Communique concerning the
Foreign Capital Framework Decree - Part I
Source: Official Gazette - Aug 24th, 1995 Official Gazette Date:
August 24, 1995, as amended by communique No. 3 published in the Official Gazette
dated June 27, 1996, No: 95/2 The purpose of this Communique is to explain
the principles concerning the application for and implementation of permits
to be granted according to the Foreign Capital Framework Decree which is
annexed to the Decree dated June 7, 1995 - No:95/6990.
Field of Activity Investment and Commercial
Activities Participations
Liaison Office Activities
Field
of Activity Article
1- Real persons and legal entities residing abroad may engage in all types
of industrial, commercial, agricultural and other fields aimed at the
production of goods and services, provided that such activities are listed
in permits and/or incentive certificates granted by the General Directorate
of Foreign Investment (GDFI), Undersecretariat of Treasury (UT), and
published in the Trade Registry Gazette of Turkey. Provisions of related
legislation are reserved on the matters regarding the banks and establishment,
operation permits and all sorts of transactions subject to special
regulations, of financial institutions whose main fields of activities are
money, capital markets and insurance. Applications regarding the
above-mentioned activities shall be made to the GDFI, UT and to the
authorities stated in their special regulations. Top
Investment
and Commercial Activities Article 2- Real persons and legal entities residing
abroad, shall apply to GDFI, UT with the following documents for
establishing a joint-stock or limited company and branch office in
compliance with the Turkish Commercial Code for the purpose of making
investments and carrying out commercial activities in Turkey. 1. For legal
entities residing abroad; a) Certificate of activity, b) Activity Report
for previous year (including balance sheet and field of activity for the
previous year. 2. For real persons residing abroad; a) Copy of passport, b)
Detailed commercial and industrial background and verifying documents. Certificate
of Activity and a copy of passport shall be certified by either the related
Turkish Consulate or in accordance with the provisions of the Convention on
the Abolishing the Requirement of legalisation for Foreign Official
Documents Approval Obligation, prepared on the basis of the Hague
Conference on International Private Law. If the copy of the passport is
certified by a Notary Public in Turkey, no other certification is required.
3. Letter of Intend by the real person or legal entity residing abroad
stating that the required capital for the desired field of activity to be
realised in Turkey shall be transferred into the country. . 4. Application
forms 5. Draft Articles of Association of the company to be established. 6.
Proforma invoices, prospectuses and catalogues of machinery, equipment and
material to be imported together with three copies of global lists which
include FOB (Currency of the Country of Origin), FOB (US Dollars), CIF
(Turkish Liras) values and Customs Duties and Charges. 7. Documents
required by the Incentive Legislation if investment is considered to
benefit from the incentive measures. 8. Power of attorney given by
shareholders to the person who will be the contact person in the course of
application procedure (power of attorney should be certified by a notary
public or in the manner mentioned above) 9. Other documents and information
considered to be of value. Top
Participations Article 3- Real persons and legal entities
residing abroad, shall apply to GDFI ,UT with the following documents in
order to become shareholders of a newly established company or to purchase
shares from existing companies in Turkey : (Excluding the exemptions
regulated in Article 14) 1. For legal entities residing abroad: a) Certificate
of Activity, b) Activity Report of the previous year (including previous
year's balance sheet and field of activity). 2. For real persons residing
abroad: a) Copy of passport, b) Detailed information relating his/her
commercial and industrial background and verifying documents . Certificate
of Activity and a copy of passport shall be certified by either the related
Turkish Consulate or in accordance with the provisions of the Convention on
Abolishing the Requirement of Legalisation for Foreign Official Documents
Approval Obligation prepared on the basis of the Hague Conference on
International Private Law. If the copy of the passport is certified by a
Notary Public in Turkey, no other certification is required. 3. Letter of
Intend by the real person or legal entity residing abroad stating that the
required capital for the desired field of activity to be realised in
Turkey, shall be transferred from abroad, 4. The following documents
related to the existing company to which the real person and legal entity
residing abroad shall become shareholder or will purchase shares from: a)
Balance sheets and profit/loss tables for the last five years approved by
the related Tax Office (in case the application is made in the second half
of the year, balance sheet and profit/loss table as of the end of the sixth
month of that year, certified by the company concerned, should be annexed),
b) Trade Registry Gazette of Turkey in which the final version of the
company's Articles of Association was published, c) Severance Indemnity
obligations as of the date of application, d) Current capacity report and,
if any, investment incentive certificate for industrial companies e)
Application forms 5. Power of attorney given by shareholders which is
certified by either notary public or in the manner described above, if
transfer of shares are processed through third persons. Share transfer from
foreign partners to domestic partners or other persons or entities
established in Turkey requires authorization; the sale value of shares will
be based on the value determined by the parties. The GDFI can perform the
valuation or ask another entity to perform it. Sale authorisation can be
given based on the value determined by the GDFI. Share transfer between
foreign partners or from foreign partners to other persons or entities
established abroad does not require authorisation, but within a month
following such a transfer, the GDFI should be informed. A notary certified
copy of the share register and other necessary documents mentioned above relating
to the new foreign partner are to be added to the application. Share
transfer between domestic partners does not require authorisation. Top
Liaison
Office Activities
Article 4- Legal entities resident abroad, shall apply to GDFI, UT with the
following documents in order to establish a liaison office in Turkey : 1.
Letter of Commitment stating that all expenditures of the liaison office
will be met by foreign currency to be transferred from abroad, 2. For legal
entities resident abroad; a) Certificate of Activity (certified as stated
in Article 2 of this Communique), b) Previous year's Activity Report
(including previous year's balance sheet and fields of activity), 3.
Detailed information concerning the activities of the liaison office in
Turkey, number of personnel to be employed and expenditures to be incurred
within a year, 4. Power of Attorney to be given to the person who will be
in charge of running the liaison office. All expenditures of liaison
offices to be opened by legal entities resident abroad shall be met by the
foreign currency transferred into Turkey from abroad. The liaison offices
can not engage in any commercial activity and in any field other than the
activity permitted. Moreover, these offices can not apply for transfer of
profits and similar transfers, excluding the closure and liquidation of the
liaison office. Top
