Foreign Investment
- Turkey
- 02/06/2008
- Nedim Karako & Partners
GENERAL:
The government of Turkey gives a strong supports to foreign investments. Especially in banking, energy, techniques, transport, communication sectors there is a need for foreign contribution.
In this respect the Foreign Investment Law has been changed and all prior permission and feasibility report presentation and other bureaucratic formalities and the requirement of minimum of US $ 50.000 has been abolished.
To make the foreign traders invest in Turkey the judgment system has been renewed by accepting international arbitration even in contracts signed with the State Enterprises. Arbitration possibilities provide a better and quicker procedure in every perspective.
A privatization program is build up for the privatization of some State own commercial enterprises.
Registration with Government, authorities and permits:
The necessity to apply to the Foreign Investment General Directorate with a feasibility file and obtain the prior permission of that department having been abolished since June 2003, foreigners since then, may participate to the existing companies or established new ones without any prior permission. Companies with foreign capital have to send in “information form” to the Foreign Investment General Directorate each year in May giving the list of the shareholders with their participation and a short activity report.
In the same way foreigners may invest in the Istanbul Stock Exchange with no any prior permission.
Transfer of Dividends, interests and royalties abroad:
There is no any restriction for the transfer abroad of the dividends, interests and royalties. Those transactions may be done by the bank or financial institutions with no any problem.
Repatriation procedure and restrictions:
There is no any special repatriation procedure or restriction for repatriation of dividends or liquidation proceeds or proceeds of sale and transfer of shares.
In the Turkish foreign investment legal system there is no any participation limitation for foreign companies. Consequently foreign participation may be 100 % with no any problem.
Foreign Personnel
Foreign personnel, requires first to obtain a “working visa” and after that a “work” and “residence” permit. The applications from out of Turkey must be submitted to the Turkish Consulates and the applications of those who have already a prior permission have to be submitted directly to the Ministry of Labor and Social Security from Turkey with-out going to the Consulates.
The ministry provides a fast procedure to reply all the applications. Work permits are given for one year in the first application and in the following demands it is granted for 3 or 5 years and finally for an indefinite time.
Foreigners working in Companies with foreign investments and who are in a key position are subject to a special and easer procedure.
The Act on Direct Foreign Investment defines “key position” which describes a position of ability to manage and represent company. This personnel is subject to an easier procedure in which it’s possible for them to apply for permission and work at the same time. This procedure requires a “working visa” in addition to other permissions. On the other hand this procedure is easer and faster than the standard way.
