Land rights for foreign investors in Turkmenistan

1) Can a foreign company/foreigner acquire land in the host country, and what forms are permitted: ownership, long-term lease, sublease, servitude?

In Turkmenistan, foreign companies and individuals are not permitted to own land outright. Instead, they may obtain land use rights exclusively through long-term leases, as provided under Article 17 of the Land Code of Turkmenistan.

2) Are there restrictions on land categories (agricultural/non-agricultural, border areas, strategic plots, coastal zones) and on size/duration of ownership/use?

Foreign citizens, legal entities, foreign states, and international organizations may lease land in Turkmenistan only for non-agricultural purposes. Permitted uses include construction projects, commercial and residential facilities, warehouses, transport terminals, and other temporary structures (Article 48(1) of the Land Code). Lease terms vary: up to 40 years for construction and other long-term non-agricultural purposes, and up to 5 years for temporary facilities such as warehouses, parking areas, or residential premises (Art. 44(5)). All such leases must be registered with the state land resources agency, which also oversees on-site demarcation of leased plots.

3) What is the best way to structure the transaction: purchase of shares in a local landholding company, direct land acquisition, long-term lease through an SPV, concession, or PPP?

Foreign individuals or entities are not entitled to acquire land ownership directly, nor to hold shares in local landholding companies as a substitute for ownership. The only available structure is a long-term lease arrangement, which may be entered into directly or through a special purpose vehicle (SPV). Other mechanisms, such as concessions or public–private partnerships, may be available depending on the sector, but they do not replace the underlying land lease requirement.

4) What approvals and permits are required (government, municipality, land commission, antimonopoly authority), and how long does the process usually take?

In Turkmenistan, land leases for foreign citizens, legal entities, foreign states, and international organizations are granted by presidential decree, following submission of a request to the Cabinet of Ministers (Article 16 of the Land Code). Once approved, the Land Resources Service of the Ministry of Agriculture, through its relevant department, defines plot boundaries, prepares land documentation, and issues a Certificate of Lease. These procedures are generally completed within 30 calendar days.

5) How is land due diligence conducted: boundaries, cadastre, encumbrances, servitudes, disputes, mortgages, designated use, environmental and urban planning restrictions?

Land due diligence in Turkmenistan can be carried out through verification of several key aspects: 

• The boundaries and legal status are recorded in the state land cadastre maintained by the Land Resources Service of the Ministry of Agriculture;
• Information on encumbrances, easements and pledges is checked with the Service for State Registration of Rights to Immovable Property under the Ministry of Adalat (Ministry of Justice);
• Compliance with the intended purpose, environmental and town-planning requirements is controlled by the State Committee for Environmental Protection and Land Resources. 

In addition, any transactions contrary to state or public interests are considered null and void, and participants are liable under the law (Article 53 (2), 116 of the Land Code).

6) Is it possible to change the designated use of land (re-zoning) for the project, what is the process, timing, risks of refusal, and possible appeals?

The legislation does not provide for changing the intended purpose of land plots (re-zoning). The Land Code establishes the division of land into funds according to their intended purpose, and it is impossible to transfer a land plot from one fund category to another. Accordingly, there is no procedure, deadlines and mechanisms for appealing against the refusal, as the very possibility of changing the target designation is not established by law.

7) What mechanisms exist to protect rights: registration of title, title insurance (if available), contractual penalties, international arbitration, investment agreements/stabilization clauses?

In Turkmenistan, one of the mechanisms for protecting land rights is state registration, which is carried out by the territorial bodies of the Registration Service and confirmed by the relevant documents: the State Act on the Right of Ownership or Use of Land and the Certificate of the Right to Lease (Article 13 of the Law “On the State Land Cadastre”). State bodies for land resource management, local executive bodies, and kazyets (courts) are responsible for resolving property and land disputes, and their decisions are enforceable without suspension (Articles 113-115 of the Land Code).

8) What are the tax and payment aspects: land tax, lease payments/indexation, VAT/profit tax on disposal, incentives for priority investment projects, transfer pricing in land transactions?

There is no land tax in Turkmenistan, as land is exclusively owned by the state (Article 22, Land Code), and foreigners can only have lease rights. The rent is established on the basis of the Dovletnama and certificate and is paid quarterly to local budgets, its amount depends on the location of the plot and the category of the lessee.

Below are the amounts of land rent in Turkmenistan for 1 year, which must be paid quarterly: 

For foreign citizens and legal entities (in US dollars per 100 m2):

• Ashgabat city - 400.0
• Velayat (Regional) centres - 200.0
• District centres and cities - 200.0
• Villages, rural settlements and others - 100.0

For foreign states, diplomatic governments, consular offices, international organisations and their representative offices in Turkmenistan and persons equal to them (in US dollars per 100 m2):

• Ashgabat city - 200.0
• Velayat (Regional) centres - 100.0
• District centres and cities - 100.0
• Villages, rural settlements and others - 100.0

VAT and profit tax are not applied to land alienation, special tax incentives for priority investment projects in terms of land relations are not established, and transfer pricing rules are not applied to land transactions.

Authors: Lachin Amandurdiyeva, Annamenli Rozymyradova, Gulenar Akmyradova.