Oguz han engineering and technology university of turkmenistan innovation economics faculty department of innovation economics

Step-by-step scheme of entering the construction market of Turkmenistan.
Stage 1: Making a decision on the possibility of exporting construction services to Turkmenistan
It is very difficult to obtain information about tenders for construction projects held in Turkmenistan, as well as access to the legislative framework of Turkmenistan.
Information about the ongoing tenders can be obtained on the following electronic platforms:

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  on the website of the Ministry of Construction and Architecture of Turkmenistan;
  
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  on the information portal of Turkmenistan;
  
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  on the site PARAHAT.INFO;
  
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  on the website "Turkmenistan. Golden Age";
  

Tendering announcements most often contain:

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  name of the subject of the tender;
  
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  address for submitting applications for participation in the tender;
  
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  deadline for accepting applications and tender proposals;
  
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  phone numbers for inquiries.
  

The application for participation in the tender must be made in writing and contain the full name of the participant, its legal status, country of registration, bank details and information about the organization's activities.
Having found a tender of interest, it is necessary to study in detail the conditions of its holding, since the legislation of Turkmenistan provides for a number of requirements for bidders, one of which is the availability of licenses for the right to carry out certain types of activities on the territory of Turkmenistan. If there is such a condition in the tender documentation, it is necessary to assess the possibility of participating in this tender, taking into account the terms of obtaining the relevant licenses and for opening a branch/representative office in Turkmenistan. The implementation of the above procedures requires considerable time.
If the terms of the tender allow you to participate in the tender without having the necessary licenses, the stages of entering the construction market of Turkmenistan may vary slightly. In this case, it is possible for a foreign bidder to participate in the tender, and only after winning, it will need to open a branch/representative office in Turkmenistan and obtain the necessary licenses.
Information portal of Turkmenistan PARAHAT.INFO " Turkmenistan. Golden Age"
Stage 2: Obtaining a visa to enter the territory of Turkmenistan
Foreign citizens have the right to enter and stay in the territory of Turkmenistan on the basis of a visa.
Visas are issued to:

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  on the territory of Turkmenistan-through regional branches of the State Migration Service of Turkmenistan;
  
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  outside of Turkmenistan-through diplomatic missions and consular offices of Turkmenistan in foreign countries.
  

Currently, the following categories of visas are valid in Turkmenistan, which can be single-entry, double-entry or multiple-entry:

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  driver's visa – DR;
  
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  exit visa-EX;
  
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  business visa – BS.
  
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  diplomatic visa-DP.
  
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  medical visa – HL.
  
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  Work visa-WP.
  
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  service visa – OF;
  
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  student visa – ST;
  
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  transit visa – TR;
  
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  tourist visa – TU;
  
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  private visa – PR.
  

The list of documents that must be submitted for visa processing directly depends on its type.
Stage 3: Opening of a branch/representative office of a Belarusian construction company in Turkmenistan
The legal, organizational and economic bases for the establishment, operation and termination of enterprises in Turkmenistan are determined by the Law of Turkmenistan dated 15.06.2000 No. 28-II "On Enterprises" (hereinafter - the Law on Enterprises).
The legislation of Turkmenistan provides an opportunity for non-resident legal entities to carry out various types of economic activities on the territory of Turkmenistan, by creating legal entities or separate subdivisions by non-residents, such as:

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  representative office – a separate subdivision of a legal entity located outside its location, protecting and representing the interests of the legal entity, performing transactions and other legal actions on its behalf (paragraph 1 of Article 56 of the Civil Code of Turkmenistan dated 17.07.1998 No. 294-I);
  
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  a branch is a separate subdivision of a legal entity located outside its location and performing all or part of its functions, including those of a representative office (paragraph 2 of Article 56 of the Civil Code of Turkmenistan).
  

Registration of a branch/representative office of a foreign legal entity and their further activities in the territory of Turkmenistan are regulated by the following main legislative acts:
Civil Code of Turkmenistan;
Law of Turkmenistan No. 698-KP of 19.05.1992 "On Investment activity in Turkmenistan";
The Law on Enterprises;
Law of Turkmenistan No. 184-W of 03.03.2008 "On Foreign Investments";
Law of Turkmenistan No. 202-Sh of 25.06.2008 "On licensing of certain types of activities";
Resolution of the President of Turkmenistan No. 11896 of 11.11.2011 "On improving the State registration of legal entities";
other legislative acts.
The branch and representative office are registered in Turkmenistan for a period of three years, with subsequent renewal of registration if necessary.
In Turkmenistan, the legal status of a branch of a foreign company is higher than that of a representative office.
Registration of a branch or representative office consists of several stages:
submitting a written application for approval of the name of the branch / representative office. The name of the branch/representative office must contain the name of the parent company, the full designation or abbreviation of the legal form, as well as, if desired, an indication of the state affiliation. The use of the words "Turkmenistan" and " Ashgabat "is not allowed, although analogs of names can be discussed individually, for example, the prefix "Turkmen -". A certificate confirming the name of the company is issued for a period of three months and is one of the documents required for further registration of the branch/representative office. If necessary, it can be extended for another three months.
payment of the registration fee and submission of documents for registration of a branch / representative office. In 2018, the fee for registration of a branch / representative office of a foreign legal entity was 8,000 manats – approximately US $ 2,288). The list of documents required for registration of a branch / representative office is provided for in the Procedure for State Registration and Registration of Legal Entities approved by the Decree of the President of Turkmenistan No. 11896 dated 11.11.1011. Documents are provided in the language of the foreign participant. They are accompanied by translations into Turkmen or Russian, certified by translation organizations. Apostilization and legalization of documents are not required for Belarusian organizations in accordance with the Convention on Legal Assistance and Legal Relations in Civil, Family and Criminal Matters, concluded in Minsk on January 22, 1993;
consideration of documents at a meeting of the Interdepartmental Commission for State Registration of Legal Entities of Turkmenistan. Getting a temporary bank statement. Based on the results of consideration of documents, a decision may be made on state registration of a branch/representative office or on refusal of state registration. The decision is made within two weeks from the date of submission of the required documents. After making a decision on state registration of a branch / representative office, a temporary extract from the state register of legal entities of Turkmenistan is issued, on the basis of which the subject of registration becomes registered with the statistical and tax authorities of Turkmenistan, as well as open a bank account. A temporary statement is issued for a period of one month. Together with the above extract, the constituent documents are also issued;
organization of statistical and tax accounting, opening of bank accounts. The main normative legal act defining the legal, economic and organizational bases of statistics, aimed at implementing a unified state policy in the field of statistics, ensuring the needs of the state and society for complete, reliable, scientifically based statistical information, regulating relations related to the implementation of statistical activities, is the Law of Turkmenistan" On Statistics " of 31.03.2012 No. 288-IV. State regulation in the field of statistics is carried out by the Cabinet of Ministers of Turkmenistan and the State Statistics Committee of Turkmenistan. As for tax accounting, in accordance with articles 17-18 and 24 of the Tax Code of Turkmenistan, foreign legal entities (non-residents of Turkmenistan), as well as their permanent representative offices, are subjects of tax legal relations and are subject to registration as taxpayers. After registration for statistical and tax registration, a branch / representative office of a foreign legal entity opens a bank account in the national currency of Turkmenistan – manats, and if necessary, in another currency. To open a bank account, the branch / representative office enters into an agreement with the bank in accordance with the Civil Code of Turkmenistan;
obtaining a certificate of entry in the Unified State Register of Legal Entities of Turkmenistan and an extract from the unified State Register of legal entities. As a result of passing the above-mentioned procedures of registration with the statistical authorities, registration as a taxpayer and opening a bank account, the subject of registration receives the following documents from the Registration Department of Turkmenistan:
Certificate of registration in the Unified State Register of Legal entities of Turkmenistan, signed by the head of the Registration Department of Turkmenistan and certified with the seal of the Ministry of Economy and Development of Turkmenistan;
Extract from the Unified State Register of legal entities, signed by the head of the Registration Department of Turkmenistan and certified with the seal of the Registration Department of Turkmenistan.
These documents have a single registration number and are invalid without each other;
carrying out business activities during the validity period of an extract from the Unified State Register of Legal Entities. An extract from the Unified State Register of Legal entities is valid for three years. During this time, the branch / representative office carries out business activities that are permitted to it in accordance with the legislation of Turkmenistan, constituent documents and decisions of the parent company. The types of activities of the branch / representative office must correspond to the types of economic activity provided for in the State Classifier of Types of Economic Activity of Turkmenistan, effective from 01.01.2014.
Procedure for state registration and registration of legal entities approved by the Decree of the President of Turkmenistan No. 11896 dated 11.11.1011
Stage 4: Obtaining the necessary licenses from organizations in Turkmenistan
Licensed types of activities in Turkmenistan include those types of activities, the implementation of which may entail damage (harm) to the rights, legitimate interests, morals, life and health of citizens, state defense and security, cultural heritage of the Turkmen people, and the environment, as defined by the Law of Turkmenistan No. 202-Sh of 25.06.2008 "On Licensing". certain types of activities" (hereinafter-the Law on Licensing).
In the construction sector, licensed activities include:
activities in the field of industrial safety, design and construction of hazardous facilities and transportation of dangerous goods;
production of building materials, products and structures;
construction activities.
If a branch / representative office of a foreign legal entity will carry out the above-mentioned activities on the territory of Turkmenistan, it should apply to the relevant licensing authority with an application for issuing a license, which should contain the following information:

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  full name of the branch/representative office;
  
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  number and date of its state registration;
  
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  organizational and legal form.
  
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  legal address.
  
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  type of activity and duration of its implementation;
  
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  the actual place (location) where the license applicant intends to carry out this type of activity.
  

The following documents are attached to the application:

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  copies of the constituent documents certified in accordance with the established procedure;
  
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  extract from the Unified State Register of Legal Entities;
  
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  a power of attorney or an order certifying the authority of the license applicant's representative.
  
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  other documents confirming the applicant's ability to meet the licensing requirements and conditions, the list of which is determined by the regulations on licensing the relevant type of activity.
  

After the licensing authorities check the completeness and reliability of the submitted documents, the possibility of the license applicant meeting the established license requirements and conditions, a decision is made to issue or refuse to issue a license and in writing, which is notified to the license applicant. The term for reviewing documents by the licensing authority is 33 calendar days.
A notice of issuing a license is given to the license applicant with the bank account details and the deadline for payment of the state fee. The license is issued within ten working days after the submission of a document confirming payment of the state fee.
A notice of refusal to issue a license is served to the license applicant with an indication of the reasons for refusal.
You must obtain a separate license for each licensed activity. Licenses are valid for the entire territory of Turkmenistan, with the exception of restrictions established by the legislation of Turkmenistan.
The term of validity of licenses is established by the regulations on licensing the relevant type of activity (but may not be less than three years) and may be extended in accordance with the licensee's application, in the same manner as the procedure for issuing it.
If a permit other than a license is required to carry out a particular type of activity, such a permit is issued only after obtaining the license.
Stage 5: Study of the package of tender documents, their preparation. Participation in a tender for the construction of a facility in Turkmenistan
In Turkmenistan, the procedure for conducting procurement, including in construction, depending on the source of financing, type of customer, and the amount allocated for the purchase, is regulated by various regulatory legal acts:
Procurement of goods, works, and services for State needs is regulated by the Law of Turkmenistan No. 158-V of December 20, 2014 "On Tenders for the Supply of Goods, Performance of Works, and Provision of Services for State Needs "(hereinafter referred to as the Law);
purchases of goods, works and services using loans and credits granted in accordance with international agreements of Turkmenistan, the International Bank for Reconstruction and Development, the European Investment Bank, as well as other international monetary and credit organizations are carried out in accordance with the rules and procedures established by these organizations, in particular the recommendations and model agreements of FIDIC, and in the case of failure to establish such rules and procedures - in accordance with the Law;
purchases of other business entities are regulated by the Civil Code and other legal norms.
The law provides for strict requirements for potential suppliers (contractors). They must have the appropriate licenses, certificates or other permits to carry out their activities. Potential suppliers (contractors) should have professional and technical competence, experience and reputation, financial resources, equipment and other material capabilities, as well as have a professional staff of specialists. Among the requirements, the law also includes-the solvency of the supplier (contractor). In addition, they should not be registered in offshore zones or be offshore companies. They must also not be persons with a conflict of interest. The law recognizes civil servants as potential suppliers as such persons. The tender organizer cannot be closely related to the supplier.
Law No. 158-V sets out the types of procurement procedures and the procedure for conducting them. Tenders on the territory of Turkmenistan are held in the following forms:
open tender – a tender with unlimited participation. It is used when the number of potential contractors invited to participate in the tender is not limited, and they have the right to submit tenders without restriction.
closed tender – a tender with limited participation. Used when the costs required for reviewing and evaluating a large number of tenders are incommensurable with the cost of goods delivered, works performed, or services rendered; goods, works, or services are available only to a limited number of potential suppliers (contractors) due to their level of technical complexity or specialized nature; in relation to objects of state significance;
request for quotations. It is used when certain types of goods, works, and services are delivered in accordance with a specification (with established technical parameters or quality standards) and is requested from at least three potential suppliers (contractors) in order to ensure competition and effectively select the most cost-effective offer.
A potential bidder, in accordance with the Law of Turkmenistan "On Tenders for the supply of goods, performance of works, provision of services for State Needs" dated 20.12.2014 No. 158-V (hereinafter referred to as the Law on Tenders), must have the following characteristics:
civil legal capacity, legal capacity (licenses, certificates or other permits);
professional and technical competence;
experience and reputation, financial resources, equipment and other material opportunities;
a staff of specialists with the necessary level of professional qualification and experience to fulfill obligations under the construction contract;
ability to pay, do not have a stable (more than three months) debt on taxes and other mandatory payments to the State Budget of Turkmenistan;
absence of signs of insolvency (bankruptcy), not being in the process of bankruptcy as of the last reporting date;
should not be in the process of liquidation or reorganization, its business activity should not be suspended in accordance with the legislation of Turkmenistan;
must not be a person who has a conflict of interest.
The tender application (quotation) is submitted in writing, in a sealed envelope (s) certified by its signature and mastic seal. The deadline for submitting bids is set by the tender organizer and, as a rule, is:
at least 30 working days from the date of publication of the notice of the tender – when conducting tender procedures with unlimited participation;
at least 20 working days from the date of sending the invitation to participate in the tender – when performing the tender procedures with limited participation.
Envelopes containing bids (quotations) received after the deadline for their submission are not opened and returned to the offerors who submitted them.
Information about announced purchases is published in the newspaper "Neutral Turkmenistan" and posted on the Internet resources of ministries and departments of Turkmenistan.
In order to expand the participation of domestic entrepreneurs and non-governmental organizations of disabled people of Turkmenistan in deliveries, the law gives them certain preferences. If the subject of deliveries is goods, works and services produced in Turkmenistan, the tender organizer has the right to limit the list of potential suppliers (contractors) only to small and medium-sized enterprises of Turkmenistan and (or) set conditions for using only local labor resources and (or) raw materials.
It is worth noting that Law No. 158-V does not provide for the preparation of a procurement plan by customers. At the same time, the Law regulates general requirements for procurement participants, including their qualification data, admission of participants to procurement procedures, the procedure for establishing and functioning a procurement commission, and others.
The law provides for the possibility of conducting prequalification procedures when conducting a tender with limited participation and in other cases by a reasoned decision of the tender organizer.
Information Portal of Turkmenistan Business Portal Cabinet of Ministers of Turkmenistan Ministry of Trade and Foreign Economic Relations
Stage 6: Conclusion of the contract based on the results of the tender in Turkmenistan
The winner of the tender enters into an agreement with the organizer of the tender on the terms that were provided for in the tender documentation.
When concluding the contract, the parties may agree that if there are no norms in the legislation of Turkmenistan, the norms of Belarusian or international legislation will be used.
Regulatory legal acts of Turkmenistan, including the Civil Code, do not regulate the procedure for concluding and executing construction contracts, and therefore it is possible to conclude a construction contract in accordance with the norms provided for in Belarusian regulatory legal acts.
When concluding a construction contract with a Turkmen customer, it is necessary to clearly define its subject matter, indicate the cost of work performed, and provide for a complete list of rights and obligations of the parties. The composition and content of a specific construction contract depends on the specifics of the planned construction object.
Sample form of a foreign economic contract for the construction of facilities (provision of construction services) in Turkmenistan (download)
Stage 7: Implementation of construction and commissioning activities in Turkmenistan
When constructing objects on the territory of Turkmenistan, it is necessary to comply with the requirements of regulatory legal and technical regulations that establish requirements for specific construction objects.
The main Law establishing the legal, economic and organizational basis of architectural activity and aimed at creating a favorable environment for human life, achieving aesthetic expressiveness, reliability of buildings, structures and their complexes is the Law of Turkmenistan" On Architectural Activity " dated 04.02.2017 No. 496-V.
Considering the" closed nature " of Turkmenistan and the absence of many legislative acts in the public domain, when entering into a construction contract with a Turkmen customer, a foreign contractor must provide for the customer's obligation to provide the contractor with all the necessary legislative acts, the requirements of which must be met during its implementation.
Special attention should be paid to the maintenance of executive documentation during the construction of an object on the territory of Turkmenistan. The procedure for drawing up and the list of executive documentation that must be issued by the start of the work of the commissions for the acceptance of the object into operation is described in SNT 3.01.02-06 " Acceptance of objects completed by construction. General provisions", approved by the order of the Minister of Construction and Construction Materials Industry of Turkmenistan No. MV-29 dated 26.02.2007 (hereinafter referred to as SNT 3.01.02-06).
Stage 8: Commissioning of the facility in Turkmenistan
SNT 3.01.02-06 is the main document regulating the general procedure for acceptance and commissioning of industrial and non-industrial facilities completed with construction, expansion, reconstruction, and technical re-equipment, regardless of sources of financing in the territory of Turkmenistan.
SNT 3.01.02-06 provides that the completed construction object is accepted by the customer from the general contractor in accordance with the terms of the contract, after which the object accepted and prepared for operation is accepted by the State Acceptance Commission together with state supervision services and local executive authorities.
Prior to the start of work of the State Acceptance Commission, the customer creates a working commission that evaluates the facility's readiness for operation and, together with the contractor, draws up an act and decides on the possibility of submitting it to the State Acceptance Commission. After a positive decision of the working commission, the State Acceptance Commission begins acceptance. If a decision is made on the possibility of putting an object into operation, the State Acceptance Commission confirms its decision by signing an Act of the State Acceptance Commission on acceptance of the completed object.
CHAPTER II
YOUTH ENTREPRENEURSHIP IN TURKMENISTAN