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Law of Turkmenistan of May 19, 1992, on Foreign Investments, Turkmenistan

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Repealed Text 
Details Details Year of Version 1993 Dates Adopted: May 19, 1992 Type of Text Other Texts Subject Matter Patents (Inventions), Trademarks, Trade Names, Competition, Undisclosed Information (Trade Secrets), Copyright and Related Rights (Neighboring Rights), Other, Industrial Property Notes This Law establishes the legal framework for investment activities in the territory of Turkmenistan.
Article 1 provides the forms of foreign investments, which includes, inter alia, intellectual property such as copyrights, inventions, trademarks, firm names, industrial samples and know-how.
Article 25 guarantees the protection of intellectual property of foreign investors.

Available Materials

Main Text(s) Related Text(s)
Main text(s) Main text(s) English Law of Turkmenistan of May 19, 1992, on Foreign Investments        
 THE LAW OF TURKMENISTAN ON FOREIGN INVESTMENT IN TURKMENISTAN

THE LAW OF TURKMENISTAN ON FOREIGN INVESTMENT IN

TURKMENISTAN

This Law determines legal, economic and organizational bases of

realization of foreign investments on the territory of Turkmenistan and is

aimed to attract in national economy of foreign advanced technologies,

managerial experience, material and financial resources and the

development of market economy.

SECTION I. GENERAL PROVISIONS

Article 1. Foreign investment

By foreign investment there are meant all kinds of property and intellectual

values, which are invested by foreign investors into the object of

entrepreneurial and other activities on the territory of Turkmenistan in the

form of:

• foreign currency, other currency values, currency valid on the � territory of Turkmenistan; �

• personal and real property (buildings, constructions, equipment and

other material values) and property rights related to them;

• shares, bonds, other securities or forms of participation in enterprises;

• money requirements or rights of requirements of contract obligations

execution, which are of value;

• any rights of intellectual property having value, including copyrights,

rights on inventions, trade marks, firm names, industrial samples,

“know­how” and others;

• right on economic activities, including exploration, extraction, output

of mine or exploitation of natural resources, received by Law or

agreement;

• paid services;

• other kinds of investments not prohibited by the legislation of � Turkmenistan. �

Foreign investors have the right to make investments in the forms of partial

participation in enterprises of Turkmenistan, creation of enterprises which

completely belong to foreign investors, or acquisition of functioning

enterprises, acquisition of movable and immovable property including

houses, apartments, premises, equipment, transport facilities and other

objects of property not prohibited by the legislation of Turkmenistan by

means of direct acquisition of property or in the form of shares, bonds,

other securities, acquisition of independence or the right to use lands and

concessions with the participation of legal entities or physical persons of

Turkmenistan for the use of natural resources on the territory of

Turkmenistan, acquisition of other property rights.

Article 2. Foreign Investors

The following persons can be the foreign investors in Turkmenistan:

­foreign legal entities including international organizations and

associations and also the states;

­foreign physical persons (foreign citizens or persons without citizenship).

Article 3. Enterprises with foreign investment

Enterprise with foreign investment is acknowledged and effect of the

present and effect of the present Law covers any form of enterprise

founded in accordance with the legislation of Turkmenistan in case when

the foreign investor possesses within the period of calendar year not less

than 20 per cent of declared Charter capital on an average or a part the

absolute value of which is established by the Cabinet of Ministers of

Turkmenistan.

Article 4. Legal regulation of foreign investment

Relations connected with foreign investment in Turkmenistan are regulated

by the Law “On investment activities in Turkmenistan”, by this Law

ans also by other legislative acts of Turkmenistan functioning on the

territory of Turkmenistan and international agreements.

In case if an international contract or agreement signed by Turkmenistan

determines different rules then those of the legislative acts of

Turkmenistan, the rules of international contract or agreement are used.

Article 5. Government policy in the sphere of foreign investment

Elaboration and implementation of the policy of Turkmenistan aimed at

attraction and use of foreign investment, co­ordination of investment

activities, the assistance to foreign investors in their activities on the

territory of Turkmenistan are performed by the Cabinet of Ministers of

Turkmenistan or by the authorized body.

SECTION II. CREATION OF LEGAL ENTITIES WITH FOREIGN

PARTICIPATION AND THEIR ACTIVITIES

Article 6. The creation of legal entities with foreign participation

By a legal entity with foreign participation any legal entity in

Turkmenistan is meant, entrepreneurial activities of which are invested by

subjects noted in Article 2 of the present Law, and foreign enterprises,

which are under jurisdiction of Turkmenistan. Legal entities with foreign

participation are created on conditions and in the order determined by the

Laws on enterprises, entrepreneurial activities, stock associations, by this

Law and other normative acts of Turkmenistan.

Article 7. Activities of legal entities with foreign participation

Legal entities with foreign participation may perform any kinds of

activities not prohibited by the legislation of Turkmenistan.

Special kinds of activities, which are determined by the Cabinet of

Ministers of Turkmenistan, may be carried out by legal entities with

foreign participation only with special permission.

Article 8. State registration

State registration of legal entities with foreign participation is carried out in

the order established by the Cabinet of Ministers of Turkmenistan. In order

to be registered the legal entities should submit the following documents:

• application of the founders;

• permission to make investment into the economy of Turkmenistan;

• agreement on the terms of establishing a joint venture;

• Charter (regulations);

• the document certifying financial position of the foreign investor.

The agreement and the Charter are to be submitted in two copies confirmed

by notary in the state language as well as in the language of original

documents.

The authority responsible for state registration has no right to require any

other documents except those mentioned above in this Law and has no

right to refuse the founder in accepting his documents for registration. The

resolution on registration or on rejection of registration is taken within two

weeks after the foundation documents have been submitted.

An enterprise is rejected in state registration in writing and rejection is

possible in case of violation by a founder of the procedure of establishing

an enterprise set by the legislation of Turkmenistan and also in case of non­

compliance of the founding documents with the requirements of this Law.

The authority that has registered an enterprise with foreign participation

within three days sends the confirmed copies of foundation documents for

enterprises to be included into the State Register of Enterprises and to the

Taxation Department of the location place of enterprise.

Enterprises with foreign participation obtain the right of legal entity after

being included into the State Register of Enterprises. The information on

including it in State Register of Enterprise is published by the legal entity.

Article 9. Foundation documents of legal entity with foreign

participation

Foundation documents of legal entity with foreign participation must

determine the subject and purposes of activities, the amount of the Charter

fund, share participation, the order of liquidation of a legal entity and also

the other regulations provided by the legislation of Turkmenistan.

All the additions and amendments to the foundation documents of already

registered enterprises with foreign investments and their branches are also

subject to the state registration.

Additions and amendments to the foundation documents come into force

only after their registration and with the written consent of the authority

that issued the permission to make investments in the economy of

Turkmenistan.

Article 10. Appraisal of investment objects

Investment protects and programs, technical­economic calculations on the

construction of objects are subject to the obligatory state expert

examination including the compliance with the standards of seismic

firmness, fire­burn security, ecological and sanitary requirements.

An investor at his discretion can carry out expert examination of the

protects additionally, involving state and other expert organizations on a

contract basis.

Article 11. Limitation of foreign investing

Foreign investing is not allowed into the objects creation and use of which

does not meet the requirements of sanitary, ecological and other standards

set by the legislation of Turkmenistan.

Article 12. Responsibility of foreign investors

The foreign investors are responsible for their actions violating the

legislation of Turkmenistan up to the holding up of their activities on the

territory of Turkmenistan by the resolution of Cabinet of Ministers.

Article 13. Requirements to production of foreign investors

The quality of foreign investors' production and provided services must � correspond to the standards accepted in Turkmenistan. � The legal entity with foreign participation can independently determine the � terms of realization of production (work, services), including prices on it. �

Article 14. Associations of legal entities with foreign participation

Legal entities with foreign participation may voluntarily join into unions,

associations, concerns, industrial, regional and other associations in the

order and on terms provided by the legislative acts of Turkmenistan.

Article 15. Customs privileges

Property imported in Turkmenistan as the contribution of a foreign investor

into the Charter fund of legal entities with foreign participation, and also

property intended for their own material production are exempted from

customs duty and the tax on import.

Property brought to Turkmenistan by foreign employees of legal entities

with foreign participation for personal needs is exempted from customs

duty.

Article 16. Export and import of production

Legal entities with foreign participation which have more than 30% of

foreign investment in hard currency in the Charter fund have the right to

export goods (works and services) of their own production without license

and in the volume adequate to the foreign investor's share in the Charter

fund on the basis of the certificate issued by the authorized body.

Legal entities with foreign participation have the right to import goods

(works, services) for their own economic activities without license.

The order of attribution of goods (works, services) to the goods of own

production of legal entities with foreign participation is established by the

Cabinet of Ministers of Turkmenistan.

After the payment of taxes and duties stipulated by the legislation of

Turkmenistan, the currency income of the legal entity with foreign

participation from he export of it's own production is left at it's disposal.

Article 17. Taxation

Legal entities with foreign participation pay taxes on profit in the amount

and in the order determined by the legislation of Turkmenistan.

For the period of the recovery of initial investments the foreign investor

who has invested the share of more than 30% of hard currency m the

Charter fund of an enterprise is exempted from the tax on dividens and the

enterprise is exempted from the tax on profit.

Enterprises with foreign participation directing their profit to re­investment

are exempted from the taxation in the sphere directed to reinvestment after

the recovery of initial investment.

The other privileges for the legal entities with foreign participation may be

established by the Cabinet of Ministers of Turkmenistan.

Control of regularity of tax payments, financial and commercial activities

is implemented by the tax authorities and authorized organizations of

Turkmenistan.

Article 18. Bookkeeping report and accounts

Bookkeeping (statistical) report and accounts of legal entities with foreign

participation on the territory of Turkmenistan are recorded according to the

rules adopted in Turkmenistan.

Balance appraisal and property accounting of legal entities with foreign

participation are carried out in the way of re­calculation of foreign

currency into the money unit of Turkmenistan according to the special rate

of the Central Bank of Turkmenistan.

Article 19. Obligations security

Property of the legal entity with foreign participation including attracted

borrowed funds, property rights including rights of buildings,

constructions, equipment, except rights of possession of land and other

natural resources can be used as security for all kinds of obligations.

Mortgaged property can be sold by the mortgage holder for the money unit

of Turkmenistan and for foreign currency including auctions, to other legal

entities and physical persons.

SECTION III. STATE GUARANTEES OF FOREIGN

INVESTMENT PROTECTION

Article 20. Legal regimen of foreign investment

Foreign investment on the territory of Turkmenistan have legal protection

provided by this Law, other legislative acts and international agreements

applicable on the territory of Turkmenistan.

Legal regimen of foreign investment and foreign investors activities

directed to the investment implementation cannot be less favorable than

regimen for property, property rights and investment activities of legal

entities and citizens of Turkmenistan.

In case the change of legislation concerning foreign investment, a foreign

investor can require that the Law that was in force at the moment of

investment registration must be used for the period of 10 years.

Article 21. Guarantees of property of foreign investors

Foreign investments in Turkmenistan are not subject to nationalization and

requisition. The property of foreign investor can be confiscated in case of

perpetration by the investor of illegal actions and only in the court order.

Article 22. Guarantees of the property transference right

Foreign investors and foreign employees are given the guaranteed right of

free property transference abroad. The order of transference through the

border of currency, payment documents, securities is determined by the

legislation of Turkmenistan on currency regulation.

Article 23. Guarantees of the use of foreign investor's profit

After paying taxes the profit of the foreign investor remains at his disposal

and can be re­invested on the territory of Turkmenistan.

Foreign investors have the right to open current and settlement accounts in

banks of Turkmenistan in the currency of Turkmenistan and currencies of

other states.

A foreign investor has the right to use the currency of Turkmenistan for

acquisition of foreign currency at the domestic currency market.

Article 24. Guarantees of the restitution of foreign investor's property

In case of termination of investment activities a foreign investor has the

right for the restitution of his investments not later than within 6 months

and also restitution of income in the form of money and goods on the real

market price.

Article 25. Protection of the rights on intellectual property of foreign

investors

The legislation of Turkmenistan provides implementation and protection of

the rights for intellectual property of foreign investors including copyright

for fiction, scientific works, programs for computers and data base, patents

and other rights for inventions and industrial samples, "know­how,"

commercial secrets, service and trade marks, firm names and protection of

these rights from unfair competition.

Article 26. Money compensation of damages and indemnification for

losses of foreign investors

Foreign investors have the right to claim in the court order for money

compensation of damages and indemnification for losses resulting from

illegal actions of authorities or its officials. The amount of damages and

losses is determined according to the current market prices or on the basis

of appraisals of independent auditors.

The damages are compensated and losses are indemnified in the currency

used for the investment or in another currency acceptable for the investor.

From the moment of effect of the right for compensation and until the

compensation payment period the interests are added

SECTION IV. LABOUR AND SOCIAL RELATIONS OF LEGAL

ENTITIES

WITH FOREIGN PARTICIPATION GOVERNED BY LAW

Article 27. Regulation of legal labor relations in enterprises with

foreign participation

Legal labor relations of enterprises with foreign participation, including

clauses of social development and health protection of the staff are

regulated by collective and individual agreements (contracts) in accordance

with the legislation of Turkmenistan and international standards.

The staff of workers and employees of the legal entity with foreign

participation and it's administration may also include foreign citizens.

Article 28. Social insurance and security

Social insurance and security of employees of the legal entity with foreign

participation (with the exception of pensions security for foreign

employees) are regulated by the legislation of Turkmenistan.

The legal entity with foreign participation makes allocations for the state

social insurance and pension security of their workers at the rates

established for enterprises of Turkmenistan.

Allocations for the state social insurance of foreign employees of the legal

entity are made by an enterprise only in case if these workers want to use

the proper forms of social insurance on the territory of Turkmenistan.

Payments for pension security of foreign employees of enterprise are

transferred to the proper funds in countries of their permanent residence

place in the currency and on the terms of these countries.

Article 29. Regulation of the right for intellectual property at the

enterprise with foreign investments

The right for intellectual property between the legal entity with foreign

participation and an employee is regulated by the agreement between them.

The agreement points the obligation of the legal entity to provide for the

financial, industrial and social security of an employee in response to his

concession to the right of the patent possession.

If such an agreement was not signed the patent is issued to the author of the

invention and the legal entity may use this invention on the terms stipulated

in the agreement with the author ­ the owner of the patent.

The patent on the invention, industrial sample and trade mark is issued to

the legal entity by proper authorities after the submission of the mentioned

agreement.

Article 30. Insurance of property and risks

Insurance of the property and risks of legal entity with foreign participation

is implemented at its discretion if it is not stipulated by the current

legislation on the territory of Turkmenistan.

SECTION V. LIQUIDATION OF THE LEGAL ENTITY WITH

FOREIGN PARTICIPATION AND SOLUTION OF ARGUMENTS

Article 31. Liquidation of legal entity with foreign participation

Liquidation of the legal entity with foreign participation, it's branches

(representations) is carried out in the order and in the cases pointed in the

foundation documents and according to the legislation of Turkmenistan.

In case if the founders have not contributed 50% of the initially declared

Charter capital within one year since the date of putting an enterprise in the

State Register of Enterprises, the banks of Turkmenistan terminate

performing operations on the accounts of such enterprises and inform on

this fact the authorities that registered this enterprise for adopting a

decision on it's liquidation.

Registration of liquidation of the legal entity with foreign participation is

implemented by the registration body on the basis of the statement of

liquidation commission and liquidation balance approved by the auditing

organization.

When liquidating the enterprise with foreign participation, its accumulated

assets are subject to taxation according to their real cost.

The legal entity with foreign participation is liquidated after the expiration

of 30 days period, after publishing it by the legal entity in press.

The enterprise with foreign participation is excluded from the State

Register after its liquidation.

Article 32. Solution of disputes of the foreign investor

Disputes of the foreign investor with legal entities and physical persons are

subject to the trials in courts of Turkmenistan or in arbitration by

agreement of the parties.

In case if the international agreement of Turkmenistan stipulates the other

rules of disputes' consideration, the rules of international agreement are

applied.

PRESIDENT OF TURKMENISTAN

SAPARMURAT TURKMENBASHY

With Changes and amendments

By Mejlis on October, 8, 1993


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