Turkmenistan - Joint Ventures/LicensingTurkmenistan - Joint Ventures

Joint ventures can be established in the form of a corporation (also referred to in Turkmenistan as a “joint-stock company”) or as a partnership (also known as a “business society”). Article 29 of the Law on Enterprises defines business societies as “associations of two or more individuals and/or individuals [established] to conduct joint activities.” Article 1 of the Law on Corporations classifies corporations as companies, in which capital contributions by physical and/or legal entities are combined as charter capital, which is divided into a certain number of shares certifying the contractual rights of shareholders of the corporation. Corporations can be close-ended (private) or open-ended (public). Registration and activities of corporations are regulated by the Law on Corporations, the Law on Foreign Investment in Turkmenistan, and the Law on Investment Activity in Turkmenistan.

The Law on Enterprises and the Law on Corporations provide for mergers and acquisitions. However, Turkmenistan’s relevant legislation does not clearly define activities involving foreign parties, nor does it have specific provisions for disposition of interests in business enterprises, both local and those involving foreign participation. Government approval is necessary for acquisitions and mergers of certain enterprises, specifically those with state shares. The Law on Licensing Certain Types of Activities lists the kinds of businesses that are subject to licensing and governs the licensing process. The law lists 44 activities. There is no comprehensive licensing agency; licenses should be obtained from the relevant authorized government agencies and are generally not issued for less than three years. Oil and gas production and exploration licenses are issued by Turkmen Oil State Concern and TurkmenGas State Concern respectively for a duration of 20-25 years. Below is the list of main business activities subject to licensing:

1. Oil and gas exploration and production
2. Oil and gas processing
3. Design, construction, maintenance and operation of trunk pipelines and power transmission lines
4. Production, transmission, and distribution of electricity
5. Design and construction of buildings and facilities
6. Production of construction materials
7. Transportation and freight forwarding services
8. Banking
9. Insurance
10. Auditing
11. Legal counsel or services
12. Quality and product certification
13. Healthcare services and production, and sale of pharmaceuticals
14. Import, production, and sale of alcohol and tobacco
15. Telecommunications
16. Tourism
17. Trade