TURKEY'S BUSINESS GUIDE
1. Where exactly is Turkey?
Republic of Turkey
Population: 70 million
Capital City: Ankara (3.6 million)
Currency: New Turkish Lira (YTL)
Latitude (Capital City): 39° 55' N
Longitude (Capital City): 32° 50' E
Coastline: 7,200 km
Area (map projection): 779,452 km2
(land) 770,760 sq km (297,591 sq ml)
(water) 9,820 sq km (3,792 sq ml)
(TOTAL) 780,580 sq km (301,383 sq ml)
Time Zone :(UTC +2)
Note that UTC is also known as GMT, or Greenwich Mean Time.
2. Is Turkey business-friendly?
Turkey’s regulatory environment is extremely business-friendly. Irrespective of nationality or place of residence,
a person can establish a business in a single day.
According to the World Bank “Doing Business Database, 2007”, Turkey ranks well ahead of all its competitors such as
Czech Republic, Hungary, Italy, Poland, Spain as well as the OECD average.
How simple is the legal framework in Turkey for FDI?
Turkey has one of the most liberal legal systems for FDI among all OECD countries.
The new FDI law focuses mainly on the protection of investors’ rights.
The main principles are as follows:
• Equal Treatment for domestic and foreign capital companies
• No pre-entry or pre-establishment screening requirements
• No need to notify to the Undersecretariat of Treasury of Turkey
• No obligation to choose a specific company name
• Unrestricted foreign ownership
Rights of international investors:
• Free transfer of funds
• Acquisition of real estate
• Dispute settlement either in local courts or international arbitration bodies.
• Valuation of non-cash capital
• Work permits for expatriates
• Opening a liaison office
Bilateral investment treaties with 80 countries
Double taxation prevention treaties with 68 countries
Social security agreements with 23 countries
Free trade agreements with 12 countries
How simple is the Turkish tax system?
Turkey has one of the most competitive corporate tax rates in the OECD region.
There are 3 types of tax:
• Taxes on income
• Corporate income tax
• Withholding tax on certain payments of resident corporations
• Withholding tax on certain payments of non-resident corporations
• Individual income tax
• Social security premiums
• Taxes on Expenditure
• Value added tax
• Stamp tax
• Customs duty
• Taxes on wealth
• Inheritance and gift tax
• Real estate tax
• Motor vehicle tax
Major corporate tax exemptions and allowances
5.How good is the infrastructure in Turkey?
Turkey’s strategic location is very attractive for investors. It has a relatively new and highly developed technological infrastructure in transportation, telecommunications, and energy.
• Transportation infrastructure in Turkey
• Telecommunications infrastructure in Turkey
• Energy infrastructure in Turkey
6.Will I find qualified people to work with in Turkey?
Turkey offers investors competitive labor costs with a workforce of over 24.7 million young, talented, motivated and skilled people. The Turkish cultures’ devotion to work, flexible working hours and a low absenteeism rate has allowed Turkey to reach remarkable productivity levels.
Labor and social security laws contribute to the formation of an investor friendly environment. Expatriates from countries that have bilateral social security agreements with Turkey have the choice to stay within their own national social security schemes.
7. Will I receive government support in Turkey?
The Turkish government provides incentives to encourage, support and orient investments which are in-line with international commitments.
Generally, there is a blend of tax and non-tax incentives which are granted equally to domestic and foreign investors. This equal treatment is guaranteed and reaffirmed by the FDI Law.
The investment incentives in Turkey can be classified mainly under the following headings:
• General investment incentive program
• Incentives for priority development regions
• Incentives granted to SME’s
• Research and development support
• State incentives for export and for agricultural activities
8. Will I have any additional advantages in the special investment zones in Turkey?
Special investment zones are created in order to provide an investor-friendly environment with proper infrastructure and various incentives.
There are 4 types of special investment zones in Turkey:
• Technology Development Zones
• Organized Industrial Zones
• Industrial Zones
• Free Zones
9. How simple is the legal framework for customs in Turkey?
Turkey joined the Customs Union with the EU on January 1st, 1996 and has amended its customs code and legislation in line with those of the EU Customs Code. Since then Turkish customs laws have been harmonized with those of EU customs practices.
Tariff and non-tariff barriers have been removed between the two parties with the establishment of the Customs Union for industrial and processed agricultural products. Turkey adopted the EU's Common Customs Tariff for imports from third countries.
Turkey offers 2 advantages to the international manufacturing and trade investors:
Turkish free zones
There are 20 free zones in Turkey which operate close to EU and Middle East markets, are adjacent to major Turkish ports on the Mediterranean, Aegean and Black Seas, and have easy access to international trade routes.
Free zones serve as investment centers with their advanced infrastructure and low rental and sale rates.
Inward processing regime
The aim of the inward processing regime is to enable exporters to supply materials for the production of their exports without being subject to customs duties, including VAT.
10. We are here to make life easier for you in Turkey