Turkmenistan Market Entry

Turkmenistan Market Entry
Basic data
Capital Ashgabat
Population 6.27 million
Language official language Turkmen, widespread Russian
Religion Islam 93%
State system presidential republic
Head of State Serdar Berdymukhammedov
Head of government Serdar Berdymukhammedov
Currency name manat
Travel
Time shift +3 hours (+4 in winter)
Economy 2021
Nominal GDP (billion USD) 89.1
Economic growth (%) 3.5
Inflation (%) 15.2
Unemployment (%) 4.5

Turkmenistan is a country with an area of ​​488.1 thousand km 2, of which 390 thousand km 2 (80%) is desert; irrigated land million ha. The climate is mildly continental, the country is predominantly desert with intensive agriculture in irrigated oases and considerable mineral wealth in the form of natural gas and oil. The main agricultural crops include cotton (mainly for export) and wheat (for internal consumption). Although agriculture accounts for approximately 10% of GDP, it continues to employ almost half of the working population. Check smber for agriculture and fishing facts of Turkmenistan.

It is the most closed country in Central Asia, where authoritarian President Gurbanguly Berdymuchammedov has been the head of state since 2006. In February 2022, he announced that it was time to hand over power to a younger generation and called a special election. According to experts’ expectations, his son Serdar Berdymuchammedov became the main candidate, who won 97% of the votes in the March 12, 2022 elections and became the new president of Turkmenistan. However, no fundamental changes in the course of Turkmen politics are expected in the near future. The overall prospects for improving the country’s economic freedom are also not very encouraging, mainly due to persistent corruption, a limited education system, government abuse of revenues from natural gas and oil extraction, and last but not least, Ashgabat’s reluctance to adopt market-oriented reforms. Much of Turkmenistan’s economic statistics are not available.

The country has been negatively affected by the Covid-19 pandemic in recent years, although it has not officially acknowledged a single case of infection in the country, and the topic of the coronavirus is officially taboo in Turkmenistan. According to unofficial reports, the pandemic hit the economy and the standard of living of the population quite strongly, and also contributed to the country’s even greater closure from the outside world. Former President Gurbanguly Berdymukhammedov managed to unify the dual exchange rate of the domestic currency during his government, reduce the state subsidy for gasoline or, for example, he supported the development of tourism by creating a tourist zone on the coast of the Caspian Sea. Although foreign investments are supported and in the long term there is a certain improvement in macroeconomic policy, strong bureaucratic obstacles and the isolation of the country prevent greater encouragement of foreign business activities.

This summary territorial information is processed for the country that is so-called accredited. The information is provided in an abbreviated form.

Basic conditions for the use of Czech goods on the market

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

It is possible to establish contacts with a whole range 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 material exchange of export commodities).

The use of local representatives is possible and many companies apply this practice because it helps them maintain contacts in the market. Personal contacts are important for promoting the offered goods in Turkmenistan. You cannot build your business activities only on sending e-mails and links to websites. If the Turkmen 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

The Act on Enterprises of 15 June 2000 enables the establishment of the following business entities:

  • state enterprise
  • individual entrepreneur
  • cooperative enterprise
  • joint venture
  • enterprises of non-governmental public organizations
  • economic community
  • joint-stock company.

The size of the registered capital informally must not be less than 100 thousand USD (sometimes even 200 thousand USD). The law states an amount of 5 thousand manats, but this is more of a formal figure. The registration fee is 8 thousand manats (2800-3000 USD) and is paid after the decision of the State Registration Commission. Founding documents can be prepared either by the founders themselves, or by agreement with them by third parties (consulting centers, law firms, etc.). It is possible to contact the nearest division of the Chamber of Commerce and Industry, whose specialists will draw up the necessary documents on a contractual basis. Information on the basic documents and rules for business registration in Turkmenistan is at www.turkmenbusiness.org (TM Business Law).

Marketing and communication

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

Effective advertising and promotion in TM for Czech companies is their participation in specialized exhibitions and fairs. An overview of these promotional events for the relevant year is published on the website of the TM Chamber of Commerce and Industry. The embassy also supports Czech companies if they are interested in participating in trade fairs.

Issues of intellectual property protection

In the field of intellectual property protection, Turkmenistan has adopted several laws corresponding to international standards. In addition to the Constitution, the Civil Code and international treaties, Turkmenistan has adopted special regulations governing this issue. These include the “Inventions”, “Industrial Designs” and “Trade Marks” laws. Turkmenistan has acceded to the following international treaties:

  • Convention Establishing the World Intellectual Property Organization
  • Paris Convention for the Protection of Intellectual Property
  • Patent Cooperation Agreement
  • Eurasian Patent Convention
  • Protocol to the Madrid Agreement on the International Registration of Trade Marks

Practical compliance, or however, enforcement of intellectual property rights protection in Turkmenistan can be very problematic.

Public procurement market

The following rules apply to public contracts: In the case of supplies under a single contract exceeding the equivalent value of USD 100,000, it is possible to implement the contract only on the basis of a tender procedure. If the value of the supply under one contract is less than the equivalent of USD 100,000, the supplier is selected on the basis of a tender procedure. The tender procedure is carried out by a commission established by the customer, if the value of the contract does not exceed the equivalent of 1 million USD. If it exceeds this value, the composition of the commission must be approved by the government. Tenders are open or closed. Anyone can participate in open tenders, closed tenders are exceptional and are announced with the approval of the government, or the relevant vice-chairman. The notice of the tender will be announced by the labor body no later than 30 days in advance, in the mass media. This is followed by the submission of a tender offer and the sending of tender documentation to those interested in participating in the tender. The tender documentation must contain: instructions for the tender participant, technical part, commercial part, preliminary draft of the contract. After that, the labor body will make a preliminary qualification selection, which will be approved by the tender committee. The rating follows. The results are published within three days in mass media. Tenders financed by foreign loans are carried out according to the rules of the World Bank, or the international bank providing the loan. The results are published within three days in mass media. Tenders financed by foreign loans are carried out according to the rules of the World Bank, or the international bank providing the loan. The results are published within three days in mass media. Tenders financed by foreign loans are carried out according to the rules of the World Bank, or the international bank providing the loan.

State and private tenders are advertised on the website:

https://turkmenportal.com/catalog/tendery-turkmenistan

Payment terms, payment ethics and resolution of commercial disputes

Payment ethics in Turkmenistan can be unpredictable, so we recommend asking your partner for payment in advance or one of the secured means of payment (e.g. documentary letter of credit). We recommend using EGAP insurance for business, which, however, currently ranks Turkmenistan in the riskiest country category (7/7) according to the OECD Consensus.

It is necessary to take into account that this is a very corrupt environment!

The system of judicial power is governed by the Law of Turkmenistan On Courts of 25/09/2012 and consists of the following instances:

  • Supreme Court Court of Arbitration
  • Ashgabat City Court
  • Courts of velayats, etraps, shakhers, obas and gengeshes (regional, district and lower level)
  • Military courts

The basis of Turkmen commercial justice is the Court of Arbitration, located in the capital city of Ashgabat. These courts are competent to resolve economic disputes between business entities as a court of first instance, unless the law provides otherwise. Disputes under this law shall be resolved under Turkmen law. It consists of the chairman and judges of the Arbitration Court.

The arbitration court in its activity:

  • assesses and resolves disputes arising from economic and legal relations in the field of management and other matters that fall within its competence; considers cases of bankruptcy of legal entities and natural persons;
  • studies and summarizes the practice of applying judicial and other normative legal acts regulating relations in the field of business and other economic activities;
  • processes proposals to improve laws and other normative legal regulations governing relations in the field of business and other economic activities;
  • organizes work on the discussion of citizens’ proposals, requests and complaints and their acceptance before the courts;
  • decides within its competence on issues arising from international treaties of Turkmenistan;
  • exercises other powers given to him by the legislation of Turkmenistan.

Visas, fees, specific conditions for traveling to the territory

Czech citizens are subject to a visa requirement. Since there is no Turkmen embassy in the Czech Republic, a visa application is usually submitted to the Turkmenistan Embassy in Vienna.

In terms of general crime, Turkmenistan can be characterized as a relatively safe country. The security situation in Ashgabat is very stable, moving around the city on the larger lighted streets is safe even after midnight, which is also due to the high number of police officers on the streets.

Detailed information on TM visas is available on the MFA TM website www.mfa.gov.tm

Employment of citizens from the Czech Republic

The basic labor law regulation in Turkmenistan is the Labor Code. As for the employment of foreigners, they can work on the territory of Turkmenistan on the basis of a permit to obtain foreign labor, which is issued to a Turkmen employer.

The employer is obliged to submit the following documents:

  • request
  • draft employment contract or other documents confirming a preliminary agreement with foreign citizens or foreign companies on the intention and conditions of obtaining foreign specialists
  • questionnaire of a foreign specialist with a photo
  • proof of payment of the permit fee
  • medical certificate of freedom from HIV infection

According to official statistics, the minimum monthly wage in Turkmenistan is set at 1,050 Turkmen manats (approx. 1,450 CZK).

Fairs and events

Traditional international fairs in Turkmenistan include, for example:

  • AgroPack Turkmenistan – animal and plant production, agricultural equipment, mineral fertilizers, packaging equipment
  • Turkmen Construction – construction industry, construction materials, equipment
  • Turkmen Energy – energy, energy security, electric power, equipment
  • Turkmen Health – healthcare, medicines, medical devices and products
  • OGT Expo – oil and oil products, gas, oil and gas industry
  • TurkmenTel – networks and connections, IT-technology, information security, communication technology

However, the dates for the current exhibition season have not yet been set.

Detailed information in case of interest: Chamber of Commerce and Industry of Turkmenistan, tel: + 902 122 726 162

 

Practical telephone numbers (emergency services, police, firemen, information lines, etc.)

Firefighters – 01

Police – 02

Emergency room – 03

Important web links and contacts

www.turkmenistan.gov.tm – news, commentary, economy

www.mfa.gov.tm – Ministry of Foreign Affairs of Turkmenistan

www.cbt.tm – Central Bank of Turkmenistan

www.cci.gov.tm – Chamber of Commerce and Industry of Turkmenistan

Information about the websites of other TM state institutions can be found, for example, at www.wiki-tm.com and russia.tmembassy.gov.tm.

Turkmenistan Market Entry