HOW TO DO BUSINESS IN TURKEY: INVESTOR'S GUIDE


1. Turkey in General


1.1. Geography, political and economic background


The Republic of Turkey covers about 814,578 square kilometers, at the junction between Europe and the Middle East. The continents of Europe and Asia are separated by the Bosphorus Straits. Turkey is composed of seven geographical regions: Marmara Region, the Black Sea Region, the Mediterranean Region, the Eastern Anatolia Region, the Southeastern Anatolia Region, the Aegean Region and the Central Anatolian Region. Turkey has a coastline of about 8,000 kilometers. The Anatolian Land is surrounded by the Black Sea in the north, the Aegean and Marmara Sea in the west and the Mediterranean Sea in the south. The capital city is Ankara which is located in the Central Anatolian Region. Turkey’s neighbors are: Greece, Bulgaria, Georgia, Azerbaijan, Armenia, Iran, Iraq and Syria. Turkey’s geographical coordinates puts its time scale two hours ahead of “Greenwich Mean Time” (GMT) and the table below shows the time differences between Turkey and the major world cities.

The official language is Turkish; all official documents which are to be submitted to the government authorities must be in Turkish. English is used as an international language in trade and business circles. Since the 1920s Turkey has based its culture and economic development on Western principles. Links with Europe and the United States are strong.

Turkey has been a parliamentary democracy since 1923. The Republic of Turkey, which was founded on 29 October 1923, is a secular republican parliamentary democracy based on division of power between various ruling bodies. Its unicameral parliament, the Grand National Assembly (Türkiye Büyük Millet Meclisi - TBMM), which includes 550 seats representing the 81 Turkish provinces is the legislative body. The Constitution of Turkey establishes the legal framework. The President is elected by the TBMM for a term of 7 years, while the members of the Parliament are elected for a 5-year period (the last election was held in July 2007). The Republic of Turkey has a tripartite legal system. Civilian and military jurisdiction is separated.

The main executive body is the Council of Ministers, consisting of a Prime Minister and twenty five ministers. Independent Courts have the judicial power. Turkey is a secular state. The freedom of worship for all religions is protected under the Constitutional Law.

1.2. Current political administration and government structure


The current President of the Republic of Turkey is Mr. Abdullah Gül who was elected in August 2007. The current Prime Minister is Mr. Recep Tayyip Erdogan who was re-appointed after the general elections held in July 2007. He is the head of the Justice and Development Party (“AKP”) which has won nearly half of the Parliamentary majority in July 2007 elections.

1.3. Currency


The domestic currency is the Turkish Lira (“TL” - TRL) with effect from 1 January 2009. As a result of the enactment of Law No. 5083 published in the Official Gazette on 31 January 2004, the new currency unit had been introduced as “New Turkish Lira” (TRY) effective from 1 January 2005. As of 1 January 2009, the old banknotes denominated in YTL have been withdrawn from circulation and new banknotes denominated in TL have been put into circulation again. “YTL” banknotes will continue to be in circulation until the end of 2009.

1.4. Population


Approximately 75% of Turkey’s population which consists of about 75,517,100 people (according to a December 2008 estimate) lives in cities. The population growth rate, which has decreased sharply in recent decades, has been about 1.31% per year; demographers project the population to increase to 80-85 million in the next 20 years, which compares with the largest current EU member state Germany that has 83 million inhabitants today, but whose population is projected to decrease to around 80 million by the year 2020.

In 2008, around 75% of the population was classified as urban (compared to 27% in 1960), and the process of urbanization is expected to continue for the foreseeable future. About 25% of the population is concentrated around the Sea of Marmara.

The most populated cities of Turkey are Istanbul (about 12.6 million), Ankara (about 4.5 million) and Izmir (about 3.6 million).

1.5. E-Government in Turkey


E-government project in Turkey is coordinated by the Prime Ministry of Turkey and a Public Committee. After Turkey signed the E-Europe project which was discussed in European Union Leaders Conference held in mid-2001, the Prime Ministry of Turkey gave a start to the project.

MERNIS is one of the big steps of the e-government project which identifies every citizen with an identity number, which will ease most operations in social life and state-related operations. This step has been effective from November 1, 2006. During the transition period between 1 November 2006 and 1 January 2007, both the identity number and tax number was used together by the citizens. By the beginning of 2007 only identity number has began to be valid. With this identity number, a citizen is able to identify himself/herself e.g. in tax offices, university applications, bank operations shortly in all state related operations. Not only does this project decrease red tape spent in bureaucratic transactions causing loss of time and money, but it also provides security for citizens and the State.

As a result of the work done, the context of ETransformation Turkey plan, the number of web sites with “gov.tr” domain rose from 1647 in 2003 to 6775 in 2007. Similarly, the number of other public web sites rose to 1138 in 2003 to 11.725 in 2007. The objective of the e-government strategy of Turkey is to finalize the infrastructure and operationalize the main E-government portal through which all public services could be accessed by 2010.

1.6. International relations


The Republic of Turkey attaches great importance to establishing strong and lasting regional and international ties based on mutual understanding and cooperation.

Turkey actively participates in a wide range of leading regional and international organizations such as the United Nations, the North Atlantic Treaty Organization (NATO), Organization for Economic Cooperation and Development (OECD), World Trade Organization (WTO), Economic Cooperation Organization (ECO), Organization for the Islamic Conference (OIC), Black Sea Economic Cooperation (BSEC), International Bank of Reconstruction and Development (IBRD), International Monetary Fund (IMF), the Group of Twenty Finance Ministers and Central Bank Governors (G20 Developing Nations), and Asian Development Bank. Turkey is in the EU Customs Union since 1996 and an EU accession country since October 2005.

In Helsinki European Council Summit in December 10-11, 1999, Turkey was officially recognized without any precondition as a candidate state on an equal level with other candidate states. The Accession Partnership for Turkey was prepared within the framework of Turkey’s ability to fulfill the Copenhagen political criteria. In December 2002 EU declared that if Turkey fulfills the Copenhagen political criteria, it would open accession negotiations with Turkey by December 2004. At the European Council on December 16- 17, 2004 the Council decided to open accession negotiations on October 3, 2005. The negotiations are open-ended and are not expected to finish before ten years.

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