Tajikistan: Investment Incentives & Subsoil Framework

01 · The Investment Case

A purpose-built regime for inbound capital

Tajikistan has rebuilt its investment regime around a single objective — attracting foreign capital into production, processing and resource development — and the incentives available to a structured investor are among the most generous in Central Asia.

The headline instrument is the Law No. 2173 of 14 May 2025 «On Investments and the Promotion of Investment Activity», which consolidates national treatment, investor guarantees and a stabilisation regime, and — critically — allows a bespoke incentive package to be fixed in a binding investment agreement with the State.

Bespoke investment agreement: An investment agreement concluded between the State-authorised body and the investor may grant a special tax regime (up to exemption of the investor, its contractors and foreign employees from certain or all taxes), a special customs regime (up to full exemption from customs payments, with simplified procedures), a special currency regime (relief from licensing and notification for project financing and from restrictions on onshore and offshore accounts), and a simplified permitting regime — for a fixed period or the entire term of the agreement. (Law No. 2173/2025)
Profit-tax holiday for new production: Newly established production enterprises are exempt from profit tax for two years from registration, with the holiday extended according to the volume of capital invested into the charter fund (Tax Code, Art. 189). The staggered scale has historically run up to five years for investment above USD 5 million.
Priority-sector relief — mining included: For sectors designated as priority by the Government — which include the extraction of minerals and manufacturing — the rate of all taxes may be reduced by 50 per cent for up to five years (Tax Code, Art. 32), under the Government resolution on the List of Priority Sectors of the Economy (October 2022).
Customs & equipment relief: Production and construction equipment imported into a Free Economic Zone enters free of customs duty and import VAT. Outside the zones, equipment and input relief is available through the customs regime of an investment agreement and through the import-VAT exemption mechanism — for which applications are filed at the start of the calendar year.
Free Economic Zones: Five zones — Sughd, Panj, Dangara, Ishkoshim and Kulob, each established for 25 years — treat goods on their territory as outside the customs territory: imports of goods and equipment enter free of customs duty and VAT, products exported from the zone leave free of customs duty, and zone subjects are exempt from most national taxes (in Sughd, 8 of the 10 taxes), with free repatriation of foreign investors’ profit and foreign employees’ salary. (fez.tj)
Guarantees & stabilisation: The 2025 law provides a stable investment regime: where later legislation worsens the conditions for investment activity — in taxation, customs or other obligations — the favourable regime is preserved (Law No. 2173/2025, Art. 1). The Tax Code mirrors this for government investment projects, and a Production Sharing Agreement carries its own statutory stabilisation clause (PSA Law, Art. 18).
Single window: Investment is coordinated by the State Committee on Investments and State Property Management through a single-window mechanism for investors and for business registration. (investcom.tj)

These incentives are not automatic. Each is conditional, procedural, and — on the record of investors already in the market — administratively demanding to secure. The value is created by structuring the entry correctly and fixing the package in a binding agreement before capital is committed. That is the work MSE does.

02 · The Framework

The legal architecture at a glance

The incentives sit on top of a framework that has no single codified mining code. It rests on a framework statute – the Law «On Subsoil» – supplemented by parallel statutes and subordinate acts.

Two principles run through it. Subsoil is the exclusive property of the state, and private ownership of subsoil is not permitted (Subsoil Law, Art. 2–3); water is likewise the exclusive property of the state (Water Code, Art. 8). Rights are granted by licence or, for qualifying deposits, by contract. The instruments below operate together — each with its own administering authority and its own boundary.

The instruments
Instrument	Statute	Edition (per ncz.tj)	Role for a mineral investor
Investment	Law «On Investments & Promotion of Investment Activity» No. 2173 (14.05.2025)	as adopted 14.05.2025	Incentives, guarantees, stabilisation, investment agreement
Subsoil	Law «On Subsoil» No. 983 (20.07.1994)	consolidated to 28.12.2013 No. 1048 (see note)	Licensing backbone – rights, allotments, reserves, payments
Production sharing	Law «On Production Sharing Agreements» No. 238 (05.03.2007)	to 01.08.2012 No. 887	Contractual route for high-cost, remote deposits
Water	Water Code No. 1688 (02.04.2020)	as adopted 02.04.2020	Process water, wastewater, tailings and groundwater permits
Public-private partnership	Law «On Public-Private Partnership» No. 907 (28.12.2012)	as adopted 28.12.2012	Enabling infrastructure – expressly excludes subsoil rights

Note on currency. Statutory references are to consolidated editions published by the National Centre for Legislation under the President of the Republic of Tajikistan (ncz.tj). The Subsoil Law text on ncz.tj reflects amendments through Law No. 1048 of 28.12.2013; a later amending act – Law No. 2122 of 02.01.2025 «On Amendments and Additions to the Law «On Subsoil»» – has been adopted and should be checked against the latest official text for any provision relied upon.

Informational overview. This note is prepared by Metal Supply Experts GmbH for orientation only. It is not legal advice and creates no lawyer-client relationship; MSE is not a law firm. Any provision or incentive relied upon should be verified against the latest official text, and qualified Tajik counsel engaged, before a decision.

03 · Subsoil

The licensing backbone

Law «On Subsoil» No. 983 of 20.07.1994.

Ownership & fund: Subsoil is exclusive state property; sale, gift or pledge of subsoil plots is prohibited (Art. 2). All subsoil forms the State Subsoil Fund, managed by the Government (Art. 3).
Government competence: Issuing subsoil-use licences, setting extraction and processing quotas for nationally significant raw materials, and setting the terms for attracting foreign investment (Art. 5).
Users: State and private entities and citizens, including foreign legal entities and citizens, may be subsoil users; study and extraction of radioactive raw materials and disposal of its waste is reserved to entities registered in Tajikistan (Art. 10).
Licensing & allotments: Licences are issued under the Laws «On Licensing of Certain Activities» and «On the Permitting System»; the area is granted as a mining allotment for extraction and underground structures, or a geological allotment for study (Art. 8, 12).
Priority right: A party that financed exploration from its own funds holds an exclusive right to develop the deposit, lost if not exercised within two years of reserves approval (Art. 8); the user has priority on licence renewal (Art. 22).
Term & termination: Subsoil is granted for a fixed term or without limit; the grounds and procedure for early termination, suspension or restriction of a licence are set out (Art. 11, 20–21).
Reserves & records: Reserves of explored deposits undergo state expertise by the State Reserves Commission, and extraction is permitted only after that expertise (Art. 30); the state cadastre and state balance of reserves are maintained (Art. 31–33).
Payments: Payment for the right to use subsoil, deductions for reproduction of the mineral resource base, and the licence-issuance fee, alongside royalty, production bonus and a depletion discount (Art. 43–48); exploration costs may be offset against royalty and bonus after reserves approval (Art. 46).
Information & disputes: Geological-information ownership and confidentiality are protected (Art. 28); antimonopoly requirements apply to tenders and auctions (Art. 13); international treaties prevail over the statute (Art. 52).

04 · Production Sharing

The contractual route

Law «On Production Sharing Agreements» No. 238 of 05.03.2007. For deposits where standard licensing terms are not viable, a Production Sharing Agreement (PSA) is the purpose-built alternative – and the instrument most relevant to high-cost, remote and infrastructure-poor assets, including reprocessing and processing-restart projects.

What a PSA grants: Exclusive rights to search, explore, develop, extract and process minerals on a defined deposit, with the investor performing the work at its own cost and risk (Art. 3).
The eligibility gate: A deposit may follow the PSA route only if placed on a Government-approved list, justified by the unacceptability of standard licensing investment terms and the absence of budget financing – including where the deposit is high-altitude or remote and lacks infrastructure, or where search, exploration and development require high-cost technology and large funds (Art. 4.3).
Output split: Produced output is divided between state and investor as agreed; the ceiling for compensation output (cost recovery) is 70 per cent (Art. 10). Profit output is split per the agreement.
Export: The investor's share may be exported without quantitative export limits, under a long-term export quota fixed in the agreement (Art. 11).
Information & assets: Primary geological, geophysical and chemical information and mineral samples belong to the state; property created or acquired for the work is the investor's unless the agreement provides otherwise (Art. 12).
Stability: If Tajik legislation later worsens the investor's commercial results, the agreement is amended to preserve the results achievable under the law in force at signing – except for changes to safety, subsoil-protection, environmental and public-health norms, including alignment with international practice (Art. 18).
Transfer, security, disputes: Rights and obligations may be assigned with the State party's consent; property and property rights may be pledged with the authorised body's consent (Art. 17). Taxation follows the Tax Code (Art. 14); disputes are resolved judicially per the agreement (Art. 22).

05 · Water

The permitting layer

Water Code No. 1688 of 02.04.2020. For a processing or hydrometallurgical asset the Water Code is not peripheral: process-water abstraction, wastewater discharge, tailings storage, sludge ponds, effluent burial and groundwater protection each carry distinct approvals, distributed across several authorities.

State ownership; subsoil interface: Water is exclusive state property (Art. 8); the boundaries of underground water objects are determined under the Subsoil Law (Art. 6) – groundwater sits at the interface of the two regimes.
Mining-supervision authority: Approves annual abstraction plans for mineral, medicinal and thermal water deposits and controls their development; approves construction projects for tailings storage, sludge ponds and other waste-discharge facilities; reviews underground burial-polygon projects for industrial effluent and radioactive waste; provides the mining allotment for wastewater discharge (Art. 17).
Subsoil-use authority: Registers geological-study works, including drilling of water wells and wells for burial of industrial effluent and radioactive waste; approves exploration and construction of new groundwater intakes, tailings, sludge-pond and filtration-field projects and underground burial polygons; maintains the state water cadastre for underground water objects under subsoil legislation (Art. 18).
Permits & payment: Abstraction by structures affecting a water body is special water use, requiring a permit (Art. 41, 48) and generally payable, with exemptions including small hydropower up to 30,000 kW·h (Art. 45). Wastewater discharge requires a special water-use permit; discharge into drinking-category water bodies is prohibited, and discharge is allowed only where it does not raise pollutant content above norms (Art. 74).
Industrial groundwater: Groundwater not classified as drinking or medicinal may be used for technical supply, extraction of contained chemical elements and geothermal energy, subject to rational-use requirements (Art. 68) – a direct basis for hydrometallurgical use.
Constraints & duties: Burial of radioactive and toxic substances in water bodies, and blasting that releases such substances on water bodies, are prohibited (Art. 77). Within water-protection zones, waste disposal, toxic- and radioactive-waste burial and wastewater discharge are prohibited; extraction of other minerals within a granted allotment proceeds under subsoil legislation on an approved technical project (Art. 84). An aquifer exposed during subsoil use must be reported to the water authority immediately, with protective measures taken (Art. 79). Water use runs as permanent or temporary – short-term up to 5 years, long-term 5–25 years – and is renewable (Art. 53).

06 · Public-Private Partnership

The boundary

Law «On Public-Private Partnership» No. 907 of 28.12.2012. The PPP statute is as useful for what it excludes as for what it covers. It expressly does not apply to the granting of any subsoil-use rights, which remain under the Laws «On Subsoil» and «On Concessions» (Art. 1).

PPP is therefore not a route to the deposit; it is the route for the enabling infrastructure around it – roads, power, and transport or processing infrastructure treated as infrastructure objects – administered through a PPP Council and an authorised state body, via tender procedures, under a partnership agreement whose mandatory contents are specified (Art. 29), governed by Tajik law (Art. 30), with compensation on adverse legislative change (Art. 37), revision (Art. 38), step-in and project control (Art. 39–40) and termination and compensation (Art. 42–43).

Ordinary state water-management structures may likewise be entrusted to private parties through PPP, concession or lease (Water Code, Art. 26), whereas structures of special strategic significance may not be leased, concessioned or privatised (Water Code, Art. 10).

07 · Reading the Boundaries

A Tajik mineral asset is not a single licence

The subsoil right comes by licence under the Subsoil Law, or by PSA for qualifying high-cost and remote deposits. Incentives – tax holidays, priority-sector relief, customs exemptions – are layered on through the Investment Law, an investment agreement or a Free Economic Zone. Water, tailings, effluent and groundwater are governed separately by the Water Code, with approvals split across the mining-supervision, subsoil-use and environmental authorities. Enabling infrastructure runs through the PPP and Concessions statutes, not the subsoil regime; the Law «On Concessions» is the further statutory pillar and is not addressed here.

For an investor, the consequence is practical: the headline mineral right is one of several authorisations, the incentives are conditional and procedural, and the real execution risk lies in sequencing them and coordinating across authorities — while fixing the upside in a binding agreement.