The law of Turkmenistan “On Foreign Investments” defines the legal framework for the activities of foreign investors, an enterprise with foreign investment in Turkmenistan and is aimed at attracting and efficient use of foreign investment in Turkmenistan.
Legislation of Turkmenistan on foreign investments
The legislation of Turkmenistan on foreign investments is based on the constitution of Turkmenistan and consists of the law of Turkmenistan “On Foreign Investments” and other regulatory legal acts of Turkmenistan.
If an international treaty of Turkmenistan establishes other rules than those contained in the law of Turkmenistan “On Foreign Investments” and other regulatory legal acts of Turkmenistan, then the rules of the international treaty apply.
The law of Turkmenistan “On Foreign Investments” uses the following basic concepts:
1) foreign investment - an investment of foreign capital in an entrepreneurial activity on the territory of Turkmenistan in the form of objects of civil rights belonging to a foreign investor, including cash, securities, other property, property rights that have a monetary value, exclusive rights to the results of intellectual activity ( intellectual property), as well as services and information:
2) foreign investors:
- a foreign legal entity, including its branch and representative office in Turkmenistan;
- international organization;
- a foreign state;
- a foreign individual, as well as a stateless person, at the time of making investments permanently residing in the territory of a foreign state;
- a citizen of Turkmenistan with a permanent residence outside Turkmenistan:
3) an enterprise with foreign investment - an enterprise established in the territory of Turkmenistan in the manner prescribed by the legislation of Turkmenistan, which is owned by the foreign investor in full or on the basis of equity participation with legal entities and individuals of Turkmenistan;
4) foreign direct investment - the possession, acquisition by a foreign investor of at least 10 percent of the shares (share, contribution) in the authorized capital of the created or newly created enterprise in Turkmenistan; investment of capital in fixed assets of a branch of a foreign legal entity established in Turkmenistan;
5) investment project - justification of economic feasibility, volume and timing of capital investments, including design estimates, developed in accordance with state standards (norms), as well as a description of practical actions for making investments (business plan). Priority investment project - an investment project, the implementation of which is carried out on the basis of a decision of the Cabinet of Ministers of Turkmenistan;
6) payback period of an investment project - the period from the day the financing of the investment project using foreign direct investment begins until the day when the difference between the accumulated amount of net profit with depreciation and the amount of investment costs of an enterprise with foreign investment, a branch of a foreign legal entity, acquires a positive value;
7) reinvestment - the implementation of capital investments in business entities on the territory of Turkmenistan at the expense of the profit (income) of a foreign investor, an enterprise with foreign investment, which they received from foreign investment on the territory of Turkmenistan;
8) free economic zone - an economic zone of free entrepreneurship, a national tourist zone, as well as other types of free economic zones, the procedure for the formation, functioning and liquidation of which is established by the legislation of Turkmenistan.
Foreign investment is carried out in the following forms:
1) equity participation in enterprises together with legal entities and individuals of Turkmenistan;
2) the creation of enterprises wholly owned by foreign investors, branches of foreign legal entities or the acquisition of existing enterprises into ownership;
3) the acquisition of movable and immovable property, with the exception of the legislation of Turkmenistan limited in civil circulation;
4) the provision of foreign loans;
5) the acquisition of property and non-property rights established by the legislation of Turkmenistan.
BT Legal Affairs Department