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Employer Of Record In Turkmenistan

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.

Entitlement Explanation
Statutory Working Hours The standard work duration for a full-time employee does not exceed 40 hours per week.
For teenagers (aged between 16 and 18 years), the work hours cannot exceed 36 hours per week and 24 hours a week for persons below sixteen years of age. Typically, office timings in Turkmenistan are from 9 am to 6 pm.
Salary or Remuneration The salary package in Turkmenistan ranges from USD 300 (minimum salary) to USD 6700 (maximum average salary) per year. The salary range is proportional to the level of work experience—the more years of experience, the higher the salary package. Typically, individuals with two to five years of experience earn on average 32% more than freshers across various industries. Employees with more than five years of experience earn 36% more than those with work experience of five years or less. In Turkmenistan, educational qualifications play a major role in determining the salary packages of candidates. Generally, professionals with a master’s degree or Ph.D. earn more than those holding just a bachelor's degree. Know more at Skuad by connecting with our experienced consultants.
Vacation Leaves In an annual package, workers are allotted 24 days of paid leaves. These are eligible only after the completion of 11 months of employment. For teachers, professors, and disabled people, a long vacation is granted with the number of days increased to 35 calendar days. People working in dangerous or harmful conditions can extend their leave by up to 15 additional days.
Compensation and Benefits A high level of growth in the Turkmenistan economy has attracted many expats to shift to the country, particularly in the natural gas and energy industry.
The concept of bonuses is uncommon in Turkmenistan. However, big global MNCs such as Hyundai rely on performance-based bonuses for their employees. For someone searching for jobs, the two most important factors are remuneration and benefits. An organization can attract high-quality professionals by offering a competitive salary package. However, Turkmenistan offers a pretty average remuneration for professionals.
Benefits Management Plan Organizations may provide supplemental benefits beyond the statutory benefits to help retain good talent. For example, public health provides both general and specialized services such as dental care. Other benefits include -
  • Company’s car/cab allowance
  • Phone allowance
  • 13th-month bonuses
  • Educational stipend/degree sponsorship
  • Performance-based bonus
Book a demo at Skuad to learn more.
Public Paid Holidays There are 9 public holidays observed in Turkmenistan:
  • New Year (31st December - 1st Jan)
  • International Women’s Day (8th March)
  • Navruz (21-22 March)
  • Oraza Bayram (13th May)
  • Constitution and State Flag Day (18th May)
  • Kurban Bayram (20-22 July) Independence Day (27 September)
  • Memorial Day (6th October)
  • International Day of Neutrality (12th December)
Medical Leave Employee’s medical leave depends on their duration of service with the organisation.
Medical Insurance Turkmenistan has a centralized healthcare system. Employees buy medical insurance to keep themselves covered from medical expenses. Expats often opt for a medical evacuation that provides sufficient medical aid in case of serious injuries or emergencies. It turns out to be a costly affair in case of a crisis if medical evacuation is not purchased beforehand.
Considering the pandemic, it is advisable for non-residents to get fully vaccinated and then enter Turkmenistan. There have been scattered cases of Hepatitis and Typhoid reported within the country’s interiors. Therefore, vaccination against these diseases too is a must. It is also advisable to carry a first aid kit and medical prescriptions.
Maternity Leave Female employees in Turkmenistan can avail up to 112 days of leave for pregnancy, 56 days before and 56 days after the birth of their child. Once the paid leaves have been availed, the employee is entitled to apply for unpaid leaves until the child turns three years old. They have the right to return to work at any time, and their position will be kept open until the child grows older.
Legally, there is no provision for paternity leaves. However, in certain circumstances, the father is entitled to parental leave where the mother is not present in the child’s life.
Work Rights and Obligations There are certain rights that the workers possess as well as many obligations that they need to fulfill.
  1. As per the labor law of Turkmenistan, workers have the right to termination and change of employment contract according to the procedure.
  2. Employees also have the right to professional training and advanced training before the commencement of work. The organization is required to incur the cost of training for its employees.
  3. Right to reliable information about the working conditions and labor protection onsite.
  4. Right to receive a salary slip. Equal pay for work of equal value without any discrimination on various grounds.
  5. Timely payment of salary as per profession, educational qualifications, and nature of work.

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.

  • Origin
  • Affiliation with a certain political party
  • Race
  • Nationality
  • Gender
  • Class
  • Financial Status
  • Language
  • Religion

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:

  1. Persons below the age of 18 years
  2. Persons with disabilities
  3. Seasonal workers
  4. Pregnant employees 
  5. Persons who have graduated from secondary vocational and higher education institutions and are coming to work in their specialty for the first time.
  6. 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.

EOR Solution

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

Visa Category Explanation
Turkmenistan Tourist Visa The tourist visa is valid for three weeks as per the rules, which is a decent amount of time to spend in the country as a tourist. An accompaniment in the form of a tour guide is allotted, and they charge between US$30 to US$50 daily.
Business Visa This visa is required for short term business trips, and the validity of this visa is shorter than a work visa.
Turkmenistan Work Visa Under Turkmenistan employment laws, undertaking the below-mentioned activities are considered professional and require a Turkmenistan work visa.
  • Consulting
  • Marketing
  • Hands-on technical work (electrician, plumber, etc.)
  • Maintenance
  • Project coordinating and planning
In certain cases, the work permit exemption may be applicable; however, it is recommended to get a legal assessment before traveling to Turkmenistan.
Work Visa Requirements Working visa requirements include filling up an application and providing certain documents such as proof of identity, a passport that is valid for a minimum of 6 months full-time beyond the date of the applicant’s invitation letter, and passport emergencies. It also requires a photocopy of the first page of the passport, receipt of payment of registration fee, and a letter of invitation from the registered business in Turkmenistan. In applying for a visa, anyone working for a political organization or in the media industry is required to clearly state their purpose of traveling, otherwise, the visa is likely to be rejected.
Invitation Letter Professionals moving to Turkmenistan for work require an invitation letter from their new employers, which is a prerequisite to apply for a work visa.
Work Visa Cost The visa cost ranges from USD 35 for a ten-day single entry to about USD 520 for a multiple entry visa. Mostly, you need a sponsor to be able to move to Turkmenistan on a work visa.
Work Permit without a job offer A Turkmenistan work permit without a job offer is difficult to attain since an invitation letter is a must when applying for a visa.

Payroll & Taxes 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.

Incorporation

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.

Conclusion

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.

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