Foreign direct investment in turkey - Marmaris land
Turkish investment, establish company in turkey, investments in
Turkey
Information
from: Turkish
Treasury, Turkish gov official web site.
Turkey
foreign direct investment
law
Law 6224 on Encouragement of Foreign Capital
enacted on January 18, 1954 was a quite liberal law compared with the
legislations of some OECD countries of those times. The term
"encouragement" in the name of Law 6224 derived from the presence of
some principles that were intended as real incentives, such as :"free
transfer" and "national treatment". However, notions, definitions and
applications concerning foreign direct investments have changed so
rapidly that Law 6224 lagged behind the contemporary demands of both
foreign investors and Turkey . As a result the need for a new Foreign
Direct Investment Law emerged.
What's is
new?
1.Inrernational
standards
"Foreign direct investment" and "Foreign
investor" terms are defined within international standards in order to
clarify the field of application of the Foreign Direct Investment Law. Within this scope:
a) Foreign Investor is defined as :
1) Real persons who possess foreign
nationality and Turkish nationals resident abroad,
2) Foreign legal entities established under
the laws of foreign countries and international institutions, who make
foreign direct investment in Turkey.
b) Foreign direct investment is defined as :
Establishing a
new company or branch of a foreign company Share acquisitions not by means
of capital markets, and share acquisitions through capital markets where
the foreign investor owns 10 percent or more of the shares or voting
power. By means of but not
limited to the following economical assets:
1) Assets acquired from abroad by the foreign
investor:
Capital in cash in the form of convertible
currency bought and sold by the Central Bank of Turkey.
Stocks and
bonds of foreign companies (other than government bonds).
Machinery and
equipment.
Industrial and
intellectual property rights
2) Assets procured from Turkey:
Reinvested
earnings, revenues, financial claims, or any other investment-related
rights of financial value.
Commercial
rights for the exploration and extraction of natural resources.
2.
Abolishing Permits
With this Law, all permits granted by the
General Directorate of Foreign Investment are abolished. As a result, all
transactions for establishing a company with foreign capital will be the
same as with local companies. Since all companies established in Turkey
within the framework of the Turkish Commercial Code are accepted as
Turkish companies, all duties and responsibilities are equal regardless of
the nature of capital formation.
3.
Informing Investors About Their Existing Rights
National Treatment
The National Treatment, the major principle
of foreign investment policy of Turkey, was emphasized in the new law.
Protection against
Expropriation
Principles stated in the
Constitution and the Expropriation Law are stated in the new law, as in
the bilateral investment agreements and other international agreements.
Therefore it is clarified that expropriation can not take place with any
reason other than the above-mentioned regulations.
Guarantee of
Transfers
In the new Law, the right of free transfer of
profits, dividends, proceeds from sale or liquidation of all or any part
of an investment, amounts arising from license, management and similar
agreements, reimbursements and interest payments arising from foreign
loans, banks or special financial institutions is clearly stated.
Access to Real
Estate
Legal entities with foreign capital,
established and registered under rules of Turkish Commercial Code can
acquire real estate with the same principles as Turkish nationals. The
principle of reciprocity is still valid for foreign real persons.
International
Arbitration
According to the new law, for the settlement
of disputes arising from investment agreements subject to private law and
disputes arising from conditions and contracts made with the
administration under which concessions concerning public services are
granted, foreign investor can apply, beside the authorised local courts,
to national or international arbitration, or other means of dispute
settlement, provided that the conditions in the related regulations are
fulfilled and the parties agree thereon.
Employment of
Expatriates
Foreign personnel can be employed for
investments in Turkey. Considering its importance to foreign to foreign
investors, employment of expatriates is explicitly mentioned in this Law.
4.
The New Role of
Undersecretaries of Treasury
Foreign Investment policy of Turkey has
changed from screening system to monitoring system. With this new scope,
Undersecretaries of Treasury will collect any kind of data concerning the
foreign investments and determine the foreign investment policy of Turkey.
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