With the “Foreign Direct Investment Law” issued in 2003, Turkey’s rate of foreign investment is increasing rapidly. According to the law, foreign investment companies that make direct investments can benefit from the same rights as Turkish investors. It can be involved in the direct investment process by opening a branch and company in Turkey or establishing a partnership with an existing company. Investor parties that provide indirect investments cannot receive any incentives from this process. Investors who prefer long-term and direct investment can use all the advantages provided by the state.
The most important incentive offered to foreign investors is the transfer of profit, compensation, or income earned due to the agreement abroad. In addition, investment owners; may encounter incentive advantages such as insurance premiums, tax deductions, and investment location-allocation.
Tax regulation is among the incentive advantages specially arranged for foreign investor companies. With the Foreign Direct Investment Law, the state offers tax exemptions to foreign investors in various periods. Turkey’s efforts to prevent double taxation contribute significantly to the investor rate in the country.
Can Citizenship Be Obtained by Investment?
With the law dated 2017, foreign investors and company owners may have the opportunity to become Turkish citizens. Investor companies that provide investment in the amount determined according to the regulated law gain the right to apply for Turkish citizenship. The conditions that must be met to obtain Turkish citizenship by investment can be listed as follows:
- Real estate with a minimum value of 250,000 USD can be purchased.
- Citizenship can be obtained by paying 500,000 USD to Turkish banks.
- Government debt instruments can be purchased with a payment of 500,000 USD and kept for 3 years.
- A minimum of 500,000 USD worth of real estate investment can be made.
Reasons to Invest in Turkey
As one of the most preferred countries by investor unions, Turkey stands out as one of the world’s largest investment centers. There are many opportunities to invest in the country, which stands out with the incentive advantages offered to investor parties. So why should foreign investor companies choose Turkey?
Turkey, a bridge between Asia and Europe, also acts as a cost-effective market for international investor companies. Turkey draws attention with its easy access to North Africa, Europe, the Middle East, and Central Asia.
According to the data, Turkey, which draws attention with its rising economy among the world’s countries, emerges as one of the largest investment markets. Turkey’s economy, which has achieved record growth, is evaluated by investor business owners.
The most important title among Turkey’s investment advantages is “suitable population.” The young and well-educated population is higher than in Europe, turned into an advantage by foreign investors. The young and dynamic population contributes to the country by forming the basis of the domestic market.
Related to the youth population ratio, this item focuses on increasing Turkey’s workforce. In Turkey, which has the 3rd largest workforce resource in Europe, the young workforce develops towards a qualified workforce.
Hosting various projects such as development investment and greenfield investment, Turkey offers special incentive programs for investing companies. These incentive programs include regulations such as lowering the initial cost and accelerating investment earnings.
Special incentive programs and projects involving technological and economic development are primarily supported. In addition, innovation, R&D, and employment projects come to the fore with grants, incentives, and loans.
Many sectors such as automotive, defense, energy, machinery, agriculture, and infrastructure make significant progress with the diversity and competitive advantages of the country.
Companies with international equivalency have equal rights with Turkish investor groups under the Foreign Direct Investment Law.
Foreign Direct Investment Law and Its Effects
The Foreign Investments Law, which entered into force in Turkey in 2003, includes special regulations that transfer incentive programs in bilateral or multilateral agreements. Regulation, based on the transfer of capital from one country to another, means economic growth and development for multinational companies. Foreign direct investment programs also benefit host countries, such as new technology, employment, and new management techniques. Foreign direct investment law; can be implemented in three different ways: company merger, joint venture, and strategic alliance.
The most important reason Turkey is preferred for foreign direct investment is economic openness. With the increase in economic exposure, investment rates in Turkey also move in parallel. Another reason for investment is listed as incentive programs. The rise in investment incentive programs contributes to the direct investment made by multinational companies.
Foreign Investment and Company Establishment
There are specific rules and regulations for investors who invest through a joint venture or branch. In investment ventures made through joint ventures, a solution is reached by signing a shareholding agreement. There are no shareholders in the branch. A petition is sent to the Trade Registry Office by preparing the necessary documents for its registration. The required documents can be listed as follows:
- Petition and organization notification form,
- The decision of the competent authority to open a company,
- The original of the main contract,
- Activity certificate,
- Company registry,
- Power of Attorney,
- A copy of the authorized representative’s passport.
All necessary documents issued outside Turkey must be notarized and approved by the Turkish consulate.