Turkmenistan - Business CustomsTurkmenistan - Business Customs
Doing business in Turkmenistan requires patience, persistence, and personal contacts.
The government encourages foreign investment and business, but current structures do not conform to international business norms. No commercial code has been adopted except for Law on Trade Activity in March 2016. Most local officials are unfamiliar with western business practices and internationally accepted norms. Few senior members of the government have been educated abroad. Business is often a matter of personal influence and politics. Many marketing methods employed in the West do not work well here. Successful companies in Turkmenistan have established personal contact with government officials through either representative offices or visits. Smaller or lesser known companies must establish their bona fides before being accepted at the highest levels.
Large-scale contracts are signed at the presidential level and usually require travel to Ashgabat by the company's president or CEO to close a deal. Follow-up visits are also critical. The Internet is filtered and often communications with headquarters can be challenging. There are locally-based distributors representing U.S. companies, but most distributors are foreign companies themselves (usually Turkish), with established offices in Ashgabat. Franchising is not popular. Almost all foreign companies investing in Turkmenistan form joint ventures. Since there is limited privatization, joint ventures generally include government partners. There is no standard form for a joint venture agreement; each agreement is negotiated individually must be approved by the Cabinet of Ministers, and finalized by presidential decree.
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