INVESTMENT POLICY OF TURKEY

Attracting foreign investment and full encouragement of foreign investors in virtually all sectors and regions of Turkey is one of the most important principles of the economic policy of the Turkish leadership, since the mid-80s. Under current law, foreign investors provided in full the same rights as the national capital. Equity participation of foreign investors is not restricted in any form. Guaranteed transfer of profits and repatriation of capital in the event of sale or liquidation of the company. In fact, in Turkey for the past several decades, there is one of the most liberal regulatory regime for foreign capital, which periodically supplemented and specified in accordance with the general direction of economic policy of the country.Main principles of activity of foreign investors set out in the Act Mo: b224 dated 18.01.1954 r .; In 1986 the law was amended to include provisions of the Decree Mo: 8b-10353, and in 1995 Turkey's investment code has been finalized by the Law on Foreign Investment Mo: 95-6990 on 06/07/95. The Turkish leadership apply to the foreign investors a set of incentives and promotional measures, which are designed to facilitate the placement of such investments in the country, which would meet the overall strategy of economic development. Thus, in regard to the sectoral distribution of investments, first of all, to encourage investment in export-oriented industry and high-tech manufacturing as well as in the tourism, transport, construction, education, health. In addition, in accordance with the policy of leveling the economic development of certain regions of the country, promotion of foreign capital in Turkey has expressed territorial.Depending on the level of economic development of Turkey is divided into four categories of areas; in this division lies a different degree of promotion of foreign investment: the first level of priority areas; Second priority areas; normal areas; developed areas. For "priority areas" include mainly the least developed regions of eastern Turkey. "Normal areas" are considered to be the western and central part of Turkey. "Development" is called the zone of large cities: Istanbul, Ankara, Izmir, Bursa, Adana and Bursa. To encourage forms of investment are mainly partial or full exemption from taxes and customs duties on a certain stage of development, production, preferential loans, delays in the payment of value added tax at import of investment goods, and others.A detailed system of incentive measures applied in Turkey in relation to foreign capital, will be discussed below. Here we point out that a deliberate policy to attract foreign capital in a relatively short time has given their results. By the end of 2002 the total volume of foreign investments in Turkey reached 31.6 billion. Dollars. Of these, 56% came from investments in industrial production, 40% - in the service sector, 4% - in the agricultural sector and mining industry . Turkey's Customs Union with the EU became an additional incentive for foreign investors. So, the big Japanese, South Korean and other companies have invested in Turkey in order to then have to deliver their products duty-free to the EU market. First of all - it's auto companies, such as TOYOTA, HONDA, HYUNDAY, KIA, RENAULT, FIAT.The Russian company is not particularly manifest themselves in the Turkish investment market. However, judging by the interest shown by Russian businessmen to implement joint projects and the creation of mixed companies with Turkish partners in the field of shipbuilding, transport, medical industry, tourism, wood processing, trade cooperation by combining the capital of the Russian and Turkish companies could be very promising and mutually beneficial for both countries. Foreign investment projects proposed for implementation in Turkey, are reviewed and evaluated by the General Directorate of Foreign Investment, which is part of the Treasury Office of the Prime Minister of Turkey. The main criterion in the assessment of foreign investment projects is their level of technology, competitiveness, export potential, the possibility of the involvement of local resources for their implementation.Equally important, as already mentioned, it has a geographical aspect. The location of the proposed facility and the amount of invested capital are key indicators for the investor so-called "incentive certificate" that is, special approval by the General Directorate of Foreign Investment, which gives the right to enjoy the benefits of the implementation of the project, namely the partial or complete exemption from customs duties and other taxes, access to soft loans, government subsidies and others. When issuing "incentive certificate" It takes into account the extent to which the implementation of the project is expected to take advantage of funding sources involved. The ratio between equity and borrowed capital is the rate of self-financing; it can be not more than 40% for investment projects in the "priority areas", 50% "normal areas" and 60% "developed".The exception does not take into account the regional dimension, are investing in the organization of aviation (Air-Kargo) and sea (Ro-Ro) transport services - 25%, and construction and repair of boats and ships, where the rate of self-financing is set at 15%. Allowed preferential rate of self-financing (15%) for those projects that are expected to be fully funded from foreign sources. The whole system of rewards and incentives for investors, including foreign ones, in Turkey, designed in great detail. In that case, if you think through investing capital in the Turkish economy, in principle, will help you to navigate and find out what benefits you can expect below is a system of privileges enjoyed by foreign capital investments in Turkey marked "incentive certificate."If your intention to make investments in Turkey is absolutely specific, should be detailed, the better with Turkish partners and lawyers to examine exactly what the benefits and encourage rely when investing this amount of capital, in this area of ​​business in the region for the production of type of product, at the intended conditions of your use of local resources, etc., as all these points are relevant to the choice of a particular incentive schemes. In addition, when necessary, to receive an explanation of the Department of Foreign Investment. --- Your investment partner, Excluzival Group Co.