INVESTING
IN TURKEY
I.
INTRODUCTION
SITUATED
AT THE CROSSROADS OF EUROPE, ASIA AND AFRICA TURKEY IS A PLURALISTIC,
PARLIAMENTARY AND SECULAR DEMOCRACY, BORN FROM THE 700 YEARS LONG
HERITAGE OF THE OTTOMAN EMPIRE.
MUSTAFA
KEMAL ATATÜRK FOUNDED THE TURKISH REPUBLIC IN 1923. BEING PRESIDENT
UNTIL HIS DEATH IN 1938, HE LINKED TURKEY’S FATE TO THE WEST
THROUGH THE ADOPTION OF THE LATIN ALPHABET, WESTERN LEGAL SYSTEM AND
MODERN LIFE STYLE.
WITHIN
THE ISLAMIC HEMISPHERE TURKEY IS THE ONLY SECULAR DEMOCRACY,
REPRESENTING A MODEL, THE IMPORTANCE OF WHICH IS HIGHLY APPRECIATED
NOWADAYS.
TURKEY
REMAINS STRONGLY TIED TO THE WEST THROUGH HER POSITION WITHIN NATO,
RELATIONS WITH THE WORLD BANK AS WELL AS HER MEMBERSHIP IN THE
EUROPEAN COUNCIL.
ÝNSPITE
OF EVENTUAL SHORT-TERM POLITICAL TURBULENCES TURKEY HAS A STRONG AND
STABLE REGIME AND IS PRESENTLY IMPLEMENTING SOCIAL, FISCAL, MONETARY
AND ECONOMIC STRUCTURAL REFORMS TO PAVE THE WAY FOR A FULL EU
MEMBERSHIP, TO WHICH SHE HAS ALREADY A CUSTOM’S UNION RELATION.
THE
COUNTRY COVERS AN AREA ALMOST THE SIZE OF FRANCE AND GERMANY
COMBINED WITH A POPULATION OF 68 MILLION, THE SECOND LARGEST AND
MOST YOUTHFUL IN EUROPE.
TURKEY
HAS A DIVERSIFIED GEOGRAPHY, RICH NATURAL RESOURCES, STRONG
AGRICULTURE, AND RELATIVELY DEVELOPED INFRASTRUCTURE, MODERN AND
ADVANCED INDUSTRY, SKILLED AND COMPETITIVE HUMAN CAPITAL.
THANKS
TO THE MAJOR STRUCTURAL REFORMS IN THE EARLY 80’S, TURKEY HAS
TODAY AN OPEN AND MARKET DRIVEN LIBERAL ECONOMY, FULLY INTEGRATED TO
THE GLOBAL SYSTEM.
THE
EXISTING LIBERAL FOREIGN INVESTMENT LEGISLATION REPRESENTS A WELL-SECURED,
RELIABLE, STABLE AND ENVIRONMENT FOR FOREIGN CAPITAL, EXPERIENCED
AND APPRECIATED BY MORE THAN 5500 FOREIGN CAPITAL FIRMS ALREADY.
II.
ADVANTAGES AND GOOD REASONS
IN
AN ENVIRONMENT WHERE MANY EMERGING ECONOMICS COMPETE FOR THE
ATTRACTION OF FOREIGN DIRECT INVESTMENT TURKEY OFFERS VARIOUS
UNBEATABLE ADVANTAGES
üUNIQUE
GEOGRAPHICAL AND GEOPOLITICAL LOCATION
TURKEY
ENJOYS A UNIQUE LOCATION, BRIDGING EUROPE, ASIA AND AFRICA AND
DOMINATES A VERY CRUCIAL GEOPOLITICAL POSITION. HER PROXIMITY TO THE
EMERGING MARKETS IN THE BALKANS, BLACK SEA, MIDDLE EAST, NORTH
AFRICA AND CENTRAL ASIA, AS WELL AS HER CULTURAL TIES WITH CENTRAL
ASIAN COUNTRIES, CREATE LUCRATIVE BUSINESS OPPORTUNITIES. TURKEY IS
THE LEADING INVESTOR IN CAUCASIAN AND CENTRAL ASIAN TURKIC REPUBLICS
AND WITH HER PRIVILEGED ACCESS SHE CAN PROVIDE A PERFECT BASE TO
DEVELOP BUSINESS WITH THESE COUNTRIES.
TURKEY
IS LOCATED ADVANTAGEOUSLY IN TERMS OF NATURAL RESOURCES AS WELL.
AGRICULTURE,
ORE RESERVES, TOURISTIC ATTRACTIONS AND RICH SWEET WATER POTENTIAL,
WHICH WILL BECOME A STRATEGIC GOOD IN THE REGION, ARE IMPORTANT
NATURAL RESOURCES, OPEN TO DEVELOPMENT.
üA
HUGE DOMESTIC MARKET
WITH
A POPULATION OF 68 MILLION TURKEY OFFERS A HUGE AND DYNAMIC DOMESTIC
MARKET TO INVESTORS.
THE
CONSUMPTION LEVELS HAVE BEEN INCREASING DUE TO RAPID WEALTH
FORMATION, IMPROVING EDUCATION AND AWARENESS, DEVELOPING MARKETING
TECHNIQUES AND A GROWING URBANIZATION RATE.
ALTHOUGH
THE UNEVEN DISTRIBUTION OF WEALTH AMONG REGIONS AND INDIVIDUALS
PROVIDES A HANDICAP, IT ALSO IMPLIES A LARGE SEGMENT OF THE
POPULATION WHO ENJOY THE SAME HIGH LIVING STANDARDS AS PEOPLE IN
MORE DEVELOPED COUNTRIES. ACCORDING TO CALCULATIONS BY ÝNVESTA A
POPULATION OF AT LEAST 12 MILLION IN THE WESTERN PART OF THE COUNTRY
ENJOY AN AVERAGE INCOME OF MORE THAN US $ 15.000 BASED ON PURCHASING
POWER PARITY. THIS MAKES TURKEY MORE ATTRACTIVE THAN MANY MEDIUM-SIZED
EUROPEAN MARKETS.
AS
A RESULT OF PRESENT LOWER PER CAPITA CONSUMPTION, THE GROWTH RATES
IN MANY INDUSTRIES IN TURKEY, SUCH AS PACKAGING, RETAIL, PLASTICS,
WHITE GOODS, BUILDING MATERIALS, PROCESSED FOOD AND BEVERAGES, FAST-MOVING
CONSUMER GOODS ARE MUCH HIGHER THAN THEIR COUNTERPARTS IN DEVELOPED
COUNTRIES WHERE THE CONSUMPTION LEVELS ARE ALREADY SATURATED.
üEXPORT
POTENTIAL
TURKEY’S
IDEAL LOCATION AND RELATIONS WITHIN HER REGION, SUPPORTED BY
GOVERNMENTAL INCENTIVES FOR EXPORTS, TURNS TURKEY INTO AN EXPORT
BASE COVERING A MARKET WITH A POPULATION OF ALMOST 200 MILLION.
THE
CUSTOMS UNION WITH EU PROVIDES AN EASY ACCESS INTO THE EUROPEAN
DEVELOPED MARKETS, AND REPRESENTS A HIGHLY APPRECIATED ADVANTAGE TO
OVERCOME TAX AND TARIFF BARRIERS FOR INVESTORS FROM THIRD COUNTRIES.
üA
FAST DEVELOPING ECONOMY
THE
ECONOMY GREW BY AN AVERAGE 6.8 PERCENT BETWEEN 1995 AND 2002, WHICH
IS WELL ABOVE THE GROWTH RATE OF OECD COUNTRIES, SUGGESTING A
DYNAMIC AND DEVELOPING ECONOMY. NEVERTHELESS, THE WORLD TRADE
ORGANIZATION STATES THAT TURKEY IS AMONG THE 20 MOST DYNAMIC
COUNTRIES IN TERMS OF WORLD TRADE.
MANY
SERVICE AND MANUFACTURING SECTORS ENJOY TREMENDOUS GROWTH RATES IN
TURKEY, PARTLY BECAUSE OF LOWER PENETRATION RATES THAN THOSE OF MORE
DEVELOPED COUNTRIES ELSEWHERE IN EUROPE, AND THE APPETITE IS
CORRESPONDINGLY GREATER.
üHIGH
SKILLED HUMAN RESOURCES
TURKISH
LABOUR FORCE IS WELL KNOWN WITH IT’S SKILLS AND LEARNING CAPACITY
AS VOCATIONAL EDUCATION IS EMPHASIZED IN THE TURKISH EDUCATION
SYSTEM.
INEXPENSIVE
LABOUR RATES MAKING TURKEY HIGHLY COMPETITIVE WITH OTHER EMERGING
MARKETS AS WELL AS WITH THE REST OF THE WORLD, OFFER CUTTING EDGE
FOR INDUSTRIES.
ON
THE OTHER HAND THE LEVEL OF WHITE-COLLAR EMPLOYEES AND PARTICULARLY
THE EXECUTIVE LEVEL HAVE OUTSTANDING QUALIFICATIONS AND CAPACITIES
COMPARABLE TO A DEGREE AS APPRECIATED ANYWHERE IN EUROPE AND USA.
FINALLY
TURKISH ENTREPRENEURS, WITH THEIR INTELLECT AND DRIVING POWER ARE
PLAYING NOW IN THE INTERNATIONAL LEAGUE AND REPRESENT RELIABLE
PARTNERSHIP POTENTIAL FOR FOREIGN INVESTORS.
üHIGH
QUALITY STANDARDS
THE
NEW QUALITY ORIENTED GENERATION IN BOTH MANUFACTURING AND SERVICES
SECTORS ENSURES HIGH QUALITY LEVELS: THIS IS ALSO PROVEN BY TURKISH
COMPANIES WINNING THE EUROPEAN QUALITY AWARD SUCH AS: BRISA, BEKSA, NETAS, BEKO, ARCELIK, ECZACIBASI VITRA.
üDEVELOPED
INFRASTRUCTURE
MOST
RESIDENTIAL AREAS BENEFIT FROM SATISFACTORY ELECTRICITY, DRAINAGE,
NATURAL GAS, TELECOMMUNICATIONS AND TRANSPORTATION SERVICES.
MOREOVER, IN ADDITION TO LARGE FACTORIES, THE GOVERNMENT PROVIDES
“FREE ZONES” AND SO-CALLED “ORGANIZED INDUSTRIAL ZONES”
DESIGNED FOR SMALL AND MEDIUM-SIZED ENTERPRISES.
TURKEY
HAS A RELATIVELY YOUNG AND EFFICIENT TELECOMMUNICATIONS NETWORK WITH
THE LATEST TECHNOLOGY. MOBILE TELEPHONE COVERAGE HAS BEEN EXTENDED
THROUGH THE COUNTRY.
THE
TURKISH FINANCIAL SECTOR IS WELL DEVELOPED IN BOTH TECHNOLOGY AND
LEGAL PROCEDURES. THE BANKING SYSTEM, WHICH UNDERWENT A
RESTRUCTURING ALONG WITH IMF POLICIES, IS EFFICIENT AND THE ÝSTANBUL
STOCK EXCHANGE (ISE) WHICH IS THE LARGEST AND THE MOST ACTIVE IN THE
REGION, PROVIDES ADEQUATE LIQUIDITY TO 280 QUOTED STOCKS WITH A
MARKET CAP OF 50 BILLION US. DOLLARS.
TURKISH
GOVERNMENT AGENCIES SUCH AS THE STATE INSTITUTE OF STATISTICS, THE
CENTRAL BANK, THE TREASURY, THE STATE PLANNING ORGANIZATION, AND THE
ISE ARE MUCH MORE EFFICIENT AND TIMELY, IN PROVIDING DATA ON VITAL
STATISTICS, THAN THE AGENCIES IN OTHER EMERGING COUNTRIES.
üTHE
GATEWAY OF ENERGY RESOURCES
TURKEY
IS PLACED AT THE CROSSROADS OF WORLD’S FUTURE ENERGY RESOURCES,
NAMELY MIDDLE EASTERN AND CASPIAN OIL AS WELL AS RUSSIAN AND CENTRAL
ASIAN NATURAL GAS THAT ARE LINKED THROUGH PIPELINES TO TURKISH
MEDITERRANEAN HARBORS AND WESTERN COUNTRIES.
üLEGAL
PROTECTION
TURKEY
HAS ONE OF THE MOST FLEXIBLE AND UNRESTRICTED LEGAL REGIMES
GOVERNING FOREIGN INVESTMENT, SUPPORTED ALSO BY THE FULL
CONVERTIBILITY OF THE LOCAL CURRENCY.
THERE IS NO DISCRIMINATION AGAINST FOREIGN INVESTORS AT ANY
STAGE OF AN INVESTMENT. TURKEY GRANTS ALL RIGHTS, INCENTIVES,
EXEMPTIONS AND PRIVILEGES AVAILABLE TO DOMESTIC INVESTORS ALSO TO
FOREIGNERS. THERE ARE NO RESTRICTIONS ON ACTIVITY AREAS, ON CAPITAL
MOVEMENTS, ON TRANSFER OF PROFITS, ON CREDIT ACQUISITIONS, ON
REPATRIATION OF CAPITAL IN CASE OF LIQUIDATION OR SALE AND ON
EMPLOYMENT OF FOREIGNERS. THERE IS NO LIMIT ON EQUITY PARTICIPATION
RATIOS, AND APPROVAL PROCEDURES FOR FOREIGN DIRECT INVESTMENT HAVE
BEEN SIMPLIFIED.
APART
FROM THE LIBERAL LEGISLATION, TURKEY PROVIDES ALSO A SECURE
ENVIRONMENT FOR FOREIGN CAPITAL. THE LAW FOR THE PROTECTION OF
COMPETITION HAS BEEN IN EFFECT SINCE 1994, INTERNATIONAL ARBITRATION
IN GOVERNMENT TENDERS HAS BEEN ACCEPTED SINCE 2000 AND SUBSTANTIVE
MEASURES FOR THE PROTECTION OF INTELLECTUAL PROPERTIES AND
INDUSTRIAL RIGHTS HAVE BEEN TAKEN IN THE LAST YEARS.
üPRIVATIZATION
OPPORTUNITIES
TURKEY
IS INCREASING HER PRIVATIZATION EFFORTS TO TURN LOW PERFORMING
GOVERNMENTAL ENTERPRISES INTO COMPETITIVE ECONOMIC ENTITIES.
THE
PRIVATIZATION PROGRAMME OFFERS UNIQUE AND GREAT OPPORTUNITIES TO
INVESTORS FOR ENTERING INTO HUGE ENERGY, TELECOMMUNICATION,
TRANSPORTATION AND INFRASTRUCTURE INVESTMENTS WITH A CAPTURED
MARKET.
III.
CHALLENGES TO FACE
!
POLITICS
AND BUREAUCRACY
DESPITE
TURKEY’S 55 YEARS HISTORY OF PLURALISTIC DEMOCRACY, OCCASIONAL
POLITICAL VOLATILITIES HAVE DISCOURAGED FOREIGN DIRECT INVESTMENT IN
THE PAST. DUE TO THE WIDE SPECTRUM OF POLITICAL PARTIES AND
IDEOLOGIES, THERE HAVE BEEN PERIODS WHERE FOREIGN DIRECT INVESTMENTS
FACED PREJUDICES AND DIFFICULTIES.
HOWEVER
IN THE RECENT YEARS THE POLITICAL AND ECONOMICAL IDEOLOGIES AMONG
THE PARTIES ARE CONVERGING AND THIS OPENED THE GATE TO THE LONG
AWAITED STRUCTURAL REFORMS IN BANKING, AGRICULTURE, PRIVATIZATION
AND OTHER AREAS.
TODAY
WITH HER STRONG ONE PARTY MAJORITY GOVERNMENT TURKEY HAS A VERY
POSITIVE ATTITUDE TOWARDS FOREIGN DIRECT INVESTMENTS, HOWEVER
COMPLEX REGULATIONS AND BUREAUCRACY COULD NOT HAVE BEEN FULLY
SIMPLIFIED YET.
WHILE
DOING BUSINESS IN TURKEY, FOREIGN INVESTORS MAY BE FORCED TO FOLLOW
UP ISSUES AT VARIOUS GOVERNMENTAL AGENCIES SUCH AS;
-
MINISTRY OF FINANCE
-
MINISTRY OF INDUSTRY AND TRADE
-
MINISTRY OF ENERGY
-
MINISTRY OF TOURISM
-
MINISTRY OF ENVIRONMENT
-
MINISTRY OF LABOUR AND SOCIAL SECURITY
-
CENTRAL BANK OF TURKEY
-
UNDERSECRETARIAT OF TREASURY
-
UNDERSECRETARIAT OF DEFENSE INDUSTRY
-
UNDERSECRETARIAT OF CUSTOMS
-
PRIVATIZATION ADMINISTRATION
-
CHAMBER OF COMMERCE
-
CHAMBER OF INDUSTRY
AND
AT THE INDEPENDENT REGULATORY BODIES WHICH ARE
-
THE CAPITAL MARKETS BOARD
-
THE BANKING REGULATION AND
SUPERVISION BOARD
-
THE ELECTRICITY MARKET REGULATION
BOARD
-
THE PUBLIC TENDER SUPERVISION BOARD
-
THE COMPETITION BOARD
-
THE TELECOMMUNICATION BOARD
-
THE SUGAR BOARD
-
THE TOBACCO AND ALCOHOLIC
BEVERAGES MARKET REGULATION BOARD
-
THE RADIO TELEVISION BOARD
FACED
WITH SUCH COMPLEX AND CONFUSED SITUATION FOREIGN INVESTORS HAVE
FORMED AND ESTABLISHED YASED (FOREIGN CAPITAL ASSOCIATION) TO ACT
COLLECTIVELY IN THE DIALOGUES TO IMPROVE THE ENVIRONMENT FOR FOREIGN
DIRECT INVESTMENTS AND REDUCE RED TAPE.
IN
SPITE OF THIS DISCOURAGING PICTURE, PROCEDURES CAN BE EXTREMELY
ACCELERATED THROUGH CLOSE FOLLOW UP, PERSONAL RELATIONS AND DIALOGUE
WITH THE RELATED POLITICAL LEVELS AND AGENCIES THAT
SURPRISINGLY IN GENERAL ARE VERY HELPFUL TOWARDS FOREIGN CAPITAL.
THEREFORE
FOREIGN INVESTORS IN TURKEY, MORE THAN ANYWHERE ELSE NEED LOCAL
GUIDANCE FOR THEIR AND THEIR WAY THROUGH THE REGULATORY PROCEDURES
AND POLITICAL DIALOGUES.
!
UNREGISTERED
ECONOMY
AS
A REACTION AGAINST HIGH INFLATION OVER ALMOST TWO DECADES, AN
IMPORTANT PORTION OF THE ECONOMY ESCAPED REGISTRATION. ALTHOUGH
ILLEGAL THIS “PARALLEL ECONOMY” WHICH IS ESTIMATED TO BE 40% OF
THE OVERALL ECONOMY, IS A FACT AND REPRESENTS NOT ONLY A SIGNIFICANT
LOSS OF TAXES FOR THE FISCAL SYSTEM, BUT ALSO CREATES UNFAIR
COMPETITION ON THE MARKET.
ON
THE OTHER HAND AS, THESE UNREGISTERED ECONOMIC ACTIVITIES ARE NOT
INCLUDED IN THE OFFICIAL STATISTICS; THESE DO NOT REPRESENT THE REAL
SITUATION. THEREFORE IT CAN BE ASSUMED THAT THE REAL GDP AND CONSUME
FIGURES ARE MUCH HIGHER THAN REFLECTED IN THE STATISTICS. THE
EVALUATION OF THIS FACT IS IMPORTANT WHEN ACCESSING THE REAL MARKET
POTENTIAL OF TURKEY.
THE
GOVERNMENT, ALSO SUPPORTED BY THE DECREASING INFLATION, HAS
LAUNCHED A DEDICATED PROGRAMME TO ELIMINATE THIS CRONICAL DISEASE,
WHICH WILL HELP TO NORMALIZE THE SITUATION.
!
LACK
OF FINANCE
INCREASED
GOVERNMENT BORROWING FROM 1990 ONWARDS HAS EXHAUSTED ALMOST ALL
DOMESTIC SOURCES AND PRIVATE SECTOR COMPANIES FACE SERIOUS HANDICAPS
TO COVER THEIR FINANCING FROM THE DOMESTIC BANKING SYSTEM OR THROUGH
OTHER CAPITAL MARKET INSTRUMENTS.
SCARCELY
AVAILABLE CREDITS ARE SHORT TERMED AND CARRY A VERY HIGH INTEREST
BURDAIN.
THIS,
FOR THE OVERALL ECONOMY UNLUCKLY SITUATION HOWEVER, CREATES GREAT
ADVANTAGES FOR COMPANIES WITH FOREIGN DIRECT INVESTMENT, WHO THROUGH
THE SUPPORT OF THEIR SHAREHOLDERS MAY HAVE EASY ACCESS TO
COMPETITIVE INTERNATIONAL FINANCE SOURCES.
!
MANAGEMENT
PHILOSOPHY
WITH
VERY FEW EXCEPTIONS, MOST TURKISH BUSINESS GROUPS AND COMPANIES ARE
FAMILY CONTROLLED OPERATIONS.
THEREFORE
WHEN COLLABORATING WITH A TURKISH PARTNER FOR A NEW VENTURE OR
ACQUIRING SHARES IN AN EXISTING COMPANY, USUALLY DEPENDENCY TO THE
FORMER OWNER FAMILY, INADEQUATE INSTITUTIONAL MANAGEMENT,
INSUFFICIENT ACCOUNTING STANDARTS, IMPROPER INFORMATION SYSTEMS MAY
BE EXPECTED AS PROBLEM AREAS. ARMS LENGTH RELATIONS BETWEEN COMPANY
AND OWNER OR OWNER’S OTHER COMPANIES ARE ALSO QUITE USUAL AND
PROBLEMATIC.
THE
OVERCOMING OF THE GAP BETWEEN THE OWNER MANAGEMENT AND INSTITUTIONAL
MANAGEMENT REQUIRES DELICACY AND TIME.
THE
INVOLVEMENT OF CONSULTANTS OR TURKISH BOARD MEMBERS ALSO RESPECTED
BY THE TURKISH COUNTERPART IS ALMOST A MUST AND VERY RECOMMENDABLE
TO OVERCOME THE INITIAL PROBLEMS.
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IV.
FORMS OF
BUSINESS ORGANISATIONS
The Turkish
Commercial Code recognises two distinct types of business
enterprise;
Partnerships
Corporations
The legal
differences between the two concern the allocation of
liability and the legal identity of the entity. Corporations
established by foreign joint venture partners with or
without a Turkish partner are treated as Turkish
corporations and are entitled to all rights available to
Turkish companies under the Turkish commercial code.
Foreign
investors may establish a corporation in either of these two
forms:
Limited
Liability Company (Limited Sirket - Ltd. Sti.)
Joint
Stock Company (Anonim Sirket - A.S.)
These
business types exist as separate legal entities and offer
their shareholders limited liability. The most common type
of business entity in Turkey is the joint stock company and
generally foreign investors establish such corporations for
doing business in Turkey.
Joint
Stock Company
A joint stock
company is defined as a corporation having its own trade
name and a predetermined amount of capital divided by shares.
The liability of the shareholder is limited to their capital.
The structure
and organisation of joint stock companies are subject to
regulation by the Turkish Commercial Code. However, the
founders of joint stock companies are afforded significant
flexibility in drafting the articles of association, thereby
serving the needs of the specific venture. Capital Market
Board regulations also apply to joint stock companies whose
shareholders' number at least 250, or who have issued bonds
or whose shares are quoted on the Istanbul Stock Exchange.
A minimum of
five shareholders, who may be either real persons or legal
entities, are required for the formation of a joint stock
company. The overall share capital must be a minimum of 5
billion TL and the minimum capital contribution by each
foreign shareholder is US $ 50,000.
The capital
of a joint stock company is divided into shares of equal
value which are treated as negotiable commercial paper. The
shares may be issued in either registered or bearer form.
Registered shares are freely transferable subject to
approval by the board of the company, unless prohibited by
the company's articles of association. Bearer shares are
freely transferable under the Code of Obligations, unless
otherwise agreed by the parties.
Decision
making in a joint stock company is by majority vote; but the
Turkish Commercial Code includes certain provisions to
protect minority interests. Minority shareholders may also
request the appointment of a special auditor on their behalf.
Limited
Liability Company
Limited
liability companies may be composed of real persons or legal
entities and must consist of at least 2 and no more than 50
partners. The overall share capital must be a minimum of 500
million TL and the minimum capital contribution by each
foreign shareholder is the TL equivalent of US $ 50,000. All
partners are personally liable for the debts of the company
up to a maximum of their contribution, however, partners are
not held liable for the unpaid portions of others'
contributions. They are also more directly exposed to the
tax liabilities of the company, limited however to their own
shares.
Shares held
in a limited liability company are non-negotiable and may be
transferred only with the approval of the other partners.
Transfers must be approved by at least a 75% majority vote,
with at least 75% of the total capital represented. Limited
liability companies are also prohibited from engaging in
banking or insurance business. A limited liability company
differs from the joint stock company in that its capital is
not divided into shares of stock nor represented by share
certificates. There is no board of directors for a limited
company. Instead, the appointed manager has authority to run
the company.
Branches
and Liaison Offices
Foreign
companies may also operate through liaison offices or
branches providing they are established in accordance with
the relevant legislation. The income of a branch derived in
Turkey is taxed in the same way as resident corporations.
Liaison
offices may be used to establish a presence in Turkey, but
may not carry on any commercial activity and must be funded
by the parent company outside Turkey.
Employing
Foreign PersonNel
Foreign
personnel can be employed in Turkey with the permission of
General Directorate of Foreign Investments. Companies can
apply to employ foreign personnel, but a real person cannot
make an application by himself.
The
applications are made directly to the General
Directorate of Foreign Investments and the applications are
evaluated according to a specific criteria where the
qualifications of the personnel and the performance of the
company are taken into account.
V.
ROADMAP FOR ESTABLISHING A FOREIGN CAPITAL COMPANY IN TURKEY

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