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Republic of Turkey Prime Ministry Investment Support and Promotion Agency of Turkey ISPAT Investment Climate of Turkey Ahmet İhsan Erdem Vice President Head of Investor Services Department AGENDA • The Agency • Turkey With Some Key Figures • Top Reasons to Invest in Turkey • Investment Environment • Turkey & Arab Countries Relations The Agency REPUBLIC OF TURKEY PRIME MINISTRY INVESTMENT SUPPORT AND PROMOTION AGENCY Established in 2006 Attached to the Prime Ministry and Reports directly to the Prime Minister Private sector approach ONE STOP SHOP approach Guidance on; Laws, Regulations, Site Selection, Sectoral Reports, Local Market Players, Potential Partners Confidentiality, Free of Charge ANKARA ISTANBUL 2 offices (Ankara – Istanbul) invest.gov.tr REPUBLIC OF TURKEY PRIME MINISTRY INVESTMENT SUPPORT AND PROMOTION AGENCY Website & Mobile Apps www.invest.gov.tr Available in 12 languages including Arabic User-friendly «Invest in Turkey» app for iOS and Android devices. All aspects of doing business, investment opportunities, incentives, key facts and more about Turkey. invest.gov.tr REPUBLIC OF TURKEY PRIME MINISTRY INVESTMENT SUPPORT AND PROMOTION AGENCY The International Network invest.gov.tr REPUBLIC OF TURKEY PRIME MINISTRY INVESTMENT SUPPORT AND PROMOTION AGENCY • ISPAT chairs the World Association of Investment Promotion Agencies • WAIPA was established in 1995 • 244 national and sub-national agencies from 162 different countries • HQ of WAIPA will be relocated from Geneva to Istanbul invest.gov.tr Turkey With Some Key Figures Turkey is the 17th largest economy in the World (6th when compared to EU Countries – IMF/2013) 76,667,864 will continue to increase and reach 93,4 million in 2050 33 million broadband internet subscribers (2013) 70 million GSM users (2013) 57 million credit card users (2013) (OICA 2013) Source: Worldsteel Association, 2013 INTERNATIONAL TOURIST ARRIVALS Country 2012 (million) 1. France 83.0 2. USA 67.0 3. China 57.7 4. Spain 57.7 5. Italy 46.4 6. Turkey 35.7 7. Germany 30.4 8. UK 29.3 9. Russia 25.7 10. Malaysia 25.0 Source: UNWTO Top reasons to invest in Turkey GDP GROSS DOMESTIC PRODUCT 900 2013 GDP (Current Prices, $Billion) 820 600 516 One of the biggest emerging economies 488 351 300 312 277 198 190 132 99 53 0 Average Annual Real GDP Growth (%) 2002-2013 5 4.9 4 3 5% annual average growth in the last 11 years 2 4.6 4.3 4.1 4.0 3.7 3.5 3.4 3.4 2.6 2.5 1.8 1 1.1 1.1 0.9 0 Source: IMF invest.gov.tr GDP Growth Future Projection by the OECD 6.0 5.0 4.0 3.0 5.1 Average Annual Real GDP Growth (%) Forecast in the OECD Countries 2012-2017 4.8 3.6 3.6 3.5 3.4 3.3 3.3 2.9 2.8 2.8 2.8 2.0 2.7 2.6 2.6 2.5 2.5 2.4 2.3 2.3 2.2 2.2 2.1 2.1 2.1 2.0 1.9 1.9 1.8 1.8 1.7 1.7 1.6 1.4 1.2 1.0 Turkey Chile Australia Norway Mexico Korea Slovak Rep. Estonia Iceland Luxembourg Poland Israel US Ireland Sweden Czech Rep. Austria OECD Spain New Zealand Hungary Canada Finland Switzerland Denmark Netherlands UK Italy Belgium France Greece Slovenia Germany Portugal Japan 0.0 Turkey will be the fastest growing economy among the OECD countries Source: OECD Economic Outlook No.93 invest.gov.tr 4h Multinational Company Number of Countries Managed from Turkey Coca Cola GE Healthcare Microsoft Intel Unilever Verifone 90 80 76 67 36 30 Schneider Electric Ericsson Cargill Pfizer Volvo BASF PepsiCo P&G LG Electronics Adobe 27 22 20 20 18 18 14 11 9 9 invest.gov.tr Exports Manufacturing industry constitutes 93% of Turkey’s total export Billion USD 160 152 140 120 100 80 60 40 36 20 0 2002 Source: TURKSTAT 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 invest.gov.tr Exports Product & Market Diversification of Exports 2002 2013 Number of export products with over $1 billion* 9 35 Number of export markets with over $1 billion 8 34 Share of top 5 countries in total exports (%) 47 32 Share of MENA in total exports (%) 13 24 Share of EU in total exports (%) 57 41 Source: TURKSTAT, Products with 2-digit HS Codes, EU includes 27 countries (new members in 2004 were included in 2002 figures), *Data for 2012 invest.gov.tr EU Customs Union and FTAs Customs Union with the EU: There is free circulation of goods between Turkey and 28 European Union member countries. Free Trade Agreements with 25 countries: 1. Albania 7. Israel 13. Switzerland 19. Jordan 2. Bosnia & Herzegovina 8. Lichtenstein 14. Syria 20. South Korea 3. Croatia 9. Macedonia 15. Tunisia 21. Mauritus * 4. Egypt 10. Morocco 16. Montenegro 22. Lebanon* 5. Georgia 11. Norway 17. Serbia 23. Ghana* 6. Iceland 12. Palestine 18. Chile 24. Malaysia* Source: Undersecretariat of Foreign Trade, * In ratification process 25. Moldavia* invest.gov.tr Investment Environment Structural Reforms National Treatment = Protection Against Expropriation Guarantee of Transfers Freedom to Invest International Arbitration The New Commercial Code Access to Real Estate Employment of Expatriates Corporate Income Tax invest.gov.tr Structural Reforms Improving Doing Business: Turkey in 2003 25 Romania Russia 30 Number of days to set up a company 35 40 27 29 Bangladesh 30 Bulgaria 30 Poland Morocco Cameroon Turkey Guatemala 31 36 37 38 Turkey in 2013 39 35 30 25 20 15 10 5 6.0 12.0 14.5 15.0 18.0 19.5 22.0 23.0 27.0 30.0 33.0 Source: World Bank Doing Business Reports 0 Turkey UK Germany Russia Switzerland Czech Republic Japan Spain India Poland China Incentive System NEW INCENTIVE SYSTEM 1. General Incentives 2. Regional Incentives 3. Incentives for large-scale Investments 4. Incentives for Strategic Investments VAT Exemption VAT Exemption VAT Exemption VAT Exemption Custom Duty Exemption Custom Duty Exemption Custom Duty Exemption Custom Duty Exemption Tax Deduction Tax Deduction Tax Deduction Employer’s share for Employer’s share for Employer’s share for insurance premium insurance premium payment payment insurance premium payment Land provision Interest Support (except 1st and 2nd regions) Land provision Land provision Interest Support VAT Refund FDI inflows to Turkey More than 4.000 of them are from Arab countries Number of Companies with Foreign Capital ‘000 FDI Inflows ($ billion) 137 135 40.0 37.0 33.8 35.0 120 105 29.5 30.0 90 75 60 20.0 45 15.0 19.1 16.1 15.0 11.7 8.8 10.0 15 5.6 6.7 Source: The Central Bank of Turkey & Ministry of Economy invest.gov.tr 2013 2012 2011 2010 2009 2008 2007 2006 2003-2013 (11 years) 2005 1923-2002 (80 years) 2004 5.0 0 2003 15 21.9 2002 30 25.2 25.0 Increasing Confidence in the Turkish Economy Investment Grade by Moody’s in May 2013 Investment Grade by Fitch in Nov 2012 Investment Grade by JCR in May 2013 Turkey’s Sovereign Credit Ratings S&P Scale Jan 2010 Moody’s Feb Mar 2013 2010 Scale Dec 2009 Jan 2010 Fitch May 2013 Scale Dec 2009 A A2 A A- A3 A- BBB+ BBB BBBBB+ BB BBB+ B B- Baa1 Baa2 Baa3 Ba1 Ba2 Ba3 B1 B2 B3 BBB+ BBB BBBBB+ BB BB- Turkey B+ B B- Turkey Turkey Turkey Turkey Turkey Turkey JCR Jan 2010 Nov 2012 Turkey Turkey Scale AAA+ AAA AAAA+ A ABBB+ BBB BBBBB+ BB BBB+ B B- CCC+ Caa1 CCC+ CCC CCC Caa2 CCC CC CCC- Caa3 CCC- C SD Ca DDD D D Source: Respective rating agencies Source: The Central Bank of Turkey & Ministry of Economy Jan 2010 Feb 2010 May 2013 Turkey Turkey Turkey invest.gov.tr Turkey & Arab Countries Bilateral Economic Relations FDI inflows to Turkey Arab investors are among the top investors in Turkey, over the past decade, they have invested over $10 billion in Turkey FDI Flows from Arab Countries into Turkey ($ Million, equity) Cumulative 2004-2013 United Arab Emirates 3.931 Saudi Arabia 2.114 Kuwait 1.379 Lebanon 1.099 Qatar 743 Bahrain 522 Jordan 180 Libya 98 Other countries 12 TOTAL Source: CBRT 10.078 invest.gov.tr Major M&As in Turkey M&As deals with over $100 million Year Acquirer Origin Target Sector Stake 2005 Saudi Oger Saudi Arabia Türk Telekom Telecommunication 55% 2007 National Commercial Bank Saudi Arabia Türkiye Finans Katılım Bankası Financial Services 60% 2008 Abraaj Capital UAE Acıbadem Sağlık Hizmetleri Healthcare 54% 2013 Commercial Bank of Qatar Qatar AlternatifBank Financial Services 71% 2007 St, Martin's Property Kuwait Cevahir Shopping Center Real Estate 50% 2012 Burgan Bank Kuwait Eurobank Tekfen Financial Services 99% France-Kuwait İzoGlass Sanayi ve Ticaret A.Ş. Insulation 61% 2007 Abraaj Capital Limited UAE Acıbadem Sağlık Hizmetleri Healthcare 22% 2007 National Bank of Kuwait Kuwait Turkish Bank Financial Services 40% 2007 Global Investment House Kuwait FFK Fon Leasing Financial Services 60% Cemre İnşaat Construction 37% 2006 Saint Gobain Isover ve Alghanim Industries 2013 Jadwa Investment Company Saudi Arabia Source: Deloitte, E&Y Deal Value (US$ million) 6.550,0 1.080,0 586,7 448,0 393,0 359,0 171,3 162,5 160,0 120,0 100,0 invest.gov.tr ON Thank you very much for your attention..