Despite ongoing regional issues, Turkey's economic performance has surpassed expectations. In 2015, foreign investors concluded 62% of the country's total M&A transactions by reaching $6.6 billion in value and outperforming the local companies. IT, oil and gas, renewables, manufacturing, food and beverage, financial services, healthcare, tourism, hospitality and leisure, infrastructure, and real estate and construction were among the leading sectors of foreign direct investment (FDI).

The General Investment Incentives Scheme illustrates the government's target sectors for FDI including COI, which is regulated under the Decree Regarding State Aids in Investments (No. 2012/3305). This grants certain incentives to attract investment in sectors such as petroleum and chemical products, harbors, automotive investments, railway and tram locomotives and cars, transit pipeline transportation services, electronics, medical, high precision and optical equipment, pharmaceuticals, aircraft and aerospace vehicles and/or parts, machinery and metal production.

Energy

One area highly anticipated for COI is nuclear energy. Turkey will open up the bidding process to build the country's third nuclear power plant in 2017, and officials expect Chinese companies to aggressively pursue these contracts, which are worth $22 billion to $25 billion.

There are already specific Chinese investments in Turkey's energy industry, including China Sunergy Co. Ltd.'s production of solar panels and Harbin Electric Co. Ltd.'s coal-fired power plant in northwestern Turkey. Since coal-fired power stations are an important source of electricity, Turkey aims to enhance cooperation with China, the world's leader in coal production and import, in this field.

The government's 2023 Strategic Vision Project aims to install 100GW of electric power, 30% of which is to be produced via renewable sources including solar, geothermal, wind and hydropower energy. This promises various opportunities for COI:

• 227 geothermal fields have been discovered in Turkey during the past 50 years.
• Turkey's hydropower potential constitutes 16% of Europe's and 1% of the world's total.
• Turkey aims to increase its wind power capacity to 20,000MW.
• It also plans to install power plants that will provide 15,000MW of solar energy.

Oil and gas

Turkey's increase over the last decade in the demand of natural gas and electricity comes second only after China. Turkey's strategic location between major energy consumers and suppliers, allows the country to enjoy a gateway status for oil and gas pipelines. Additionally, the Turkish government intends to raise the natural gas storage capacity to more than 5,000,000,000m³. These all require significant infrastructure investments and offer ample opportunities for COI.

Infrastructure

Turkey's infrastructure development plans for the next 10 years is valued at approximately $400 billion. This also presents valuable investment opportunities for COI, especially as Turkey is expected to play a key role in the advancement of China's “One Belt, One Road” initiative.

b. Is the government generally supportive of COI? Which government, and regional, bodies are responsible for driving COI in Turkey?

There are various bilateral agreements aimed at increasing the volume of investments between two countries, as well as enhancing investor protection. The Turkish government intends to be very supportive of COI.

There are four commercial representatives of Turkey located in Beijing, Guangzhou, Hong Kong and Shanghai. The Prime Ministry Investment Support and Promotion Agency (ISPAT) is the official organization responsible for promoting Turkey's investment opportunities.

c. What are some notable Chinese investments or M&A that have recently taken place in Turkey?

Turkey attracted $16.58 billion in FDI in 2015, recording an increase of 32% from the previous year. China was among the top 10 countries.

China is Turkey's third global trade partner after Germany and Russia, as well as its first trade partner in East Asia. According to the PRC Ministry of Foreign Affairs, Chinese investment in Turkey between 2002 and 2014 totaled $700 million—the Turkish government intends to raise this figure to at least $10 billion.

As of December 31, 2015, there are 46,755 foreign companies in Turkey, 738 of which are Chinese. Most operate heavily in the transportation, energy and mining sectors.

As for M&A, the third-largest deal in 2015 was COSCO Pacific Ltd., China Merchants Holdings (International) Co. Ltd. and CIC Capital Corp.'s acquisition of a 65% stake in the Port of Kumport, one of Turkey's leading port operators, for $940 million. In 2015, the Industrial and Commercial Bank of China Ltd. announced its acquisition of a 75.5% stake in Tekstilbank A.Ş. from GSD Holding A.Ş.

The Ankara-Istanbul high-speed railway was also built by a Chinese-Turkish consortium, which won the bid in 2005. The project involved China Railway Construction Corp. Ltd. and China National Machinery Import and Export Corp. teaming up with Turkish firms Cengiz Construction A.Ş. and Çeçen İçtaş Construction, and was successfully completed in 2014.

Turkey is also very keen to further strengthen commercial and strategic relations with China, and in this respect places much importance to the One Belt, One Road project. Chinese officials indicated that the 6,000km Silk Road will start in Xinjiang and pass through Kyrgyzstan, Tajikistan, Uzbekistan, Turkmenistan, Iran and Turkey to Bulgaria, to as far as Luxembourg. Turkey will be a crucial partner for Chinese companies investing along the Silk Road to Europe.

Section 2: Investment vehicles and capital

a. What are the most common legal entities and vehicles used for COI in Turkey? How long do they take to become operational?

“Capital companies” are the most common form of business entities in Turkey utilized by both local and foreign investors. The most preferred types of capital companies by Chinese companies are “joint stock” and “limited” companies.

The incorporation can be handled within a week once all the necessary documents are provided from abroad.

b. What are the key criteria for establishment and operation of these vehicles that are relevant to COI (e.g. capital requirements, local directors)?

There are several differences in requirement between joint stock companies and limited companies:

• The minimum amount of capital required is ₺10,000 (Rmb22,100) for limited companies and ₺50,000 (Rmb110,500) for joint stock companies.
• The board of directors of joint stock companies can be comprised of a single person. Board members are not required to be shareholders.
• Limited companies are managed and represented by all shareholders. External managers can also be nominated, provided that one of the shareholders is appointed as the other company manager.
• Shareholders of joint stock companies are liable only with their capital subscription to the company.
• Shareholders of limited companies are liable only with the company assets against third parties, however the ones who are also general managers may be held liable from public debts which cannot be collected from the company, in proportion to their shares.

Section 3: Investment approval

a. Explain the process and timing for foreign investment approval (including any national security review).

The Foreign Direct Investment Law (No. 4875) (FDI Law) was enacted for encouraging FDI and established a notification-based, rather than an approval-based, system.

The FDI Law requires notifying the General Directorate of Foreign Investment when a company with foreign capital is incorporated or a foreign investment is made to a Turkish company. This procedure is for statistical purposes and does not have the characteristics of an approval.

b. Briefly explain the investment restrictions for any specially regulated/restricted sectors (e.g. natural resources, financial services, telecom and infrastructure), including whether the government is entitled to any special rights (e.g. golden shares) in those sectors.

Certain regulated sectors require permission from the relevant administrative authorities, such as mining, electricity, petroleum, banking and telecommunications.

c. Which authority oversees competition clearance, when is notification mandatory, and what is the merger control process (including whether pre- or post-closing)?

The Turkish Competition Board is the main body responsible for facilitating and protecting market competition in Turkey.

M&A in Turkey is subject to certain competition rules mainly governed under the Law on the Protection of Competition (No. 4054) (Competition Law). Article 7 regulates the general competition principles for M&A. Under this provision, the Competition Law empowers the Board to determine and publish the types of M&A considered legally valid. Accordingly, the Board adopted the Communiqué No. 2010/4 on the Mergers and Acquisitions Subject to the Approval of the Competition Board. This sets forth that the following transactions are subject to Competition Board approval:

(i) If the parties' total turnover realized in Turkey exceeds ₺100 million (Rmb221 million) and the Turkish turnover of at least two of the parties each exceeds ₺30 million (Rmb62.3 million); or

(ii) If the asset or facility subject to acquisition or, in the case of a merger, one of the transaction parties' turnover realized in Turkey exceeds ₺500 million (Rmb1.1 billion) and one of the other parties' global turnover exceeds ₺30 million (Rmb62.3 million).

d. Are there any unique processes that could potentially block a foreign investment (e.g. consent from labor unions)?

There are no rules blocking foreign investment. In fact, Turkish law is intended to attract institutional investors, facilitate their businesses and enhance FDI inflow.

e. Are there approval requirements when a foreign investor increases or exits its investments?

Approval from the relevant administrative authorities must be obtained for share transfers in regulated sectors such as electricity, telecommunications and banking.

Section 4: Tax and grants

a. Are there tax structures and/or favorable intermediary tax jurisdictions that are particularly useful for FDI into Turkey?

The incentive scheme offers VAT exemption, customs duty exemption, tax deduction, social security premium support (employer's share), withholding income tax support, interest support, land allocation and VAT refund.

The Technology Development Zones Law (No. 4691) regulates special investment areas called technology development zones and is designed to support R&D activities and attract investments in high-technology fields. Investors are able to benefit from exemptions from income and corporate tax, VAT, stamp duty and customs duty.

The Organized Industrial Zones Law (No. 4562) is designed to allow companies to operate within an investor-friendly environment with ready-to-use infrastructure and social facilities. Investors can benefit from VAT exemption for land acquisition, as well as exemptions from real estate duty and municipality tax.

The Free Zones Law (No. 3218) is designed to increase the number of export-focused investments. Investors are eligible for exemptions from corporate income tax, stamp duty, customs and other related duties, as well as income tax on employees' wages.

b. What are the applicable rates of corporate tax and withholding tax on dividends?

The corporate income tax rate is 20%. The withholding tax rate is 15%, which is applied to dividends unless a bilateral double taxation avoidance treaty offers a reduced rate.

The current corporate tax rate is 20% of taxable profits (based on worldwide income for tax residents in Turkey and income in Turkey for limited taxpayers). The rate of withholding that applies to dividend payments for non-Turkish residents is 15%, unless a lower rate is provided under a double tax treaty.

c. Does the government have any FDI tax incentive schemes in place?

The incentive scheme and other legislation such as the Free Zones Law may benefit investors.

d. Other than through taxes, does the government provide any other financial support to investors? If so, please provide an overview.

Please see Section 4a.

e. Are there any reciprocal tax arrangements between Turkey and China? If so, how can they aid investors?

An agreement for the avoidance of double taxation was signed in 1995. The agreement applies to:

• For companies established in Turkey: Income tax, corporate tax, and the levy imposed on the income tax;
• For companies established in China: Individual income tax, income tax for ventures with foreign investment and foreign ventures, and local income tax.

Chinese investors can thereby benefit from the prevention measures and the reduced withholding rate of 10% on dividends.

Section 5: FX controls and local operations

a. What foreign currency or exchange restrictions should investors be aware of?

The Law Regarding the Protection of the Value of the Turkish Currency (No. 1567) and the Decree Regarding the Protection of the Value of the Turkish Currency (No. 32) govern monetary transfers from Turkey. In general, any amount of foreign currency may be transferred out of the country regardless of reason.

An overseas transfer of ₺25,000 (Rmb55,000) or more, or any foreign currency exceeding €10,000 (Rmb74,000) or its equivalent, must be done through banks or within the system determined by the Undersecretariat of Treasury. Banks are also required to notify any money transfers exceeding $50,000 (Rmb333,000) (or its equivalent in another currency) that do not arise from imports, exports or invisible transactions. It is worth noting that this is merely a notification procedure and by no means a restriction.

b. Are there any legal restrictions on bringing in foreign workers? How difficult is it to secure expatriate visas for shareholder representatives, senior managers and workers in practice?

There are several requirements to be fulfilled by the employer, which include:

(i) At least five Turkish citizens must be employed at the workplace for which a work permit is requested. In case the foreigner requesting a work permit is a partner of the company, this condition will be required for the last six months of the one-year work permit.

(ii) The company's paid-in capital must be at least ₺100,000 (Rmb221,000), the lowest figure for its gross sales amount must be equal to ₺800,000 (Rmb1.77 million), or its export amount in the last year must be at least $250,000 (Rmb1.67 million).

(iii) The foreign partner of the company requesting a work permit must own at least 20% of the company's shares, and the value must correspond to at least ₺40,000 (Rmb88,400).

In addition, recruiting foreigners within the scope of the FDI Law must be in compliance with the Communiqué on Employing Foreigners in Foreign Direct Investments.

c. What are the requirements and process for purchasing commercial property?

Foreign real persons are entitled to acquire real estate and rights up to 10% of the total parcels in an area, within the boundaries of the zoning application plan and the local zone plan in a district. A foreign investor is limited to acquiring a total area of 30 hectares.

As for legal entities; the terms “foreign company” and “foreign-capital company” are interpreted differently by Turkish legislation. Foreign companies are entities established abroad and can only acquire real estate in accordance with the, Tourism Law and the Organized Industrial Zones Law.

Foreign-capital companies are incorporated in Turkey with the foreign investors individually or collectively holding 50% or more of the shares or able to appoint or remove the managers, on the condition that the company has a legal personality in Turkey. Accordingly, foreign-capital companies are entitled to acquire real estate or rights related to the activities set in the company's articles of association.

Foreign foundations and associations currently cannot acquire real estate or limited property rights in Turkey.

Section 6: Dispute resolution

a. Does Turkey have a bilateral investment protection treaty with China or other locations commonly used for investing into the country?

The Bilateral Investment Promotion and Protection Agreement with China was signed in 1990.

Turkey is also a party to more than 100 investment protection treaties including the U.S. and many EU countries.

b. How efficient are local courts' enforcement and dispute resolution proceedings, and are there any procedural features foreign investors must be aware of?

Turkish laws and regulations have been amended in the past decade to align with the EU acquis and meet global needs and standards. However, court procedures in Turkey may take a very long time and, in matters involving technical issues, the judges or court experts may fail to make a justifiable evaluation in line with the technical developments. Investors are therefore advised to prioritize dispute resolution via arbitration, if possible. The Istanbul Arbitration Center established in 2015 stands out as an important independent dispute resolution institution in Turkey.

c. Do local courts respect foreign judgements and are international arbitration awards enforceable?

Foreign judgments, including arbitration awards, are enforceable under Turkish laws upon following a legal process called “recognition and enforcement” before the Turkish courts.

The main legislation governing the enforcement of foreign judgments and arbitral awards is the International Private and Procedure Law (No. 5718). In addition, the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 1958) (New York Convention) was ratified by Turkey in 1992.

d. Are local judgments and arbitration awards from Turkey generally enforceable in other jurisdictions?

This varies depending on the applicable laws and regulations of the respective country.

Author biographies

Güvenç Ketenci

Güvenç Ketenci is the Owner & Managing Partner of Ketenci&Ketenci. He was admitted to the Istanbul Bar Association in 2004, and previously worked as a visiting solicitor in the UK and gained international law experience. He has broad-ranging expertise on cross-border transactions and dispute resolution and litigation in Turkey.

Mr. Ketenci represents top-tier clients on their needs with respect to Turkish law. He offers deep industry experience across multiple practices including commercial litigation, corporate law, arbitration and private equity. Mr. Ketenci is also the Founder of European Lawyers, a global lawyer network, and has been acting as the President of this organization.

Bahar Nalan Danış

Bahar Danış is a Partner at Ketenci&Ketenci and head of the firm's Corporate Department. She was admitted to the Istanbul Bar Association in 2004, and draws on her experience to advise multinational companies and global investors in sectors including banking and finance, logistics, energy, renewables, mining, IT and infrastructure.

Ece Nihan Günen

Ece Günen is a Senior Associate at Ketenci&Ketenci. She was qualified as a lawyer in 2012 and was admitted to the Istanbul Bar Association, after obtaining her LLM, GDL and LPC in the UK. Her main areas of practice include the fields of commercial law, corporate law, litigation, M&A, energy and renewables.

土耳其

Güvenç Ketenci﹑Bahar Nalan Danış 和 Ece Nihan Günen

Ketenci&Ketenci ILP

第一节︰中国境外投资

1. 土耳其哪些主要行业吸引中国境外投资，或者说政府希望将中国境外投资吸引到哪些主要行业？

尽管目前地区问题不断，但土耳其的经济表现超出预期。2015年，外国投资者完成的并购交易占全国62%，金额达66亿美元，超出本地公司。外国直接投资的主要领域为信息技术、石油与天然气、可再生能源、制造业、食品与饮料、金融服务、医疗、旅游业、酒店和休闲业、基础设施、房地产和建筑业。

“一般投资激励计划”受“国家投资援助法令”（第2012/3305号）监管，就政府有关外国直接投资（其中包括中国对外投资）的目标行业作出说明。该计划通过授予特定激励来吸引对石油与化工产品、海港、汽车投资、铁路、电车机车与车厢、输油管道运输服务、电子、医学、高精光学设备、制药、航空航天器及部件、机械及金属制造行业的投资。

能源

对中国对外投资而言，核能是一个备受期待的领域。土耳其将于2017年启动建造全国第三座核电站的投标程序，官员预计中国公司将为获得这些合同全力参与竞标，合同价值为220亿美元至250亿美元。

目前土耳其能源行业已有若干中国投资项目，其中包括中电光伏的太阳能电池板制造以及哈尔滨电气股份有限公司在土耳其西北部的火力发电厂。火力发电厂是能源的重要来源，而中国又是世界领先的煤矿生产国和进口国，土耳其计划加强与中国在该领域的合作。

政府的2023年战略愿景项目计划目标建造100GW发电设施，其中30%的电力通过可再生能源生产，包括太阳能、地热能、风能和水能。这给中国对外投资带来众多机遇：

• 土耳其在过去50年间已发现227片地热田。
• 土耳其的水电潜能占欧洲的16%和全球总量的1%。
• 土耳其目标将风电容量提高至2万MW。
• 土耳其同时计划建设发电站，提供1.5万MW太阳能。

石油与天然气

过去十年间，土耳其对天然气和电力的需求增长仅次于中国排名第二。土耳其地处主要能源消费国和供应国之间的战略位置，使之成为石油和天然气管道的门户。此外，土耳其政府计划将天然气存储容量提高至50亿立方米以上。这些都需要重大基础设施投资，从而给中国对外投资带来丰厚的机遇。

基础设施

未来十年，土耳其基础设施发展计划的价值约为4000亿美元。这将为中国对外投资带来宝贵的投资机遇，尤其是土耳其预期将在中国推进“一带一路”战略的过程中发挥重要作用。

2. 总体来说，政府支持中国境外投资吗？哪个国家或地方机构负责促进中国在土耳其的投资？

有多个双边协议旨在增加两国间的投资数量，并增进对投资者的保护。土耳其政府计划为中国对外投资提供大力支持。

土耳其有四名商务代表驻北京、广州、香港和上海。土耳其总理府投资支持与促进局（ISPAT）是负责促进土耳其投资机遇的官方机构。

3. 最近中国在土耳其进行了哪些重大的投资或并购交易？

土耳其在2015年吸引了165.8亿美元的外国直接投资，较上一年增长32%。中国是排名前十的国家之一。

中国是土耳其全球第三大贸易伙伴，仅次于德国和俄罗斯，也是东亚最大的贸易伙伴。根据中国外交部的数据，2002年至2014年间中国对土耳其的投资总额达到7亿美元，土耳其政府计划将这一数字提高到至少100亿美元。

截至2015年12月31日，土耳其有46,755家外国公司，其中738家为中国公司，多数主要经营运输业、能源业和矿业。

在并购方面，2015年第三大交易为中远太平洋有限公司、招商局国际有限公司与中国投资有限责任公司以9.4亿美元收购土耳其主要码头Kumport码头65%股权。2015年，中国工商银行宣布向GSD 控股公司收购Tekstilbank A.Ş. 75.5%股权。

安卡拉－伊斯坦布尔高速铁路也由中国-土耳其联合体建造，该联合体在2005年中标。项目由中国铁建股份有限公司、中国机械进出口（集团）有限公司与土耳其Cengiz Construction A.Ş.和Çeçen İçtaş Construction公司合作，于2014年成功完成。

土耳其还致力于进一步增进与中国的商业和战略关系，为此高度重视“一带一路”项目。中国官员表示6千公里的丝绸之路始于新疆，穿越吉尔吉斯斯坦、塔吉克斯坦、乌兹别克斯坦、土库曼斯坦、伊朗、土耳其至保加利亚，最远抵达卢森堡，土耳其将成为中国企业沿丝绸之路到欧洲进行投资的重要合作伙伴。

第二节︰投资工具和资本