INVESTMENT CLIMATE IN TURKEY

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REPUBLIC OF TURKEY PRIME MINISTRY Investment
Support and Promotion Agency of Turkey
INVESTMENT CLIMATE IN TURKEY
Alpaslan KORKMAZ PRESIDENT
5th WORLD CHAMBERS CONGRESS - ISTANBUL July 2nd,
2007
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Global FDI

• 1/3 of the flowing fund globally received by
  emerging markets like Turkey
• 1/3 of the total FDI flow generated from the
  finance, telecommunications, petroleum and
• natural gas investments
• 80 of the FDI created by MAs generated by
  privatization activities

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Agenda

• GENERAL ECONOMIC OUTLOOK
• INVESTMENT CLIMATE
• POLICY ACTIONS
• FDI FIGURES MEASURES OF STRONG PERFORMANCE
• THE AGENCY

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• ECONOMIC
• OUTLOOK

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Stability and High Performance in the Economy
GNP Growth (YoY)
Contribution of Private Investment to Growth


GDP Growth
Private Investment
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Stability and High Performance in the Economy
Annual Inflation and Expectations

Productivity Index in Total Manufacturing Industry
Index
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Stability and High Performance in the Economy
Exports and Tourism Revenues
Public Sector Net Debt Stock ( of GNP)
Billion USD

Exports
Tourism Revenues
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Potentials of the Turkish Economy

Population-Age Groups Pyramid
GDP Per Capita (PPP)
US
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Benchmarking Performance of the Turkish Economy
Billion Euro
GDP (2006)

Real GDP Growth 2003-2006 Average
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Access to diversified markets
RUSSIAN FEDERATION
GDP Population 766
billion USD 145 million

EUROPE
GDP Population
14,801 billion USD 657 million
CENTRAL ASIAN AND CAUCASIAN COUNTRIES
GDP
Population 113 billion USD 75
million
MIDDLE EAST AND NORTH AFRICA
GDP Population
1,258 billion USD 311
million
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TURKEY AS AN ENERGY CORRIDOR
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• INVESTMENT
• CLIMATE

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Main Principles of FDI Regime in Turkey
Legal Framework for Foreign Direct Investment

• No Approval Requirement
• No Minimum Capital Requirement
• National Treatment
• Guarantee to Transfer Proceeds
• Key Expatriate Personnel
• Protection Against Expropriation
• Access to Real Estate
• International Dispute Settlement

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Investment Incentive Schemes
Incentives for the SMEs
General Investment Encouragement Program
Incentives for Low-Income Regions
Research and Development Supports by TUBITAK
Supports in Technology Development Zones
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• POLICY ACTIONS
• FOR A BETTER INVESTMENT CLIMATE

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Strong Track Record of Structural Reforms

• Key Elements of Structural Reform Agenda
• Public Sector Reform
• Financial Sector Reform
• Social Security Reform
• Tax Reform
• Enhancing Private Sectors Role in the Economy
• Opening the Key Markets to Competition, and
  Regulation by Independent Agencies
• Improving the Investment Environment
• Accelerated Privatization

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FDI FIGURES MEASURES OF STRONG PERFORMANCE
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Strengthening Upward Trend in FDI Inflows
FDI Inflows
Number of Companies with International Capital
(Cumulative)
19,8
billion US
thousands
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AT Kearney International Direct Investment
Confidence Index
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Global Competitiveness Index 2006 and 2005
Comparisons
Positive
Negative
Source IMD
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2006 UNCTAD World Investment Report
Ranking
Billion USD
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To Sustain Our Performance ...

• Predictability
• Maintained political and macro-economic stability
• Strict implementation of economic program
  policies
• Increased integration of liberal-open economy
  with the world
• Reform Programme for Improving Investment
  Environment
• Constant review and improvement of investment
  environment
• Rationalization of regulatory procedures in line
  with the EU practice
• Harmonization with EU Acquis Adoption of
  European Standards
• Pro-Active Investment Promotion Strategy
• New Investment Support and Promotion Agency
• Investment Portal of Turkey www.investinturkey.g
  ov.tr
• Best quality investor services (efficient one
  stop shop approach)

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THE AGENCY Investment Support and Promotion
Agency of Turkey
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General Objective

• Promote worldwide the great economical potential
  of Turkey (Greenfield investments,
  privatizations, infrastructure investments BOT
  PPP, etc...)
• Support the investors in all their administrative
  processes (before, during, after) with a 100
  SERVICE attitude

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The Agency is...

• Attached to Prime Ministry and reports directly
  to Prime Minister
• In charge of attracting FDI by promoting Turkeys
  dynamic economic environment
• In charge of supporting settlement of the
  investors in Turkey and the follow up (after
  sales service)
• Result oriented

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The Agency has...

• Private sector mind with State support
• 2 offices (Ankara Istanbul)
• International representatives network worldwide
  and strategical partners in Turkey (public
  private)
• Multilingual, professional and dedicated project
  leaders with one stop shop approach

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TURKEY IS A TREASURE
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S A M P L E P R O J E C T S
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Public Private Partnership Opportunities
In order to modernize and expand the net of
railways to the key regional centers, PPP
opportunities will be introduced as BOT
concepts - High Speed Railway Stations
Construction Projects ? - High Speed Main
Line Projects...
ANKARA-ISTANBUL 533 KM 3 BILLION (3
HOURS) ANKARA-KONYA 212 KM 0,5 BILLION (1
HOUR 15 MIN.) ANKARA-SIVAS 471 KM 1.8 BILLION
(2 HOURS) ANKARA-IZMIR 606 KM 2 BILLION (3
HOURS 20 MIN.) BURSA-OSMANELI 106 KM 0,3 BILLION
(30 MIN.) ANKARA-KAYSERI 175 KM 0,5 BILLION
(5 HOURS)
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GAP REGION
South-Eastern Anatolia Project
Total Budget for Complete Investment 32 Billion
Investments already done 20 Billion
Investments forseen 12 Billion

• Advantages in Investing
• A Large and Rapidly Growing Market
• Proximity to Middle East Market
• Gate of Europe to Middle East and Asia
• Qualified Agricultural Production
• Potential of Tourism
• Transportation
• State Assistance

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LOCATION IN TURKEY
?40 km to Istanbul City Center ?30 km to
Sariyer ?60 km to Atatürk Airport ?Highway and
Maritime Lines to Istanbul City Center
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Area Size 9000 ha Existing settlements 500 ha
Existing Settlements
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• TOURISM ACTIVITIES WHICH CAN BE DEVELOPED
• Entertainment and Congress Centers
• Hotels and Holiday Villages
• Yacht Marines
• Water Sports Centers
• Golf Resorts
• Arboretum
• Natural parks
• Residences

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Turkey in summary

• Booming country (200 bio to 400 bio GDP)
• 75 mio population
• Young, dynamic, well educated, multi-cultural
• Consumer base motivated work force
• Centrally located (Europe, Central Asia, M-E)
• Energy corridor and terminal of Europe
• Strong political willingness (reforms, stability)
• Clearly EU oriented
• Strong industrial services culture and

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In One Word

• The TURnKEY Agency for all potential investors!

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POWER ON YOUR BUSINESS
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• REPUBLIC OF TURKEY
• PRIME MINISTRY
• Investment Support and Promotion Agency
• of Turkey

The Rising Star
THANK YOU FOR YOUR ATTENTION
www.investinturkey.gov.tr