The establishment of Special Economic Zones (SEZ) in Turkmenistan is regulated by Law of Turkmenistan “On Free Economic Zones”, dated October, 9 2017 (hereafter, the “Law”).
Pursuant to art. 5 of the Law, the following different types of zones can be established:
- Service zones, specializing in providing financial, credit, banking, tourist-recreational, information services and other kind of services;
- Agro-industrial zones
- Zones with a combined propriety activities
SEZ participants can be, inter alia, foreign entities and individuals. Moreover, foreign legal entities are allowed to operate through branches and representative offices.
The minimum volume of capital investments must be determined separately for each type of SEZ.
SEZ are established for a period of 40 years, with the possibility of extension.
A set of preferences are provided for residents of SEZ. The main preferences are:
|Reduction of registration time (foreign residents)||10 working days for branches and representative offices of foreign legal entities (generally, it takes 3-4 months from the date the necessary documentation was duly submitted)|
|Land rent rate|
0% for the first 3 years from the date of contract
50% of the rate established by the legislation of Turkmenistan in the next 7 years
100% after 10 years
|Customs regime||free customs zones (except for tourist-recreational ZES)|
|Tax regime||favourable tax treatment|
|Currency regime||parallel circulation of national and foreign currencies and exchange of national money in freely convertible currency.|
exemption from the obtaining of a work permit
exemption from compliance to the numerical conditions in terms of the employment of local and foreign people (currently, ninety per cent of the workforce of foreign-owned enterprises must be citizens of Turkmenistan).
|License||exemption from obtaining of a license, however they are obliged to comply with the requirements and conditions laid down under Turkmenistan law on licenses.|
SEZs provide to foreign investors comfortable conditions to conduct business, remove the administrative barriers and provide the opportunity to access the Turkmenistan market which is historically situated in a natural crossroad for major transit corridors from East to West, from North to South and is a part of the Great Silk Road.
Turkmenistan’s advantageous geographic position allows quick delivery of the SEZ’s products also to the market of Europe, Middle East, Asia-Pacific.
Further reading of Desk Russia on Special Economic Zones
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