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Executive Summary

Tajikistan is a challenging place to do business but presents potential high-risk, high-reward opportunities for foreign investors who have experience in the region, a long-term investment horizon, and the patience and resources to conduct significant research and due diligence.  At the most senior levels, the Tajik government continues to express interest in attracting more U.S. investment, and in 2020 President Rahmon signaled the importance of outreach to U.S. companies by appointing the former head of the government’s Investment Committee as Tajikistan’s ambassador to the United States.  Nevertheless, the poorest of the Central Asian countries harbors few U.S. investors and remains an uncompetitive investment destination.

President Rahmon publicly emphasizes the need to foster private-sector-led growth, and attracting investment is prioritized in the government’s 2016-2030 National Development Strategy and in-progress 2021-2025 Economic Development Strategy.  Strategy documents notwithstanding, authoritarian policies, bureaucratic and financial hurdles, widespread corruption, a flawed banking sector, non-transparent tax system, and countless business inspections greatly hinder investors.  The absence of private investment and the government’s decision to dedicate significant financial resources to the construction of the Roghun Dam hydropower plant, creates pressure for the Tax Committee to enforce or reinterpret arbitrary tax regulations in order to meet ever-increasing revenue targets.  The government launched a tax reform project in 2019 to ease the burden for the private sector; it is intended to enter into force in 2022.

Politics also play a role.  Tajikistan is saturated in opaque loans connected to China’s Belt and Road Initiative, and Chinese investments account for more than three-quarters of the country’s total Foreign Direct Investment.  Tajikistan also reportedly continues to face pressure to join the Russian-led Eurasian Economic Union.  Should it apply for and receive membership, firms could experience higher trade tariffs.  Finally, despite Tajikistan’s 2013 accession to the World Trade Organization, the Tajik government has imposed trade policies to protect private interests without notifying its partners, notably in the poultry and mining sectors.

Additionally, the Tajik economy faces endemic challenges, and the novel coronavirus pandemic exposed a number of systemic economic weaknesses.  Consumption, the major driver of Tajikistan’s economic growth, is driven by migrant remittance flows from Russia, where about one million labor migrants reside.  In 2020, closed borders depressed both the flow of remittances and foreign trade, leading to a three percent contraction of Tajikistan’s Gross Domestic Product, and precipitating an 11-percent currency devaluation in the face of foreign exchange shortages.  Tajikistan’s banking sector is plagued by politically directed, non-performing loans, high interest rates, and the absence of correspondent banking accounts in the West.

Despite these challenges and risks to potential investors, Tajikistan is pursuing greater trade links with its neighbors and has made modest progress on trade facilitation and increasing transparency in the extractives sector to improve its investment climate in past years.  In 2020 authorities continued small steps towards compliance on intellectual property rights protections.  Should the government pursue an economic reform path, opportunities in energy, agribusiness, food processing, tourism, textiles, and mining could prove promising.

Table 1: Key Metrics and Rankings
Measure Year Index/Rank Website Address
TI Corruption Perceptions Index 2020 149 of 180
World Bank’s Doing Business Report 2019 106 of 190
Global Innovation Index 2020 109 of 129
U.S. FDI in partner country ($M USD, historical stock positions) 2019 $38
World Bank GNI per capita 2019 $1,030

1. Openness To, and Restrictions Upon, Foreign Investment

Policies Towards Foreign Direct Investment

The Tajik government is consistent in its calls for greater U.S. investment. Despite this, Tajikistan has traditionally courted state-led investment and external loans from China and Russia.  In 2020, overall Foreign Direct Investment (FDI) to Tajikistan fell 53 percent to USD 162 million, and Chinese investments, which account for three-quarters of all FDI, fell 50 percent to USD 120.3 million.  Russia (USD 13.9 million) was the second largest source of FDI last year, followed by Cyprus (USD 8.2 million) and Turkey (USD 7.8 million).

Tajikistan’s Investment Law (Article 7) guarantees equal rights for both local and foreign investors.  According to this law, foreigners can invest by jointly owning shares in existing companies with other Tajik companies or Tajik citizens; by creating fully foreign-owned companies; or by concluding agreements with legal entities or citizens of Tajikistan that provide for other forms of foreign investment activity.  Foreign firms may acquire assets, including shares and other securities, as well as land leasing and mineral usage rights.  Foreign firms may also exercise all property rights to which they are entitled, either independently or shared with other Tajik companies and citizens of Tajikistan.  Most of Tajikistan’s current international agreements provide most-favored-nation status.

Tajikistan’s legal code does not discriminate against foreign investors by prohibiting, limiting, or conditioning foreign investment.  To receive permission and licenses for operation, however, a foreign investor must navigate a complicated, cumbersome, and often corrupt bureaucratic system.

Several Tajik government agencies are responsible for investment promotion, but they frequently have competing interests.  The State Committee on Investments and State Property Management ( chiefly facilitates FDI.  In addition, state-owned enterprise Tajinvest under the State Committee on Investments and State Property Management is responsible for attracting investment into Tajikistan (

Tajikistan has established several formal mechanisms to maintain open channels of communication with existing and potential investors.  With donor support, the government established a Consultative Council on the Improvement of the Investment Climate in 2007.  This annual council provides a formal venue for dialogue with donors, international financial institutions, and members of the private sector (  Nevertheless, investors continue to claim that many of their complaints to the government go unheeded.

Limits on Foreign Control and Right to Private Ownership and Establishment

Tajikistan’s legislation provides a right for all forms of foreign and domestic ownership to establish business enterprises and engage in remunerative activity.  There are no limits on foreign ownership or control of firms and no sector-specific restrictions that discriminate against market access.  Local law considers all land and subsoil resources to belong exclusively to the state, although initial efforts to establish a private land market are underway.

Tajikistan’s legislation allows for 100 percent foreign ownership of local companies.  In the context of jointly owned companies, local partners generally seek to possess a controlling share (51 percent or more) at the initial stage of business development and in some cases may seek to increase their stake over time.

All sectors of Tajikistan’s economy are open to foreign participation except for aviation, defense, security, and law enforcement, which require special government permission for the operation of such types of businesses or services.  Tajikistan does not restrict foreign investment; it does not mandate local stakeholder equity positions or local partnership.  In some cases, the government requires specific licenses.  There are no mandatory IP/technology transfer requirements.

Tajikistan’s government maintains an investment screening mechanism for inbound foreign investments involving government interests, including investments into its five Free Economic Zones, issuing approval or rejection statements in particular for investments requiring government financial support or state guarantees.  The State Committee on Investments and State Property Management is responsible for filing and coordinating foreign investment project proposals as they pass through the review pipeline.  The government takes particular interest in determining whether the proposed project may impact the county’s national security and/or economic performance.

Investors must submit their proposals for screening to all relevant government agencies.  This process can be lengthy and cumbersome.  The State Committee on Investments and State Property Management circulates the investor’s proposal among the relevant government offices and ministries with instructions to review and then provide a formal opinion.  If a ministry objects to the proposed investment activity, it submits an official note to the State Committee on Investments and State Property Management.

Screening proposals often involve background checks on the company, the person(s) representing the company, and identification of a financial source to comply with anti-money laundering regulations.  U.S. businesses have not identified screening mechanisms as a barrier to investment.

The purpose of the investment screening process is to ensure that a proposed project does not violate Tajik laws.  The review process could reject the proposal and the Tajik government may flag it as “incomplete.”  Applicants may appeal the government’s decision by submitting a claim to the Tajik Economic Court.

Other Investment Policy Reviews

The COVID-19 outbreak forced the postponement of Tajikistan’s first WTO Trade Policy Review, which had been scheduled for March 2020.  Additionally, the OECD launched a 2020 Peer Review of Investment Promotion in Tajikistan, and has suggested that Tajikistan enhance communication with existing investors and establish a clear investment strategy that articulates economic objectives and agency roles.

Business Facilitation

Although the Tajik government has simplified the business registration process by adopting a single-window registration system for investors in 2019, that process still requires significant legal and human resources, government connections, and time.  The Tax Committee is the primary agency responsible for business registration (  In addition to obtaining state registration through a single-window, a company must also register with the Social Protection Agency (; Statistics Agency under the President of Tajikistan (; Ministry of Labor, Migration, and Employment (; Sanitary-Epidemiological Service at the Ministry of Health (; as well as with local authorities, municipal services, and other agencies.  According to the country’s regulations, registering a business should take less than five business days; in reality, it may take several days weeks or even months due to the inappropriate or illegal actions of registering agencies.

The Tajik Tax Code recognizes three types of enterprises: small-scale (up to USD 100,000 annual turnover), medium scale (up to USD 2.5 million annual turnover), and large-scale (above USD 2.5 million annual turnover).  The international donor community, in coordination with the government, funds a number of projects that stimulate development of small and medium enterprises in Tajikistan.

Outward Investment

The Tajik government does not promote outward investments.  Private companies from Tajikistan have invested in Kazakhstan, Uzbekistan, the Kyrgyz Republic, Turkey, Russia, the United Kingdom, the United States, and the UAE, primarily in trade, food processing, real estate, and business development. The Tajik government does not restrict domestic investors from investing abroad.

2. Bilateral Investment Agreements and Taxation Treaties

Tajikistan does not have a bilateral Free Trade Agreement with the United States and does not participate in United States Trade Representative (USTR)’s Generalized System of Preferences program.

Based on the principles of succession, the Convention between the United States of America and the Union of Soviet Socialist Republics on Matters of Taxation is currently in force. The convention can be found here:  The Tajik government does not recognize this treaty and has requested a double taxation treaty with the United States.  In 2004, Tajikistan became a signatory to the U.S.-Central Asia Trade and Investment Framework Agreement (TIFA) along with the United States, Uzbekistan, Turkmenistan, the Kyrgyz Republic, and Kazakhstan.

Tajikistan signed bilateral investment treaties (BITs) with Austria, Azerbaijan, Belarus, Belgium, China, the Czech Republic, France, Germany, India, the Islamic Republic of Iran, Kazakhstan, the Republic of Korea, Kuwait, Lithuania, Luxembourg, the Republic of Moldova, Mongolia, the Netherlands, Pakistan, Slovakia, Spain, Switzerland, and Turkey.  It has also signed BITs that are awaiting parliamentary approval with Algeria, Armenia, the Belgium-Luxembourg Economic Union, Indonesia, the Kyrgyz Republic, Qatar, the Russian Federation, the Syrian Arab Republic, Thailand, Turkmenistan, Ukraine, the United Arab Emirates, and Vietnam.  BIT information is available at:

Tajikistan’s other investment agreements include: the Eurasian Investment Agreement with Belarus, Kazakhstan, the Kyrgyz Republic, and the Russian Federation; the European Community-Tajikistan Partnership Agreement with the European Union; the Commonwealth of Independent States Investor Rights Convention with Armenia, Belarus, Kazakhstan, the Kyrgyz Republic, and the Republic of Moldova; the Energy Charter Treaty; and the Organization of the Islamic Conference Investment Agreement.  Another signed agreement, the Economic Cooperation Organization Investment Agreement, has not yet entered into force.

Tajikistan does not have a Free Trade Agreement or an Association Agreement in force with the European Union.  Tajikistan, however, is a beneficiary of the EU’s Generalized System of Preferences (GSP) program, a bilateral trade arrangement through which the EU provides preferential access to its market to developing countries and territories in the form of reduced tariffs for their goods when entering the EU market.  Tajikistan is also considering filing an application to the EU’s GSP+ program, which will provide it additional preferences when trading with EU countries.  Preferential imports from Tajikistan are heavily concentrated in two sectors, industrial products – such as base metals – and textiles.

Tajikistan currently has bilateral agreements to avoid double taxation with Armenia, Austria, Azerbaijan, Bahrain, Belarus, Belgium, Brunei, China, Czech Republic, Finland, India, Indonesia, the Islamic Republic of Iran, Japan, Kazakhstan, Kuwait, Kyrgyz Republic, Latvia, Luxembourg, Moldova, Pakistan, Poland, Romania, the Russian Federation, South Korea, Switzerland, Thailand, Turkey, Turkmenistan, Ukraine, the United Arab Emirates, and the United Kingdom.  The provisions of double tax agreements prevail over Tajik domestic law.  The list of bilateral agreements to avoid double taxation can be found here:

Although Tajikistan is not a member of the Eurasian Economic Union (ECC), and therefore not a party to its trade agreements, it nevertheless pledged in 1992 to uphold certain USSR treaty obligations, including an Income Tax Treaty that entered into force in 1976.

Tajikistan’s burdensome current tax code was adopted in 2013, and a 2019 tax reform project is scheduled for implementation in 2022.  Investors should be aware that financial transfers from parent companies to branches within Tajikistan will be taxed as revenue.

Investors who qualify for a value-added tax (VAT) exemption on imported materials should be aware that they must submit applications for exemption no later than January 1 and that any exemption granted will expire December 31 of that year.   Often, the government does not grant exemptions until October, leaving a short window to file.  While the exemption applies retroactively for the calendar year, the Tajik government has said the tax code has no legal mechanism to authorize refunds of VAT paid prior to the date the government granted the exemption.

According to Article 110 of Tajikistan’s Tax Code, companies that produce goods are profit tax exempt for 12 months from the date of state registration.  Further profit tax breaks are staggered based on the size of the investment: two years for USD 200,000-500,000, three years for USD 500,000-2 million, four years for USD 2-5 million.  Should the government change its tax code after an investment is made, the investor has the right to keep the initial conditions.

3. Legal Regime

Transparency of the Regulatory System

Tajikistan’s regulatory system lacks transparency.  Despite recent improvements to allow access to presidential decrees and laws online, governmental instructions, ministerial memos, and regulations are often inaccessible to the public.  Businesspeople and investors must purchase access to Adliya, a commercial legal database, to obtain updated legal and regulatory information –  Each ministry has its own set of unpublished regulations and these may contradict the laws and/or regulations of other ministries.

The Tajik government rarely publishes proposed laws and regulations in draft form for public comment.  Although the Tajik government solicited public comment on the 2013 Tax Code, it did not modify the draft law based on the input received.  The government has provided a period for public comment on its ongoing tax reform project.

TajikStandard, the government agency responsible for certifying goods and services, calibrating and accrediting testing laboratories, and supervising compliance with state standards, lacks experts and appropriate equipment.  TajikStandard does not publish its fees for licenses and certificates, or its regulatory requirements.

Ongoing assistance from the World Bank’s Public Financial Management Modernization Project helps the Ministry of Finance and some parastatals adopt International Public Sector Accounting Standards (IPSAS) and International Financial Reporting Standards (IFRS) in order to comply with the government’s 2011 Accounting Law.

The Tajik central government is the highest rule-making and regulatory authority.  On a case-by-case basis, this office may delegate regulatory functions to regional or district levels.  The Office of the General Prosecutor, Anti-Corruption Agency, the Tax Committee, and the State National Security Committee oversee government and administrative procedures.

The Tajik government did not announce any regulatory system or enforcement reforms in 2020.  Government agencies submit proposed draft regulations to government commissions.  Once cleared, draft regulations receive final review by the relevant ministries and the Executive Office of President.  Legally, the public has the right to review and monitor the enforcement process.  In practice, however, Tajikistan does not regularly enforce or review regulations. Tajikistan archives its laws, regulations, and policies at

Although the government has taken steps to improve its fiscal transparency, publicly available budget documents fall short of internationally accepted standards. International assessments recommend that Tajikistan break down data by ministry and include information about debt held by State-Owned Enterprises.

International Regulatory Considerations

Tajikistan is a member of the CIS (Commonwealth of Independent States).  Government officials are still studying the prospect of membership in the Eurasian Economic Union.  The regulatory system that governs Tajikistan’s cotton sector incorporates CIS and U.S. technical norms.

Tajikistan became a WTO member in 2013 and notifies all draft technical regulations to the WTO Committee on Technical Barriers to Trade.

Legal System and Judicial Independence

Tajikistan has a civil legal system in which parties to a contract can seek enforcement by submitting claims or disputes to Tajikistan’s Economic Court.  Tajikistan has written laws on commercial activities and contracts.

Nominally, the judicial system is independent.  In practice, the executive branch interferes in judiciary matters.  The current judicial process is neither fair nor reliable.  Outcomes tend to favor the government’s executive branch.

By law, regulation and enforcement actions are appealable and the national court system adjudicates appeals.  In practice, national courts typically carry out executive preferences, leaving business and commercial interests vulnerable to government interference.

Laws and Regulations on Foreign Direct Investment

Several government websites provide information on laws/regulations:

The Tajik government regulates investments through a number of laws, inter alia, the Law on Investment Agreement, Law on Concessions, Law on Resources, Law on Legal Status of Foreigners, Law on Free Economic Zones, Law on Investments, Concept of State Policy on Investments and Protection of Investments, Law on Natural Resources Tenders, and Law on Privatization of Housing.  Historically, inspections lack justification and are a means to extract fines and revenue from the private sector.

The Tajik government’s “one-stop-shop” Single Window website for investors launched in 2019: .

Competition and Antitrust Laws

The Antimonopoly Service under the Government ( is responsible for regulating prices for products of monopolistic enterprises, preventing and eliminating monopolistic activity, and monitoring potential monopolistic abuse and unfair competition.  The agency’s decisions are subject to a legal appeals process, although there are few instances in which decisions have been overruled.

Expropriation and Compensation

The Tajik government can legally expropriate property under the terms of Tajikistan’s Law on Investments, Law on Privatization, civil code, and criminal code.  The laws authorize expropriation if the Tajik government identifies procedural violations in privatizations of state-owned assets or determines a property has been used for anti-government or criminal activities, as defined in the criminal code.  Under the Law on Joint Stock Companies, the government may request that a court cancel the private purchase of shares in SOEs if it determines that there was a violation to the procedure within the original sale.

Tajikistan has a history of expropriating land that was illegally privatized following independence.  After an investigation by government anti-corruption, anti-monopoly, and other law enforcement agencies, the State Committee for Investments and State Property Management can issue a finding that the asset was illegally privatized, and request that the Tajik court system order its return to government control.  Domestic law requires owners be reimbursed for expropriated property, but the amount of the compensation is usually well below the property’s fair market value.

In several cases, Tajik officials have used government regulatory agencies to pressure businesses and individuals into ceding properties and business assets.  The Tajik government has not shown any pattern of discrimination against U.S. persons by way of illegal expropriation.  All privately owned operations are vulnerable to expropriation actions.

The Tajik government may threaten to impose inflated and baseless taxation charges on companies, and use this as leverage to negotiate the transfer of some share of a company to the government.  In cases of expropriations, claimants and others have generally had no access to due process.

Dispute Settlement

ICSID Convention and New York Convention

Tajikistan is not a member state of the International Centre for the Settlement of Investment Disputes (ICSID) Convention.

Tajikistan became the 147th country to sign and ratify the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958), and acceded to the Convention on August 14, 2012.  The convention entered into force on November 12, 2012 – 90 days after depositing the signed text at the UN in accordance with Article XII (2) of the Convention.

Nonetheless, Tajik courts have overturned arbitral awards in favor of connected officials.  Tajikistan signed the Convention with a number of reservations regarding types of arbitration agreements and decisions that Tajikistan can recognize and implement.  One of the reservations established that Tajikistan does not apply the provisions of the Convention to disputes with immovable property – Norway has established a similar reservation.  Another reservation established that Tajikistan applies the Convention only to disagreements and decisions “arising after the entry into force of the Convention and to decisions made in the territories of third countries.”

Investor-State Dispute Settlement

In 2011, Tajikistan joined the Cape Town Convention on International Interests and Mobile Equipment.  This convention and its protocol on Matters Specific to Aircraft Equipment is intended to standardize transactions involving movable property, particularly aircraft and aircraft engines.  The treaty creates international standards for registration of ownership, security interests (liens), leases, and conditional sales contracts, and various legal remedies for default in financing agreements, including repossession and the effect of a particular state’s bankruptcy laws.

Disputes involving foreign investors have primarily centered on the implementation of tax incentives.  In the last ten years, numerous foreign investors have reported difficulty utilizing promised value-added tax exemptions on imported items to Embassy officials.  Tajik procedures require businesses to submit in January of the calendar year a list of goods to be imported, and the exemption then expires at the end of December in that same year.  According to Tajikistan’s Economic Procedural Code, dispute resolution decisions take 30-60 days after the process begins.  In practice, companies say the process typically takes much longer.

International Commercial Arbitration and Foreign Courts

Tajik law recognizes the role of local courts in dispute resolution and arbitration but in reality, there is no reputable arbitration institution for resolving disputes domestically among individuals and businesses.  In practice, local courts are primarily used to resolve disputes over agricultural plot demarcations as part of the land reform process, and do not serve as venues to resolve non-agricultural commercial disputes.  State-owned enterprise TALCO lost an international dispute process in 2013, and eventually came to terms on the dispute settlement in 2017.

Tajikistan has signed bilateral agreements with several countries on arbitration and investment disputes, but local domestic courts do not always properly enforce or recognize these rulings.

Bankruptcy Regulations

Under Tajikistan’s 2003 Law on Bankruptcy, both creditors and debtors may file for an insolvent firm’s liquidation.  The debtor may reject overly burdensome contracts, and choose whether to continue contracts supplying essential goods or services, or avoid preferential or undervalued transactions.  The law does not provide for the possibility of the debtor obtaining credit after the commencement of insolvency proceedings.  Creditors have the right to demand the debtor return creditors’ property if that property was assigned to the debtor less than four months prior to the institution of bankruptcy proceedings.  Tajik law does not criminalize bankruptcy.

4. Industrial Policies

Investment Incentives

According to statements by President Rahmon, there are 240 tax, regulatory, and legal incentives for businesses.  According to the IFC Business Regulation and Investment Policy project, there are 97 incentives for investments.  In practice, businesses and investors cannot access or utilize most of these incentives.

The Tajik government has officially expressed an interest in attracting FDI and in recent years the government has issued state guarantees for joint projects, principally with Chinese investments.  In 2016, Tajikistan’s government approved an ambitious National Development Strategy 2016-2030, which highlights the critical role of private sector investment.  According to 2016-2030 strategy, the Tajik government plans to attract as much as  USD 55 billion in FDI by 2030.  Given the country’s business and tax environment, however, this plan appears to be more aspirational than realistic.  The State Committee on Investments and State Property Management’s website lists government-promoted investment opportunities (

Foreign Trade Zones/Free Ports/Trade Facilitation

The Tajik government has established five Free Economic Zones ( which offer reduced taxes and customs fees to both foreign and domestic businesses.  To be eligible for preferential tax treatment, manufacturing companies must invest a minimum of USD 500,000, trading companies USD 50,000, and service and consulting companies USD 10,000.  The newest Free Economic Zone was created in March 2019, in Kulyob.

Performance and Data Localization Requirements

According to the Tajik Law on Audits, 70 percent of a local company’s workforce must be made up of local employees.  If the CEO of the company is foreign, then the percentage of local staff should be at least 75 percent.  The Tajik government can waive this requirement.

In June 2015, the Minister of Labor, Migration and Employment announced that for large-scale projects implemented in Tajikistan, which are signed between the Tajik government and either a company registered in another country or a government of another country, at least 80 percent of the workforce must be locally hired.  Depending on the qualifications of the local labor force, Tajik authorities may increase this requirement to 90 percent.

Tajik legislation permits foreigners to hold senior management and directorial positions.  It is possible to obtain visas and residence/work permits, but applicants are required to provide documentary support, and most permits cannot exceed one year.  According to Article 3 of government resolution #529 (foreign worker permission procedures,) investors and depositors with more than USD 500,000 in investments do not require work permits for one year from the date of state registration.

The government does not practice forced data localization.  The Tajik government requires all telecommunication service providers to install surveillance equipment.  Russia provides the equipment and technology as a part of the Collective Security Treaty Organization agreement.  Since 2017, Tajikistan’s Telecommunication Agency sends all internet traffic through its unified communication center.  The government does not impede the transmission of customer or other business-related data outside the country’s territory unless the data violates anti-terrorist and anti-extremist laws.  Growing the digital economy remains a priority for Tajik policymakers, who in recent years announced plans to create an Agency on Innovation and Digital Technologies and implement projects from the government’s Digital Economy 2040 concept note.

5. Protection of Property Rights

Real Property

The Tajik government uses a cadaster system to record, protect, and facilitate acquisition and disposition of property, but it needs improvement.  Even when secured interests in property do exist, enforcement remains an issue.  Investors should be aware that establishing title might be a more involved process than in Western countries because title histories can be difficult to find.

Since 2007, the U.S. government has provided significant, sustained, and focused support to the Tajik government on market-driven land reforms.  Most recently, Tajikistan’s Land Market Development Activity (LMDA) successfully launched “one-stop shops” for land registration throughout Khatlon, cutting wait times from 15 to four days.  The activity also supports the launch of a new automated registration system designed to centralize records, streamline procedures, and further simplify land registration.   In 2020, LMDA supported government implementation of single-window principles in land management, and developed a land appraisal law approved by the government to regulate appraisals and better-define land market value.

According to domestic law, all land belongs exclusively to the state; individuals or entities may be granted first or second-tier land-use rights.  The government restricts foreigners’ first-tier land-use rights to 50 years, while Tajik individuals and entities may have indefinite first-tier land-use rights.  Foreigners may request second-tier land-use rights from the government similar to the first-tier rights of Tajik individuals and entities, for periods of up to 50 years.  Tajik first-tier land-use rights holders may also grant foreigners lease agreements for up to 20 years.  Ownership of rural land-use rights can be particularly opaque, since many nominally privatized former collective farms continue to operate as a single entity.  Many of the new owners do not know where their land is and do not exercise their property rights.

Tajik law does not allow the sale of land.  In 2008, however, the government passed mortgage legislation that allows parties to use immovable property as collateral.  All land is the property of the state.  If leaseholders do not use land in accordance with the purpose of the lease, then authorities can revert it to other owners.

Intellectual Property Rights

Tajikistan is a signatory to several international conventions that protect intellectual property rights (IPR), including the World International Property Organization (WIPO) Convention.  Tajikistan has signed 17 WIPO administered treaties.  IPR-related laws, regulations, and treaties are listed here:

Although the novel coronavirus pandemic drained resources and attention away from IPR issues, the Tajik government is actively working to improve IPR protection.  A presidential decree mandating that the government use licensed software led to the September 2019 creation of an interagency working group — chaired by the Ministry of Economic Development and Trade, with participation from the Ministries of Foreign Affairs, Internal Affairs, and Culture, as well as the Customs Service and the Department for the Protection of State Secrets — to develop processes to enforce intellectual property rights.  In 2020, the IPR working group met with donors and the private sector and reported data on court cases related to IPR violations.  Additionally, the working group produced the first draft of the administration’s in-progress National Strategy for the Development of Intellectual Property.  Tajikistan was removed from the USTR Special 301 Watch List in 2019 and is not included in the Notorious Markets List.

Notwithstanding the gains Tajikistan has made in the past couple years, numerous challenges remain as the government lacks the technical capacity to effectively protect patents, copyrights, and other intellectual property.  Despite the IPR protections enshrined in international agreements as well as in Tajikistan’s criminal and civil codes, infringement is widespread and enforcement remains weak. Following a seven-year hiatus between 2012-2018 in which the government declined to share enforcement data, the Ministry of Internal Affairs reported 54 intellectual property rights violations in 2020, and initiated 11 administrative and 43 criminal cases.

At present, IP does not represent a sizeable portion of the Tajik economy, although estimates indicate over 90 percent of software and other media products sold in the country are unlicensed copies, and many “brand name” consumer goods are counterfeit.  Counterfeit goods available in Tajik markets are principally manufactured in China, and most purveyors are independent operators and small traders rather than organized criminal groups.

Tajikistan amended Article 441 of its customs code during WTO accession to provide ex officio authority for customs officers to seize and destroy counterfeit goods.  The Department on Disclosing and Seizing of Counterfeit Products within the Customs Service of Tajikistan has the responsibility to detect IPR-related violations.  Currently, the Customs Service has only three IPR products registered in its customs registry.  Tajikistan’s Law on Quality and Safety of Products requires IPR violators to pay all expenses for storage, transportation, and destruction of counterfeit goods.

To register a patent or trademark with the National Center for Patents and Information (NCPI), applicants must submit an application with all relevant information on the IP and pay a fee.  The NCPI ( will search its records for conflicts and, if none is found, register the IP within 30 days from the time the application is received.  In general, the issuance of a trademark might take four to seven months, while obtaining a patent for an invention could take up to two years.

For additional information about treaty obligations and points of contact at local IP offices, please see WIPO’s country profiles at

Resources for Rights Holders:

U.S. Embassy
Economic Section

American Chamber of Commerce in Tajikistan
+992 (93) 577 23 23 +992 (93) 577 29 29

Public list of local lawyers:

6. Financial Sector

Capital Markets and Portfolio Investment

Foreign portfolio investment is not a priority for the Tajik government, and the country lacks a securities market.  According to government statistics, portfolio investment in Tajikistan totaled USD 502.5 million at the end of 2020.  This includes the USD 500 million Eurobond the National Bank of Tajikistan issued in 2017.  The National Bank of Tajikistan has made efforts to develop a system to encourage and facilitate portfolio investments, including credit rating mechanisms implemented by Moody’s and S&P.  Apart from these initial steps, however, Tajikistan has not established policies to facilitate the free flow of financial resources into product and factor markets.

Tajikistan does not place any restrictions on payments and transfers for current international transactions, per IMF Article VIII.  It regards transfers from all international sources as revenue, however, and taxes them accordingly.  Commercial banks apply market terms for credits, but are also under considerable pressure by governing elites and their family and friends to provide favorable loans for commercially questionable projects.  The private sector offers access to several different credit instruments.  Foreign investors can get credit on the local market, but those operating in Tajikistan avoid local credit because of comparatively high interest rates.

Money and Banking System

According to the latest National Bank of Tajikistan (NBT) report from December 2020, 69 credit institutions, including 18 banks, including one Islamic bank, 18 microcredit deposit organizations, five microcredit organizations, and 27 microcredit funds, function in Tajikistan.  Tajikistan has 356 bank branches, an eight percent increase from 2019.

Tajikistan’s banking system is on a recovery path following a 2015 financial crisis.  AgroInvestBank and TojikSodirotbank, two of Tajikistan’s largest, are in fact collapsed banks awaiting liquidation.  Tajikistan’s banking sector has assets of USD 2.32 billion as of December 2020, a 2.2 percent increase from 2019.  Total liabilities in 2019 were unchanged from 2018, reaching USD 1.6 billion.  Banking-sector capital adequacy and liquidity indicators exceed the NBT’s minimum requirements. Although authorities report 23.4 percent of commercial loans are non-performing, other estimates range as high as 50 percent.

The NBT is Tajikistan’s central bank and, in recent years, has pursued policies to strengthen financial inclusion and cashless payments.  Foreign banks can establish operations but are subject to National Bank of Tajikistan regulations.  United States commercial banks discontinued correspondent banking relations with Tajik commercial banks in 2012.  To establish a bank account, foreigners must submit a letter of application, a passport copy, and Tajik government-issued taxpayer identification number.

Foreign Exchange and Remittances

Foreign Exchange

Tajikistan places no legal limits on commercial or non-commercial money transfers, and investors may freely convert funds associated with any form of investment into any world currency.  However, businesses often find it difficult to conduct large currency transactions due to the limited amount of foreign currency available on the domestic financial market.  Investors are free to import currency, but once they deposit it in a Tajik bank account it may be difficult to withdraw.

In 2015, the National Bank of Tajikistan reorganized foreign currency operations and shut down all private foreign exchange offices in Tajikistan.  Since that time, only commercial bank exchange offices may exchange money and transactions require customers to register with an identity document.  In 2019, the National Bank of Tajikistan launched a national money transfer center that centralizes the receipt of all remittances from abroad.

The government’s policy supports a stable exchange rate but remains susceptible to changes in the Russian ruble due to the high volume of remittances.  During 2020, the Tajik somoni fell 16.6 percent against the U.S. dollar to TJS 11.3 for 1 U.S. dollar.  Defending the somoni’s rate to the dollar puts pressure on Tajikistan’s foreign currency and gold reserves and leads to differences between the official exchange rate and the non-bank market rate.

Remittance Policies

Beginning in 2016, the National Bank of Tajikistan mandated that commercial banks disburse remittances in local currency.  There are no official time or quantity limitations on the inflow or outflow of funds for remittances.  Tajikistan’s tax code classifies all inflows as revenue and taxes them accordingly; however, the Tajik government does not tax remittances from labor migrants.

Sovereign Wealth Funds

Tajikistan does not have a sovereign wealth fund.  The country does have a “Special Economic Reforms Fund,” but, according to official statistics, it is empty.

7. State-Owned Enterprises

World Bank and IMF reports indicate there are 920 state-owned enterprises (SOEs) (up from 583 in 2004) which employ 24 percent of the labor force, use 50 percent of all available credit, and account for 17 percent of the country’s economic output.

SOEs are active in travel, transportation, energy, mining, metal manufacturing/products, food processing/packaging, agriculture, construction, heavy equipment, services, finance, and information and communication sectors.  The government divested itself of smaller SOEs in successive waves of privatization but retained ownership of the largest Soviet-era enterprises and any sector deemed to be a natural monopoly.

The government appoints directors and boards to SOEs but the absence of clear governance and internal control procedures means the government retains full control.  Tajik SOEs do not adhere to the Organisation for Economic Co-operation and Development (OECD) Guidelines on Corporate Governance for SOEs.  When SOEs are involved in investment disputes, it is highly likely that domestic courts will rule in favor of state enterprises.  Court processes are generally non-transparent and discriminatory.

The State Committee for Investments and State Property Management maintains a database of all SOEs in Tajikistan, but does not make this information publicly available.

Major SOEs include:

  • Travel: Tajik Air, Dushanbe International Airport, Kulob Airport, Qurghonteppa Airport, Khujand Airport, and Tajik Air Navigation;
  • Automotive & Ground Transportation: Tajik Railways;
  • Energy & Mining: Barqi Tojik, TajikTransGas, Oil, Gas, and Coal, and VostokRedMet;
  • Metal Manufacturing & Products: Tajik Aluminum Holding Company (TALCO), and several TALCO subsidiary companies;
  • Agricultural, Construction, Building & Heavy Equipment: Tajik Cement; Food Processing & Packaging: Konservniy Kombinat Isfara;
  • Services: Dushanbe Water and Sewer, Vodokanal Khujand, and ZhKX (water utility company);
  • Finance: AmonatBonk (state savings bank), TajikSarmoyaguzor (state investments), TajikSugurta (state insurance);
  • Information and Communication: Tajik Telecom, Tajik Postal Service, and TeleRadioCom

In sectors that are open to private sector and foreign competition, SOEs receive a larger percentage of government contracts/business than their private sector competitors.  In practice, private companies cannot compete successfully with SOEs unless they have good government connections.

SOEs purchase goods and services from, and supply them to, private sector and foreign firms through the Tajik government’s tender process.  Tajikistan has undertaken a commitment, as part of its WTO accession protocol, to initiate accession to the Government Procurement Agreement (GPA).  At present, however, GPA does not cover Tajik SOEs.

Per government policy, private enterprises cannot compete with SOEs under the same terms and conditions with respect to market share (since the government continually increases the role and number of SOEs in any market), products/services, and incentives.  Private enterprises do not have the same access to financing as SOEs as most lending from state-owned banks is politically directed.  Local tax law makes SOEs subject to the same tax burden and tax rebate policies as their private sector competitors, but the Tajik government favors SOEs and regularly writes off tax arrears for SOEs.

Privatization Program

The Tajik government conducted privatization on an ad-hoc basis in the 1990s, and then again in the early 2000s.  Following a World Bank recommendation, in 2020 the government continued implementing its plan to split national electrical utility Barqi-Tojik into three public/private partnerships, responsible for generation, transmission, and distribution but progress has been slow.

Foreign investors are able to participate in Tajikistan’s privatization programs. There is a public bidding process, but the privatization process is not transparent.  Privatized properties have been subject to re-nationalization, often because Tajik authorities claim an illegal privatization process.

In 2020 Tajikistan’s lower house of parliament approved amendments to the state privatization law that remove the Roghun energy project and TALCO aluminum company from the list of state facilities precluded from foreign investment.

8. Responsible Business Conduct

The Tajik government has given no guidance on responsible business conduct for companies, and does not promote OECD or UN recommendations on these issues. There are no standards on corporate governance, accounting, or executive compensation to protect shareholders.  There are no independent NGOs, investment funds, worker organizations/unions, or business associations in Tajikistan that promote or monitor responsible business conduct.

Authorities protect consumer rights through the Law on Consumer Protection.  Citizens may file lawsuits against violators of consumer rights with the court system.  Tajikistan’s state labor union is responsible for safeguarding labor and employment rights.  In practice, no enforcement is in place.  The Tajik government does not fairly enforce domestic law to protect individuals from adverse business impacts.

Although there have been no high-profile allegations of labor rights concerns, in 2020 media reported that a foreign mining company did not allow its workers to leave its compound over COVID concerns.  The Tajik government does not encourage adherence to the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Afflicted and High-Risk Areas.  In 2020, however, the Extractive Industries Transparency Initiative recognized significant progress implementing the EITI Standard in Tajikistan and lifted the country’s suspension, which had been in place since 2016.

9. Corruption

Tajikistan has enacted anti-corruption legislation, but enforcement is politically-motivated, and generally ineffective in combating corruption of public officials.  Amendments to the criminal code in 2016 now allow individuals convicted of bribery-related crimes to avoid prison in return for payment of fines (roughly USD 25 for each day they would have served in prison had they been convicted under the previous criminal code).

Tajikistan’s anti-corruption laws officially extend to family members of officials and political parties.  Tajikistan’s laws provide conditions to counter conflict of interest in awarding contracts.  The Tajik government does not require private companies to establish internal codes of conduct that prohibit bribery of public officials.  Private companies do not use internal controls, ethics, or compliance programs to detect and prevent bribery of government officials.

Tajikistan became a signatory to the UN’s Anticorruption Convention in 2006.  Tajikistan is not a party to the OECD Convention on Combatting Bribery of Foreign Public Officials in International Business Transactions.  Tajik authorities do not provide protection to NGOs involved in investigating corruption.

U.S. firms have identified corruption as an obstacle to investment and have reported instances of corruption in government procurement, awards of licenses and concessions, dispute settlements, regulations, customs, and taxation.

Resources to Report Corruption

Sulaimon Sultonzoda, Head
Agency for State Financial Control and Fight with Corruption
78 Rudaki Avenue, Dushanbe
992 37 221-48-10; 992 27 234-3052; 

(The agency requests that contact be made via a form on their website – )

United Nations Development Program
39 Aini Street, Dushanbe
+992 44 600-56-00

10. Political and Security Environment

Tajikistan’s civil war lasted from 1992 to 1997 and resulted in the deaths of 50,000 people.  Apart from a minor uprising in September 2015, however, political violence following the end of the civil war has been rare.

In 2020, President Rahmon won his fifth-consecutive term in office with 91 percent of the vote.  Earlier in the year, the President’s political party won 47 of 63 seats in parliament.  Tajikistan’s authoritarian ruler has consolidated power by silencing opposition voices and political parties.  As part of its security efforts, the Tajik government has placed numerous restrictions on religious, media, and civil freedoms.

The state, as an extension of the regime, furthers the interests of the ruling elite, often to the detriment of the business community.  Democratic reform is viewed by many elites as a threat to important political and financial interests.  Government institutions are often unwilling or unable to protect human rights, the judiciary is not independent, and the court system does not present Tajiks with a fair or effective forum in which to seek protection.  Law enforcement institutions often overuse their authority to monitor, question or detain a wide spectrum of individuals, and the State Committee on National Security (GKNB) exercises a wide degree of influence in all aspects of government.

11. Labor Policies and Practices

The official unemployment rate at the end of 2020 was 1.9 percent, although the World Bank estimates the unemployment rate to be 10.9 percent.  Government unemployment statistics do not include the roughly one million citizens (12.5 percent of the population) that migrate in search of work in other countries – primarily to Russia.

According to information provided by the Ministry of Labor, Migration, and Employment, Tajikistan’s labor force is comprised of 5.2 million workers.  Due to demographic growth, the World Bank estimates that demand for jobs exceeds job growth by a ratio of two to one.

Unskilled labor is widely available, but skilled labor is in short supply, as many Tajiks with marketable skills choose to emigrate due to limited domestic employment opportunities.  Corruption in secondary schools and universities means degrees may not accurately reflect an applicant’s level of professional training or competency.  Foreign businesses and NGOs report difficulty recruiting qualified staff for their organizations in all specialties.

The Ministry of Labor, Migration and Employment is expanding its network of training centers at which Tajik workers can become more marketable.  The curriculum at these centers is primarily focused on the migrant community, offering training in English, Russian, culture, and history.  Centers also provide certification of a worker’s existing skills, and short-term vocational training as welders, electricians, tractor operators, textile workers, and confectioners.

The International Labor Organization in its 2021 annual report on the application of international labor standards requested additional information from Tajikistan on both the country’s labor inspection practices and legal framework related to trade unions due to concerns of non-compliance with various international regulations.  Article 36 of Tajikistan’s Labor Code gives employers the right to change workers’ contracts (remuneration, hours, responsibilities, etc.) due to fluctuating market conditions.  If the worker does not accept the amended contract, the employer may terminate the worker, but the worker can claim a severance payment equivalent to two months’ salary.

Tajikistan’s Labor Code does not include any provisions for waiving labor regulations to attract or retain investments, but the Tajik government has in some cases waived the requirement that Tajiks make up 70 percent of a company’s labor force.  There are no special regulations regarding treatment of labor in Tajikistan’s free economic zones.

The labor market favors employers.  Although the majority of workers are technically unionized, most are not aware of their rights, and few unions effectively advocate for workers’ rights.  The Tajik government controls unions.  The National Trade Union Federation has not had many disputes with the government.  Tajikistan has no formal labor dispute resolution mechanisms.  Although collective bargaining can occur, it is rare. During 2020, there were no significant labor strikes in Tajikistan.

Tajikistan’s labor code regulates employer-employee relations.  The domestic labor code includes reference to international labor standards but employers may frequently violate or misinterpret procedures.

13. Foreign Direct Investment and Foreign Portfolio Investment Statistics

Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy
Host Country Statistical source* USG or international statistical source USG or International
Source of Data:  BEA; IMF;
Eurostat; UNCTAD, Other
Economic Data Year Amount Year Amount
Host Country Gross Domestic Product (GDP) ($M USD) 2020 $7,986 2018 $7,523
Foreign Direct Investment Host Country Statistical source* USG or international statistical source USG or international
Source of data:  BEA; IMF;
Eurostat; UNCTAD, Other
U.S. FDI in partner country ($M USD, stock positions) 2018 $43 2018 $43 BEA data available at
Host country’s FDI in the United States ($M USD, stock positions) 2018 $N/A 2018 $N/A BEA data available at
Total inbound stock of FDI as % host GDP 2019 50.8% 2018 36.7% UNCTAD data available at

* Source for Host Country Data:  

Table 3: Sources and Destination of FDI
Direct Investment from/in Counterpart Economy Data
From Top Five Sources/To Top Five Destinations (US Dollars, Millions)
Inward Direct Investment Outward Direct Investment
Total Inward 3.722 100% Total Outward 130 100%
China, P.R. 1.454 39.6% n/a n/a/ n/a
Russian Federation 765 20.57%
United Kingdom 369 9.92%
Islamic Republic of Iran 354 9.52%
Switzerland 139 3.74%
“0” reflects amounts rounded to +/- USD 500,000.

Source: TajStats

Table 4: Sources of Portfolio Investment
Portfolio Investment Assets
Top Five Partners (Millions, current US Dollars)
Total Equity Securities Total Debt Securities
All Countries Amount 100% All Countries Amount 100% All Countries Amount 100%
USA 250 50% Country #1 Amount X% Country #1 Amount X%
Austria 250 50% Country #2 Amount X% Country #2 Amount X%

Comment: Tajikistan issued 500 million Eurobonds in 2017. European and U.S banks and funds are key shareholders of the Eurobonds.

14. Contact for More Information

Jason Monks
Economic Officer
109A I. Somoni
+992 37 2292504

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