Law on Foreign Direct Investment

1. Definition of Foreign Direct Investment: The law defines foreign direct investment as any investment made by foreign investors in the Turkish economy, either by establishing a business or acquiring shares in existing Turkish companies. This includes investments in sectors such as manufacturing, services, and infrastructure.
2. Equal Treatment and Non-Discrimination: One of the fundamental principles of the FDI law is the assurance of equal treatment for both domestic and foreign investors. Foreign investors are entitled to the same rights and protections as Turkish nationals, and they cannot be subjected to discrimination based on their nationality.
3. Investment Incentives: The Turkish government offers various incentives to foreign investors, such as tax exemptions, customs duties reductions, and grants, to promote investments in strategic sectors and regions. These incentives aim to enhance the attractiveness of Turkey as an investment destination.
4. Permits and Licenses: Foreign investors must obtain the necessary permits and licenses before commencing their business activities in Turkey. The law outlines the procedures for applying for these permits, ensuring transparency and efficiency in the approval process.
5. Capital Transfer and Remittance: The law guarantees the unrestricted transfer of profits, dividends, and other earnings generated by foreign investments. Foreign investors have the right to freely remit funds outside Turkey, subject to the regulations of the Central Bank of Turkey.
6. Protection of Investments: The FDI law provides a framework for the protection of foreign investments against nationalization or expropriation. Any measures taken by the government that may affect foreign investments must be justified and accompanied by appropriate compensation.

7.  Dispute Resolution: The law outlines mechanisms for resolving disputes between foreign investors and the Turkish government, including the option to submit disputes to international arbitration if agreed upon in the investment agreement. This provides a level of security and assurance to foreign investors regarding the resolution of potential conflicts.