LAW OF TURKMENISTAN

of March 3, 2008 No. 184-III

About foreign investments

This Law determines the legal basis of activities of foreign investors, the companies with foreign investments in the territory of Turkmenistan and is directed to attraction and effective use of foreign investments in Turkmenistan.

Chapter I. General provisions

Article 1. The basic concepts used in this Law

In this Law the following basic concepts are used:

1) foreign investments - attachment of the foreign capital in object of business activity in the territory of Turkmenistan in the form of the objects of the civil laws, including money, securities, other property, property rights having money value, exclusive rights on results of intellectual activities (intellectual property) belonging to the foreign investor and also services and information;

2) foreign investors:

- the foreign legal entity, including its branch and representation in Turkmenistan;

- international organization;

- foreign state;

- the foreign physical person, and also the person without citizenship who at the time of implementation of investments is constantly living in the territory of foreign state;

- the citizen of Turkmenistan having the permanent residence outside Turkmenistan;

3) the company with foreign investments - the company created in the territory of Turkmenistan according to the procedure, established by the legislation of Turkmenistan which belongs to the foreign investor completely or on the basis of equity with legal entities and physical persons of Turkmenistan;

4) direct foreign investments - ownership, acquisition by the foreign investor at least 10 percent of shares (shares, contribution) in authorized capital of the created or newly created company in the territory of Turkmenistan; capital investments in fixed assets of the branch of the foreign legal entity created in the territory of Turkmenistan;

5) the investment project - the reasons for economic feasibility, amount and terms of implementation of capital investments including the design estimates developed according to state standards (regulations) and also the description of practical actions for implementation of investments (business plan). The priority investment project - the investment project which realization is enabled based on the decision of the Cabinet of Ministers of Turkmenistan;

6) payback period of the investment project - term from the date of the beginning of financing of the investment project with use of direct foreign investment about one day when the difference between the cumulative amount of net profit with the depreciation charges and amount of investment costs of the company with foreign investments, branch of the foreign legal entity acquires positive value;

7) reinvestment - implementation of capital investments in objects of business activity in the territory of Turkmenistan by profit (income) of the foreign investor, the company with foreign investments which is got by them from foreign investments in the territory of Turkmenistan;

8) the free economic zone - the economic free enterprise zone, the national tourist area, and also other types of free economic zones, procedure for education which functioning and liquidations it is established by the legislation of Turkmenistan.

Article 2. Legislation of Turkmenistan on foreign investments

1. The legislation of Turkmenistan on foreign investments is based on the Constitution of Turkmenistan and consists of this Law and other regulatory legal acts of Turkmenistan.

2. If the international treaty of Turkmenistan establishes other rules than containing in this Law and other regulatory legal acts of Turkmenistan, then rules of the international treaty are applied.

Article 3. Forms of implementation of foreign investments

Foreign investments are performed in shape:

1) equity in the companies together with legal entities and physical persons of Turkmenistan;

2) creations of the companies which are completely belonging to foreign investors, branches of foreign legal entities or acquisition in property of operating plants;

3) acquisitions of the personal and real estate except for limited in civil circulation to the legislation of Turkmenistan;

4) provisions of foreign loans and loans;

5) acquisitions of rights of the property and non-property rights established by the legislation of Turkmenistan.

Chapter II. State policy in the field of foreign investments and the mechanism of its realization

Article 4. State policy in the field of foreign investments

Development and realization of state policy on attraction of foreign investments, coordination of investing activities, rendering assistance to foreign investors in their activities in the territory of Turkmenistan are performed by the Cabinet of Ministers of Turkmenistan and the state body (daleeupolnomochenny body) authorized by it.

Article 5. Competence of the Cabinet of Ministers of Turkmenistan

Cabinet of Ministers of Turkmenistan:

Develops 1) and implements state policy in the field of the international investment cooperation;

Develops 2) and provides implementation of state programs on attraction of foreign investments;

3) determines priority objects, industries and the territories in which attraction of foreign investments is reasonable, and also makes the decision on implementation of priority investment projects;

4) exercises control of preparation and the conclusion of investment agreements with foreign investors, the companies with the foreign investments connected with implementation of priority investment projects by them;

5) performs other functions on attraction in economy of Turkmenistan of foreign investments.

Article 6. Competence of authorized body

Authorized body:

Develops 1) and implements actions for implementation of state policy, stimulation of attraction of direct foreign investments in economy of Turkmenistan;

2) is coordinated by activities in the field of foreign investments, create effective mechanisms of partnership of the state and business, provide interaction between public authorities of local self-government and foreign investors, the companies with foreign investments;

3) is performed by creation and maintaining databank about the course of preparation and implementation of investment projects with foreign investments, including the states realized in case of equity, including on the basis of use of the foreign credits and grants;

4) will be organized by conducting examination of investment projects with foreign investments, and also carries out their registration;

5) provides to potential foreign investors services of marketing and information and consulting nature, and also gives them necessary practical assistance;

6) exercises control of obligation fulfillment, taken by the foreign investor, the company with foreign investments for implementation of investment projects;

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