Tajikistan Market Entry

Tajikistan Market Entry

Subchapters:

  • Market entry
  • Forms and conditions of operation on the market
  • Marketing and Communications
  • Issues of intellectual property protection
  • Public procurement market
  • Payment terms, payment ethics and resolution of commercial disputes
  • Visas, fees, specific conditions of travel to the territory
  • Employment of citizens from the Czech Republic
  • Fairs and events

Market entry

Business networks and sales channels in the European concept are emerging in Tajikistan. However, it is advisable to enter into contacts with them in cooperation with the Ministry of Economic Development and Trade of Tajikistan or through the Chamber of Commerce and Industry of Tajikistan. Check smber for agriculture and fishing facts of Tajikistan.

It is also possible to establish contacts with a number of business companies. However, it is always important when concluding a specific business case to check whether: – the given product is not among those for which the import or export regulated by the state (special license required, trade reserved only for certain organizations, export, import or transport prohibited; does the partner really have access and authorization to trade in the offered commodity; does the partner have a real possibility to obtain freely convertible currency; has his own foreign exchange account and sufficient domestic currency for exchange; whether it is possible to buy goods or services that can be further traded with it – e.g. on the raw materials exchange of export commodities (but many goods sold on the exchange can only be bought again with freely exchangeable currency).

The use of local representatives is possible and many companies apply this practice. Personal contacts are important for promoting the offered goods in the country. You cannot build your business activities only on sending e-mails and links to websites. If the Tajik businessman is not interested in the offer or contact, he does not respond. He behaves similarly if he does not understand the sent offer. A good knowledge of Russian is necessary for communication with a partner, the use of other languages, both in writing and orally, can cause problems.

Forms and conditions of operation on the market

Registration of a joint venture (SP) in the classic way takes about a month. There are no restrictions on the amount of foreign share in SP, which can reach a full 100%. However, SP registration is difficult and requires time in negotiations with local representatives of the Tajik bureaucracy. SP must be registered by the Ministry of Finance of Tajikistan.

  • The following documents are required:
  • application submitted by the Tajik partner
  • a copy of the founding document and the agreement on the future SP certified by a local notary
  • confirmation of the bank on the solvency of the Tajik partner
  • confirmation of payment of the registration fee to the Republic Foreign Exchange Fund.

These documents are checked and verified by a special commission of the Ministry of Finance of Tajikistan, which meets every two weeks. Based on the certificate issued by the commission, SP can open a bank account.

SP must also be registered by the State Statistical Committee of Tajikistan. The following documents are required:

  • certificate of the Ministry of Finance of Tajikistan,
  • copy of founding contract and agreement,
  • confirmation of payment of the registration fee.

The SP is also obliged to inform the local regional, regional or municipal administrative authorities by official letter of its existence and must be registered with the local tax authorities.

Every SP whose activity involves foreign economic activity (e.g. export) must be registered by the Ministry of Economic Development and Trade (MEO) as a participant in external economic activity. The following documents must be added to this:

  • registration request,
  • a copy of the founding contract and agreement,
  • certificate of the State Statistical Committee,
  • certificate from the Ministry of Finance,
  • three copies of the completed registration form,
  • confirmation of payment of the registration fee to the Republic Foreign Exchange Fund.

A special commission of this ministry will then study all the submitted documentation, and after approval, the entity can be registered and issued a license as a participant in external economic activity.

Establishment of an office, representation

To establish an office, or representatives of a foreign company must submit the following documents to the Ministry of Economic Development and Trade:

  • an application stating the purpose of establishing an office or representation and a description of the company,
  • a copy of the founding document in the Russian language, which must be certified by the consulate of the TJ (or the Russian Federation) in the country where the company is registered,
  • extract from the commercial register of the country where the company is registered,
  • guarantee letter from the company’s bank,
  • confirmation of payment of the registration fee to the Republic Foreign Exchange Fund.

A special commission of the MEO will check the submitted documents of the approved entity and then issue the office or representation with the appropriate license.

More detailed information on the website of the Chamber of Commerce and Industry of Tajikistan: http://tpp.tj/put2011/about_taj_sozdanie_comp_rus.htm or at https://alpschase.com/registratsiya-kompanii-v-tadzhikistane/

Marketing and communication

Advertising and promotional activity can be carried out in Tajikistan using completely standard procedures, i.e. using the press, radio, television, advertising areas in public spaces – billboards, banners, etc. In Tajikistan, posters or electronic banners, etc. are common. In addition, there are various advertising, marketing and consulting companies operating in the country.

As with most Central Asian states, most business transactions will not be concluded without personal presence and contacts in Tajikistan. Advertising and promotional agencies use standard means and forms, such as advertisements in the press, advertising spaces on billboards, spots on television or radio. In recent years, promotion through social networks has become increasingly popular, especially among the young population.

It is recommended to accept local customs, which means especially communication with potential local customers in Russian, and to prepare catalogs and other promotional materials in Russian as well. Advertising of alcoholic beverages is prohibited.

Issues of intellectual property protection

Tajikistan has been a member of the WTO since 2013.

In the field of intellectual property protection, Tajikistan has adopted a number of laws that correspond to world standards. In addition to the Constitution, the Civil Code and international treaties, Tajikistan has adopted special regulations governing this issue. These include the “Inventions”, “Industrial Designs” and “Trade Marks” laws. In accordance with the laws “on inventions” and “on industrial designs”, the Patent Office was established, which was entrusted with the legal protection of inventions and industrial designs. The Appellate Board is created within the framework, which is the first-instance body for resolving disputes arising from inventions and industrial designs. The decision of this body can be challenged in court within 6 months from the issuance of the decision. The law also establishes an institute of patent representatives, through whom the applicant deals with the Patent Office. Representation by a patent attorney is mandatory.

The issue of trademarks is entrusted by the Law “On Trademarks” to the State Service for the Protection of Inventions and Registration of Trademarks. As part of this service, the Appellate Board of Patent Expertise is established at the State Service for the Protection of Inventions and Registration of Trademarks. If the trademark is not registered, the applicant can appeal to the aforementioned Board of Appeal within a period of three months. Its decision can be contested in the same way as for inventions and industrial designs within 6 months of the decision being issued in court.

Public procurement market

The field of public procurement in Tajikistan falls under the State Agency for Public Procurement of Goods, Purchase of Works and Services under the Government of the Republic of Tajikistan. All legislation and relevant procedures are available on their website (in Tajik, English and Russian). Website: https://zakupki.gov.tj/

Currently announced public contracts are published at: https://eprocurement.gov.tj/ru/searchanno

However, international organizations evaluate Tajikistan’s public procurement market and the transparency of the state procurement process somewhat critically. According to them, Tajikistan’s legal regulations governing this area do not meet the modern requirements of a democratic society and work needs to be done to improve them. The Transparent Government Procurement Rating rated the openness and transparency of public procurement of the Republic of Tajikistan in 2019 at 37.88 points out of a possible 100, the lowest score in the region.

Payment terms, payment ethics and resolution of commercial disputes

The payment conditions and payment morals of Tajiks cannot be generalized, they differ from case to case. In any case, similar to other Central Asian countries, it is necessary to calculate with a certain prudence and not be overly trusting. Payment ethics in Tajikistan can be unpredictable, so we recommend asking your partner for payment in advance or one of the secured means of payment. We recommend using EGAP insurance for business, which, however, currently ranks Tajikistan in the riskiest category of countries (7/7) according to the OECD Consensus.

The general trend is high dollarization of the economy and (especially for orders of smaller volume) payment in cash.

The resolution of commercial disputes is handled by the Economic Court of the Republic of Tajikistan, or its territorial components. Disputes can also be resolved through an arbitration court, which is explicitly provided for in the Law “On Foreign Investments in Tajikistan”. The resolution of business disputes can be both lengthy and may not lead to a legally clear (and enforceable) resolution. The outcome of such a dispute will be influenced mainly by widespread nepotism and corruption, so according to European standards, the success of a Czech entity in such a dispute is extremely unlikely. The Embassy of the Czech Republic in Tashkent therefore recommends that relevant provisions be included in contracts in advance so that similar problems do not arise in the future. The Tajik Chamber of Commerce and the Tajik Investment Agency may, in some cases, serve as a mediator of a dispute between the parties.

Visas, fees, specific conditions for traveling to the territory

From January 1, 2022, Tajikistan unilaterally introduced a visa-free regime for more than 20 EU countries, including the Czech Republic (does not apply to citizens of Slovakia). However, the stay may not exceed 30 days. A visa is required for stays longer than 30 days. Citizens of the Czech Republic can make tourist trips to the territory of Tajikistan only with a valid travel document. A valid travel document means a passport or another type of passport (diplomatic, official) with a validity period of at least until the end of the stay in the Republic of Poland. For motor vehicle drivers, a valid international driver’s license and vehicle technical document are required.

Tajikistan does not have its embassy in the Czech Republic. Czech citizens’ applications for Tajik visas are therefore processed by consular offices in third countries (from the point of view of citizens of the Czech Republic, the best solution is to contact the consular section of the Embassy of Tajikistan in Berlin or Vienna). After the entry of the Czech Republic into the EU, Tajik embassies can issue visas to citizens of the Czech Republic on the basis of presenting a valid passport, a photograph and a completed online application (Note: However, it depends on the approach of the individual office or the responsible consular officer whether they also request an invitation from the inviting Tajik entity). Another option for obtaining a Tajik visa is the request of a Tajik natural or legal inviting person (travel agency, company), who will apply for it for a Czech citizen at the Ministry of Foreign Affairs of TJ in Dushanbe. (travel office, company, etc.).

Movement in the capital city of Dushanbe is safe and trouble-free, there is a public transport network and, above all, official taxi services, which have marked cars and must use a taximeter. On the way from the airport, passengers are approached by unofficial taxi drivers with significantly inflated prices, but it is more reliable to take an official taxi with a standard rate (the price from the airport to the hotel in the center is about 15 somoni). Movement outside the capital may be due to poor quality roads, mountain massifs, poor signage, etc. more challenging, so it is better to have a local guide/accompaniment available.

Employment of citizens from the Czech Republic

Local legislation is very liberal regarding the employment of Tajik citizens and foreigners. The head of a foreign company’s sales representative office can be both a foreigner and a citizen of Tajikistan. In the conditions of cheap and relatively qualified labor force, many foreign companies prefer to employ local experts who are of relatively high quality. In recent years, emphasis has been placed on the education of qualified experts.

Officially, local forces can be employed on the basis of a contract that is registered with the Ministry of Foreign Affairs (similar procedure to Uzbekistan). An employee may be paid in somoni.

The quality of health care in the country varies greatly, so most foreigners seek help from foreign doctors, doctors working for the international community and organizations operating in Tajikistan.

However, the situation has been improving in all respects in recent years.

Fairs and events

In ternational Universal Exhibition-Fair “Tajikistan-2022” (Spring) and Business Forum of business circles of Tajikistan and exhibitors – May 19-22, 2022
International Fair “Sughd – 2022” – June 2022
International Exhibition and Business Forum “Bohtar Food – 2022” – June 2022 (food industry)
1st International Exhibition “Healthcare, Pharmacy and Cosmetics” – 2nd half July 2022
1st International Exhibition “Construction and Architecture” – 2nd half August 2022
International Universal Exhibition-Fair “Tajikistan -2022” (Autumn) and Business Forum of business circles of Tajikistan and exhibitors – October 27-30, 2022

The organizer of the mentioned exhibitions is the Chamber of Commerce and Industry of the Republic of Tajikistan, contact: Mirsaidov Dilšod, phone: +992 372 271 378, mobile: +992 900 919 999, e-mail: [email protected] / [email protected], website: http://tpp.tj/

Tajikistan Market Entry