General
Businesses may operate in Tajikistan through a number of different forms; the main being limited liability companies; open and closed joint stock companies; private enterprise; branches and representative offices of foreign companies. The most common types of business presence in Tajikistan for foreign companies are: • limited liability companies; • open and closed joint stock companies; • representative offices and branches.
Limited Liability Companies
The business form offering the most flexibility in Tajikistan is the limited liability company or LLC, with minimum capital requirements of no less than 500 Somoni (approximately US$ 55). Owner equity shares are determined by capital contributions. LLCs may engage in any type of activity (licensed or otherwise) permitted by domestic legislation; float obligations and other securities. They are governed through shareholder meetings, which are responsible for electing executive bodies (sole or collective). Shareholders may withdraw from an LLC and receive payment for their share of net assets. Any remaining partners have the pre-emptive right to acquire any shares being sold. An LLC with a single partner may not act as the sole partner of another LLC. Likewise, the maximum number of partners in an LLC is 30.
Joint Stock Companies (JSC)
JSCs are divided into open and closed types. Open joint stock companies may have unlimited shareholders. Minimum charter capital is 5000 Somoni for open joint stock company (approximately US$530). They are subject to elaborate disclosure requirements, but may openly trade their shares similar to a western “public” company. A closed joint stock company is limited to a maximum of 50 shareholders. Minimum charter capital is set at 1,000 Somoni (approximately US$ 110). A closed joint stock company is often the structure preferred by minority partners in a joint venture as the JSC Law grants greater rights to minority shareholders than that governing LLCs. Under the JSC Law:
- a closed joint stock companies may engage in any type of activity (licensed or otherwise) permitted by law;
- shares are allocated exclusively among founders or another predetermined group of persons. Closed joint stock companies may not offer shares to an unlimited group of persons;
- shareholders govern close joint stock companies through shareholder meetings held at least once a year.
Branches and representative offices
Under the Civil Code, both branches and representative offices are treated as the subdivision of the head office of a foreign legal entity. Branches are entitled to perform all or a part of a legal entity’s functions, including representation and entrepreneurial activities, while representative offices may only represent their parent company’s interests.
Registration requirements
The tax authority of the Republic of Tajikistan is responsible for the state registration of legal entities. To register, applicants should submit:
- an application on set form;
- the Founder’s resolution on incorporation a legal entity signed by the founders;
- a copy of document deemed to be proof of identity a head of the executive body of the creating legal entity;
- If the head of the executive body of the created legal entity is a foreign citizen, than the copy of the document confirming presence and working on the territory of the RT (the visa, the registration card and the residence permit for validity period not less than three months) is required;
- a copy of document deemed to be proof of identity of every founder — individual;
- for the founder — joint stock company — extract from the register of shareholders and certifying documents of the holder of the shareholders’ register; and a certificate of the tax authority on absence of tax debt from the founder — legal entity;
- for the founder — foreign legal entity — copy of the state registration or extract from the register of the legal entities or other equivalent document confirming that the foreign legal entity is operating legal entity under the laws of its country;
- copy of the document confirming legal address a document confirming payment of state duties (receipt or payment order). The state registration process takes up to 5 working days. Tajikistan adopted “one-stop” registration system, whereby the registrar is responsible for registration in tax, statistical and state social insurance registration.
State registration of a branch/ representative office of a foreign legal entity.
To register a branch or representative office, applicants should submit:
- an application on the set form;
- notarized parent company constitutive documents;
- the relevant parent company resolution to: – Incorporate a branch/representative office. – Appoint a chief executive to the branch/representative office.
- a copy of document deemed to be proof of identity a head of the executive body of the branch\RO if the documents are submitted by the head of the executive body. If the head of the executive body of the branch\RO is a foreign citizen, than the copy of the document confirming presence and working on the territory of the RT;
- parent company power of attorney to the branch/representative office chief executive;
- a copy of the document confirming state registration of the parent company;
- a copy of the document confirming of legal address;
- a document confirming payment of state duties (receipt or payment order). The branch/representative office registration procedure takes up to 5 business days.