Hire in Turkmenistan through our Employer of Record (EOR)

An Employer of Record (EOR) is a third-party organization that takes on the legal and administrative responsibilities of employing workers on behalf of another company. This arrangement allows businesses to hire employees in countries where they don't have a legal entity, effectively expanding their global reach without the need to establish a local subsidiary or navigate complex international employment laws.

For a country like Turkmenistan, with its unique economic landscape and regulatory environment, an EOR can be particularly valuable. It enables foreign companies to tap into the Turkmen workforce and market opportunities while ensuring compliance with local labor laws and regulations.

How Does EOR Work?

The EOR model operates through a series of interconnected steps:

1. Client Partnership: A company (the client) partners with an EOR provider to hire employees in Turkmenistan.

2. Legal Employment: The EOR becomes the legal employer of record for the workers in Turkmenistan, handling all official paperwork and registrations.

3. Payroll Management: The EOR manages payroll, including salary calculations, tax withholdings, and social contributions in accordance with Turkmen law.

4. Compliance Oversight: The EOR ensures ongoing compliance with Turkmenistan's labor laws, tax regulations, and other relevant legislation.

5. HR Support: The EOR provides human resources services, such as drafting employment contracts and managing benefits.

6. Day-to-Day Management: While the EOR handles administrative and legal aspects, the client company maintains control over the employee's daily work activities and responsibilities.

Benefits of Using an EOR

Employing an EOR in Turkmenistan offers several advantages:

1. Simplified Market Entry: Companies can quickly establish a presence in Turkmenistan without the need to set up a local entity, saving time and resources.

2. Regulatory Compliance: EORs possess in-depth knowledge of Turkmenistan's complex labor laws and ensure full compliance, reducing legal risks for the client company.

3. Cost-Effectiveness: By eliminating the need for a local subsidiary, companies can avoid significant setup and maintenance costs associated with establishing a legal entity in Turkmenistan.

4. Flexibility: EORs allow companies to scale their operations in Turkmenistan up or down quickly, adapting to market conditions without long-term commitments.

5. Local Expertise: EORs provide valuable insights into Turkmenistan's business culture, labor market, and regulatory environment, helping companies navigate potential challenges.

6. Focus on Core Business: By outsourcing administrative and legal responsibilities to the EOR, companies can concentrate on their core business activities and strategic goals in the Turkmen market.

7. Risk Mitigation: EORs help mitigate the risks associated with international expansion, particularly in a country like Turkmenistan with its unique economic and regulatory landscape.

8. Access to Talent: EORs can facilitate access to Turkmenistan's workforce, helping companies find and hire local talent efficiently.

In the context of Turkmenistan's state-controlled economy and complex regulatory environment, an EOR can be an invaluable partner for foreign companies looking to establish a presence or expand their operations in the country. By navigating the intricacies of Turkmen employment law and providing local expertise, EORs enable businesses to focus on their core activities while ensuring compliance and minimizing risks in this unique Central Asian market.

Turkmenistan's employment landscape is characterized by a young workforce, high literacy rates, and a strong focus on state-controlled sectors. The country's economy is heavily influenced by its oil and gas industry, agriculture, and government-led initiatives. Despite these strengths, Turkmenistan faces challenges in aligning its education system with modern labor market needs and providing up-to-date vocational training.

Overview of Labor Laws

Turkmenistan's labor laws are primarily governed by the Labor Code, which outlines the rights and responsibilities of employers and employees. Key aspects of the labor laws include:

• Employment contracts: Written contracts are mandatory for all employees.
• Working hours: The standard workweek is 40 hours, with provisions for overtime pay.
• Paid leave: Employees are entitled to a minimum of 30 calendar days of paid annual leave.
• Maternity leave: Women are granted 112 calendar days of paid maternity leave.
• Termination: Employers must provide valid reasons for dismissal and adhere to notice periods.

It's important to note that while these laws exist, their implementation and enforcement may vary in practice.

Cultural Considerations

When operating in Turkmenistan, it's crucial to be aware of the following cultural aspects:

1. Respect for authority: Turkmen society places great importance on respecting elders and those in positions of power.

2. Language: Proficiency in the Turkmen language is essential, although Russian is also used in some sectors.

3. Gender roles: Traditional family values often influence workplace dynamics and expectations.

4. Communication style: Indirect communication is common, requiring attention to nonverbal cues and context.

5. Relationship-building: Personal connections and networks play a significant role in business and employment opportunities.

6. Hierarchical structure: Workplaces often follow a top-down decision-making approach.

Challenges of Direct Hiring

Employers considering direct hiring in Turkmenistan may face several challenges:

1. Limited labor market data: Accurate and up-to-date information on the workforce can be difficult to obtain.

2. Skills mismatch: The education system may not always align with the needs of modern industries.

3. Language barriers: Finding employees proficient in both Turkmen and international languages can be challenging.

4. Bureaucratic processes: Navigating the complex administrative procedures for hiring and employment can be time-consuming.

5. Cultural adaptation: Understanding and adapting to local work culture and communication styles may require significant effort.

6. Legal compliance: Ensuring adherence to local labor laws and regulations can be complex for foreign employers.

7. Limited private sector: The dominance of state-controlled industries may restrict options for private sector employment.

By understanding these challenges and cultural nuances, employers can better prepare for entering the Turkmenistan job market and develop strategies to overcome potential obstacles in the hiring process.

Turkmenistan's payroll and tax system is characterized by a straightforward structure that applies to both employers and employees. The country operates on a flat tax rate system for personal income, with additional contributions required for social security and special purpose duties. This system aims to ensure a fair distribution of tax burden while supporting the nation's social welfare programs and infrastructure development.

Employer Contributions

Employers in Turkmenistan have several financial obligations when it comes to payroll and taxes:

Income Tax Withholding

Employers are responsible for withholding income tax from their employees' wages and salaries through the Pay-As-You-Earn (PAYE) system. The personal income tax (PIT) rate in Turkmenistan is a flat 10%, which applies to all forms of employment income, including salaries, wages, bonuses, and benefits. These PAYE deductions must be submitted to the tax authorities on a monthly basis.

Social Security Contributions

Employers are required to register with the social security system and make contributions on behalf of their employees. The employer contribution rate is approximately 20% of the total remuneration provided to local employees. These contributions cover various benefits, including retirement and disability. Like income tax withholdings, social security contributions are typically paid monthly.

Special Purpose Duty

In addition to income tax and social security contributions, employers must withhold and pay a special purpose duty of 5 manats (TMT) per month for each employee. This duty is earmarked for the improvement of urban and rural territories, contributing to the country's infrastructure development.

Employee Contributions

Employees in Turkmenistan also have tax and contribution responsibilities:

Personal Income Tax

All employees earning income in Turkmenistan are subject to Personal Income Tax (PIT). The PIT is calculated using a flat rate of 10% of gross income. This straightforward system ensures that all employees contribute a consistent percentage of their earnings to the national tax pool.

Special Purpose Duty

Employees are required to contribute a fixed amount of 5 manats (TMT) per month as a special purpose duty. This contribution, like the employer's portion, is designed to support the improvement and development of urban and rural areas in Turkmenistan.

Social Security Contributions

While the bulk of social security contributions are made by employers, employees may also be required to contribute a portion of their salary towards social security. However, the exact percentage of employee contributions may vary and should be confirmed with local authorities or a payroll specialist.

Understanding these payroll and tax obligations is crucial for both employers and employees in Turkmenistan. Employers must ensure accurate withholding and timely payment of taxes and contributions, while employees should be aware of the deductions from their gross income. By adhering to these regulations, both parties contribute to the country's social welfare system and overall economic development.

Turkmenistan, like many countries, has a set of mandatory benefits that employers must provide to their workers, as well as optional benefits that can be offered to attract and retain talent. An Employer of Record (EOR) plays a crucial role in managing these benefits, ensuring compliance with local labor laws, and handling the administrative complexities associated with employee benefits. By partnering with an EOR like Rivermate, companies can navigate the intricacies of Turkmenistan's benefit landscape while focusing on their core business operations.

Mandatory Benefits

Turkmenistan's labor laws mandate several essential benefits for employees, including:

• Paid Annual Leave: Employees are entitled to 24-30 calendar days of paid annual leave after one year of service, depending on factors such as industry and job type.

• Public Holidays: Turkmenistan observes 10-12 paid public holidays annually.

• Sick Leave: Employees with proper medical documentation are eligible for paid sick leave, with duration and salary percentage varying based on length of service.

• Maternity Leave: Female employees receive 112 days of social leave for pregnancy and childbirth, typically paid at a percentage of their salary.

• Social Security: The government provides various social benefits, including pensions, unemployment benefits, and disability benefits, funded through mandatory contributions.

• Minimum Wage: Turkmenistan has a government-mandated minimum wage, though the specific amount may fluctuate.

• Overtime Pay: Work exceeding the standard workweek requires premium pay, although exact details may vary.

Optional Benefits

Employers in Turkmenistan may offer additional benefits to enhance their employee value proposition:

• Health Insurance: Some companies provide supplementary health insurance plans that extend beyond basic state coverage.

• Wellness Programs: Employers may invest in employee wellness initiatives, such as on-site fitness facilities or gym membership subsidies.

• Performance-Based Bonuses: Companies might offer bonuses tied to individual or organizational performance to incentivize productivity.

• 13th-Month Bonus: Some employers provide an extra month's salary at the end of the year as a bonus.

• Company Car or Transportation Allowance: Employers may offer transportation benefits to ease commuting burdens for employees.

• Educational Stipends: Financial assistance for educational programs or professional development opportunities might be provided by some companies.

It's important to note that the availability and prevalence of these optional benefits can vary significantly depending on factors such as industry standards, company size, and financial resources. Additionally, due to limited publicly available information on workplace practices in Turkmenistan, the exact extent of these benefits may be challenging to confirm.

Terminating an employee and managing the offboarding process in Turkmenistan requires careful attention to local labor laws and regulations. The Labor Code of Turkmenistan governs employment relationships and outlines the procedures for ending employment contracts.

In Turkmenistan, employment can be terminated through mutual agreement, expiration of a fixed-term contract, employee resignation, or employer-initiated dismissal. Each of these scenarios comes with specific requirements and considerations.

Lawful Grounds for Dismissal

Employers in Turkmenistan can terminate an employment contract based on several grounds:

1. Mutual agreement between the employer and employee
2. Expiration of a fixed-term contract
3. Employee resignation
4. Employer-initiated dismissal, which may include:
   • Company liquidation
   • Staff reduction due to organizational changes
   • Employee incompetence or inability to perform duties
   • Systematic failure to fulfill job responsibilities
   • Unexcused absences
   • Intoxication at work
   • Criminal conviction preventing job performance

Notice Requirements

The notice period for termination varies depending on the circumstances:

• Mutual agreement: Notice period is determined by both parties
• Employee resignation: At least two weeks' written notice
• Employer-initiated termination: Generally between two weeks to two months, depending on the reason

Severance Pay

Turkmenistan law mandates severance pay in certain situations:

• Company liquidation or cessation of activities: Two weeks' average earnings
• Staff reduction: Two weeks' average earnings

Offboarding Process

When terminating an employee in Turkmenistan, consider the following steps:

1. Provide written notice of termination, clearly stating the reason and effective date
2. Calculate and prepare final pay, including any severance pay if applicable
3. Arrange for the return of company property
4. Update internal records and systems
5. Conduct an exit interview, if company policy allows
6. Provide necessary documentation, such as a letter of recommendation if appropriate

Conclusion

Navigating the termination and offboarding process in Turkmenistan requires a thorough understanding of local labor laws. To ensure compliance and avoid potential legal issues, it's advisable to consult with legal experts or relevant government agencies for the most up-to-date information and guidance.

Turkmenistan, a Central Asian country known for its rich cultural heritage and natural resources, has specific requirements for foreign workers seeking employment within its borders. Understanding the visa and work permit process is crucial for both employers and employees to ensure compliance with local regulations.

Visa Requirements

Foreign nationals planning to work in Turkmenistan typically need to obtain a work visa before entering the country. The process usually involves the following steps:

1. Invitation letter: The Turkmen employer must obtain an official invitation letter from the State Migration Service.

2. Visa application: The foreign worker submits a visa application to the Turkmen embassy or consulate in their home country, along with the invitation letter and other required documents.

3. Entry visa: Upon approval, a single-entry visa is issued, allowing the foreign national to enter Turkmenistan.

Work Permit Process

Once in Turkmenistan, foreign workers must obtain a work permit to legally engage in employment. The work permit process includes:

1. Employer application: The Turkmen employer applies for a work permit on behalf of the foreign employee.

2. Document submission: Required documents typically include a copy of the employee's passport, educational qualifications, and proof of relevant work experience.

3. Approval: The State Migration Service reviews the application and issues the work permit if approved.

4. Registration: Foreign workers must register with local authorities within three days of arrival.

Important Considerations

• Work permits are usually valid for up to one year and can be renewed.
• The number of foreign workers a company can employ may be limited by quotas.
• Some positions may be restricted to Turkmen citizens only.
• Employers must ensure compliance with local labor laws and regulations.

Understanding and adhering to Turkmenistan's visa and work permit requirements is essential for foreign workers and their employers. It's advisable to consult with local authorities or legal experts for the most up-to-date information and guidance throughout the process.