FDI law provides secure environment, equal rights
Turkey maintains a transparent and open foreign trade regime. Pro-business foreign investment policies have been introduced as a part of the liberalization of the Turkish economy.
Turkey maintains a transparent and open foreign trade regime. Pro-business foreign investment policies have been introduced as a part of the liberalization of the Turkish economy. The foreign investment legislation provides a more secure environment for foreign capital by providing support from several bilateral and multilateral agreements and organizations, granting foreign capital the same rights and obligations as domestic capital and guaranteeing the transfer of profits, fees and royalties and the repatriation of capital.
[HH] FDI according to law No. 4875
The foreign direct investment law, No. 4875, which has been in force since June 2003, emphasizes the key elements of the liberal investment environment in Turkey and represents a “legal guide” to international investors about their rights and obligations. The objective of this law is to regulate the principles to encourage foreign direct investment, to protect the rights of foreign investors, to define investment and investor in line with international standards, to establish a notification-based system for foreign direct investment rather than screening and approval, and to increase foreign direct investment through established policies. The law establishes the treatment to be applied to foreign direct investment.
[HH] Principles concerning foreign direct investment
Freedom to invest and national treatment: According to Article 3 of law No. 4875, unless stipulated by international agreements or other special laws:
• Foreign investors are free to make foreign direct investments in Turkey
• Foreign investors shall be subject to equal treatment as domestic investors
These provisions guarantee investment freedom and equal treatment for foreigners.
Expropriation and Nationalization: Foreign direct investment shall not be expropriated or nationalized, except for a public purpose and upon compensation in accordance with due process of law. Thus, foreign investments are protected against the state.
Transfers: Foreign investors can freely transfer abroad profits, dividends, proceeds from the sale or liquidation of all or any part of an investment, compensation payments, amounts arising from license, management and similar agreements, and reimbursements and interest payments arising from foreign loans through banks or special financial institutions.
Access to Real Estate: Companies used to be able to freely acquire real estate or limited rights in the real estate market through a legal entity established or participated in by foreign investors in Turkey, provided such acquisitions were permitted for Turkish citizens as well. But this provision was annulled by a decision of the Constitutional Court in March 2008.
Dispute Settlement: For the settlement of disputes arising from investment agreements subject to private law and investment disputes arising from public service concessions agreements concluded with foreign investors, foreign investors can apply either to authorized local courts, or to national or international arbitration or other means of dispute settlement, provided the conditions in the related regulations are fulfilled and the parties agree thereon.
Employment of Expatriates: Work permits are issued by the Ministry of Labor for foreign personnel to be employed at companies, branches and entities established within the scope of this law. Recently, the Ministry of Labor shortened the process for granting a work permit and now applications and correspondences can be made online.
Hurriyet Daily News/29.01.2010
Turkey maintains a transparent and open foreign trade regime. Pro-business foreign investment policies have been introduced as a part of the liberalization of the Turkish economy. The foreign investment legislation provides a more secure environment for foreign capital by providing support from several bilateral and multilateral agreements and organizations, granting foreign capital the same rights and obligations as domestic capital and guaranteeing the transfer of profits, fees and royalties and the repatriation of capital.
[HH] FDI according to law No. 4875
The foreign direct investment law, No. 4875, which has been in force since June 2003, emphasizes the key elements of the liberal investment environment in Turkey and represents a “legal guide” to international investors about their rights and obligations. The objective of this law is to regulate the principles to encourage foreign direct investment, to protect the rights of foreign investors, to define investment and investor in line with international standards, to establish a notification-based system for foreign direct investment rather than screening and approval, and to increase foreign direct investment through established policies. The law establishes the treatment to be applied to foreign direct investment.
[HH] Principles concerning foreign direct investment
Freedom to invest and national treatment: According to Article 3 of law No. 4875, unless stipulated by international agreements or other special laws:
• Foreign investors are free to make foreign direct investments in Turkey
• Foreign investors shall be subject to equal treatment as domestic investors
These provisions guarantee investment freedom and equal treatment for foreigners.
Expropriation and Nationalization: Foreign direct investment shall not be expropriated or nationalized, except for a public purpose and upon compensation in accordance with due process of law. Thus, foreign investments are protected against the state.
Transfers: Foreign investors can freely transfer abroad profits, dividends, proceeds from the sale or liquidation of all or any part of an investment, compensation payments, amounts arising from license, management and similar agreements, and reimbursements and interest payments arising from foreign loans through banks or special financial institutions.
Access to Real Estate: Companies used to be able to freely acquire real estate or limited rights in the real estate market through a legal entity established or participated in by foreign investors in Turkey, provided such acquisitions were permitted for Turkish citizens as well. But this provision was annulled by a decision of the Constitutional Court in March 2008.
Dispute Settlement: For the settlement of disputes arising from investment agreements subject to private law and investment disputes arising from public service concessions agreements concluded with foreign investors, foreign investors can apply either to authorized local courts, or to national or international arbitration or other means of dispute settlement, provided the conditions in the related regulations are fulfilled and the parties agree thereon.
Employment of Expatriates: Work permits are issued by the Ministry of Labor for foreign personnel to be employed at companies, branches and entities established within the scope of this law. Recently, the Ministry of Labor shortened the process for granting a work permit and now applications and correspondences can be made online.
Hurriyet Daily News/29.01.2010
