Free Economic Zones are the economic development mechanism. The state creates special areas which will have special legal status and preferences for attracting local and foreign investments in the country’s priority sectors.
A project under The Government of the Republic of Tajikistan Decree on Free Economic Zones in RT was drawn up in 2005 which after coordination with relevant ministries and departments was directed for approval to the Government of the Republic of Tajikistan.
The decision to create FEZ was taken on 2nd May 2008. Regulation of FEZ was approved at the same time in October. 4 free economic zones were created under Government Decree: Panj, Sughd, Dangara and Ishkoshim.
The Administration of Sughd FEZ began its functioning in 2009 and a year later the first subjects were registered on August 18, 2010.
The state creates favorable conditions for investors by offering tax and customs preferences.
The FEZ subjects pay only 2 kind of tax from 10, stipulated by Tax Code of Tajikistan, namely tax on income (from 8 to 13% withheld from employer’s salary) and social tax (25% on payroll).
The goods placed on Sughd FEZ territory are considered to be the goods outside the customs territory of Tajikistan. This allows importing the goods without payment of import duty and VAT from abroad.
Import of foreign and domestic goods, machinery and construction site equipment into FEZ territory is free from customs duties and taxes.
Export from the territory of the free economic zone of the goods outside of the Republic of Tajikistan shall not be subject to taxes and customs duties, except for the fees for customs clearance, and the bans and the restrictions of economic nature shall not apply.
When goods are exported from FEZ territory to Tajikistan, customs duties will not be charged. VAT is paid by buyer.
Sughd FEZ is an innovative and industrial zone, therefore the priority activities can be regarded those activities that have a novelty or are not popular and largely absent in Tajikistan. The production of excisable goods is prohibited except for the production of cars.
Individual entrepreneurs, companies as well as their branches and representative offices can be a subject of Sughd FEZ regardless of their type of business stipulated by the legislation of Tajikistan.
One of the most main goals of Sughd FEZ is to attract foreign direct investment (FDI).
Equal legal treatment of foreign investment is guaranteed in Sughd FEZ as well as avoiding any form of discrimination of companies with foreign investment in accordance with the legislation of the Republic of Tajikistan and International Law). A foreign subject has a right to possess, use and dispose with the results of his investment. Profit earned by foreign investors and salaries of foreign workers (in a foreign currency) can be freely transferred abroad.
You must file an application for obtaining a status of the subject, present a business-plan and submit a set of documents to FEZ Administration. You also must defend the investment project in the Ministry of Economic Development and Trade, to conclude a contract with FEZ Administration. For further information click here.