How to invest in a factory in Türkiye? If you want to invest in factories in Türkiye, you need to decide which sector you will operate in. The field of activity, the region of operation, and the dynamics of the sector are important factors in establishing a factory in Türkiye. If you want to invest in factories in Türkiye... you need to pay attention to: Which sector will you work in? Will you build a factory from scratch or acquire an existing one? Location? Capital requirements? Ease of access to human resources? You need to have feasibility studies prepared that include all these factors.
What kinds of factory investments can be made in Türkiye? In Türkiye, leading factory investments are concentrated in sectors such as iron and steel, textiles, energy, automotive manufacturing and spare parts production, home appliances and white goods manufacturing, and furniture manufacturing; factories are located and production takes place in almost every field.
Is investing in a factory in Türkiye advantageous? Undoubtedly, rising exchange rates, Türkiye's geographical and transportation infrastructure, and its pursuit of a global balance of power make Türkiye attractive for investment. Turkey's diplomatic balance with global powers such as Russia, America, Ukraine, Arab countries, India, Pakistan, and China allows it to work comfortably with many countries worldwide. Furthermore, its geographical location, advantages in sea, air, and land transportation, proximity to energy resources, and positive human resources make Türkiye attractive for manufacturing.
How is factory investment made with foreign capital in Türkiye? What is the Law No. 4875 on Direct Foreign Investments? Foreign investment is possible in Türkiye. Various government supports are available for this. Foreign investors' ability to invest in Türkiye is guaranteed by Law No. 4876.
Law No. 4875 on Foreign Direct Investments
ARTICLE 1
The purpose of this Law is to regulate the principles regarding the encouragement of foreign direct investment, the protection of the rights of foreign investors, compliance with international standards in the definitions of investment and investor, the transformation of the permit and approval system into an information system in the implementation of foreign direct investment, and the increase of foreign direct investment through the determined policies. This Law covers the treatment to be applied to foreign direct investment.
ARTICLE 2
In this Law;
a) Foreign investor: An investor who makes direct foreign investments in Türkiye.
1) Natural persons who are citizens of foreign countries and Turkish citizens residing abroad,
2) Legal entities established under the laws of foreign countries and international organizations,
b) Direct foreign investment: By a foreign investor,
1) Items brought from abroad;
- Cash capital in the form of convertible currency traded by the Central Bank of the Republic of Turkey,
- Company securities (excluding government bonds),
- Machinery and equipment,
- Industrial and intellectual property rights,
2) Sourced domestically;
- Profits, revenues, monetary receivables, or other investment-related rights with financial value that are used for reinvestment.
- Rights relating to the exploration and extraction of natural resources,
Through economic values such as these;
i) Establishing a new company or opening a branch,
ii) Becoming a partner in an existing company through the acquisition of shares outside of stock exchanges or through acquisitions from stock exchanges that provide at least a 10% shareholding or the same percentage of voting rights,
c) Undersecretariat: Refers to the Undersecretariat of the Treasury.
Principles regarding foreign direct investment
ARTICLE 32
a) Investment freedom and national treatment
Unless otherwise stipulated by international agreements and special laws;
1- Foreign direct investment in Türkiye by foreign investors is permitted.
2. Foreign investors are treated equally with domestic investors.
b) Expropriation and nationalization
Under current legislation, foreign direct investments cannot be expropriated or nationalized unless required by public interest and compensation is paid.
c) Transfers
Net profits, dividends, sales, liquidation and compensation payments arising from the activities and transactions of foreign investors in Türkiye, as well as amounts to be paid in return for license, management and similar agreements, and principal and interest payments on foreign loans, may be freely transferred abroad through banks or private financial institutions.
d) Acquisition of immovable property
Foreign investors are free to acquire real estate or limited real rights in areas open to acquisition by Turkish citizens, through companies they have established or in which they have a stake in Turkey.
Cancellation clause: E. 2003/71 K. 2008/79 11.03.2008 t. AyM K.
e) Resolution of disputes
For the resolution of disputes arising from investment contracts subject to private law, and investment disputes arising from public service concession agreements and contracts concluded between foreign investors and the administration, in addition to the competent and authorized courts, national or international arbitration or other dispute resolution methods may be resorted to, provided that the conditions stipulated in the relevant legislation are met and the parties agree.
f) Valuation of non-cash capital
The valuation of capital other than cash is carried out within the framework of the provisions of the Turkish Commercial Code. If securities of companies established in foreign countries are used as investment instruments, the valuations of the authorities authorized to determine value according to the legislation of the country of origin, or expert appraisers appointed by the courts of the country of origin, or international valuation organizations, shall be taken as the basis.
g) Employment of foreign personnel
Foreign nationals to be employed in companies, branches, and establishments founded under this Law shall be granted work permits by the Ministry of Labor and Social Security.
Repealed: Article 27 of Law No. 6735, dated 28.07.2016.
In accordance with Article 23 of the Law No. 4817 on Work Permits for Foreigners dated February 27, 2003, the regulation to be jointly prepared by the Undersecretariat of Treasury and the Ministry of Labor and Social Security will determine which foreign-capital companies and organizations fall within this scope, the definition of key personnel to be granted permits under the said regulation, and other specific principles and procedures regarding work permits.
Repealed: Article 27 of Law No. 6735, dated 28.07.2016.
The provisions of Article 14, paragraph 1, subparagraph (b) of Law No. 4817 shall not apply to personnel to be employed within this scope. The circumstances under which Article 13, paragraph 1 of Law No. 4817 shall apply to key foreign personnel to be employed shall be determined in the regulation to be prepared.
Repealed: Article 27 of Law No. 6735, dated 28.07.2016.
h) Liaison offices
The Undersecretariat is authorized to grant permission to companies established under the laws of foreign countries to open liaison offices in Turkey, provided that these companies do not engage in commercial activities in Türkiye.
Policy making and information requesting
ARTICLE 4
The Undersecretariat is authorized to determine the general framework of policies regarding foreign direct investment, taking into account the development plan and annual program objectives, the general economic situation of the country, global investment trends, and the opinions of relevant public institutions and organizations and private sector professional organizations, and to participate in the activities of other organizations for this purpose. The Undersecretariat's approval is obtained regarding amendments to legislation and new draft legislation concerning foreign direct investment.
The Undersecretariat is authorized to request statistical information on investments from all types of public institutions and organizations, as well as private sector professional organizations, in order to establish and develop an information system regarding foreign direct investments.
Foreign investors shall report statistical information regarding their investments to the Undersecretariat in accordance with the procedures and principles determined by a regulation to be prepared by the Undersecretariat. This information may not be used as evidence other than for statistical purposes.
Various provisions
ARTICLE 5
a) Existing foreign-capital companies
Companies established under Law No. 6224 dated January 18, 1954, are subject to this Law, without prejudice to their acquired rights.
b) Regulation
The principles regarding the implementation of this Law shall be regulated by a regulation to be prepared by the Undersecretariat within one month following the publication of the Law.
c) Repealed provisions
The Law No. 6224 on the Encouragement of Foreign Investment, dated January 18, 1954, has been repealed. References to Law No. 6224 in legislation shall be deemed to refer to the relevant provisions of this Law.
d) Amendments to the provisions of this Law shall be regulated only by adding provisions to this Law or by amending this Law.
TRANSITIONAL ARTICLE 1
Until the regulations to be prepared to demonstrate the implementation of this Law come into force, the provisions of existing decrees, circulars and circulars that are not contrary to this Law shall continue to be applied.
Force
ARTICLE 6
This Law shall enter into force on the date of its publication.
Executive
ARTICLE 7
The Council of Ministers shall execute the provisions of this Law.
How to make a joint venture factory investment in Türkiye? In Türkiye, foreign investors can partner with Turkish companies to form partnerships in existing companies or organizations, or they can establish a new company together.
What is the capital required for factory investments in Türkiye? Depending on the size and sector of the project in Türkiye, the average factory investment starts from 1 million euros.
How can one become a partner in factories in Türkiye? A factory previously established in Türkiye can acquire a foreign partner through a share transfer.
Are there any industrial enterprises/factories for sale in Türkiye? In Türkiye, factories are for sale in almost every sector. For foreign investors considering investing in these factories, preparing a detailed feasibility study would be the most important first step.
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