2022 Investment Climate Statements: Tajikistan

Policies Towards Foreign Direct Investment

The Tajik government consistently calls for greater U.S. investment. Despite this, Tajikistan has traditionally courted state-led investment and external loans from the People’s Republic of China and Russia.  In 2021, overall Foreign Direct Investment (FDI) to Tajikistan roughly doubled to $342 million, and Chinese investments, which account for forty percent of all FDI, increased 175 percent to $211 million.  Iran ($32.6 million) was the second largest source of FDI in 2021, followed by Turkey ($25.1 million) and Switzerland ($21.5 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 legislation 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. In practice foreign companies may encounter different types of hurdles while exercising their rights. For example, registration of a company by a foreign entity or foreigner may be a more complicated process than for local founders.

Several Tajik government agencies are responsible for investment promotion, but they frequently have competing interests.  The State Committee on Investments and State Property Management ( https://investcom.tj ) 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 ( https://www.tajinvest.tj ). Although a donor-supported Consultative Council on the Improvement of the Investment Climate provides a formal venue for dialogue, investors continue to claim that 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 State Committee on Investments and State Property Management screens inbound foreign investments involving government interests, including investments into its five Free Economic Zones, and issues approval or rejection statements. The government takes particular interest in investments requiring government financial support or state guarantees as well as projects that may impact the country’s national security.

Investors must submit their proposals to all relevant government agencies to solicit feedback or objection, and this process can be lengthy and cumbersome.  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.  The review process could reject proposals that violate Tajik law or flag a proposal as “incomplete.”  Applicants may appeal the government’s decision by submitting a claim to the Tajik Economic Court.

Other Investment Policy Reviews

In December 2021 the World Trade Organization conducted its first Trade Policy Review  for Tajikistan. Additionally, in 2020 an OECD Peer Review of Investment Promotion in Tajikistan suggested enhancing communication with existing investors and establishing a clear investment strategy that articulates economic objectives and agency roles.

Business Facilitation

Although the Tajik government 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 ( www.andoz.tj ).  In addition to obtaining state registration through a single-window, a company must also register with the Social Protection Agency ( www.nafaka.tj ); Statistics Agency under the President of Tajikistan ( www.stat.tj ); Ministry of Labor, Migration, and Employment ( www.mehnat.tj ); Sanitary-Epidemiological Service at the Ministry of Health ( www.moh.tj ); as well as with local authorities and municipal services.  According to Tajik regulations, registering a business should take less than five business days; in reality, it may take several weeks or even months due to inappropriate or unlawful actions of the registering agencies.

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.

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. Information about Tajikistan’s bilateral investment treaties is available at: https://investmentpolicy.unctad.org/country-navigator/213/Tajikistan .

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: https://www.irs.gov/businesses/international-businesses/tajikistan-tax-treaty-documents .  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’s other investment agreements include: the Eurasian Investment Agreement; the European Community-Tajikistan Partnership Agreement with the European Union; the Commonwealth of Independent States Investor Rights Convention; the Energy Charter Treaty; and the Organization of Islamic Cooperation Investment Agreement.

Tajikistan does not have a Free Trade Agreement or an Association Agreement in force with the European Union but 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.  Preferential imports from Tajikistan are heavily concentrated in two sectors: industrial products – such as base metals – and textiles.

Although Tajikistan is not a member of the Eurasian Economic Union (EAEU), 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.

A new, ostensibly simplified Tax Code went into force on January 1, 2022 following extensive, World Bank-funded technical assistance; its impact has yet to be assessed. 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. According to Article 189 of the new Tax Code, all manufacturing companies are tax exempt for two years, and that period can be extended based on the size of the investment.

Tajikistan is not a member of the OECD Inclusive Framework on Base Erosion and Profit Shifting.

A list of bilateral agreements to avoid double taxation can be found here: https://andoz.tj/docs/mejdunarodnie-soglasheniya/agreement%20with%2025%20states_ru.pdf .

Transparency of the Regulatory System

Tajikistan’s regulatory system lacks transparency, and the government does not encourage companies to disclose environmental, social, or governance 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 or unpublished.  Although Tajikistan archives laws, regulations, and policies at www.mmk.tj , investors must purchase access to Adliya, a commercial legal database, to obtain updated legal and regulatory information.

The Tajik government rarely publishes proposed laws and regulations in draft form for public comment. Government agencies submit proposed draft regulations to government commissions, which receive a final review and approval from the Executive Office of President.

TajikStandard, the government agency responsible for certifying goods and services 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 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. Publicly available budget documents fall short of internationally accepted standards, but the government has made progress towards greater fiscal transparency in recent years.

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 EAEU.  The regulatory system that governs Tajikistan’s cotton sector incorporates CIS and U.S. technical norms. Tajikistan became a WTO member in 2013. According to a December 2021 WTO report, Tajikistan has outstanding or outdated notifications in a number of areas.

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. 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.

Laws and Regulations on Foreign Direct Investment

The Tajik government regulates investments through several 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.

The Tajik government’s “one-stop-shop” Single Window website for investors launched in 2019: https://investcom.tj/en/investments/single-window/ .

Competition and Antitrust Laws

The Antimonopoly Service under the Government ( http://www.ams.tj ) is responsible for regulating prices for products of monopolistic enterprises and for preventing and eliminating monopolistic activity, 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.

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.  The Tajik government has not shown any pattern of discrimination against U.S. persons by way of illegal expropriation.

Dispute Settlement

ICSID Convention and New York Convention

Although Tajikistan is not a member state of the International Centre for the Settlement of Investment Disputes (ICSID) Convention, the Tajik government acknowledges the ICSID is currently reviewing a claim against Tajikistan. 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. Nonetheless, Tajik courts have overturned arbitral awards in favor of connected officials.

Tajikistan signed the Convention noting that it does not apply the provisions of the Convention to disputes with immovable property – Norway has established a similar reservation. Tajikistan also established that it 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.  Numerous foreign investors report difficulty utilizing promised VAT exemptions on imported items.  According to Tajikistan’s Economic Procedural Code, dispute resolution decisions should 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.  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.

Investment Incentives

According to statements by President Rahmon, there are over 200 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 State Committee on Investments and State Property Management’s website lists government-promoted investment opportunities ( https://map.investcom.tj/ ).

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. Tajikistan’s ambitious National Development Strategy 2016-2030 highlights the critical role of private sector investment, but the strategy’s goal to attract $55 billion in FDI by 2030 may be more aspirational than realistic.

Foreign Trade Zones/Free Ports/Trade Facilitation

The Tajik government has established five Free Economic Zones ( http://www.fez.tj ) offering 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 $500,000, trading companies $50,000, and service and consulting companies $10,000. The newest Free Economic Zone was created in March 2019, in Kulob.

Performance and Data Localization Requirements

The government does not practice forced data localization but does require telecommunication service providers to install surveillance equipment provided by the Russian Federation as part of a 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.

Real Property

The Tajik government uses an outdated cadaster system to record, protect, and facilitate acquisition and disposition of property, and 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. The activity also supports the launch of a new automated registration system designed to centralize records, streamline procedures, and further simplify land registration.

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.

Tajik law does not allow the formal sale of land.  In 2008, however, the government passed mortgage legislation that allows parties to use immovable property as collateral.  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 18 WIPO administered treaties.  IPR-related laws, regulations, and treaties are listed here: http://www.wipo.int/wipolex/en/profile.jsp?code=TJ 

The IPR landscape underwent few changes in 2021 as the government took largely cosmetic steps towards the protection of intellectual property. The government adopted a 2021-2030 National Strategy for the Development of Intellectual Property, but the strategy offers few specifics or benchmarks to guide officials in its implementation and comes with no additional resources or funding. Tajikistan was removed from the United States Trade Representative’s Special Watch List in 2019 and is not included in the Notorious Markets List.

At present, sales from IP intensive industries do not represent a sizeable portion of the Tajik economy. Moreover, 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 products manufactured in the People’s Republic of China. Officially, Tajikistan amended its customs code during WTO accession to provide authority for customs officers to seize and destroy counterfeit goods; in practice, IP enforcement actions are limited.

To register a patent or trademark with the National Center for Patents and Information (NCPI), applicants must submit an application and pay a fee.  The NCPI ( www.ncpi.tj ) will search its records for conflicts and, if none is found, should 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: https://www.wipo.int/directory/en/ 

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 $502.5 million at the end of 2021.  This includes the $500 million Eurobond the National Bank of Tajikistan (NBT) issued in 2017.  The NBT 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.  Politically-driven lending has historically saddled commercial banks with a high percentage of non-performing loans.  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 NBT report from December 2021, 62 credit institutions, including 13 banks, including one Islamic bank, 18 microcredit deposit organizations, four microcredit organizations, and 27 microcredit funds, function in Tajikistan.  Tajikistan has 295 bank branches and 1,204 banking service centers. The National Bank has estimated roughly 25 percent of Tajiks have a bank account.

Tajikistan’s banking system is on a recovery path following a 2015 financial crisis.  AgroInvestBank and TojikSodirotbank, two of Tajikistan’s largest, entered the liquidation process in May 2021.  Tajikistan’s banking sector has assets of $1.98 billion as of December 2021, while liabilities reached $1.53 billion.  Although authorities report 13.4 percent of commercial loans are non-performing, other independent estimates are considerably higher.

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 NBT 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, but investors find it difficult in practice to conduct large currency transactions due to the limited amount of foreign currency in the domestic financial market. Investors are free to import currency, but once deposited in a Tajik bank account it may be difficult to withdraw.

In 2015, the NBT shut down all private foreign exchange offices in Tajikistan and restricted money exchange to commercial banks – transactions require customers to register with an identity document.  In 2019, the NBT launched a national money transfer center that centralizes the receipt of all remittances from abroad.

The NBT strives for a stable exchange rate but remains highly susceptible to changes in the Russian ruble due to the high volume of remittances.  In March 2022, the Tajik somoni fell 15 percent against the U.S. dollar to TJS 13 for 1 U.S. dollar.

Remittance Policies

In 2016, the NBT 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.

World Bank and IMF reports indicate there are 920 state-owned enterprises (SOEs), 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. The State Committee for Investments and State Property Management maintains a private database of all SOEs in Tajikistan.

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 OECD Guidelines on Corporate Governance for SOEs.  When SOEs are involved in investment disputes, domestic courts typically rule in their favor.  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.  Tajikistan has undertaken a commitment, as part of its WTO accession protocol, to initiate accession to the Government Procurement Agreement (GPA), but the agreement does not cover SOEs.

Privatization Program

The Tajik government conducted privatization on an ad-hoc basis in the 1990s, and again in the early 2000s.  Following a World Bank recommendation, in 2020 the government began splitting national energy parastatal Barqi Tojik, which is now legally three distinct public/private partnerships.

Foreign investors are able to participate in Tajikistan’s privatization programs.  There is a public bidding process, but the privatization process is not transparent.

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, 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, and 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 but in practice, no enforcement is in place.

Additional Resources

Department of State

• Country Reports on Human Rights Practices;
• Trafficking in Persons Report;
• Guidance on Implementing the “UN Guiding Principles” for Transactions Linked to Foreign Government End-Users for Products or Services with Surveillance Capabilities;
• U.S. National Contact Point for the OECD Guidelines for Multinational Enterprises; and;
• Xinjiang Supply Chain Business Advisory 

Department of the Treasury

• OFAC Recent Actions 

Department of Labor

• Findings on the Worst Forms of Child Labor Report ;
• List of Goods Produced by Child Labor or Forced Labor ;
• Sweat & Toil: Child Labor, Forced Labor, and Human Trafficking Around the World  and;
• Comply Chain .

Climate Issues

The government’s 2016-2030 National Development Strategy and midterm goals in the 2021-2025 period of the strategy promote green economy principles with few specifics. Tajikistan uses tree plantings, hydropower, and regional energy integration to work towards environmental goals but has stressed that international cooperation and financial assistance would be keys to success. Tajikistan has prioritized industrialization for economic development and poverty reduction and, accordingly, has not pledged to reach net-zero carbon emissions.

Additionally, the government’s National Climate Change Adaptation Strategy for the period up to 2030 stresses the country’s vulnerability to climate change, which it identifies as a barrier to development priorities. Priority sectors under the strategy include energy, water resources, transport, and agriculture.

Tajikistan ranks 135 in terms of global emissions rankings, and 96 percent of energy generation is hydropower. In the 2021 Climatescope ranking of the most attractive destinations for energy transition investments, Tajikistan places 97 of 136 countries ranked.

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 allow individuals convicted of bribery-related crimes to avoid prison in return for payment of fines (roughly $25/day they would have served in prison).

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.  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

Contact at the government agency or agencies that are responsible for combating 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
info@anticorruption.tj; agenti@anticorruption.tj
(The agency requests that contact be made via a form on their website – www.anticorruption.tj )

Contact at a “watchdog” organization:

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

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.

The official unemployment rate at the end of 2021 was 2.2 percent, although the World Bank estimates the unemployment rate to be 10.9 percent. Estimates on labor force participation in the informal sector vary widely, but some Embassy contacts speculate half of all Tajiks work outside of the formal sector.  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 5.6 million workers.  Due to demographic growth, the World Bank estimates that demand for jobs exceeds job growth by a ratio of two to one. Tajikistan placed last in the Eastern Europe and Central Asian Region in the World Economic Forum’s 2021 Global Gender Gap Index (125 of 156 countries ranked), which noted women make up only 31 percent of the Tajik labor force and often hold jobs with few protections and meager earnings.

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, international organizations, 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 donor-assisted 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 labor market favors employers.  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 in Tajikistan’s Free Economic Zones or to attract or retain investments, but the Tajik government has in some cases waived requirements on the percentage of Tajiks which make up a company’s labor force.  According to the Tajik Law on Licenses, foreign companies may negotiate the percentage of the foreign work force under an investment agreement. Large-scale projects signed between the Tajik government and a foreign entity or government require 80 percent of the workforce to be locally hired. 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.

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.  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.  Tajikistan has no formal labor dispute resolution mechanisms.  Although collective bargaining can occur, it is rare. There were no significant labor strikes in Tajikistan during 2021.

There are opportunities for the Development Finance Corporation to work in Tajikistan.  The Overseas Private Investment Corporation (OPIC) has supported a potato chip factory, an expansion at the University of Central Asia, and consulting companies.

Tajikistan signed an investment incentive agreement with the United States in 1992, with provisions for issuing investment insurance, loans, and guarantees administered by OPIC.

* Source for Host Country Data: TajStats

Almaz Saifutdinov
Economic/Commercial Specialist
109A I. Somoni
+992 37 2292355
saifutdinov@state.gov