Turkmenistan legal and accounting and tax considerations in 2024

1. Turkmenistan companies with foreign involvement incur a corporate tax rate of 20%. A rate of only 8% applies to companies without foreign investment. Individual income is taxed at a rate of 10% and dividends paid to shareholders are taxed at a rate of 15%;
2. Annual audited financial statements and corporate tax return is submitted to the Turkmenistan Tax Office. Audit exemptions are rare and applications tend to be unsuccessful;
3. Resident companies and individuals settle their tax liabilities either by monthly payments, third party withholdings, or a combination of both;
4. Resident Turkmenistan companies are required to withhold tax at a rate of 15% from the payments to foreign companies unless reduced by a double taxation treaty. However, Turkmenistan’s 24 double tax treaties minimize withholding tax for service fees, dividends, interest, royalties, and branch profits;
5. An individual is considered tax resident if he is present in Turkmenistan for at least 183 days per year;
6. It is important our Clients’ are aware of their personal and corporate tax obligations in their country of residence and domicile; and they will fulfill those obligations annually. Let us know if you need Healy Consultants’ help to clarify your annual reporting obligations;
7. A Turkmenistan company must make a social security payment amounting to 20% of total computed payroll;
8. A Turkmenistan company must contribute to the development fund of the city of Ashgabat (if the company’s legal address in Ashgabat) amounting to 0.5% of the profit used for computing the profit tax;
9. A Turkmenistan branch office must pay an earmarked contribution to the Agricultural Development Fund of Turkmenistan. The contribution is 3% of the income used for the calculation of corporate profit tax. Depending on where the branch office is registered in Turkmenistan, it may also be subject to up to 1% local tax;
10. Registration for tax and pension funds should be completed in the same region in which the branch office is registered in Turkmenistan;
11. A Turkmenistan branch office must report to the Turkmenistan tax authority on the income paid to the parent company’s bank account, as it is considered income from activity in Turkmenistan.

Legal and compliance

Healy Consultants Compliance Department guides our Client through legal and tax obligations.

1. The minimum amount of paid up capital to be invested in a foreign-owned company is US$10,000. 50% of the share capital must be deposited in a local bank before Turkmenistan company incorporation, while the rest must be invested within one year of incorporation. There must be at least one shareholder and one director;
2. All business entities must submit annual audited financial statements by March 31^st of each year;
3. A company secretary is not required to set up company in Turkmenistan; however, we recommend one be appointed to ensure compliance with the corporation act;
4. Export of i) fertilizer ii) non-ferrous metals iii) products made from non-ferrous metals is prohibited in Turkmenistan;
5. For Turkmenistan company incorporation, the Turkmenistan’s Government requires foreign companies to have 70% of their employees be local citizens;
6. The process of deregistering a company is dictated by the Government. This process will take a minimum of 6 months. Healy Consultants fee to project manage company de-registration is US$1450. During this 6 months period it is mandatory to maintain a resident company secretary and a legal registered office.