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The document ceased to be valid since October 11, 2017 according to article 38 of the Law of Turkmenistan of  October 9, 2017 No. 620-V

LAW OF TURKMENISTAN

of October 8, 1993 No. 893-XII

About the economic free enterprise zone

(as amended on 26-03-2016)

This Law determines general legal and economic basis of the organization and functioning of economic free enterprise zones, govern the relations of the business entities acting in the territory of the economic free enterprise zone.

The law is aimed at providing development of regional economic and scientific and technical potential with involvement of foreign investors and business entities of the non-state sector of economy.

Section I. General provisions

Article 1. Concept of the economic free enterprise zone

The economic free enterprise zone is the specially allocated territory with accurately certain administrative borders and particular legal regime.

The economic free enterprise zone occupies the territory which borders are determined by regulatory legal acts of Turkmenistan.

In the territory of the economic free enterprise zone any kinds of economic, financial and other activities of business entities of the non-state sector of the economy of Turkmenistan and foreign investors except for prohibited by the legislation of Turkmenistan are allowed.

Article 2. Legislation on the economic free enterprise zone

1. The legal relationship arising in the economic free enterprise zone are regulated by this Law and other other regulatory legal acts of Turkmenistan.

2. If the international treaty with participation of Turkmenistan establishes other rules, than those which are determined in this Law then are applied rules of the international treaty.

Article 3. Creation of the economic free enterprise zone

Creation of the economic free enterprise zone and regulation of the mechanism of its functioning are performed by the decision of the President of Turkmenistan.

The economic free enterprise zone in which tourist and the types of activity accompanying it are the main is created in the form of the national tourist area.

The procedure for creation and functioning of the national tourist area is established by the legislation of Turkmenistan on tourism and other regulatory legal acts of Turkmenistan.

Article 4. Creation and liquidation of the company in the economic free enterprise zone

1. Registration of the companies in the economic free enterprise zone is performed according to the procedure, stipulated by the legislation Turkmenistan. Registration of the companies with foreign participation is made by the body authorized by the Cabinet of Ministers of Turkmenistan.

The companies with foreign participation are acquired by the status of the legal entity from the moment of receipt of the certificate on state registration (re-registration) issued by the holder of the Unified state register of enterprises and organizations of all patterns of ownership and managing.

2. Liquidation of the companies in the economic free enterprise zone irrespective of their forms of business is performed according to the legislation of Turkmenistan.

Article 5. Guarantees of the rights and interests of business entities

1. Turkmenistan guarantees observance of the rights and legitimate interests of business entities in the economic free enterprise zone.

2. Nationalization of property of business entities by the state in the economic free enterprise zone is not allowed.

3. In the economic free enterprise zone any discrimination of the companies with foreign investments in comparison with other companies operating in the economic free enterprise zone, and also measures for forced withdrawal of foreign investments (nationalization, requisition, confiscation) or other measures similar for the effects is not allowed.

The sequester of the invested property, except for temporary suspension of the right before repayment by the investor of its obligations is not allowed.

Forced withdrawals can be performed only by a court decision under conditions of payment of compensation, the corresponding actual (market) cost of the withdrawn investments, including the lost profit determined at the time of the actual implementation of forced withdrawal or decision making about the forthcoming measures for implementation of this act.

Compensation is performed in the same currency in which these investments were originally made.

4. The transfer right abroad of the foreign currency earned by them is guaranteed to the foreign investors acting in the economic free enterprise zone after tax payment.

In the economic free enterprise zone foreign investors have the unlimited right to transfer, transfer, pledge, export and the termination of investments of freely convertible currency.

5. Bodies of the public and local authority cannot interfere with free movement of citizens of Turkmenistan between the economic free enterprise zone and other regions of the country.

Section II. Functioning of the economic free enterprise zone

Article 6. Basic principles of activities of business entities

1. The economic relations which the companies located in the economic free enterprise zone enter are under construction on contractual basis. The companies independently create production programs and sell the made products (services). Products of the companies go into their complete disposal.

2. Forming and functioning of the economic free enterprise zone is performed on the basis of self-financing including currency.

3. The business entities acting in the economic free enterprise zone have the right to possess the credits of foreign banks and to attract foreign insurance companies to the conclusion of all types of insurance transactions.

4. State regulation of the funds allocated for consumption is not made for the companies located in the economic free enterprise zone.

5. For foreign investors of condition of economic activity which is connected with search, investigation, operation and production of renewable and non-renewable natural resources, including resources of sea economic zone are determined by the relevant legislation of Turkmenistan.

Article 7. Features of implementation of export-import transactions

1. In the economic free enterprise zone the simplified procedure of export-import transactions providing the following is effective:

export of manufactured goods is not subject to quoting and licensing except for of separate types of products which list is established by the Cabinet of Ministers of Turkmenistan;

the goods are considered made in the economic free enterprise zone if the size of value added of processing exceeds 30 percent of its total cost;

the companies and the organizations have the right to perform goods exchange (barter) and intermediary transactions with the goods and services made in the economic free enterprise zone;

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