Membership
No
Customs legislation
There are no legal limits on the foreign ownership or control of companies. In practice, the government has only allowed fully-owned foreign operations in the oil sector. Foreigners may establish and own businesses and also engage in business activities within the boundaries of domestic laws, but revenue repatriation is very challenging as currency conversion remains difficult in the country. The nature of government-awarded contracts may vary in terms of the requirements for ownership of local enterprises. All contractors operating in Turkmenistan for a period of at least 183 days a year must register with the Main State Tax Service. National accounting and international financial reporting standards apply to foreign investors. In the energy sector, Turkmenistan precludes foreign investors from investing in the exploration and production of its onshore gas resources. All land in Turkmenistan is government-owned. The State Migration Service of Turkmenistan requires that citizens of Turkmenistan make up 90 percent of the workforce of a company owned by a foreign investor.
Customs regulation consists of Customs Code of Turkmenistan last adopted in 2011. Customs control and rates applied to importing goods to Turkmenistan depends on country-origin of goods
Tax regimes
Personal Income Tax. The general PIT rate is 10%, which applies to employment income, business and professional income, interest, royalties, income from immovable property, and capital gains. The tax is generally withheld at source. In the case of business and professional income, the tax is levied on a self-assessment basis.
Corporate Income Tax. Branches of foreign legal entities are subject to a 20% CIT, whereas Turkmen legal entities are subject to an 8% CIT (or 2% CIT in cases where the company qualifies as a small or medium enterprise).
Companies involved in oil and gas operations are subject to a 20% CIT, irrespective of the legal status/ownership structure.
Entities where the government holds more than 50% of shares are subject to CIT at the rate of 20%.
Other taxes. VAT is generally payable at the rate of 15%. The import of goods into Turkmenistan is generally subject to 2% customs duty. Property tax in Turkmenistan generally applies at the rate of 1% on the average annual net book value of fixed assets and average annual value of tangible assets used for business purposes and located in Turkmenistan. Pension insurance is payable by employers at 20% of the total remuneration provided to local employees. Natural or associated gas extraction is taxed at 22%, and crude oil extraction is taxed at 10%. Tax rates for other mineral resources vary depending on profitability (internal rate of return) from 0% to 50%
Regulatory framework (investors’ protection)
Tight administrative controls and the public sector’s dominant role in economic activity have hindered private sector development. Despite the growth of the private sector’s share in segments of the economy, public sector and state-owned monopolies continue to govern the economy and the formal labor market. Apart from the hydrocarbon sector, foreign direct investment (FDI) remains limited
GDP annual growth rate
The Gross Domestic Product (GDP) in Turkmenistan was worth 42.36 billion US dollars in 2017. The GDP value of Turkmenistan represents 0.07 percent of the world economy. GDP in Turkmenistan averaged 13.22 USD Billion from 1987 until 2017, reaching an all time high of 43.52 USD Billion in 2014 and a record low of 0 USD Billion in 1991
We can see a stable growth of the Turkmen GDP until the year 2014. After that there is a relatively sharp decline in the two following year. The investigation on this showed the following result: “ASHGABAT, Feb 8 (Reuters) - Turkmenistan’s gross domestic product growth slowed to 6.2 percent last year from 6.5 percent in 2015, state television reported on Wednesday, citing final official data.
Economic growth in the gas-exporting Central Asian nation has been slowing since 2015 as energy prices dropped and Russia halted imports of Turkmen gas, leaving China as its main buyer. (Reporting by Marat Gurt; Writing by Olzhas Auyezov; Editing by Larry King)”
It shall come back and surpass the last highest point of its GDP of 2014 (43.52) by the end of this quarter, reaching the amount of 44.90 USD Billions and is expected to growing up to 49.70 USD Billions by the year 2020 according to TRADING ECONOMICS.
We can see how much the Turkmen economy depends on oil. The sole price downfall in the oil market has caused the GDP of the country slow down significantly for to consecutive years. Reasonably, we can argue, that this is not a stable and successful economic model. More diversified economy would be preferable to successfully overcome shocks in certain world markets.
Income growth
The Gross Domestic Product per capita in Turkmenistan was last recorded at 16389 US dollars in 2017, when adjusted by purchasing power parity (PPP). The GDP per Capita, in Turkmenistan, when adjusted by Purchasing Power Parity is equivalent to 92 percent of the world's average. GDP per capita PPP in Turkmenistan averaged 8291.35 USD from 1990 until 2017, reaching an all time high of 16389 USD in 2017 and a record low of 4202.50 USD in 1997
We see a steady growth of income (GDP per capita) in Turkmenistan. It is expected to keep growing by at least 2020 up until 7900.00 USD according to TRADING ECONOMICS.
Main investors and trading partners
The government selectively chooses its investment partners; making a strong relationship with a government official is often essential to achieving commercial success. Turkmenistan is actively collaborating with People`s Republic of China, especially with China Development Bank and China Petroleum Corporation; Asian Development Bank, European Bank of Reconstruction and Development.
Credit Rating
September 09, 2010 - Moody's Investors Service has today withdrawn all its ratings and outlook on the Government of the Republic of Turkmenistan.The credit rating has been withdrawn because Moody's Investors Service believes it has insufficient or otherwise inadequate information to support the maintenance of the credit rating
No ratings from S&P Global
Inflation rate, CPI
The inflation rate in Turkmenistan was recorded at 6.50 percent in 2017. Inflation Rate in Turkmenistan averaged 11.99 percent from 1997 until 2017, reaching an all time high of 83.70 percent in 1997 and a record low of 0.10 percent in 2009
Turkmenistan’s gas reserves are estimated to be the world’s fourth largest, representing about 10 percent of global reserves. In addition to cotton and natural gas, the country is rich in petroleum, sulfur, iodine, salt, bentonite clays, limestone, gypsum, and cement—all potential inputs to chemical and construction industries.
China remains the largest market for Turkmenistan’s hydrocarbon exports. In an attempt to diversify gas exports, the country is embarking on the construction of the Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline. In addition, the potential resumption of gas supplies to Russia, as well as the possibility of exporting gas to the South Caucasus by using gas swaps with Iran, would help diminish the risk of overreliance on a single client.
Turkmenistan’s positive economic outlook is based on the assumptions that global energy demand will remain strong and China’s economy will not falter. Both expectations carry significant uncertainties, however. Policies aimed at fostering private sector development and economic diversification could gradually promote non-hydrocarbon sectors and contribute to inclusive growth
Main export partners are: China (70%), Turkey (5.3%), Italy (5.3%), Afghanistan (4.5%), and Russia (4.1%). Exports in Turkmenistan increased to 7457.53 USD Million in 2017 from 6963.89 USD Million in 2016. Exports in Turkmenistan averaged 4773.60 USD Million from 1992 until 2017, reaching an all time high of 12394.90 USD Million in 2014 and a record low of 64.34 USD Million in 1992
Main importing partners are: Turkey (26.4%), Russia (10.5%), Japan (8.6%), Germany (8.2%), South Korea (7.8%), China (7.2%), and Italy (5.2%). Imports in Turkmenistan decreased to 2254.56 USD Million in 2018 from 4570.95 USD Million in 2017. Imports in Turkmenistan averaged 3838.30 USD Million from 1992 until 2018, reaching an all time high of 10166.68 USD Million in 2014 and a record low of 141.49 USD Million
Ahal: Area: 97,160 km², population – 939 700. Akhal velayat is an important region of Turkmenistan, having such major industries as natural gas extraction, the production of building materials and textile production - the biggest in the world factory of denim, knitted and cotton fabrics has been into operation in Geokdepe and Kaka in recent years. Two Special Economic Zones located in Ahal are Ashgabat-Annau and Serakhs.
Asgabat: Area: 470 km², population - 1 032 000. The principal industries are cotton textiles and metal working. It is a major stop on the Trans-Caspian railway. More than 43 large and 128 medium-sized industrial enterprises along with over 1,700 small industrial facilities are located in Ashgabat and its suburbs. The most important are “Ashneftemash”, “Turkmenkabel”, “Turkmenbashi Textile Complex”. SEZ in Ashgabat is Ashgabat-Abadan.
Balkan: Area: 139,270 km², population – 553 500. The capital is Balkanabat; other industrial centers are Turkmenbashi, Khazar and Serdar. In the field of industrial development, the priority is given to the fuel-energy complex. Chemical and food industries are also of a great importance. The Balkan Region has significant energy reserves, which account for 94% of Turkmenistan's natural gas production and 12% of its petroleum production. It also generates 18% of the country's electric power. Two SEZ are located there: Bakharden-Serdar and Okarem-Hazar. Recently the major gas mains such as Turkmenistan-Iran and Bereket-Serdar have been put into operation. These are a number of industrial enterprises - porcelain works, oil refinery and flour mill in Balkanabat. Large-scale restoration works have been carried out at oil gas deposits of Burun and Korpedzhe. Balkan velayat is well known for its spinal rehabilitation sanatorium in Mollagara. This region has good prospects in the field of tourism for ancient architectural monuments and excellent seacoast area.
Dasoguz: Area: 73,430 km², population – 1 370 400. The administrative centre is Dashoguz city. Among major enterprises is the cotton spinning mill and construction materials. In the field of agriculture, the velayat is a big supplier of cotton, vegetables, fruits, gourds and grain cultures.
Lebap: Area: 93,730 km², population – 1 334 500. SEZ in this region is Turkmenabat-Seidi. China-Turkmenistan gas-pipeline started from this region. Lebap Regions Bagtiyarlik natural gas field is main supplier of Chinese natural gas. The capital is Turkmenabat, other industrial towns are Atamurat, Magdanly and Seydi. The main industrial are gas, food, textile and chemical branches-ammonium and carbomide works, a modernized gin in Turkmenabat.
Mary: Area: 87,150 km², population – 1 480 400. Here is located Mary-Baýramaly SEZ. The administrative centre is Mary city. The following branches represent the industry of Mary province: production of electric power, mineral fertilizers, cotton fabrics, knitted articles and others. The first in the country sugar refinery has been recently put into operation in the city of Mary
Ministry of Foreign Affairs: https://www.mfa.gov.tm/en
Ministry of Finance and Economics: http://www.minfin.gov.tm/ru
Ministry of Trade and Foreign Economic Relations: http://mintradefer.gov.tm/index.php/en/
State Customs Service: https://www.customs.gov.tm/en
The State News Agency: http://tdh.gov.tm/en/
The Union of Industrialists and Entrepreneurs: https://www.tstb.gov.tm/
State Committee For Statistics: http://www.stat.gov.tm/ru/ba-sahypa/
Central Bank of Turkmenistan: https://www.cbt.tm/en/index.html
Ministry of Energy: http://www.minenergo.gov.tm/en
State Bank for Economic Affairs: http://www.tfeb.gov.tm/index.php/en/
Chamber of Commerce and Industry: https://www.mfa.gov.tm/en/essential-websites
National Center of Trade Unions: http://www.tradeunions-kardesh.gov.tm/ru
State Commodity and Raw materials Exchange: https://www.exchange.gov.tm/en/