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TURKISH ECONOMY / FOREIGN CAPITAL IN TURKEY

Economic Outlook

Foreign Trade

Foreign Investment

Free Trade Zones

Banking and Capital Market

Frontier Formalities

Statistics

 

The Turkish Government considers foreign capital an essential factor in its efforts to rank among the top economic powers of the world at the end of the 20th century. Flexible foreign investment policies have been introduced as part of the liberalization of the Turkish economy. The foreign investment laws provide a secure environment for foreign capital via support from several bilateral and multilateral agreements and organizations, granting such capital the same rights and obligations as local capital while guaranteeing the transfer of profits, fees and royalties, and the repatriation of capital in the event of liquidation or sale.

 Investors, upon discovering these policies and the remarkable opportunities Turkey offers in its unique location, extensive local and regional markets, skilled labor force and fairly developed infrastructure, have not been hesitant in utilizing them.

At present there are more than 3160 enterprises with foreign partnership in operation in various sectors. Almost 15% of the industrial output of the country is produced by enterprises with foreign capital. Among the major investors one can find familiar names such as Toyota, Honda, Mazda from Japan, GM, Philip Morris, Reynolds, General Dynamics, Hilton, Sheraton, Hyatt Regency from the USA; Cement Francaise, Total, Renault from France, Siemens, AEG, Bosch, Mercedes from Germany, and Pirelli and Fiat from Italy. These companies are just some of the many international firms poised to take advantage of Turkey's favorable investment policies. Favorable results of the liberalization policies and promotion measures adopted have appeared as increased direct foreign investment flows into the country. While the cumulative foreign capital between 1954 and 1979 was $228 million, this amount reached $1.8 billion in 1992, $2.2 billion in 1993, $1.5 billion in 1994 and $2.9 billion US in 1995.

* : January - October Period
Source: Undersecretariat of the Treasury

These figures simply indicate that, despite the negative effects of the Gulf Crisis, the Foreign Investment Policy of Turkey and other measures have satisfied the requirements of foreign investors. The Foreign Investment Law and the corresponding Decree provides guarantees for foreign capital and guarantees the transfer of profits, fees and royalties. In addition to the guarantees provided by the investment legislation, the Turkish Government provides a well protected environment for foreign capital by being participants in several bilateral and multilateral agreements and organizations such as OECD Codes, Investment Promotion and Protection Agreements, Agreements on Avoidance of Double Taxation, Settlement of Disputes and Investment Guarantees.

On the other hand, all fields which are open to the Turkish private sector are open to foreign participation and investment without any limitation on the equity participation ratio of the foreign shareholders.

To implement and coordinate foreign capital entries effectively, the Turkish Government has reestablished the General Directorate of Foreign Investment (GDFI) within the Undersecretariat of the Treasury (UT). This General Directorate is authorized to assist and guide foreign investors in exploring investment opportunities in Turkey, register and approve license, royalty and management agreements, negotiate bilateral investment protection and promotion agreements, and coordinate Build-Operate-Transfer projects and Privatization Programs

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* : Provisional
Source: Undersecretariat of the Treasury


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