Establishment of a company with foreign capital
Turkey has a non-discrimination and equal treatment policy towards foreign investors, thus foreigners have the same rights and liabilities as locals. There are no rules requiring Turkish participation in the capital or management of a company with foreign capital; a company may be established with 100 percent foreign capital. Almost all sectors are open to foreign capital.
The company establishment procedures have been simplified to a great extent through the shift from a “screening system” to a “monitoring system” for foreign investments and through the elimination of the unnecessary procedures to set up a business for both local and foreign investors.
Infrastructural developments have added to the investment attracting assets of Turkey, which has a large population of about 70 million, dynamic and fast developing economy, large domestic market, growing international investment, highly skilled and competitive labour, strong telecommunications and banking, and customs union and EU relations. Turkey also enjoys unique tourist attractions and has the potential of being a hub for the trade with countries in Caucasian, Central Asian and Middle East.
INCENTIVES FOR INVESTING IN TURKEY
Investment incentives include:
- Removal of the requirement of the pre-establishment ministerial approvals for company formation, entitling ‘Turkish Company’ status to all foreign investment based companies with the same rights of and obligations for Turkey based companies.
- Guarantee of the continuation of existing investment rights
- Conformity with international standards
- Broadening the definition of a foreign investor to include companies registered outside Turkey, non-Turkish nationals and Turkish nationals residing outside Turkey.
- Exemptions from customs duties, levies and VAT for imports of some machinery and equipments.
- A number of exemptions from income tax and social insurance contributions.
- Energy subsidies
- Incentives applicable in the Free Trade Zones, the export-oriented special industrial sites, including exemptions from corporate and income taxes for manufacturing companies, customs duty for goods imported from abroad and the removal of restrictions on the age or model of imported machinery.
- Protection against Expropriation, Guarantee of Transfers, Employment of Expatriates, Access to property and International Arbitration.
There are business organizations under special Turkish legislation for which prior establishment approval must be obtained from the Ministry of Commerce and Industry. These regulated sectors are: Banks, Private Finance Institutions, Insurance, Financial Leasing, Factoring, Holdings, Foreign Currency Exchange Offices, Public Warehousing, founders and operators of Free Trade Zones and companies subject to the Capital Markets Law.
Turkey has big environmental challenges on its way to become a member of EU and regarding to fulfill the obligations of the Kyoto protocol. The country also has a great need for energy. The government cannot afford the short-term costs in this area alone, and foreign actors are welcome. There is thus a large positive potential for foreign companies, which can be pioneering businesses and contribute to technology partition with environmental benefits.
Turkey was in 2010 on the 56th place on Transparency International's Corruption Perception Index, where corruption in the public sector in 178 countries was measured. Turkey was in company of several EU countries in the region, but was ranked above Italy (67) and Greece (78). Transparency International has also recently established a national organization in Turkey. There is a large informal economy in the country. This is a challenge, not least for the government.
Riviera Invest has experience as an advisor for those who wish to establish business in the Alanya region. Contact us for advice if you want to start a business. We will of course help you with practical things like getting a business lawyer and to find business premises. We provide commercial premises such as hotels, shops, restaurants and of course apartments and villas. We have many times helped with advice in the area of construction, start-up of business, tax liabilities, personnel policies, etc. And we help investment companies to sell apartments and villas they've invested in.