IncentIves for InvestIng In karaman

LAW ON FOREIGN  DIRECT INVESTMENT

The Law on FDI ( No . 4875 ) has been in force since June 17 , 2003 This law not only provides a definition of leag l terms such as foreign direct  invesment and investors , but also lists the rights of foreign investors recognized in various legislations. The main focus of the law is to protect the rights of foreign investors.

MAIN PRINCIPLES OF THE LAW

EQUAL TREATMENT FOR DOMESTİC AND FOREIGN

CAPITALIZED COMPANIES

Companies established with foreign capital are considered equal to Turkish companies and therefore are entitled to and benefit from the same rights and exemptions granted to domestic companies engaged in the same  field of activity. Foreign capital – based companies also have

the same obligations as domestic capitalized companies.

NO PRE-ENTRY OR PRE-ESTABLISHMENT SCREENING REQUIREMENTS

Foreign investors are not required to obtain any additional permits or approval in order to set up their business in Turkey.

NOTIFICATION

Foreign capitalized companies are required to notify the Undersecretariat of  Treasury after establishment of the business.

UNRESTRICTED FOREIGN OWNERSHIP

Foreign investors can freely control 100 % of the shares of all types of companies with the exception of a few  specific sectors that are governed by and subject to special laws.

NO OBLİGATION TO CHOOSE A SPECIFIC COMPANY TYPE

While setting up a business in Turkey , foreign entrepreneurs can choose from any type of company stipulated in the Turkish Commercial Code.

RIGHTS OF FOREIGN INVERTORS

FREE TRANSFER OF FUNDS

Foreign invertors can freely transfer a variety of capital abroad including : net profits , dividends , proceeds from the sale or liquidation of al lor any part of an investment , compensation payments,  funds arising from license, management or similar agreements, reimbursements and interest payments originating from foreign loans through banks or special financial institutions.

ACQUISITION OF REAL ESTATE

Real estate acquisition by foreign real persons

Foreign real persons can acquire real estate for residence or business purposes provided that it is in line with the reciprocity principle and other legal requirements. The real estate must be allocated for such purposes within the development plans. Foreigners, with either full or limited real righs , can acquire up to 10% of land in a province within its development plans. A foreign real person can acquire at most 2.5 hectares of land in Turkey.

Real estate acquisition by companies with foreign capital

Companies with foreign capital established in Turkey within the Turkish Commercial Registries are legally accepted as “Turkish companies” regardless of the citizenship of their shareholders. Accordingly , such companies can acquire real estate in Turkey to conduct business activities.

Procedures of establishing and registration of a new company, local or foreign, is one of the simplest in the world. It can be completed in 1 day to a week and is  handled by a single Trade Registry Office. All you need is a- Submit  the notarized “Articles of Association”, b- Deposit 0.04% of the capital, and c- Fill in the “Company Registration Form”. One can start a Limited Liability Company, a Joint Stock Company or open a Liason Office or a Branch Office.

Procedures of registration      

Karaman, being included in “Zone 3”among the Priority Areas for Development by the government, is in a very favorable position for general investment incentive regime as well as region based incentives. In general local and foreign investors have equal access to:

a.      General investment incentives i.e. Customs tax and VAT exemptions

b.      Incentive for large scale investments i.e. 4% Corporate tax rates,Social Security Premium exemptions for up to 5 years,and land allocations for large scale investments 

c.       Region and sector based incentives

d.      Incentives on employment

e.       R&D supports i.e. up to 100% reduction of R&D expenditures depending on the number of personnel employed in the R&D center. In addition, there are other subsidies provided by the Scientific and Technological Research Council of Turkey and Turkish Technology Development Foundation for design and sketching studies, concept development patent and license studies, test production etc.

f.       Support for SMEs ( employee number under 250 and below TRY 250 million turnover) i.e. customs duties and VAT exemptions, and low interest credits

g.      Industrial thesis program; direct financial support for new technology projects with university partnerships.

h.      Loans for technology development projects; interest free loans up to USD 1 million

i.        Training supports

j.        State aids for export.

KARAMAN INDUSTRY SECTORAL ANALYSIS 

There are a total of 163 active ındustrial facilities in Karaman  of which 93 operate in the Organized Industrial Zone. As of the end of 2009, the distribution of factories by sectors is as follows;

Total Employment capacity of Industrial facilities is 14.600 of which 9.800 work in the Organized Industrial Zone. Karaman’s exports for the year 2009 totaled US Dollars 157 millions. Total output of chocolate, candy and biscuits in 2008 was 295.000 tons. Marble and coal mining is also an important sector in Karaman. 2008 output of marble was 400.000 m 2 and 45.000 m3. As to coal, it was 257.000 tons.Scientific studies put Karaman among the prime locations in Turkey for solar and wind energy.




 ORGANİZED INDUSTRIAL ZONE

Located on the Northeast corner of the city, the Zone covers an area of 570 hectars and around 60% of the area is currently occupied. Natural gas, water, electricity and road insfrastructure are complete and it is easy to reach by rail and highway. It has its own managing administration made up of both local authorities and industrialist.