Upload
others
View
3
Download
0
Embed Size (px)
Citation preview
Engaging Foreign Direct Investment to
Turkish Economy
REPUBLIC OF TURKEY MINISTRY OF ECONOMY
Kiev, Ukraine
June 22, 2015
2
Outline
Foreign Direct Investments
Determinants & Impact
Turkey’s FDI Inflows
Turkey’s FDI Regime: Basic Principles
Structural Reform Agenda
Public-Private Partnership in the Reform Agenda
Turkey’s YOIKK Structure
Investment Advisory Council
Major Success Factors & Achievements
Investment Incentives
Turkey’s Experience Sharing Program
3
Foreign Direct Investments
FDI Determinants
Political and economic stability
Market characteristics (size, growth potential)
Costs (labor, transportation, tax system)
Policy framework
Natural resources
Availability of infrastructure
Business support and promotion
FDI Impact
Stimulate capital accumulation
Increase domestic productivity and efficiency
Technology transfer
Improve local management skills and human capital
Increase competition
Promote product and process innovation
Resource-seeking
Market- seeking
Efficiency seeking
Strategic asset seeking
4
0
5000
10000
15000
20000
25000
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015*
Mill
ion
USD
FDI Performance…
FDI INFLOWS- TURKEY 2002-2015*: USD 153.8 Billion
* April
4,028
12,539
520 companies with Ukranian capital
5
FDI Regime: Basic Principles…
Turkey’s FDI Regime
• National treatment • No pre-entry screening /minimum capital requirements • Right to acquire real estate • Guarantee to free transfer of proceeds, dividends and other financial assets. • Right to employ key expatriate staff • Right to access international dispute settlement
International Agreements
• Bilateral Investment Treaties with 76 countries (94 were signed) • Double Taxation Agreements with 80 countries • Customs Union with the EU
6
Structural Reform Agenda
Public sector reform
Financial sector reform
Social security reform
Tax reform
Enhancing the private sector role in the economy
Opening key markets to competition
Improving the investment environment
Privatization
R&D
7
Public-Private Partnership in
the Reform Program
COUNCIL OF MINISTERS
Coordination Council for the Improvement of Investment Environment (YOIKK)
Investment Advisory Council (IAC)
Steering Committee
Working Groups for Assesment and Evaluation
Monitoring
Company registration and corporate governance
Employment Input Supply Strategy (GITES) and
Sectoral Licensing
Land for investment, environmental and zoning permits
Taxes and Incentives
Foreign Trade and Customs
Intellectual Property Rights and R&D
Legislation of Investment Climate
Access to Finance Infrastructure
TECHNICAL COMMITTEES
Turkey’s YOIKK Structure...
A strong advocate for regulatory reform since 2001…
9
Turkey’s YOIKK Structure...
YOIKK PARTNERS
Public Sector (15 institutions) Private Sector (5 Associations)
Prime Ministry Ministry of Customs and Trade Ministry of Development Ministry of Economy Ministry of Energy and Natural
Resources Ministry of Environment and
Urbanization Ministry of Finance Ministry of Justice Ministry of Labor and Social Security Ministry of Science, Industry and
Technology Ministry of Transport Maritime Affairs
and Communications Capital Markets Board of Turkey Investment Support and Promotion
Agency of Turkey (ISPAT) Scientific and Technological Research
Council Undersecretary of Treasury
Turkish Union of Chambers and Commodity Exchanges (TOBB)
Turkish Exporters Assembly (TIM)
Turkish Industrialists and Businessmen Association (TUSIAD)
Foreign Investors Association (YASED)
Independent Industrialists and Businessmen's Association (MUSIAD)
Chaired by the Prime Minister
Executives of leading multinational firms,
Heads of international institutions (IMF, World Bank, European Investment Bank)
Mr. Jim Yong KIM, President of the World Bank Group attended the last
meeting
TOBB, TUSIAD, YASED, TIM (Top representatives of the Turkish private sector)
Investment Advisory Council of Turkey had 8 meetings so far.
VIII. Meeting October 31, 2013
VII. Meeting May 11, 2012
VI. Meeting June 10, 2010
V. Meeting June 18, 2008
IV. Meeting June 11, 2007
III. Meeting June 29, 2006
II. Meeting April 29, 2005
I. Meeting March 15, 2004
Investment Advisory Council...
Transforming to high value-added and productive economic activities, Sustaining productivity gains by enhanced infrastructure, Supporting the internationalization and growth of SMEs, Enhancing the healthcare system, Access to land for investment, Labor market improvements, Effectiveness of judicial system, Strengthening the technological aspects in public procurement procedures, Ease of doing business.
Recommendations of the last IAC Meeting
Investment Advisory Council...
The achieved progresses regarding each recommendation are presented in each year’s IAC Report.
The reports can be downloaded at http://www.yoikk.gov.tr/detay.cfm?MID=270
Political ownership
Strong coordination between public and private sector
Benchmarking
Close monitoring and evaluation of the progress
Transparency and public awareness www.yoikk.gov.tr (both in Turkish and English)
Major Success Factors…
FDI Law
Simplification of Business Start-up Procedure
Investment Support and Promotion Agency of Turkey
Reduced Corporate Income Tax
Employment Package
Law on Enhancing Research and Development
New Investment Incentive System
Enhanced Credit Guarantee System
Liberalization of Railway Transportation
Establishment of Istanbul Arbitration Center
Major achievements…
Regional Scheme
Priority Investments
Strategic Scheme
Large Scale Scheme
General Scheme
Investment Incentives System
Incentives to promote private sector led growth
Support Measures General
Investment Regional
Investment Large Scale Investment
Strategic Investment
VAT Exemption
Customs Duty Exemption
Tax Deduction
Social Security Premium Support (Employer’s Share)
Interest Support
Land Allocation
VAT Refund
Only For Region 6 (The Least Developed Region)
Income Tax Withholding Support
Social Security Premium Support (Employee’s Share)
VAT Exemption
Customs Duty Exemption
Tax Deduction - 15–55 % 25–65 % 50 %
Social Security Premium Support (Employer’s Share)
- 2–12 years
2–12 years
7 years
Interest Support - 3-7% for TL 1-2% for FX
- 5% for TL 2% for FX
Land Allocation -
VAT Refund - - -
Only For Region 6 (The Least Developed Region)
Income Tax Withholding Support 10 years 10 years 10 years 10 years
Social Security Premium Support (Employee’s Share)
- 10 years 10 years 10 years
Support Measures
Turkey-Regional Investment Incentive Scheme Regional Incentives Map
Investment Incentives System
Turkey’s Experience Sharing Program...
The Program is designed for all parties:
In the process of or considering reform in investment climate
Thinking hands on experience would contribute their efforts
Supporting knowledge transfer between public institutions of different countries
Willing to create fruitful partnerships to design platforms handling issues on investment environment
Seeking to catch up the innovative mentality to attract more FDI in the upcoming years
Turkey's Experience Sharing Program on Investment Climate Reforms
Turkey’s Experience Sharing Program...
• The member countries of Islamic Development Bank (IDB),- 2011, 2012,2013
• Tunisian Delegation, 2012, 2014
• Palestine Delegation, 2012
• The member countries of Economic Cooperation Organization (ECO), 2011
• Turkish Republic of Northern Cyprus, 2011
• Yemen Delegation, 2010
• Kyrgyz Delegation, 2008
• Iraq Delegation, 2008
Turkey's Experience Sharing Program on Investment Climate Reforms
Republic of Turkey
Ministry of Economy
General Directorate of Incentive Implementation and Foreign Investments
Website: http://www.yoikk.gov.tr/index.cfm?dilSecim=2
E-mail: [email protected]
Phone: +90 312 212 8446
Fax: + 90 312 212 8916
For more information
REPUBLIC OF TURKEY MINISTRY OF ECONOMY
Engaging Foreign Direct Investment to
Turkish Economy
REPUBLIC OF TURKEY MINISTRY OF ECONOMY
Kiev, Ukraine
June 22, 2015