TAJIKISTAN Law and Practice Contributed by: Farhad Azizov and Shavkat Akhmedov, AAA Law Offices
however, remain subject to Tajikistan’s anti-money laundering (AML), counter-terrorist financing (CFT), and sanctions rules. Foreign exchange operations can only be restricted under national law for AML/CFT or national security reasons. The National Bank of Tajikistan regulates cur - rency positions and sets limits for banks and Islamic credit institutions operating in foreign currency. Sanctions and Compliance Cross-border investment and currency movements must comply with Tajikistan’s AML/CFT framework. Financial institutions must observe National Bank rules and any sanctions recognised by the state. Transfers can be delayed or limited to meet these compliance obligations. Investment Stability Tajik law provides strong investor protection against adverse legal changes. New laws that worsen condi - tions for ongoing projects do not apply retroactively. In addition, investors benefit from a 15-year “stabili - sation guarantee”, under which the legal conditions existing at the time of investment continue to apply if subsequent rules are less favourable. Expropriation and Requisition Expropriation is only permitted for public interest, on a lawful and non-discriminatory basis, and must be accompanied by prompt and adequate compensation reflecting market value, typically in the investment cur - rency. Interest accrues from entitlement until payment. Requisition is allowed only in emergencies and must be followed by return or compensation. Investors can challenge such measures in court or arbitration. Equal Treatment Foreign investors enjoy the same legal protection as domestic investors. Discrimination based on nationali - ty or other grounds is prohibited. In practice, Tajikistan also applies a most-favoured-nation approach, ensur - ing that investors from one country receive conditions no less favourable than those offered to others. Investment Agreements and Incentives The government may conclude individual investment agreements that provide tailored incentives, such as:
• preferential tax or customs treatment; • simplified licensing or registration procedures; • flexibility in foreign exchange rules; and • permission to maintain accounts in Tajikistan or abroad. Such benefits are negotiated on a case-by-case basis and should be expressly documented in the agree - ment. Sectoral and Activity Restrictions While Tajikistan is broadly open to foreign investment, the government may restrict or prohibit specific sec - tors for national interest, environmental, or security reasons. Investors should verify current lists before entering the market. In the financial sector, Islamic credit institutions face limits on investments and ownership. They generally cannot invest more than 10% of regulatory capital in securities or acquire shares in other credit institu - tions without prior approval. Excess holdings or non- operational assets must be divested within defined timeframes. Real Estate and Corporate Structures Foreign-invested companies, branches, and repre - sentative offices are registered under Tajik corporate law. Investors should plan for standard procedures such as notarisation, translation, and registration timelines. Foreign investors typically hold long-term land use rights rather than unlimited land use rights enjoyed by domestic entities. These rights are transferable and protectable but must align with zoning and sectoral regulations. Early verification of project land rights and local approvals is recommended. Transfers, Guarantees, and State Liability The state is not automatically responsible for the obli - gations of public or private entities involved in invest - ments. Guarantees apply only where explicitly grant - ed. Investors should rely on contractual protections and collateral rather than assumed sovereign backing.
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