New restrictions to be imposed for entrepreneurs

Starting from Monday, 4 November the Central Bank of Turkmenistan is imposing restrictions on foreign currency withdrawals for entrepreneurs who hold personal foreign currency accounts in Turkmenistan's banks.

From now on private business owners will be able to withdraw a maximum of $1000 (one thousand US dollars) a month.

Most likely these restrictions may result in the fact that entrepreneurs will start concealing their foreign currency savings from the authorities, refrain from using and replenishing their foreign currency accounts in Turkmen banks and try to hide their income. The federal treasury will consequently receive less tax revenues.

Let us remember that, effective 26 August, restrictions on cash withdrawals from entrepreneurs' accounts were introduced. They were allowed to withdraw a maximum of 8800 manats ($3090) a month from their accounts. After we had published the article devoted to this topic and posted a scanned copy of the documents, the restrictions were lifted.

However, just over two months have passed and the Central Bank has imposed new restrictions. It is likely that the banking sector is experiencing an acute shortage of cash and the overall economy is seriously constrained. The authorities have decided to address these concerns by imposing restrictions on private businesses.

The World Bank, which compiles annual ratings assessing the investment climate for running businesses in national economies, never includes Turkmenistan in their listings simply because the country does not provide any data.

It should be highlighted that the company registration procedure in Turkmenistan takes two to three months for residents. The registration of a foreign company depends on the founder's citizenship. It takes three or more months to obtain a permit at a cost of $3000, and about $50000 on top of that which ends up in the pockets of government officials.

As is witnessed by Turkmen and foreign entrepreneurs it is very risky and troublesome to run a business in Turkmenistan. Moreover, the authorities continue to make never-ending obstacles for businessmen.

Source: TIHR