FAQ 

If the length of service is:

 

• Between 1 and 5 years (including 5 service years), paid annual leave cannot be less than 14 days.
• More than 5 years but less than 15 years, paid annual leave cannot be less than 20 days.
• 15 years (including 15 service years) or more, paid annual leave cannot be less than 26 days.

• National holidays - 5 days
• New Year - 1.5 days
• Religious holidays - 8 days
• Wedding - 3 days
• Funeral - 3 days
• 2 supplementary days of leave can also be used.

Generally, the regular working period cannot exceed 45 hours per week. Continuation of services after the 45-hour limit is considered “overtime work”.

 

• The overtime wage is calculated by increasing the normal wage/hour by 50%.
• If workers do work on national and general holidays, the wages for those days are to be paid in full.
• The normal weekly working period may be split among the working days as required but cannot exceed the daily 11-hour limit. Overtime work cannot exceed the total limit of 270 hours per year.
  

• Employers may request additional work for a period of 2 months after the cessation of work activities for any reason.
• The compensation work for previous lost time cannot exceed the maximum working period in a day and cannot be more than 3 hours per day. These cases are not considered overtime work.
  

Night shifts cannot exceed the 7.5 hour limit. “Night” is defined as a work period which starts at 8.00 p.m. at the latest and ends at 6.00 a.m. at the earliest, and lasts no more than 11 hours.

 
Source: Higher Education Council Student Selection and Placement Center (OSYM)

Yes, there are internationally recognized schools that provide education for foreign nationals.

 

PRIVATE INTERNATIONAL SCHOOLS:   Only pupils of foreign nationality are allowed to attend these schools. The curriculums of these schools are written by their management and ratified by the Ministry of National Education. There are currently 27 schools with this status.

 

PRIVATE MINORITY SCHOOLS:  These are the schools established by Greek, Armenian and Hebrew minorities during the era of the Ottoman Empire. Pupils of Turkish nationality belonging to minorities attend these schools. These schools are permitted to offer education in their minority language in addition to Turkish. In total, there are currently 41 minority schools. These include 19 Armenian schools, 19 Greek schools and 3 Jewish schools.

 

PRIVATE FOREIGN SCHOOLS:  These are 31 schools established by foreigners under the Lausanne Treaty. These schools were established by French, German, Italian, Australian and US citizens during the era of the Ottoman Empire. Turkish pupils are allowed to enroll in these schools. 

Non-academic education and training activities are mostly carried out under the Ministry of National Education (MNE). The MNE manages these activities both internally and in cooperation with other institutions and organizations of relevant sectors and industries. The Turkish Employment Organization (ISKUR) and labor unions, foundations such as MEKSA (Foundation for the Promotion of Vocational Training and Small Industry) and Small and Medium Industry Development Organization (KOSGEB) also offer vocational education and training programs.

As an affiliate of the Ministry of Labor and Social Security, ISKUR is the official employment organization responsible for the development of human resources. ISKUR’s remit includes:

 

• Providing employment services to public and private enterprises
• Implementing employment improvement measures
• Accrediting private employment agencies
  

The Turkish Goverment actively supports vocational education and training programs for reducing unemployment. The government also cooperates extensively with the European Union in the area of vocational education.

The private sector and related professional institutions have been supporting and benefiting from vocational education. Through the public sector's contributions and assistance to such training and courses, a qualified and skilled labor pool has been made available for employment. In addition, organizations such as KOSGEB run a multitude of support schemes in the areas of consultancy/training, technological development/innovation, international cooperation, exports promotion, entrepreneurship development, information technology, quality improvement and regional development. In addition to these, ISKUR also offers training seminars to enterprises.

The acquisition of real estate is based on the “reciprocity principle”, which means that nationals of a country that allows Turkish nationals to purchase real estate properties within its borders are allowed to purchase real estate in Turkey. As regards the ISPAT International representatives’ network, the reciprocity principle does not apply to India, China, Kazakhstan, or the Gulf countries.

The lands of the organized industrial zones and free zones are owned either by the state or by private individuals. State-owned lands may be allocated in organized industrial zones, while privately owned lands can be sold or rented in organized industrial zones and free zones.

Free Zones are defined as special sites with the following attributes:

 

Valid regulations relating to foreign trade and other financial and economic areas are not applicable, are only partly applicable or a test of new regulations is in progress.

 

Special measures taken in order to increase trade volume and exports for some industrial and commercial activities as compared to other parts of the country.

 

Under the Free Zones Law, the main objectives of the establishment and operation of Free Zones are stated as promoting export-oriented investments and production, attracting foreign direct investment and the latest technologies, directing enterprises towards exports and developing international trade.

 

There are 20 Free Zones in Turkey operating close to the EU and Middle Eastern markets. They are adjacent to major Turkish ports on the Mediterranean, Aegean and Black Seas and provide easy access to international trade routes.

 

Organized Industrial Zones (OIZs) are designed to allow companies to operate within an investor- friendly environment with ready-to-use infrastructure and social facilities.

 

The existing infrastructure provided in the zones includes roads, water, natural gas, electricity, communications, waste treatment and other services.

Allocation permits granted by the OIZs to investors may be annulled under the following circumstances and within the time frames mentioned:

 

• If the investor does not submit the project to the OIZ in order to get a construction permit and does not obtain an Environmental Impact Report within a year.
• If the investor does not start actual construction works within 2 years of obtaining the necessary construction permit.
• If the investor does not start production within 3 years, beginning from the date of issue of the construction permit.
  

If the founder of the company is a legal entity, the following documents are required: Petition, Establishment Statement, Articles of Association, Certificate of Activity, Power of Attorney, Signatory Declaration, Original of Bank Receipt, Chamber Registration Statement, Letter of Commitment, Proof of Residence and Board Resolution.

 

If the founder of the company is a natural person, a Board Resolution is not necessary but the individual's identification certificates or passport is needed in addition to the above-mentioned documents.

There are no restrictions for securing loans from Turkish banks. Loans are issued mainly on the basis of the financial situation of the company and its shareholders.

 

Under the Foreign Direct Investment Law, foreign investors can finance the whole investment through equity. If the equity is not enough or requires leverage, investments can also be financed by part equity and part loan. The capital can be in the form of cash of convertible currency bought and sold by the Central Bank of the Republic of Turkey, stocks and bonds of foreign companies (excluding government bonds), machinery and equipment, industrial and intellectual property rights, reinvested earnings, revenues, financial claims, or any other investment-related rights of financial value.

 

Securing loans from commercial banks depends entirely on the project, credibility and guarantees. Moreover, under the general regime, one of the main incentives is credit allocation from the budget (limited to a certain amount depending on the type of the investment), if certain conditions are met. There is no cash subsidy program within Turkey's general framework of incentives. 

There is no limitation for repatriation of profits unless the company is monitored by an upper supervisory body (such as the Capital Market Board or the Banking Regulatory and Supervisory Board), whose approval is required. After paying a 20% corporate tax, there is a 15% dividend withholding tax if the profit is distributed to local natural persons or foreign natural/legal persons. Under the Turkish tax system, all taxable entities are subject to the same dividend withholding tax rate, which is 15% and is applied to profits after taxation. Favorable dividend withholding tax rates exist due to Turkey's Double Taxation Treaties.

 

Turkey has around 70 Double Taxation Treaties (DTT) signed with many countries. Therefore if the DTT dividend withholding tax rate is lower than the generic 15% rate, the DTT rate may apply.

 

Foreign investors are free to transfer dividends to abroad in accordance with the Foreign Direct Investment Law. However, the Turkish Commercial Code legal reserve requirements must also be met. There are no restrictions with respect to dividend payments under the Foreign Exchange legislation, but the dividend withholding tax has to be paid before repatriation. This will be checked by the banks used for the transfer. 

Energy importation accounts for a major part of the current account deficit in Turkey. As an energy dependent country, Turkey’s current account balance is highly sensitive to the change in energy prices.

The structural reform process launched in 2003 has resulted in a new, dynamic and much more internationally integrated Turkey. The opening up of key markets such as banking, telecommunications, energy, tobacco, and agriculture to competition and projected privatizations are indicative of Turkey’s progress towards becoming an effective free market.

 

Turkey has decided to implement an active policy to improve its investment environment, as the following acts clearly demonstrate. Turkey has created the national Coordination Council for the Improvement of the Investment Environment (CCIIE), whose duties include rationalizing regulations concerning direct investments, developing policies that will increase the competitiveness of the investment environment, and preventing any bureaucratic problems faced by national and international investors. The government has also devised the international “Investment Advisory Board”, gathering together the CEOs of the world's top 20 companies in Turkey for a full working day with the Prime Minister and the State Minister for the economy. The Investment Advisory Board meeting always culminates in the announcement of a public recommendation list. These initiatives are clear steps taken towards enhancing the role of private industry in the economy.

 

A significant range of additional economic reforms has changed the global investment conditions in Turkey. The new FDI Law introduced by the Parliament in 2003 guarantees equal treatment for all investors, with no distinction made between international investors and locals. Turkey's economic power has drastically increased in the last six years.

a.    Media, radio and television broadcasting

Under the Article 29 of the Law governing the establishment of radio and television broadcasting institutions, the share of foreign capital in a private company operating in the media-broadcasting sector cannot exceed 25% of the capital paid up. Any foreign investor who is already a partner in a radio & TV company cannot hold any additional shares in another private company.

 

b.    Petroleum

The conditions for foreign companies seeking to invest in direct petroleum activities are subject to the Petroleum Law, Article 12.

 

c.     Passenger-cargo air transportation

For companies interested in commercial air transportation, the majority of the shareholders are to be Turkish citizens. The majority of the administrators and the representatives of the private company are to be Turkish citizens. (Regulation of Commercial Air Transportation, Article 8)

 

d.    Airport ground handling services

For A or C type private companies requesting operation licenses, the majority of the administrators and the representatives of the private company are to be Turkish citizens, and the majority of votes in the statute of the company have to belong to Turkish citizens. (Regulation of Ground Handling, Article 7)

 

e.    Management of airports

Although there is no restriction on private capital investment in this market, the issuing of licenses for such companies is subject to approval by the Turkish Armed Forces. (Regulation of Civil Aviation, Article 34)

 

f.     Transportation railways infrastructure services

The sole operator of the infrastructure services in Turkey is the Turkish National Railway Institution.

 

g.    Port management

The foreign capital of a private company operating in the port management sector cannot exceed 49%. The majority of the administrators and the representatives of the private company are to be Turkish citizens and the majority of votes in the statute of the company have to belong to Turkish citizens. (Law on Privatization Practices, No 4046)

 

h.    Transportation in coastal waters and rivers

Transportation and trade activities in Turkey's coastal waters and rivers are under the sovereignty of Turkish citizens. (Cabotage Act, No 815)

 

i.      Yacht ports management

Companies with foreign capital can only operate in the yacht ports management sector if they form a partnership with Turkish citizens. (Law on Tourism Incentives, No 2634)

In terms of asset size by sector, the banks occupy the leading position in Turkey. According to figures for Q1 of 2009, almost 79% of the assets in the financial sector belong to the banks. These are followed by the Turkish Central Bank (18%) and financial leasing companies (1.8%), as well as factoring companies (1.8%). The total size of the sector reached 958 billion TRY as of Q1 of 2009.

The total number of banks in Turkey is 45 as of March 2009, and they employ 171,048 people.

By the end of 2008, the number of foreign banks in Turkey reached 17. In addition, the financial sector was the target of large amounts of FDI between 2004 and 2008. The total amount of FDI attracted by this sector totals USD 28 billion - Turkey attracted almost half of the FDI in the time frame mentioned above.

List of Regulatory Bodies in the Financial Sector 

Institutions in the sector		Authorities
Banks		Capital Markets Board Banking Regulation and Supervision Board
Participation banks		Banking Regulation and Supervision Board
Insurance comp.		Treasury
Financial leasing comp.		Treasury
Factoring comp.		Treasury
Real estate inv. Trusts		Capital Markets Board
Pension comp.		Capital Markets Board
Consumer financial comp.		Treasury
Financial Intermediary Operating in Stock Exchange		Capital Markets Board

 

When investing in the Turkish financial sector, foreign investors are subject to the same conditions and permits as Turkish investors. There are no limits or restrictions in the financial legislation regarding foreign investors. The establishment of a bank in Turkey or the opening up in Turkey of the first branch of a bank established abroad shall be permitted if at least five members of the Banking Regulation and Supervision Board vote in favor.

 

All insurance and reinsurance companies must be established as joint-stock or cooperative associations and must be allowed to conduct transactions relating to insurance operations only. License applications are to be made to the Undersecretariat of Treasury and the relevant documents are listed in the Article 15 of the regulation. Licenses are issued within 2 or 3 months if the Undersecretariat of Treasury decides that the applicant fulfils the conditions.

 

Leasing companies can be founded as joint stock only. The establishment of leasing companies and branches of foreign companies operating in Turkey are subject to permits and controls of the Ministry to which the Undersecretariat of Treasury reports.

EU and OECD norms form the basis of the Turkish financial system as regards accounting and supervision standards. Regulations ensuring the implementation of risk management measures in all financial institutions will be drafted. In addition to the transition to the Basel II Framework, harmonization with the relevant EU regulations will be achieved and a credit and corporate governance rating system will be set up to ensure monetary and financial stability.

Within the scope of developing new markets and products and deepening the financial system, the development of gold banking will be supported, the rights of minority shareholders in companies will be improved and financial instruments will be issued to benefit from the capital accumulation in the Gulf countries.

According to a survey conducted by the Association of Machinery Manufacturers in 2007, there are over 11,000 companies operating in the machinery industry in Turkey with annual revenue of USD 29 billion. Today, the share of machinery manufacturing in the overall manufacturing industry is about 4.7 %.

 

The product range of the Turkish machinery industry consists of internal combustion engines and turbines, boilers and burners, building machinery, heavy industrial machinery, machining tools, milling machines, drilling machines, cutting and bending machines, woodworking machinery, pumps and compressors, hand tools, air conditioning units, textile machinery, food processing machinery, hoisting and conveying machinery, sewing machines, refrigerators and washing machines (both domestic and industrial), valves, gears and bearings.

 

The Turkish machinery industry is able to produce almost all of the parts and accessories for the above-mentioned items with competitive prices and high quality. The average local contribution to the production process is around 80­85 %.

As mentioned above, the production value of the machinery industry is around USD 20 billion USD. In terms of the value of the machinery produced, Turkey ranks sixth in Europe. Around 5% of all machinery production in Europe takes place in Turkey.

 

The products in the Turkish machinery sector are considered highly competitive in international markets due to their relatively flexible production process and good engineering. The Turkish machinery industry has recorded a substantial increase in exports compared with Turkey’s overall exports. In 2007, the export value of the machinery industry was USD 8.77 billion, indicating a 35% increase compared with 2006 figures.

 

In 2008, the total exports of the machinery manufacturing industry exceeded USD 10.25 billion, corresponding to an increase of 17% compared with the year before.

 

Export Figures (Value: 1,000 USD)  

	2003	2004	2005	2006	2007	2008
Export	3,436,811	4,397,455	5,512,030.	6,868,127	9,245,040	10,927,687

Source: Turkish Statistical Institute (TurkStat)

 

The most important export goods are engine and spare parts, refrigerators and freezers, construction and mining machinery, washing machines, metal and wood processing machinery, pumps and compressors, air conditioning equipment, machinery components, taps, cocks, valves and similar appliances for pipes, boiler shells, tanks, vats, food processing and packaging machinery.

 

Machinery Export by Products (Value: 100 USD) 

Product	2005	2006	2007	2008
Engine and Spare Parts	875,520	1,027,239	1,429,695	1,478,995
Refrigerators and Freezers	916,421	1,158,455	1,450,117	1,454,162
Construction and Mining Machines	434,465	531,918	841,629	989,676
Washing Machines	486,522	603,841	684,002	704,854
Metal and Wood Processing Machines	275,995	357,385	540,004	673,915
Pumps and Compressors	257,995	357,385	540,049	673,915

 Source: Undersecretariat of Foreign Trade

 

In 2008, Germany was the leading importer of Turkish machinery products, with a share of 15.5%. The United Kingdom, France, Italy, the United States, the Russian Federation, Romania, Spain, Iraq, Iran, Poland, Kazakhstan, Bulgaria, Azerbaijan, Greece, Ukraine, Belgium and the Netherlands are the other important markets for Turkey’s machinery exports.

When investing in the machinery sector, there are a number of incentive systems that investors can benefit from: Under the umbrella of the General Investment Incentive Regime, investors are exempted from both customs duties and fund levies, VAT for the imported or locally purchased machinery and equipment. In the newly launched incentive scheme the machinery industry is one of the key sectors to be supported. The sector will be benefiting from reduced corporate tax, interest support and a social security premium contribution for employers. The third system, called the Inward Processing Regime, is structured to encourage Turkish exporters. Since the machinery industry is an export-oriented industry, the support given through this regime is also beneficial to investors: Under the Inward Processing Regime, exporters have the opportunity to obtain materials for the production of their exports, without being subject to customs duties or VAT.

The Association of Machinery Manufacturers, the Turkish Machinery Promotion Group and the Central Anatolian Machinery and Accessories Union are the leading organizations in the sector.

The Turkish ICT market accounts for approximately 4% of the country's GDP; it has shown robust growth over the last couple of years, exceeding USD 28 billion in 2008, up from 10 billion in 2008. The rapid growth in the Turkish ICT sector is a result of technological advances as well as the technological sophistication level of Turkish society. With its strategic position in the region and its qualified human resources, Turkey provides an excellent platform for global ICT companies' operations in the Middle East and Central Asian countries.

 

Source: Interpromedya Informatics - 2009

 

The sophistication level of Turkish society can be observed through the usage of mobile phones; the number of mobile phone subscribers exceeded 65 million in 2008, up from 23 million in 2002.

 

GSM and Land Line Subscribers
	2002	2003	2004	2005	2006	2007	2008
GSM	23.323.118	27.887.535	34.707.549	43.608.965	52.662.709	61.975.807	65,824,110
Land Line	18.914.857	18,916,721	19,125,163	18,978,223	18.831.616	18.201.006	17,502,205

 Source: Information and Communication Technologies Authority 

 

 Source: Undersecretariat of Foreign Trade

A qualified labor force and technological advancement has contributed to the exponential growth of the Turkish software industry. The industry reached USD 1,5 billion in 2008, up from USD 336 million in 2002. According to projections, it is estimated that the software industry will grow by more than 7% in 2009, while the overall ICT market is estimated to decrease by 6%. A newly introduced incentive package for Research and Development will boost the industry further.

The value of the Turkish ICT market is forecast to decline by approximately 6% in 2009 compared with the previous year. One of the major reasons for the decline is the negative impact of the recent global financial crisis, which eventually hit the real economy hard, thus weakening the domestic demand for ICT products. However, an eventual pickup in the ICT market is expected once the markets start to recover from the crisis.

 

 Source: Interpromedya Informatics - 2009 *forecast

Broadband penetration is forecast to reach about 16%. Given the high percentage of young people in Turkey's growing population, growth in Internet subscriptions and e-commerce is likely to be strong. As with telecoms services, growth in 2009-13 will be driven by rising incomes (in the second half of the forecast period) and sales of personal computers (PCs), as well as the availability of online services through cable-TV and wireless applications. The Internet and its many uses are becoming increasingly familiar, and computer literacy is growing in Turkey. A major project by the Ministry of Education to introduce computers and the Internet throughout the school system is currently under way.

 

Source: Economist Intelligence Unit.

 

In 2010-13 IT spending is forecast to rise by 16% a year, reaching around US$10.6bn at the end of the forecast period.

 

 Source: Economist Intelligence Unit.

There are two petrochemical complexes, one is the Petkim-Aliaga complex in Izmir and the other one is the Tupras (Turkish Petroleum Refineries Corporation)-Korfez Petrochemical and refinery in Kocaeli. In these two complexes, a wide range of petrochemicals, all common plastics (HDPE, LPDE, PS, PVC, and PP) aromatics, ethylene glycol, phtallic anhydrite, terephthalic acid, carbon black, synthetic rubber, acrylonitryl and caustic soda are produced. The total production of these petrochemicals reaches about 2.9 million tons/year and meets around 25% of the domestic demand.

• Privatization of Petkim is an opportunity for international investors.
• Turkey is an important energy hub thanks to its unique geographical position.
• Petkim has a wide variety of products in its portfolio, which is continuously expanding.
• The high utilization rate (%97) in the industry.
  

Thanks to its favorable ecological conditions and climate, Turkey benefits from a major agricultural sector and is the largest producer and exporter of agricultural products in the Near East and Africa. This provides local manufacturers with easy access to raw ingredients, while the well-developed retail sector provides an attractive distribution network. 

 

Cereals are of great importance to the Turkish agricultural sector, and the country is one of the top 6 wheat exporters in the world. In addition, pulse production, edible nuts and dried fruits production dominate the world markets. With its vast agricultural potential, Turkey offers an extensive range of fruits and vegetables, and therefore frozen & canned / dried fruit & vegetable industries are rapidly growing sectors in Turkey’s agro industry. Turkey also ranks highly in terms of the quantity and quality of its vegetable oil, in particular olive oil. Milling / pastry goods, sugar / confectionery, chocolate / cocoa products, pasta & biscuits, fishery products, poultry and drinking water are also widely regarded as promising, along with the fast developing organic agricultural sector.

There is huge potential in the field of renewable energy in Turkey with the use of solar, wind, bio-mass, hydro and geothermal as sources of power, complete with related technology, equipment and services.

 

• Geothermal potential
  The geothermal energy potential in Turkey is estimated to be about 31,500 MW. There are 470 wells in Turkey and 187 geothermal fields have been discovered. The total geothermal capacity used in Turkey is about 1,342 MW.

 

• Solar potential
  The solar energy potential evaluations made by the General Directorate of Electrical Power Resources Survey and Development Administration (EIE) based on the data measured by the State Meteorological Services (DMI) during 1966-1982 revealed the following:

 

- The annual average total insulation duration is 2,640 hours (7.2 hours/day).

- Average annual solar radiation is 1,311 kWh/m²-year (3.6 kWh/m²-day).

- Total solar energy potential in Turkey is 35 MToe per year.

- Solar energy production is expected to reach 602 KToe in 2010 and 1,119 KToe in 2020.

 

• Wind potential

Turkey’s total wind potential is approximately 88,000 MW and economically viable wind potential is approximately 10,000-12,000 MW. However, wind energy potential in Turkey is largely unutilized, with only 333,35 MW currently in use.

 

The total installed capacity of wind farms in Turkey has risen significantly from 50 MW in 2006 to 146 MW in 2007. As of September 2008, the total installed capacity has reached 333 MW. The approved overall capacity of wind farm projects totals 3,300 MW, with 143 MW under construction, 1,070 MW with a turbine supply contract and 1,782 MW licensed.

 

Since the total installed capacity in Turkey is well behind the EU 27 average of 2,094 MW and the EU 15 average of 3,724 MW (2007), the Turkish wind energy market is still in its infancy, offering strong growth prospects. According to the figures issued by the European Wind Energy Association, Turkey has ranked first among other European countries with the highest growth rate of installed capacity. The growth rate of installed capacity in Turkey  was 192% by 2007. This ratio was 18% in EU 27, and 2% in EFTA countries. The high growth rate indicates that Turkey still has room for improvement in terms of utilizing the full market potential of its wind energy.

 

• Hydropower potential

 

Currently, Turkey has 172 hydroelectric power plants in operation with a total installed capacity of 13,700 MW, generating an average of 48,000 GW/year, which is 35% of the economically viable hydroelectric potential. 148 hydroelectric power plants with a total installed capacity of 8,600 MW are under construction to generate approximately 20,000 GW annually, representing 14% of the economically viable potential. In the future, 1,418 more hydroelectric power plants will be constructed in order to make use of an additional 22,700 MW of installed capacity. As a result of these, a total of 1,738 hydroelectric power plants with a capacity of 45,000 MW will tame rivers to harness the economically viable hydropower of Turkey.

 

Turkey's theoretical hydroelectric potential is 1% of that of the world and 16% of that of Europe. The gross theoretical viable hydroelectric potential in Turkey is 433 billion kWh and the technically viable potential is 216 billion kWh. The economically viable potential is estimated at 140 billion kWh.

Turkey’s main energy policy is to secure its supplies of energy. In order to secure the supply, a balanced resource diversification of primary energy resources between the countries of origin is being implemented. Nuclear energy is also to be included in electricity production.

The energy deals that Turkey is a signatory to serve not only to address the country’s main concern of securing supplies but also to assert its strategic location. Turkey will be promoted to the status of a transit country between energy producing and consuming countries by making efficient use of its geo-strategic location, thereby strengthening its geo-strategic position.

Law No.5346, entitled “Renewable Energy Resources Law for the Purpose of Generating Electricity” stipulates that RES (Renewable Energy Resources) are wind, solar, geothermal, bio-mass, bio-gas, wave current and tidal power sources suitable for electricity generation, together with hydraulic power generation plants, either canal or run-of–the-river type or with a reservoir surface area of less than 15 km².

 

• The purchase guarantee covering the produced energy for 10 years will not be below 5 Euro Cent per kWh rate or its TRY equivalent.
• Only 1% of the total licensing fee is to be paid.
• Exemption from annual license fees for the first eight years following the completion date of the facility.
• Electricity may be supplied by the private sector at wholesale prices on the condition of not exceeding the annual power output of the facility in question.
• Priority for system connection.
• Generating units based on renewable energy that are not designed for frequency and voltage control, are not subject to these conditions and requirements.
• Exemption from the liabilities of the Energy Market Regulatory Authority’s Electricity Market Balancing and Settlement Regulation.
• Wind power generation and canal-type hydroelectric power generation plants that sell electricity to wholesale and retail licensees are exempted from settlement.

According to the Ministry of Transport, the total revenue from all toll roads in Turkey in 2008 was USD 121 million. The total revenue from the two bridges crossing the Istanbul Strait was USD 100 million during the same period.

 

Airports, ports, railways and roads are major areas of investment in terms of infrastructure. According to the Privatization Administration, the privatization of motorways and bridges is one of the top-priority projects. The scope of privatization of motorways and bridges covers Turkey's motorways, bridges and service facilities. These are to be privatized via a “Transfer of Operating Rights” agreement. Due to its geopolitical location, Turkey is an industrial hub with an attractive privatization portfolio.

 

The expansion of Sabiha Gokcen International Airport, the construction of 3 new airports and the construction of Bodrum Airport are major airport projects planned in Turkey.

 

Since 1997, the ports of Tekirdag, Rize, Ordu, Sinop, Giresun, Hopa, Antalya, Marmaris, Alanya, Cesme, Kusadasi, Trabzon and Dikili have been privatized. One of the major examples of port privatization has been the Port of Mersin, a 36-year concession worth USD 777 million. The concession was won by a consortium of Singapore PSA and the Turkish Construction firm Akfen, in May 2007. Derince Port was also privatized in 2007 at a total investment cost of USD 100 million.

 

The railway sector is one of the potential markets in Turkey’s infrastructure, offering many growth opportunities. On March 13, 2009, the first portion of the Ankara–Istanbul fast rail system, the Ankara-Eskisehir line, was constructed; the construction of the last portion, Eskisehir-Istanbul, is still under way. The construction of the tunnel passage of Istanbul’s subway network underneath the Bosphorus, Baku-Tbilisi-Kars railway and the Syria-Turkey railway will contribute to the development of multimodal transportation in Turkey.

• Turkey has developed one of the largest land transportation fleets in Europe and the country has the most developed infrastructure in its region. The country’s location as a bridge between continents means that transportation connections can be established between Europe, Asia and Africa.

The government is implementing a series of policies in order to make the country's transportation infrastructure safer and more efficient. These policies include shifting freight transportation to railways and transforming major ports into logistic centers. A corridor approach will encourage the utilization of the maritime and railway transportation network, and priority will be given to the implementation of public-private partnership models in the construction and operation of large transportation projects.

Logistic centers make trade services more efficient by serving as beginning-end points for freight transfer, where all the relevant parties are gathered together for the collection and distribution, the storage and classification, and the transfer of containers among various means of transportation. All bureaucratic procedures can be completed at a single point.

Turkey has an extensive network of approximately 10,000 km of pipelines. Of this network, 3,373 km consist of crude oil pipelines and 8,467 km of natural gas pipelines.

 

In Turkey, all the oil and natural gas transmission lines are owned by BOTAŞ, the only authority for the transmission of natural gas. In the past, BOTAŞ was also responsible for distribution; however with privatization, distribution rights can now be given to private companies as well. In the future, the privatization of transmission rights may also be considered. Licenses to distribute natural gas are issued by the Energy Markets Regulatory Authority (EMRA). The national oil pipelines are also owned by BOTAŞ.

Foreign tourist arrivals increased substantially in Turkey between 2002 and 2008, up from 13 million to 26 million. With these figures, Turkey is one of the most visited countries in the world. In terms of both tourist arrivals and tourism revenues, Turkey is among the top ten countries that are leading the tourism sector.

 

Distribution of Foreign Arrivals and Tourism Revenues by Years

Source: UNWTO

 

The majority of the tourists visiting Turkey are from Germany and the Russian Federation.

 

Distribution of Tourist Arrivals by Main Countries of Nationality

Source: UNWTO

The Ministry of Culture and Tourism is the main regulatory body in Turkey’s tourism sector. All issues relating to investments in the tourism sector are handled by the General Directorate for Investment. There is also a private entity called the Turkish Tourism Investor Association, which was formed to serve as a meeting point for entrepreneurs investing in the tourism sector and to provide assistance for future investment plans.

In order to invest in Turkey’s tourism sector, the area for the proposed investment should be allocated for tourism in the zoning plan. In order to learn if the area is suitable for the proposed type of investment, the investor can apply either to the related municipality or directly to the ministry. After clarification of the zoning plan, the next step is to apply for a tourism investment certificate from the Ministry of Tourism. This application is submitted to the General Directorate for Investment.

As a country that is steadily increasing its reputation in the global tourism industry with ever higher numbers of tourists attracted each year, Turkey continues to create new potential tourist attractions by taking into account the changing consumer preferences in foreign markets, promoting activities for golf, winter, mountain, yacht, and congress tourism and ecotourism. Another important aspect of the Turkish tourism sector, healthcare services, is increasingly in demand, due to Turkey’s competitive advantage in terms of prices, service quality and geothermal resources.

An investor that has a tourism investment certificate can benefit from the following incentives:

 

• Tax reduction
• Investment loans
• Investment premiums
• Access to tourism development funds
• Loans with low interest rates and long maturity
• Partial customs duty exemption
• Land allocation
  

Turkey is a founding member of the United Nations (UN), the Organization of the Islamic Conference (OIC), the Organization for Economic Co-operation and Development (OECD) and the Organization for Security and Co-operation in Europe (OSCE); a member state of the Council of Europe since 1949, and of NATO since 1952. The Republic of Turkey is also a member of the Black Sea Economic Cooperation Organization (BSEC), the Economic Cooperation Organization (ECO), and the Developing 8 (D-8). Turkey is also a member of the G20, which brings together the 20 largest economies of the world.