Development of the legislation in Tajikistan is the evidence of authorities’ commitment to reforms and their support of all forms of entrepreneurial activities. Enhancement of the legislation, introduction of changes and amendments in the Tax and Customs Codes are targeted to bring the national economic legislation in compliance with international standards, including guarantees of protection of investors’ and entrepreneurs’ rights.
By the new legislation, enterprises supported by foreign investments are exempted from the income tax for the period from 2 to 5 years, depending on the amount of invested capital.
There are no limitations on foreign direct investments in Tajikistan. Any current account transactions are fully convertible. Interest rates are liberalized. The exchange rate is regulated and floating.
Legal guarantees for investors and protection of investments:
• equal rights for foreign and domestic investors;
• non-discrimination policies for investors;
• the right to select the most favorable legal conditions during five years;
• guarantees of stability of signed agreements;
• guarantees of rights for using incomes, and free movement within the country;
• non-interference of the state authorities in investor’s investment activities;
• guarantees of investor’s rights against nationalization and requisition;
• guarantees of investor’s right on export of equipment and information;
• guarantees of rights on the use of natural resources.
Tax and customs preferences:
1) Exemption from customs and VAT
• import of industrial-manufacturing equipment and spare parts;
• import of personal property for private needs for foreign employees of enterprises with foreign investments;
• import of commodities for implementation of targeted projects approved by the Government of the Republic of Tajikistan;
• import of commodities for construction of hydropower plants, which are considered the most important for Tajikistan;
• import of items for private needs for newly created enterprises involved in the full cycle of processing of raw cotton.
2) Exemption from VAT
• financial services;
• interest on financial leases;
• export of commodities, apart from processed cotton, cotton yarn and primary aluminum, precious metals and precious stones, jewelry made from precious metals and precious stones.
3) Exemption from income tax
Enterprises created for production of commodities with invested registered capital are exempted from income tax. The exemption period depends on the invested amount:
• 2 years – if the volume of investment is up to $500,000;
• 3 years – if the volume of investment exceeds $500,000, up to $2 million;
• 4 years – if the volume of investment exceeds $2 million, up to $5 million;
• 5 years – if the volume of investment exceeds $5 million.
Special tax regulations
1) Taxation of construction of hydropower plants.
Construction customer and general contractor are exempted from the following taxes:
• value added tax;
• road tax;
• income tax from legal entities;
• minimal profit tax;
• land taxes;
• taxes from owners of transport;
• immovable property tax;
• social tax;
• state tax.
2) Taxation of newly created enterprises involved in full cycle of processing of raw cotton:
a) export of commodities manufactured by newly created enterprises are exempted from value added taxes.
b) newly created enterprises are exempted from:
• income tax from legal entities;
• minimal profit tax for enterprises;
• immovable property tax;
• land taxes.
Creation of the Consultative Council on Improvement of Investment Climate under the President’s Office and activities it implemented have been very conducive to improvement of Tajikistan’s investment climate.
Favorable conditions are being consistently created to attract foreign investments, support market structures and develop commercial banking and finance system. The process of registration of joint ventures and enterprises with other forms of property has been simplified. Tajik Government’s policy measures create favorable conditions for foreign direct investments flow into the country’s economy.
National resource endowment for economic development:
• availability and accessibility of mineral resources and raw materials;
• fertile soil and favorable climate;
• availability of inexpensive and qualified manpower;
• renewable resources of energy and hydropower.
Tajikistan is the land of inexhaustible hydro resources.
The estimated hydro potential of Tajikistan is 527 bln. Kilowatt-hour per annum. Less than 6 percent of this capacity is being used at present.
Tajikistan is the only country in the CIS, which during the years of independence built and put into operation a major hydropower facility – Sangtuda-1 with capacity of 400 Megawatt and with the total volume of investments of $750 million.
The Government of Tajikistan defined the list of priority investment projects in the area of hydropower and heating stations, including 11 projects, implementation of which requires investment of over $5 billion. Schemes of integrated use of Tajikistan’s hydro potential and construction of power transmission lines have been developed.
The State Committee on Investments and Property Management in close cooperation with public and private sector partners implements activities to improve the investment climate and promote investments. The Committee regularly updates the list of priority proposals for potential investors.
Currently, more than 200 projects are under consideration of the State Committee on Investments. The database of priority projects contains around 40 projects for the total amount of over USD 8 billion.
Mineral wealth of Tajikistan. More than 400 mines and deposits of ore and non-metallic subsoil assets have been discovered and prepared for exploration:
• deposits of gold and silver;
• iron-bismuthic and wolfram minefields;
• antimony deposits;
• marble, granite and precious stones;
• deposits of oil and natural gas.
Konimansuri Kalon is one of the biggest silver minefields located in the northern region of Tajikistan. The deposits of the minefield amount to about 1 billion tons of ore with the content of silver – 49 grams, lead – 0.49 grams, and zinc – 0.38 grams per ton of ore. The total deposits of silver in Konimansur are estimated at more than 50 thousand tons. There is a list of companies selected for participation in the final bidding. The Government is planning to organize biddings on other prospective minefields.
Tajikistan has favorable natural and climate conditions – plenty of sunshine and water, fertile valleys. It is conducive for growing delicious fruits and vegetables.
Priorities for development of agriculture:
• processing of agricultural products;
• processing of wool and leather;
• cotton farming;
• gardening and vegetable farming (organic products);
• cattle breeding;
• newlands reclamation.
Tourism. Tajikistan strengthens infrastructure in the areas of tourism and services. The country has a potential for further development in:
• health & spa tourism;
• hiking and hunting tourism.