Business in Turkmenistan

Turkmenistan recognises formal entrepreneurship, including hususy telekeçi activity by an individual entrepreneur. Available forms include a state enterprise, individual enterprise, cooperative, joint enterprise, business company, joint-stock company and public-organisation enterprise. Foreign participation can use a joint venture, a fully foreign-owned enterprise or a branch or representative office. Branches and representative offices do not have separate legal personality but require registration. The Tax Directorate, the Ministry of Finance and Economy and local tax offices handle registration at the relevant tax-accounting place. A legal entity generally submits an application, charter, constituent agreement where applicable and proof of the registration fee. An enterprise decision should be issued within a maximum of three working days after complete documents are submitted. Electronic filing is legally possible, and registration data is forwarded to the State Statistics Committee, Customs Service and Central Bank within three working days. Refusal is limited to statutory grounds. The Unified State Register of Legal Entities records registered legal entities. Business activity is generally permitted unless prohibited, although the Cabinet may reserve sectors for state enterprises. The relevant economic-activity classifier helps identify the planned activity. A licence, certificate or other permit is generally obtained after registration when the activity requires one. Unregistered business activity is prohibited, and unlicensed activity or activity without a required certificate can be unlawful. Criminal Code Article 260 provides penalties for unregistered business activity or a mandatory-licence breach involving extra-large income, including a fine of 50 to 100 base units or corrective work for up to two years. An individual enterprise has a minimum charter fund of 25 times the tax or fee base value. Generally, at least 50% of the founder's contribution is paid before filing and the remainder within one year after registration. Failure to complete payment can lead to registration of a reduction in the charter fund. Small and medium-sized enterprise classification depends on the sector and the annual average number of workers. In industry, electricity, construction, gas and water, a micro business has up to 15 workers, a small business has 16 to 50 and a medium business has 51 to 200. In other sectors, the corresponding limits are up to 10, 11 to 25 and 26 to 100. An individual entrepreneur is included in the small-business scale up to 10 people, including the entrepreneur. The calculation includes part-time, seasonal and temporary workers and workers in branches. If a threshold is exceeded, SME benefits can end on 1 April of the following year; restoration may be possible after one year. Support measures can include legal, organisational, property, financial, information, investment, innovation, import-substitution, export, e-commerce, consulting, training, fair and technology-park support. The Cabinet may set a reduced registration fee for SMEs. Regional programmes may operate through velayat authorities, Ashgabat and Arkadag, but the available evidence does not establish a single nationwide grant, loan or fee scheme with fixed eligibility, amounts and deadlines. During operation, a business keeps accounting records and submits statistical, tax and other required reports. Tax, environmental and other competent inspections may apply. Quality standards and certificates are required where sector rules prescribe them. Businesses generally set prices by agreement, although some sectors have state-regulated prices. External trade follows national law. Legal entities may open domestic bank accounts. Property and lawful business activity receive legal protection, while founders set capital and management arrangements in the charter. The enterprise answers for its obligations with its own property, and taxes and other mandatory payments take priority over profit distribution. Unfair competition is prohibited. Foreign-investment projects require state examination and registration. Depending on the project, this can include seismic, fire and explosion, environmental and sanitary compliance. Foreign-investment businesses generally receive the national legal regime. Free economic zones can provide a more favourable regime, including project-specific exemptions from fees, licence fees, land rent, extra-budgetary contributions and certification charges. Transfers of profit or income abroad after taxes and other mandatory payments remain subject to the law. A business can be reorganised by merger, accession, division, separation or transformation. Reorganisation requires successor documents and creditor notice. Voluntary termination can be initiated by the owner or participants. A court can order termination for bankruptcy, invalid registration, unlicensed or prohibited activity, or repeated or gross violations. Liquidation includes appointing a liquidation commission and notifying creditors for at least two months. Claims are paid in order of priority: life and health claims, wages and severance, secured claims, taxes and state claims together with bank loans, and then other creditors. Termination takes effect when the business is removed from the Unified State Register.