire state's courts and regulators takes time, he said, while a smaller zone concentrates skilled staff and clearer rules in one place, giving investors a more predictable point of entry. Uzbek President Shavkat Mirziyoyev's daughter is also in charge of appointing the executive director and deputies of the Financial Centre Administration at TIFC.

Farkhodjon Israilov, an Uzbek investment consultant, said the law separates her coordinating role from the independent regulator and court, and that the test will be "early, visible rulings that don't simply favor well-connected parties." The other factors that may hinder institutional investment are the lack of companies to invest in and the illiquidity of listed stocks.

Only about $612 million of shares can be traded freely in the Tashkent stock market, which is worth $35.5 billion, based on the exchange's figures at the end of June. The main index more than doubled in August, but some of its biggest gains came in companies with tiny free floats.

Uztransgaz, the state gas pipeline operator, jumped 546% after just 134 shares were traded on turnover of only $4,268, Scott Osheroff, chief investment officer of the AFC Uzbekistan Fund, told Nikkei Asia. "A large fund simply cannot come in with a ticket of $1 million to $2 million without 'breaking' the order book," said Arnold Vdovkin, head of brokerage at Avesta Investment Group, adding that the state holds 95% to 99% of many listed companies. Rysmambetov agreed that the illiquid market is an issue.

"The constraint is the supply of investable, bankable companies, credible projects and securities that investors can trade after buying them," he said.

Gaps in custody infrastructure, a lack of direct links to Euroclear or Clearstream -- depositaries that clear and settle cross-border trades -- and few tools to hedge currency risk also present stumbling blocks for some institutional investors.

"Creating TIFC on the basis of English law is the necessary minimum, but on its own it does not generate deals," Vdovkin said.

Nonetheless, the brokerage head told Nikkei Asia that foreign accounts at his firm have doubled to almost 600 from last year, and foreign clients made up about 60% of its turnover since May, which he attributed to the UzNIF offering.

For now, Astana still holds the edge over Tashkent, particularly for companies doing business in Kazakhstan and Russia or raising capital abroad, though investors not yet incorporated there "are likely to seriously consider TIFC," Osheroff said. Tamchy is much further behind its bigger neighbors.

AIFC said its participants attracted $6.6 billion of investment in 2025, nearly doubling from the year before. But Rysmambetov said the center cannot claim sole credit for the expansion, which he attributed to attractive yields, credit quality, prospects in the commodities sector and the low tax regime.

In the bond markets, Kazakh debt is investment grade, compared with Uzbekistan's high-yield rating. In August, S&P Global Ratings upgraded Kazakhstan's sovereign debt to a BBB rating from BBB-. The agency rates Uzbek debt two notches below investment grade at BB.

TIFC's success ultimately depends on whether international custodians, global investment banks and leading law and audit firms open full offices there, analysts said. TIFC hopes to draw them in with major tax breaks until 2076.

Tamchy advertises a broader zero-tax regime for qualifying activities for 49 years and signed up five foreign companies at launch. Kyrgyz President Sadyr Japarov is targeting 3,900 resident companies by 2035 in an economy less than 10% the size of Kazakhstan's.

"Realistically, a single financial center in the region should be sufficient," Osheroff said. "There is, of course, also the [United Arab Emirates] nearby, which these financial centers are modeled on." Dubai's financial center added 2,318 companies in the year to June, more than the roughly 1,400 Astanaed in 2025, figures from the two centers show.

Rysmambetov cited another crucial metric: "The real test is whether successful practices spread into the wider economy, rather than remaining confined to a small enclave," he said. Yevgeniya Mikhailidi is a contributing writer.