Category: Other financial sites. Country: Turkmenistan.
The government is anxious to attract foreign investments to meet the huge needs for capital and technology to develop its oil and gas industry. In 1992, the Government developed a list of goods and services whose import would be subject to licensing or prohibition. The goods and services included on the list do not constitute a barrier to US or other foreign exports. Turkmenistan has also proven its commitment to the growth of its energy market by implementing favorable foreign investment laws. In 1993, Turkmenistan enacted the мLaw on Foreign Investment.о It defines opportunities for foreign investment, and allows foreign investors to act as depositors, creditors and buyers. It protects foreign investors against changes in Turkmen legislation, and provides equal protection for property. Turkmenistan is one of the few countries with substantial tax incentives for foreign investment. Investors are fully exempt from a profits tax the first year if at least 70 percent of their total revenue comes from production or processing of agricultural goods, production of consumer goods, or production of construction materials. This profits tax exemption can also be extended for up to three years. Most recently, a comprehensive hydrocarbon law was passed in March 1997. This law regulates projects, licenses and contracts with foreign companies. It sets out duties for the government, such as defining a development strategy and organizing statistical reports on hydrocarbon resources. The law brings Turkmenistanнs regulations into line with international petroleum projects standards. Several major companies have taken advantage of the positive investment environment in Turkmenistan in other sectors as well. Turkmen farmers recently received $73.6 million worth of farm equipment from U.S. John Deere Company. A Japanese consortium, led by JGC Corp., Itochu and Nisso Iwai Corp., are upgrading refinery facilities and adding a polypropylene plant with an export potential of over $100 million annually. Fueled by continued reforms and investment in the energy sectors, the Turkmen economy is expected to more than double by the year 2002. Reforms in privatization launched soon after the countryнs independence have led to measured but effective private economy growth. The private sector now employs approximately 22 percent of the labor force and represents 18 percent of the Turkmenistan GDP. Just this year, a law was passed privatizing state owned and collective farms. The law defines the basic legal principles for transferring land to the ownership of private citizens for the production of agricultural commodities.
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