Legal Aspects of Doing Business

in Republic of Türkiye

Czech-TurkishJoint Chamber of Commerce

June 19thFestival Exportu 2014

Alper Özmert, LL.M., Esq.Vice-Chairman of Executive Board

Czech-Turkish Joint Chamber of Commerce

Legal Aspects of Doing Businessin Turkey

Alper Özmert, LL.M., Esq.Vice-Chairman of Executive Board

Foreign Direct Investment Law (2003)

•Equal treatment for all domestic and foreign investors

No prior approval from governmental authorities necessary

No requirement of Turkish participation in the capital or management

Foreign investment legislation

Foreign Direct Investment Law (2003)

Foreign investment legislation

Article 3

•foreign investors are free to make foreign

direct investments in Turkey

•prevailing principle is non-discrimination and

equal treatment to all nations in Turkish

foreign investment legislation

• Monitoring system for foreign investments

• Elimination of the unnecessary procedures to set up business

• Registration can be completed in few days upon fulfillment of document requirements

• Procedure is handled by one ministry

Establishing business entity in Turkey

Types of legal entities in Turkey

The most common types of legal entities in Turkey:

1.limited liability companies

2.joint-stock companies

3.Branches and liaison offices

• Convenient for investors who intend to set up subsidiary/affiliated company

• More simple and easy to manage system

• New Turkish Commercial Code:

Can be formed by one partner only

Capital amount of 10.000,- TL (i.e. 96.592,- CZK or 3.518,- EUR)

Limited liability company

• Convenient for more than one interest groups in a foreign investment company

• More complex management tools

• New Turkish Commercial Code:

Can be formed by one shareholder only

Capital amount of 50.000,- TL (i.e. 482.798,- CZK or 17.591,- EUR)

Joint stock company

• Convenient for exploration of market before making an investment

• Have not legal entity status and are barred from participation in active trade

• Tax free

• Establishment: Permission of Undersecretariat of Treasure

Liaison office

• 20 % fixed corporate income tax

• 15 % withholding tax

• Earnings of individuals: from 15 to 35 %

• 18 % value added tax

Taxes related to business

• Liberal system for settlement of disputes

• New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards

• Even disputes against governemental authorities can be brought before international arbitration

Legal disputes & Arbitration

• Liberal system for settlement of disputes

• New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards

• Even disputes against governemental authorities can be brought before international arbitration

Legal disputes & Arbitration

Thank you for your attentionVodičkova 710/31, CZ-110 00 Praha 1

Tel.: +420-221 506 300http://www.ctsok.eu

Alper Özmert, LL.M., Esq.

Vice-Chairman of Executive Board

E-mail: ozmert@ctsok.eu