Foreign Capital Law No:
6224 - Part I
Source: Undersecretariat of
Treasury; Official Gazette - Jan 24th, 1954 ; Approved: 18 January
1954; Issued: 24 January 1954
Subject and Scope of the Law
Article 1 - This law applies to foreign capital
and foreign credit loans obtained from abroad and to be procured from
abroad upon decision of the Committee for the Promotion of Foreign
Investment, and approval and ratification by the Council of Ministers,
provided that the subject of investment is: a) of benefit to the economic
development of the country, and b) in a field of activity open to Turkish
private enterprise. Moreover, foreign capital to be brought into Türkiye
may not acquire a majority share of institutions carrying out activities on
a monopoly basis within the country. The "Committee for the Promotion
of Foreign Investment" mentioned in this Article and established in
accordance with Article 8, shall hereafter be referred to as the
"Committee".
* The functions of this Committee were
transferred to the Undersecretariat of Treasury by the Law No:4059
Principal Foreign Capital
Article 2 - For the purposes of implementation of
the present Law, the term "Principal Foreign Capital" shall mean
the total of various values determined and evaluated as follows; a) The
following assets allocated for the efficient establishment, expansion or
revival of a business included in the scope of the present law, and to be
imported from abroad:
1. Capital funds in the form of foreign currency,
2. Machinery, equipment, tools and similar goods,
machinery components, spare parts and materials, and other necessary
commodities to be approved by the Committee,
3. Services and rights over intangible property
such as patent rights, licenses and trade marks,
4. Portions of profit converted into and
integrated with investment capital, by way of reinvestment in accordance
with Article 3 thereunder.
b) The values of imported assets, whether in
goods, services or proprietary rights, as well as their necessity and
appropriateness for the approved enterprise are determined by experts to be
appointed by the Committee.
The values assessed by experts may be reexamined
and reappraised by the Committee.
The assessment shall be made both in the currency
of the country of origin and in Turkish lira at the official rate of
exchange prevailing at the time of importation.
With the condition that objection rights
indicated in Article 8 are reserved, the decision of the Committee
concerning the evaluation of assets is final.
Conversion of Profits into Capital
Article 3 - Subject to the decision of the
Committee, the shares of profits accruing in favour of principal foreign
capital investors may, either in whole or part, be added to the principal foreign
capital or reinvested in another enterprise which meets the qualification
requirements indicated in Article 1 above.
Transfer of Profits and Principal Capital
Article 4 - a) Pursuant to the provisions of
paragraph (c) of this Article, the following profits and capital funds
shall be transferred abroad in the national currency of the principal
foreign capital at the current official exchange rate:
1. Net profits accruing in favour of the owner of
the principal foreign capital out of income realised after 31 December 1953
and calculated in accordance with the tax laws in force,
2. In case of a partial or total liquidation of
an enterprise established under the present law, the share accruing in
favour of the owners of the principal foreign capital at reasonable prices,
3. Proceeds obtained from the sale, at a
reasonable price and whether in whole or in part, of the principal foreign
capital invested in a business founded or working under the terms of this
Law,
4. Repayment instalments and interest payments,
as they become due and payable in accordance with the respective foreign
loan agreements, over a credit loan contracted pursuant to the terms and
provisions of Article 6 of this Law.
b) If deemed necessary, the Ministry of Finance
or the Committee may:
1. Order the examination of the accounting books
and tax declarations of an enterprise established under this Law, in order
to determine the amount available for transfer under sub-paragraph (1) of
paragraph (a) of this Article,
2. Order an inquiry in order to ascertain whether
the sale of capital shares, liquidation sale of assets, or credit loans are
executed in good faith.
c) Upon application for the transfer of profit
shares, sales proceeds, loan repayment instalments and interest payments of
the sort classified as transferable in paragraph a).of this Article, the
Ministry of Finance will grant permission for such transfers.
Transfer of Shares
Article 5 - a) Therefore, the Ministry of Finance will
undersign, on request the following guarantee for the registered shares,
share certificates or provisional receipts of a Turkish company
representing the principle foreign capital as defined in Article 2:
"The dividends on this share, upon
presentation of this share certificate or provisional receipt to the
Central Bank of the Republic of Türkiye or to authorised representatives of
the said Bank abroad, will be immediately transferred..... (in the foreign
currency of origin).... converted at the current rate of exchange at the
time of transfer. Proceeds from the sale of this share certificate or
provisional receipt from the proceeds of liquidation of the enterprise
shall be transferable to the rightful holder of this share or provisional
receipt (in the currency of the country of origin).... in accordance with
Article 4 of Law No. 6224 of the Republic of Türkiye". The Minister of
Finance or his Authorised Officer. Top
