Corporate Law at Turkmenistan
Corporate Law in Turkmenistan is governed by a combination of civil, commercial, and investment legislation, reflecting a centrally controlled economy with growing but cautious openness to foreign investment. The main legal framework includes:
🇹🇲 Corporate Law in Turkmenistan: Overview
1. Legal Framework
Key legal instruments governing corporate activity:
Civil Code of Turkmenistan (includes general provisions on legal entities)
Law on Enterprises (2000) – regulates formation and operation of businesses
Law on Joint Stock Companies (2009) – governs companies with share capital
Law on State Registration of Legal Entities (2008)
Law on Foreign Investments (2008)
2. Types of Business Entities
The most common legal forms of companies include:
➤ Individual Enterprise
Sole proprietorship; liability is not limited.
➤ General Partnership (GP)
Partners have unlimited liability.
➤ Limited Liability Company (LLC)
Most common form for SMEs.
Requires minimum one founder.
Liability is limited to the capital contribution.
➤ Joint-Stock Company (JSC)
Can be open (public) or closed (private).
Share capital divided into shares.
Subject to state regulation, especially in strategic sectors.
3. Incorporation and Registration
All companies must be registered with the Ministry of Finance and Economy.
Basic documents include:
Charter (Articles of Association)
Founders’ agreement
Confirmation of registered address
Bank certificate of capital contribution
4. Corporate Governance
LLCs are managed by a general director appointed by the founders or the board.
JSCs have a General Meeting of Shareholders, Board of Directors, and Audit Commission.
For strategic enterprises, state representation may be involved.
5. Foreign Investment Regulation
Governed by the Law on Foreign Investments.
Foreign investors can own 100% of companies, but some sectors (like oil/gas, telecom, infrastructure) are restricted or require government participation.
Investment projects may require approval from relevant ministries.
Investors may receive tax incentives in designated Free Economic Zones.
6. Tax and Compliance
Corporate Income Tax: 8%-20%, depending on type and status.
VAT: 15%
Companies must comply with:
Local accounting standards
Labor Code (employment regulations)
Environmental laws (if applicable)
7. Restrictions and Practical Considerations
Strong state control over strategic sectors.
Bureaucratic hurdles in registration and licensing.
Currency controls and difficulties with repatriation of profits.
Transparency and enforcement of commercial contracts may be inconsistent.
8. Recent Developments
Ongoing initiatives to digitize business registration.
Increased interest in Public-Private Partnerships (PPP) and diversification of the economy.
Reforms aimed at improving the investment climate, though progress is slow.
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