This information is derived from the State Department's Office of Investment Affairs' 2015 Investment Climate Statement. Any questions on the ICS can be directed to EB-ICS-DL@state.gov
Last Published: 11/3/2017

Capital Markets and Portfolio Investment
Turkmenistan’s underdeveloped financial system and severe limitations on conversion of local currency significantly hinder the free flow of financial resources. The largest state banks include: The State Bank for Foreign Economic Relations (Vnesheconombank), Dayhanbank, Turkmenbashy Bank, Turkmenistan Bank, Halk Bank, and President Bank. These banks have narrow specializations–foreign trade, agriculture, industry, social infrastructure, savings and mortgages, respectively. There are two smaller state banks, Senagat Bank and Garagum Bank, which provide only general banking services. In September 2011, the government established the State Development Bank to provide loans to state-owned and private enterprises implementing projects that increase production and create jobs. The government also established Rysgal Bank in 2011 to provide general banking services to the members of the Union of Industrialists and Entrepreneurs. There are also five foreign commercial banks in the country: a joint Turkmen-Turkish bank (with Ziraat Bank), a branch of the National Bank of Pakistan, the German Deutsche and Commerz Banks, and a branch of Saderat Bank of Iran. The two German banks provide European bank guarantees for companies and for the Turkmen government; they do not provide general banking services. The government generally welcomes any type of investment in all sectors of the economy. Insufficient liquidity in the market can make it difficult for investors to exit the country easily. There have been no reported cases where foreign investors have received credit on the local market. The Union of Industrialists and Entrepreneurs, a nominally independent organization of private companies and businesspeople is in fact closely controlled by the government and issues loans with no more than one per cent interest per annum to its member companies to finance their projects in such areas as animal husbandry, agricultural and food production and processing, and industrial development. EBRD provided loans to a few private Small and Medium Enterprises (SME) in Turkmenistan and also extended a limited credit line to Government of Turkmenistan in 2016. There is no publicly available information to confirm whether the government or central bank respect IMF Article VIII.
Money and Banking System
The total assets of the country’s largest bank, Vnesheconombank, were TMT 14,255,418 or about USD 5 billion (at a rate of 2.85 manat per $1) as of December 31, 2014. The bank’s financial statements are published at The State Bank for Foreign Economic Affairs of Turkmenistan website. Vnesheconombank has not published its financial statements since 2014. The assets of other banks are believed to be much smaller. All banks, including commercial banks, are regulated by the state. Commercial banks are prohibited from providing services to state enterprises. The U.S. Export Import (EXIM) Bank announced in January 2010 that it had extended its available financing to include long-term public sector transactions in Turkmenistan. Previously, EXIM had only been open for short- to medium-term public sector financing. Short-term financing is available for up to two years, medium-term for up to seven years, and long-term for up to 18 years. For private sector transactions, EXIM requires detailed financial information to enable the bank to reach a credit decision. Financial statements provided in support of the transaction should be audited by an affiliate of an international accounting firm and prepared in accordance with International Financial Reporting Standards (IFRS). Coverage under the Working Capital Guarantee Program requires that the transaction be supported by an irrevocable Letter of Credit issued by a bank acceptable to EXIM. Exceptions may be made for private sector transactions that are insured for comprehensive political and commercial risk. The government of the United States of America and the Government of Turkmenistan have an Intergovernmental Agreement (IGA) in principle under the 2010 U.S. Federal Foreign Account Tax Compliance Act (FATCA) but the agreement has not been concluded yet.
State banks primarily service state enterprises and allocate credit on subsidized terms to state entities. Foreign investors are only able to secure credit on the local market through the Pakistan National Bank and EBRD equity loans. There is no capital market in Turkmenistan, although the 1993 Law on Securities and Stock Exchanges outlines the main principles for issuing, selling and circulating securities. The 1999 Law on Joint Stock Societies further provides for the issuance of common and preferred stock and bonds and convertible securities in Turkmenistan, but in the absence of a stock exchange or investment company, there is no market for securities. In November 2011, the government approved the State Program for Stock Market Development (2012-2016), which portends that new regulations and procedures might be developed in this area. In late 2015, the President signed a decree on the issuance of government bonds for a term of up to five years on the basis of the refinancing rate of the Central Bank of Turkmenistan (five percent). The bonds have not yet been issued as of March 2017. The Embassy is not aware of any restrictions on a foreigner’s ability to establish a bank account based on residency status. There is no publicly available information on any rules on hostile takeovers.
Foreign Exchange and Remittances
Foreign Exchange
The government tightly controls the country’s foreign-exchange flows. On January 1, 2009, Turkmenistan introduced the redenominated manat (TMT), which had a fixed exchange rate of 2.85 manat per USD 1 until January 1, 2015, when Turkmenistan devalued its currency against the U.S. dollar to TMT3.50 per USD. In October 2011, Turkmenistan adopted the Law on Hard Currency Control and the Regulation of Foreign Economic Relations as a step towards bringing the national legislation into compliance with international standards. The Central Bank controls the fixed rate by releasing U.S. dollars into the official exchange markets. Foreign exchange regulations adopted in June 2008 allow the Central Bank to provide banks with ready access to foreign exchange. These regulations also allowed commercial banks to open correspondent accounts.
In the last two years, the government has been unable to meet demand for U.S. dollars. It limited the amount of U.S. dollars that can be withdrawn per month to USD250 and imposed administrative procedures that make withdrawals more cumbersome (i.e., proof of residency is now required). On January 12, 2016, the Central Bank of Turkmenistan further restricted access to foreign currency and issued a press release preventing banks from selling U.S. dollars at the country’s exchange points. In addition, when an individual purchases foreign currency through a wire transfer (limited to the equivalent of a person and his/her immediate family members’ monthly salaries), the currency (at an exchange rate of 3.5 manat per USD) must be deposited onto the individual’s international debit card (Visa or MasterCard). The individual does not receive cash. Moreover, the TMT used to purchase the foreign currency must be transferred through the individual’s TMT account. If the individual wishes to pay cash, s/he must prove the origins of the cash with an official document. The government also introduced an amendment to the Administrative Offences Code that raises the fines for illegal foreign exchange transactions (i.e. selling and purchasing foreign currency via informal channels) and also trading in foreign currency on the territory of Turkmenistan. The currency is not convertible, and an inability to convert enough TMT into a hard currency is problematic for many companies operating in Turkmenistan. Oil producers operating under the Petroleum Law (2008) receive a share of their profit in crude oil, which they ship to other Caspian Sea littoral states. In many cases, petrochemical investors have negotiated deals with the government to recoup their investment in the form of future petroleum products. Two American consumer goods companies have temporarily stopped production or importing their products in/to Turkmenistan due to their inability to convert local currency into hard currency. Similarly, several American companies are not being paid by various agencies and ministries of Turkmenistan for services and goods delivered. Converting the local currency and repatriating funds have become near impossible for foreign companies and their local distributors operating in Turkmenistan.
Turkmenistan imports the vast majority of its industrial equipment and consumer goods. The government’s foreign-exchange reserves and foreign loans pay for industrial equipment and infrastructure projects.
Remittance Policies
Foreign investors generating revenue in foreign currency do not generally have problems repatriating their profits. Some foreign companies receiving income in Turkmen manat seek indirect ways to convert local currency to hard currency through the local purchase of petroleum and textile products for resale on the world market. Since the government of Turkmenistan introduced numerous limitations on foreign currency exchange on January 12, 2016, converting local currency into a foreign currency has become nearly impossible. Some foreign companies have complained of non-payment or major delays in payment by the government. In June 2010, Turkmenistan became a full member of the Eurasian Group (EAG), a regional AML/CFT organization part of the Financial Action Task Force (FATF).
Sovereign Wealth Funds
The government maintains sovereign wealth funds, including a Stabilization Fund, but there is no publicly available information about these accounts. Auditing and oversight information related to these accounts is not publicly available.

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Turkmenistan Economic Development and Investment Law