Tajikistan Adopts a 16-Year Strategy for Attracting Investments

11 August 2025

The main goal is, obviously, to attract new investments, create jobs, diversify the economy, and build new businesses and industries.

WHAT IS IN THERE?

 The strategy focuses on the following main areas:

Green Vision: Strategy aims to promote Tajikistan as a "green country" with a huge potential for renewable energy, especially from its vast hydropower resources. It also highlights that the country has large reserves of minerals like lithium and copper, which are essential for green technologies.

The strategy's decision to brand Tajikistan as a hub for "green investments" is a key strength. It recognizes that global capital is increasingly flowing toward sustainable projects. By leveraging the country's massive hydropower resources and minerals for the green transition, the plan creates a powerful and unique story for investors that goes beyond simple financial incentives. This makes Tajikistan a more attractive destination for a specific and influential group of investors.

Highlighting the country's main asset: Tajikistan has the eighth-largest hydropower potential in the world, holds 60% of Central Asia's total water resources, and is politically stable. It also notes a young, growing population and a strategic location as a potential transit hub.

The document correctly identifies the nation's key assets. It emphasizes that Tajikistan already has the foundation for its "green" brand: 98% of its electricity is generated from renewable sources, and it has an incredible hydropower potential that is 20 times larger than what is currently being used. This honest and detailed self-assessment is essential for building a credible investment plan.

 Improving legal environment: The plan proposes improving the legal system to creating new support structures for investors, creating an "investment ombudsman" to protect investor rights, which could increase confidence.

The strategy proposes a wide range of policy improvements. These include simplifying business registration, reducing the number of government inspections, and introducing special "investment" visas to make it easier for foreign professionals to enter the country. By proposing reforms across multiple areas, the government signals its commitment to creating a stable and predictable business environment, which is what investors value most.

 WHAT IS NOT THERE:

The plan is still a high-level policy statement, not a concrete plan of action. This seems its biggest weakness. Broad, ambitious language does not extend to explaining how to achieve the goals, when they will be completed, or who is responsible for them. The proposed solutions to the correctly identified real-world problems of today’s Tajikistan are not specific enough.

The plan seems to focus more on what needs to be done than on how. For instance, it says the government needs to "continue reforms" and "develop mechanisms" for public-private partnerships, but it doesn't provide a list of specific laws to be changed, who is in charge, or what the timeline is. This makes it very difficult for anyone - whether a government official or a potential investor - to understand the actual next steps.

 There is a disconnect between the problems identified and the solutions proposed. For example, the plan correctly states that a winter electricity shortage is a major roadblock to attracting investment. However, the solution it offers is simply to "develop infrastructure" without a specific, funded plan to build the power plants or other infrastructure needed to solve the problem. The document also highlights issues like a weak transport network and low internet speeds but again offers vague solutions rather than a concrete, master plan for upgrading these critical areas.

 The plan sets very ambitious financial goals, like increasing foreign direct investment from $459 million in 2024 to over $5 billion by 2040. So far economic analysis has not been provided to show how this massive increase will be achieved, especially given the challenges it identifies.

 The strategy proposes creating new bodies like a national investment operator and an ombudsman. However, the document itself points out that "insufficient inter-agency cooperation" is already a major problem. The plan doesn't explain how these new institutions will overcome the existing bureaucracy, creating a risk that they will just add more layers of complexity instead of solving the problem. It lacks a clear, practical plan for how these new bodies will function and have the authority to get things done.

Key industries and problems:

• Energy: The plan highlights the country's huge potential for hydropower. However, winter energy deficit needs yet to be balanced out with promoting large-scale energy exports through projects like CASA-1000.
• Industry and Mining: The plan aims to shift from simply extracting raw materials to creating high-value finished products. However, is still required to make this happen. The document mentions that most foreign investment in this sector currently goes to mining, so a clear plan is needed to reverse this trend.
• Transport and Logistics: The strategy correctly identifies that poor transport and logistics are a major barrier to trade and investment, noting it increases the cost of goods. This, however is addressed - so far – only with a wish list of potential investment areas, which puts the burden of planning and financing entirely on the investor.
• Agriculture, Tourism, and ICT: there good opportunities are not matched with practical solutions for the problems. For example, the tourism, the country's beauty and safety need the fixing of the high cost of flights and the lack of flight routes. Similarly, it promotes the ICT sector but doesn't provide a concrete plan for improving the slow and unreliable internet service, which is a major barrier to digital development.

Taking security over the bank account in Tajik law

23 June 2025

As weird as it may sound, to date, Tajik law does not offer a straightforward option for lenders to take security over the bank accounts of the borrower. This article briefly explores the exiting legal framework, its limits and the options that are available currently in the Tajik law to provide comfort to those lenders who would still consider taking security over the bank accounts.

Current law on pledges of movables allows explicitly only for taking security over the cash amounts which can be either “locked in” in a bank account or with a notary (as a deposit). The security can take place only by way of the security holder taking possession of that money making this form of security a traditional “mortgage”.

Obviously, this type of security may not be rational from the perspective of both the security provider and the security holder where the very cash needs to be flowing to allow for business to operate especially where the security provider is a credit institution. In an English law this would be a “floating charge”. In Tajik law, however, such floating charge can be said to have very limited existence – in the form of a goods in circulation – and does not extend to moneys. And it would not be legally possible to go and attach the accounts simply by exercising a notification to the bank and taking possession of them. The enforcement would have to go through a normal enforcement process through private or public sale/auction, in or outside the court proceedings.

Moreover, the enforcement procedures do not easily lend themselves to accommodating the interests of the security holder when it comes to security over moneys on the bank account. A common approach for enforcement (be it with or without court leave) would be to sell the assets. In the case with the moneys, this would seem impossible. Hypothetically, if the security is a foreign currency money, then it might be sold, i.e. converted into a local currency (and this would perhaps work the other way around, too), but the exchange losses may make this unattractive an enforcement, besides that the fact that the whole process would seem far from being commonly accepted. Ultimately, this existing enforcement procedures were not designed with moneys in the mind as their subject matter.  

Outside these legal obstacles, there is one more fundamental one that relates to the enforcement itself. In an out-of-court proceedings to which parties may opt into contractually, there is always a possibility for the security provide to involve a court with the latter potentially being unfettered in its abilities to delay or hamper the process and thus watering down the essence of what would otherwise be a quick release for the security holder.

Finally, since legally this is a borrower’s account, it remains open to the borrower to close the account if it wishes to do so.

Against all these legal hurdles, there are still tools which may be relied upon and invoked to provide certain security to the interests of the financier. These include:

• Sticking to the security agreement over the bank accounts more as a way to retain control over the disposition of money on the bank account. This would be effected if the bank was properly notified of the created security over the accounts by both the security provider (whose accounts are held with that bank) and security holder;
• Having the borrower/security provider issue an irrevocable power of attorney in favor of the financer/security provider in respect of the accounts both for the purposes of exercising control over the bank accounts ad during the enforcement (when and if the time comes) which would potentially provide security provider with maximum powers. This would also provide a contractual prohibition on the Borrower’s ability to manage money on the secured bank accounts;
• An additional tool would be to have the security provider act as a joint-signatory on the bank accounts - this can be opted into as a separate or in addition to the previous option(s).

While these tools are not security interest in the original sense they may be said to be quasi- security instruments with almost the same effect (if not potentially grating the security holder a wider leverage against the borrower).

Besides, in line with spirit of Article 9 of the Uniform Commercial Code (UCC) Tajik law since some time introduced the possibility to register any security-like interests which have the same effect of a traditional security. Thus, essentially, any encumbrance or interest can be registered thereby outing third parties on notice of the existence of some sort of interest of a secured party. This means that broadly speaking any of the above measures, while not being a security in a strictest sense of word, can be registered and, at least legally, have the same legal effect.

Personal Data Protection in Tajikistan: An Overview

13 June 2024

Overview

The Law of the Republic of Tajikistan on Personal Data Protection (the Law on DP) has been in force since 2018 but has yet to be tested in practice, as there is no case law on this legislation. The Law on DP differentiates between the collection and processing of personal data:

• Collection: An action directed at obtaining personal data.
• Processing: Includes recording, systematizing, storing, changing, supplementing, extracting, using, distributing, anonymizing, blocking, and destroying personal data.

Controllers and Processors

Controllers (referred to as data holders) and processors can be either private or public entities. The legal grounds for collecting and processing personal data are as follows:

• Private Controllers and Processors: Must obtain the data subject's consent.
• Public Controllers and Processors: Can also collect and process data with the data subject's consent. However, if these are State organs exercising State power, they can do so without consent in two cases:
1. When processing personal data in the course of exercising State functions.
2. When protecting the constitutional rights and freedoms of other individuals.

Other legal grounds such as binding corporate rules or standard data protection clauses are not foreseen by the Law on DP.

Principles of Data Collection and Processing

• Collection and processing must align strictly with the purposes for which personal data was collected.
• Personal data can be retained until the purposes of collection and processing are fulfilled.
• Data subjects must be notified about the collection and processing of their personal data, have access to it, and have the right to rectify mistakes.

Biometric Data

Biometric personal data (data on physiological and biological peculiarities of individuals) can be collected and processed only upon receiving written consent, except when State organs process biometric data for purposes such as crime detection and investigation.

Access to Personal Data

There are two legal regimes for accessing personal data:

1. Publicly Accessible Personal Data: Can be included in publicly accessible databases through the data subject's consent or without consent by State organs. Once consent is given for public use, it cannot be revoked.
2. Personal Data of Limited Access: The competent State organ defines the minimum publicly accessible data, which includes the name, additional name of the subject, email address (without the data subject's name), place of work, and job position.

Transborder Flow of Personal Data

Transborder flow of personal data is allowed upon the data subject’s consent or when the foreign State’s data protection regime provides adequate protection of data subjects. The Law on DP does not specify what constitutes ‘adequate protection’ or the procedure for evaluating such regimes.

Data Handling Requirements

• Personal data must be separated from other information, particularly by recording it on media.
• Specific storage locations and a list of persons authorized to collect, process, or access personal data must be determined.
• Databases must exclude the combination of fields that exceed the purposes of their collection.

Safety Measures

Controllers and processors, as well as third parties, must:

• Establish measures to ensure the safety of personal data and prevent unauthorized access.
• Determine the list of persons responsible for implementing these measures.

Database Contents

Databases containing personal data must include:

• Purpose of data collection and processing.
• Name and address of the controller and processor.
• Surname, first name, and address of the data subject.
• Source of obtaining personal data.
• Time of processing personal data.
• List of actions to be performed with personal data.
• A field for data subjects to check their consent for data collection and processing.

Controllers and processors must take measures to destroy personal data once the purpose of its collection and processing is achieved. Data subjects must have the opportunity to familiarize themselves with their personal data without violating the rights and interests of other data subjects.

Reporting Requirements

If data subjects request a report on their personal information retained by the controllers and processors, the latter must provide such a report within three working days.

Public-Private Partnership in the Republic of Tajikistan

27 May 2024

Public-Private Partnership in the Republic of Tajikistan

Introduction

The Republic of Tajikistan adopted the Law "On Public-Private Partnership" No. 907 on December 28, 2012. This law regulates collaborations between public authorities and private sector entities in infrastructure and social services projects.

Definition and Purpose of PPP

Public-Private Partnership (PPP) is defined as cooperation between the state and private companies to implement projects in various sectors like transport, energy, health, and education. The aim of these projects is to meet public needs, which is a primary responsibility of the state.

Scope of Regulation

The PPP Law governs the preparation and implementation of PPP projects, establishing the legal framework for creating, executing, and terminating PPP contracts. However, it does not apply to:

• Procurement of goods, services, and works (regulated by the Law on State Procurement).
• Privatization of state property and enterprises (regulated by the Law on Privatization).
• Subsoil usage rights (regulated by the Laws on Subsoil and Concessions).
• Credit projects funded by international financial institutions and foreign governments (regulated by the rules of these institutions).

Transparency and Equal Treatment

The PPP Law ensures transparency and equal treatment throughout the project lifecycle, detailing procedures for project initiation, approval, private partner selection, project implementation stages, and post-implementation relations.

Competent Authorities

• Government of Tajikistan: Defines the authorized state body on PPP, establishes the PPP Council, approves its composition and regulations, and lists infrastructure facilities and social services exempt from the PPP Law.
• PPP Council: Reviews and approves project proposals, pre-selection reports, and draft agreements, and oversees the activities of the authorized body.
• Authorized State Body: The State Committee on Investment and State Property Management (Goskominvest) implements state policy on PPPs, assists in project proposal preparation, and provides recommendations. Goskominvest also manages tender documents, PPP agreement standards, and supports the PPP Council's operations through the Centre for Implementation of Public-Private Partnership Projects.

Objects of a PPP The government determines the infrastructure facilities and social services exempt from the PPP Law, which include military, scientific, production, social institutions, and infrastructure critical for state functioning and citizen security.

Parties Involved

• Public Partner: Central or local authorities with the power to initiate projects and enter agreements with private partners.
• Private Partner: Individual entrepreneurs or legal entities, including consortia with technical and financial expertise, and foreign legal entities.

Main Obligations

• Private Partner: Constructs facilities, carries out activities, or provides services at their own expense as per the agreement.
• Public Partner: Grants rights to the private partner for owning and using the PPP facility and assists in obtaining necessary licenses and permits.

Private Partner Selection

Private partners are typically selected through a tender process, though non-tender selection is possible with PPP Board consent under specific conditions such as urgent need, short project duration with low initial investment, national defense or public safety matters, or lack of tender responses.

Term and Payment

The law sets no restrictions on PPP Agreement duration, with a minimum term of three years for social service projects. Payment methods and procedures are outlined in the PPP Agreement, which can include budgetary funds or consumer payments post-implementation.

State Obligations and Risk Distribution

The PPP Law addresses remedies for non-performance and compensation for increased costs or reduced income due to changes in law or public authority actions. Risk distribution is determined contractually, with mechanisms for the private partner to secure assets and revise agreements under significant economic or legislative changes.

Post-Agreement Asset Resolution

The PPP Agreement specifies asset transfer procedures upon termination, including assets to be returned, purchased by the public partner, or disposed of by the private partner. It also covers compensation for transferred assets, technology transfer, and staff training.

Termination of the PPP Agreement

The agreement can be terminated by mutual consent or due to uncontrollable circumstances. Additional grounds for termination by the private partner include the public partner's failure to fulfill obligations, inability to revise the agreement, or actions that increase costs or decrease revenues.

Crypto and Tajikistan: RECONGIZED AND OUTLAWED?

15 April 2024

Two years ago we wrote in our article (https://aaa.tj/articles/cryptocurrency-and-tajikistan-last-and-least-or-the-majority) that on the scale of global crypto adoption and regulation Tajikistan was among the last and the least if compared to its closer or immediate neighbors. Our legal analysis at the time showed, at the same time, that, strictly speaking, crypto was neither legally banned nor legally restricted in Tajikistan.

In this update we take a snapshot of what happened since then. The update was prompted by the Presidential Decree No 798 of 27 March 2024, which approved a Regulations of the Agency for Innovation and Digital Technologies and the Special Regime Rules in the sphere of Innovation and Digital Assets. The Decree’s main focus was to open the door for pilot project involving digital transformation and innovation.

Regulation and Recognition

While the new regulations touch upon, and actually operate with, the term “crypto assets”, they still do not define it. Similarly, crypto mining remains to be undefined to date, too. The same applies to the definition of the “blockchain” altough on a few occasions reference was made to the "technology of a ditributed ledger". 

This is in contrast to some of neighboring jurisdictions, where, attempts have been taken to define some of the terms a few yers eralier (Kazakhstan, Kyrgyzstan and Uzbekistan).

At the same time, the Agency for Innovation and Digital Technologies is now entrusted with regulation of, including proposing new legislation for, the “circulation of digital assets including crypto-assets”. This is the first time that Tajik law calls crypto by its name using the word "crypto". On this basis, we have now a legal recognition of the possibility for the existence of crypto-assets in Tajikistan, although, as mentioned previously, this and related terms are not defined and this is likely to come soon.

Restrictions

While the Decree No 798, recognizes the legal possibility for the existence of the crypto assets in Tajikistan, it introduces certain restrictions. 

Thus, the Decree aims to promote digital assets transformation by allowing for special regulatory regimes for companies which introduce innovation and digitization during testing their project ideas (pilot projects).  It is in this context of this special regimes that the Decree makes it clear that any such projects promoting the use of crypto assets as the medium of payment will be prohibited. In other words, it is prohibited (a) to pay with crypto; and (b) to receive crypto as a remuneration for any service or good. Such tight interpretation still leaves issues of mining and other use of crypto in Tajikistan unanswered and unregulated, at least for the time being.

It is not utterly clear if the intention was to exclude any crypto-related projects from the ambit of the special regime or to prohibit them altogether. Given that the Agency for Innovation and Digital Technologies was granted power to regulate the crypto assets domain, crypto as such is not ultimately outlawed and the government, perhaps, prefers to retain its monopoly over such potential projects.  

What is crypto in legal terms?

Because cryptocurrency has in it a refence to the word “currency”, it is often called the currency. However, legally speaking, in Tajik law, it is not. There are two key terms with which Tajik law operates in this regard: “national currency” and “currency”. The former is Tajikistan Somoni, a legal tender in Tajikistan. The latter is defined as “national currency of a foreign state”. It now becomes obvious that crypto currency is not the currency in Tajikistan. Now, with the adoption of the Decree No 798, Tajikistan calls the crypto currency a “crypto asset”, the term which better reflects the nature of crypto.

Is crypto asset a digital money? As described previously, the message of the Decree No 798 essentially is that using crypto as a medium of exchange is prohibited in Tajikistan. So, crypto cannot be a legal tender, at least it cannot be contemplated as a payment medium within the framework of the projects which the government allows to be promoted.

If you wish to go deeper into the subject as is currently applied to Tajikistan, please refer here https://aaa.tj/articles/cryptocurrency-and-tajikistan-last-and-least-or-the-majority.