Employer Of Record In Turkmenistan
Skuad’s Employer of Record solutions takes the burden off your shoulders and manages the end-to-end employment requirements of your company. Skuad’s Turkmenistan Employer of Record solutions facilitates the hiring of local professionals, managing their payroll, compensations, benefits, and employment contracts in compliance with local regulations without going through the hassle of establishing a physical office in Turkmenistan.
Turkmenistan at a Glance
Population: 6 million
Currency: Turkmenistani Manat
Capital City: Ashgabat
Languages spoken: Turkmen, Russian, Uzbek
GDP: 1.8% (2020)
Employment in Turkmenistan
Due to the lack of employment laws and a well-laid out system in the past, the employment landscape in Turkmenistan often consisted of delayed payment, working overtime, constant pressure from local government authorities, seven days of work without any leaves and lack of labor motivation.
Productivity of employees is vital for any organization as it contributes directly to organizational growth. Therefore, over time, organizations became more professional, and labor laws were developed in the country. The below-mentioned table depicts the current laws for both domestic and foreign workers in Turkmenistan.
Contractors vs. Full-time Employees
Work-life balance is an important aspect that professionals consider while applying for jobs in another country. Discussions on working hours of contractors vs. full-time workers are ongoing, and it is important to understand that contractors working hours are as per their agreement with the organization. Part-time workers or contractual workers fix their working hours with their employers before starting a job.
Hiring in Turkmenistan
To recruit in Turkmenistan, it is important to get clarity on whether to conduct the process internally or outsource it to a local company. There are many legal requirements for staffing in Turkmenistan, such as the general guarantee of equality of citizens. Asking direct questions related to the below-mentioned parameters while hiring can be considered offensive.
- Affiliation with a certain political party
- Financial Status
Probation & Termination
Probation and termination in Turkmenistan somewhat match the global standards. The probationary period for employees does not exceed three months, and for managers, chief accountants, branch heads, and other senior roles, the probation period is six months unless otherwise specified by the legislation of Turkmenistan. Once the employment contract ends, the probationary period does not apply to people belonging to the below-mentioned categories:
- Persons below the age of 18 years
- Persons with disabilities
- Seasonal workers
- Pregnant employees
- Persons who have graduated from secondary vocational and higher education institutions and are coming to work in their specialty for the first time.
- Persons working in public paid jobs.
The grounds for termination of the employment contract include failure of the employee to work as per the conditions of the employment contract. These grounds are stated as per the labor laws in Turkmenistan. Most terminations are performance-based, but the employer must notify the worker of the termination in writing. Depending on the reason for termination, the duration of the notice period is decided, and could range from two weeks to two months.
Expanding globally is an exciting and important step for any company. Yet, for many executives, the fear can be real in terms of understanding the legal procedures and compliances of different countries. Skuad EOR solutions simplify global expansion and if a business wants to employ even 2% of foriegn employees and set up a legal entity, Skuad provides customized options. If any of this seems too complex, there is no need to hire accountants, lawyers, payroll, and HR specialists for this task as all the information is available on Skuad’s website.
Types of Visas in Turkmenistan
In Turkmenistan, resident citizens are taxed on their worldwide income, which includes benefits like housing, meals, relocation, etc.
A general Personal Income Tax (PIT) is deducted at source when paid by withholding agents (resident legal entities, individual entrepreneurs, and permanent establishments [PEs] of non-resident legal entities). The PIT rate levied is 10% and is applicable to employment income, professional and business income, royalties, interest, income from immovable property, and capital gains. Taxes paid on professional, and business income are on a self-assessment basis.
Corporate taxes on corporate income
Residents of Turkmenistan are levied a Corporate Income Tax (CIT) on their worldwide income, whereas non-residents are levied CIT only in respect of their Turkmenistan sourced income. The CIT base is calculated at gross income minus allowable deductions.
Companies which deal in oil and gas operations are subject to a 20% CIT.
Business opportunities in Turkmenistan are plenty. Starting or registering a subsidiary in Turkmenistan could be a tedious task as it requires immense paperwork. Here, it helps to partner with an EOR like Skuad to get assistance with registration.
Professional Employer Organization (PEO)
There can be several reasons that require using International PEO and other related services in Turkmenistan. Here are some examples:
- You are setting up a foreign entity and require immediate hiring, and are in need of an interim solution.
- The employment status of your workers needs to change from contractual to full-time.
- You are looking for a cost-effective solution to convert international contractors into employees.
- You require assistance with registering a subsidiary in the country.
- Your contractual staff requires assistance in upgrading their status and designation to full-time employees.
- The costs and risk of starting or maintaining a foreign corporate entity from a compliance and financial perspective are too high for the potential benefit or do not align with the organization’s long-term objectives.
Earlier, the presence of factors that hindered productivity and displayed ambiguity between the employer and employee were very prominent. Over time, hiring in Turkmenistan abided by structured Turkmenistan labor laws for organizations to function effectively. The major goals of Turkmenistan labor legislation are to create the appropriate social and legal circumstances and assurances for the execution of the constitutional citizens' right to work, as well as providing legal recourse to labor relations and other issues. Therefore, organizations or individuals seeking new talent or looking to start a new business here must have an in-depth understanding of the labor laws in Turkmenistan. That’s why it is worth seeking assistance from a well-established employer of record companies in Turkmenistan, such as Skuad.