ON INVESTING ACTIVITIES

TURKMENISTAN


(Bulletin of the Mejlis of Turkmenistan, 1992 № 5, article 37)

(As amended by the Law of Turkmenistan
12.04.1993g. № 832-XII of 08.18.2015 and № 274-V)

This Law defines the legal, economic and social conditions of investment activity on the territory of Turkmenistan. It is aimed at ensuring the equal protection of rights, interests and property investment activities, regardless of their form of ownership entities.

CHAPTER I. GENERAL PROVISIONS


Article 1. Investments

Investment refers to all types of property and intellectual values ​​invested in the facilities business and other activities, as a result of which produces a profit (income) or social effect is achieved.
These values ​​can be:
money, special bank deposits, shares and other securities;
Movable and immovable property (buildings, structures, equipment and other tangible assets);
Property rights arising out of copyright, "know-how", experience and other intellectual property;
Right to use land and other natural resources, as well as other property rights;
Other valuables.
Investment in reproduction of fixed assets may be in the form of capital investments.


Article 2. Investment Activity

1. Investment activities understood as a set of practical actions of the state, individuals and legal entities on the sale of investments.
2. Investment activities are based on:
investments made by individuals, economic associations, companies and partnerships, as well as public and religious organizations, other legal entities of Turkmenistan, regardless of ownership;
Public investments made by the Turkmen authorities and control bodies of local executive power at the expense of budget, off-budget funds and borrowed funds as well as state enterprises and institutions at the expense of own and borrowed funds;
Investment by foreign states, corporations and individuals, as well as persons without nationality;
Joint investments made by Turkmenistan and foreign states, corporations and individuals, as well as stateless persons.


Article 3. Objects of investment activity


The objects of investment activity are re-created and modernized fixed assets and working capital in all industries and economic sectors, securities, trust cash deposits, scientific and technical products, intellectual values, other property and property rights.
Prohibited investment facilities, the creation and use of which does not meet the standards of seismic resistance, fire - explosion -Security, sanitary, environmental and urban planning requirements, as well as damages to the legally protected rights and interests of citizens, legal persons and the state.


Article 4. Subjects of investment activity

1. The subjects (investors and participants) of investment activity may be natural and legal persons of Turkmenistan and foreign countries, as well as directly to the state.
2. Investors - subjects of investment activity, making decisions about investing their own, borrowed and borrowed property and intellectual property. Investors may act as depositors, creditors, customers, and also serve as any member of investment activity. 3
. The participants of investment activity are the physical and legal entities of Turkmenistan and other countries to ensure the implementation of investments as executors of orders or on the basis of the investor's instructions.


Article 5. Legislation of Turkmenistan on investment

The relations connected to investment activity in Turkmenistan is regulated by this Law and other legislative acts of Turkmenistan.
Investment activity is regulated:
entities of Turkmenistan to foreign countries - the legislation of the State in which this activity is carried out, the relevant international agreements and international treaties, as well as special legislation of Turkmenistan;
Entities - foreign states in Turkmenistan, the present Law and special legislation of Turkmenistan.

CHAPTER II. IMPLEMENTATION OF INVESTMENT ACTIVITIES


Article 6. Rights of investors

1. All investors have equal rights to engage in investment activity.
Use of investor property and intellectual property to invest in facilities that are not prohibited by the present Law and other legislation of Turkmenistan without any restrictions of their inalienable right recognized and protected by law.

2. The investor determines the volume, direction and efficiency of ongoing investments and at its discretion, draws on a contractual basis of natural and legal persons for the implementation of necessary investments. 3
. According to the decision of the investor the right of possession, use and disposal of investments and the results of their implementation can be transferred to other individuals and legal entities in the manner prescribed by law. Relations between the parties when this transfer of rights governed by the contract.
4. For investment funds in the form of loans, issue in accordance with the legislation of the securities and loans may be involved.
The property investor can use them as security for its obligations. The security deposit is accepted only such property, which is owned by the borrower or belongs to him as a full economic management, unless otherwise provided by legislative acts of Turkmenistan. Mortgaged property in violation of pledges can be implemented in accordance with legislation.
5. The investor has the right to possess, use and dispose of the objects and results of investments, including reinvestments and trade deals on the territory of Turkmenistan in accordance with the law.
The legislation of Turkmenistan can be defined objects, investment in which does not entail the acquisition of property rights to them, but does not preclude the possibility of subsequent ownership or operational control of the investor participation in obtaining profits from the operation of these facilities to investors of other countries - with the provision of the right to export outside of Turkmenistan.
6. The investor has the right to acquire property it needs from individuals and legal entities, directly or through intermediaries at prices and on terms to be determined by agreement of the parties, if it is not contrary to the law, without any restrictions on the volume and range.

Article 7. The relationship between the subjects of investment activity

The main legal document regulating relations between the subjects of investment activity, is a contract (agreement).
The conclusion of contracts, the choice of partners, definition of the obligations of any other conditions of economic relations not contradicting the legislation of Turkmenistan, are the exclusive competence of the subjects of investment activity. Interference by State bodies and officials in the implementation of the contractual relations between the subjects of investment activity is not allowed, except for cases stipulated by this law.

Subjects of investment activity have the right to organize tenders (bids) to attract individuals and legal entities to engage in investment activity.

Article 8. Obligations of subjects of investment activity

1. An investor in cases and order established by the legislation of Turkmenistan, shall:
present bodies authorized by the Cabinet of Ministers of Turkmenistan, a declaration on the amounts and sources of investments carried out by them;
Obtain the necessary permits and approvals of the relevant authorities and special services for capital construction;
Receive the state examination of investment projects in terms of compliance with regulations and seismic resistance, fire and explosion safety, sanitation, environmental and urban planning requirements.
2. Subjects of investment activity are obliged:
comply with norms and standards, establishing the order of which is determined by the legislation of Turkmenistan;
Avoid unfair competition and anti-monopoly regulation to fulfill the requirements;
Meet the requirements of government agencies and officials imposed within their competence;
Submit to the established procedure accounting and statistical reporting. 3
. Each participant of investment activities, performing special types of work requiring appropriate certification artist should be licensed to carry out this type of work. The list of such works and the procedure of their licensing shall be established by the competent authorities of Turkmenistan.

Article 9 Sources of investment activity financing

Investment activity may be due to:
own financial resources of the investor (profit, depreciation, cash savings, the savings of citizens, legal persons and other);
Borrowed funds investors (bond issues, bank loans and budget);
Attracted investor funds (funds derived from the sale of stocks, mutual and other contributions of individuals and legal entities);
Budgetary investment allocations.

CHAPTER III. STATE REGULATION AND MANAGEMENT OF INVESTMENT ACTIVITIES

Article 10. Objectives of state regulation of investment activity


State regulation of investment activity is carried out in order to realize the economic, scientific-technical and social policy of Turkmenistan and should provide preferential treatment to any investors carrying out investment activities in the priority areas of the state. The list of priority sectors, which created favorable conditions for investors to be approved and periodically reviewed by the Cabinet of Ministers of Turkmenistan with the differentiation across regions.

Article 11. Forms of state regulation of investment activity

1. State regulation of investment activity includes the regulation of conditions of investment activities and direct management of public investment.
2. State regulation of investment conditions is carried out by state authorities of Turkmenistan in accordance with the law:
system of tax benefits provided by tax legislation;
Conduct depreciation policy, including accelerated depreciation of fixed assets. At the same benefits for depreciation may be established differentially for individual industries and sectors of the economy, the elements of fixed capital, types of equipment;
Providing financial assistance in the form of grants, subsidies, subventions, budget loans for the development of certain regions, production sectors;
Through the implementation of credit policies, government regulations and standards, anti-monopoly measures, privatization of state property, including unfinished construction, and pricing policies;
Conditions of use of land and other natural resources, ekspertirovaniem investment projects.
As the economic methods of state regulation of investment activity can be used off-budget funds, formed in accordance with the procedure established by the legislative acts of Turkmenistan, as well as funds to support small businesses.
The State creates conditions for the investment activity of individuals, business associations, companies and partnerships, as well as public and religious organizations and other legal entities in the priority directions for the country, as well as to attract them to participate in state investment activities, including the implementation of state target complex programs through the issuance and sale of shares, attraction of share contributions and other measures.

Article 12. Turkmenistan's cooperation with other states


Turkmenistan's cooperation with other states in investing activities in accordance with an intergovernmental agreement, through the convergence of economic legislation and harmonization of policies in the field of investment, development and implementation of joint state target scientific-technical, economic, social, environmental and other programs, of common interest, as well as programs in the aftermath of natural disasters and catastrophes, establishment and use of the fund for regional development and social support of the population and other measures.
Turkmenistan on its territory and establishes the procedure for the implementation of investment protection.

Article 13. The order of decision-making on public investment

1. public investment decisions are based on forecasts of economic and social development of Turkmenistan and schemes of development and distribution of productive forces, target scientific-technical and complex government programs and feasibility studies for determining the feasibility of these investments.
2. Projects target complex programs of national importance are being developed in the manner determined by the Cabinet of Ministers, with the participation of local authorities, relevant state bodies and public organizations. 3
. When planning public investment Turkmen Cabinet of Ministers with the participation of local authorities ensures their compliance with the terms of the investment required for the implementation of target complex programs, and public order in a timely manner.
4. Allocations from the state budget allocated only to the most important building of the state order, the implementation of government programs.

Article 14. Examination and approval of public investment in capital construction

1. The state, interstate and regional projects, the target complex programs carried out at the expense of public investment, subject to mandatory state examination and approval in accordance with the procedure established by the Cabinet of Ministers of Turkmenistan.
In the course of the examination should be given to the conclusion of an investment security each program or project in conjunction with the already agreed programs and projects.

2. Projects, feasibility studies and feasibility study on the construction of facilities regardless of the sources of funding are subject to mandatory state examination in terms of compliance with standards of seismic resistance, fire and explosion safety, sanitation, environmental and urban planning requirements.

Article 15. The order of placement of state orders for capital construction

1. One form of implementation of public investment are state orders for capital construction.
2. State order for capital construction shall be issued for the creation of major production facilities and non-production objects of priority sectors and areas indicating the period of deployment. 3
. State order is usually placed on a competitive basis. During the period of transition to market relations the Turkmen Cabinet of Ministers has the right to establish public contracts, compulsory for all public enterprises and organizations - participants of the investment activity, taking into account the economic profitability of these orders to the enterprises and organizations. Turkmenistan's Cabinet of Ministers approves the scale of benefits and privileges on the priority execution of the state order.
4. Approval of the state order for the construction of objects is made after approval of their accommodation with the local executive authorities in the manner prescribed by the legislation of Turkmenistan.
5. Any participant of investment activity has the right to participate in tenders for state orders for capital construction.
6. Acceptance into operation of the state order of objects made in the order established by the Cabinet of Ministers of Turkmenistan.
7. Final settlements with contractors for the projects of the state order is made after approval of the acts of the State Commission.

Article 16. The procedure of public investment in securities, deposits, movable and immovable property and other valuables

1. The volume of public investment in securities, deposits, movable and immovable property and other assets shall be approved by the Cabinet of Ministers of Turkmenistan.
2. Investment projects in the above areas are the state examination in the manner prescribed by the Cabinet of Ministers of Turkmenistan.

Article 17. The activities of local authorities for the implementation of public investment

Local executive authorities carried out the investment in accordance with this Law and the Law of Turkmenistan "On Property".



Article 18. Pricing in investment activity

The cost of goods (works, services) in investment process is determined primarily at bargain prices, including on the results of tenders (auctions), and on construction projects financed by the state budget of Turkmenistan for the estimated prices with subsequent indexation. Negotiable price in construction is defined as using the recommended standards and current estimated prices to compensate for the additional costs.

CHAPTER IV. GUARANTEES OF RIGHTS AND PROTECTION OF INVESTMENTS

Article 19. Guarantees of rights of investment activity subjects

1. Turkmenistan guarantees the stability of the rights of subjects of investment activity. In the case of the adoption of legislative acts, provisions which restrict the rights of subjects of investment activity, the relevant provisions of these acts can not be enforced earlier than 10 years from the date of publication.
2. In the event of acts of public authorities that violate the rights of investors and participants of investment activity, the losses, including lost profit, caused by the subjects of investment activity as a result of these acts, they shall be compensated by that body under the court decision. In case of insufficiency of funds in this state organ damage is compensated accordingly by the Cabinet of Ministers of Turkmenistan.
State bodies and their officials shall not interfere in the activity of the subjects of investment activity, except in cases when such interference is permitted by law and is carried out within the competence of the bodies and officials.
No one has the right to restrict the rights of investors in selecting investment targets, except in cases specified by law. 3
. Termination or suspension of investment activity by decision:
investors while investors pay damages participants
investment activities;
A competent government authority.
The decision of the state body of the termination or suspension of investment activity may be adopted by reason of:
ads in accordance with the law of the investor bankrupt due to insolvency;
Natural disasters, accidents and other similar cases;
State of emergency;

If in the process of investment activities it became clear that its continuation would lead to a breach of the legislation sanitary, environmental and other regulations, the legally protected rights and interests of citizens, legal persons and the state. The procedure for compensation to participants of investment activity in this case is determined by the legislation of Turkmenistan.

Article 20. Responsibility of subjects of investment activity

Failure to comply with contractual obligations of investment activity subjects bear property and other responsibility stipulated by laws and existing agreements. The payment of fines and penalties for violation of contract terms, as well as compensation of damages is not exempt the guilty party from its obligations, unless otherwise provided by law or contract.


Article 21. The responsibility of the implementation of the order states

1. In case of failure or improper fulfillment of the commitments made to implement the order of the State or assigned to the legitimate responsibilities of the enterprise and the organization shall be financially liable for its obligations to the subjects of investment activity. The perpetrators of this officials are personally responsible in accordance with current legislation.
2. State authorities have a mutual financial responsibility for failure or improper fulfillment of obligations related to the implementation of government orders, offsetting damages, including lost profits. 3
. Participants of investment activities shall be financially responsible to the investor - Turkmenistan for the implementation of government orders in the manner prescribed by law and existing agreements.


Article 22 Investment protection

1. Turkmenistan guarantees the protection of investments, regardless of ownership and nationality. Investment protection is provided by the legislation of Turkmenistan. This ensures equal treatment for all investors, excluding the application of discriminatory measures that would impede the investment management, use and elimination, as well as provide for conditions and procedures for the export of investment results.
2. Investments can not be nationalized, expropriated or it can not be applied measures of equal effect. Such measures can only be applied on the basis of legislative acts of Turkmenistan with compensation to the investor in full for losses caused in connection with the termination of the investment activity.

Bug or special bank deposits purchased by investors, shares and other securities, payments for the purchased property or lease rights in cases of withdrawal in accordance with the laws of Turkmenistan compensated investors, except for amounts which were used as lost as a result of actions of investors or taken with their participation. 3
. Disputes arising as a result of investment activities are considered relevant by the courts.
4. The debate about non-fulfillment or improper fulfillment of obligations relating to investment activities between Turkmenistan and foreign countries, shall be resolved through negotiation or the courts determined by interstate treaties (agreements).
5. Investments may, in the cases provided for by law, must be insured.
This Act shall come into force from the day of its publication in the press.


President of Turkmenistan Saparmurat Niyazov

Mountains. Ashgabat
May 19, 1992.
Number 698-XII