TBY talks to Murat Yalçıntaş, President of the Istanbul Chamber of Commerce (İTO), on the business environment, the significance of the chamber, and changes to the Commercial Code.
TBY How would you characterize the business environment for foreign investors in Turkey?
MURAT YALÇINTAŞ In 2009, Turkey’s economy managed to grow by 9% and became the fastest growing economy in its region. In the first half of 2011, we grew by 10.2% and became the fastest growing economy in the world, surpassing China, India and, Argentina.
Our FDI laws grant national treatment to foreign investors. There are no limitations, no restrictions, and no permissions required, except in a few specific sectors. Investors are subject to the same rules, laws, and regulations as local companies. Entering and exiting the Turkish market is quite easy. We have a very liberal business environment. Furthermore, company establishment procedures were simplified remarkably. Foreign investors can register their companies in five or six days at the most and start doing business shortly thereafter. Investors are also granted quite generous investment incentives. Thus, we highly recommend to our foreign friends that they consider Turkey as a serious option in their search for new markets.
The Istanbul Chamber of Commerce (İTO) is one of the largest of its kind in the world. How significant is its role within the Turkish economy?
İTO represents a considerably large portion of the Turkish business community. Before anything else, this stems from Istanbul’s great share and weight in the Turkish economy. With more than 25% of total GDP, around 50% of total external trade volume, nearly 28% of total industrial value added, a sixth of Turkey’s population, 43% of the state’s total tax revenues, 50% of all foreign investments, and one-quarter of all commercial companies, we call Istanbul “the heart and the brain” of the Turkish economy. As a result, İTO is one the largest chambers in the world with more than 300,000 active members. This puts great responsibility on our shoulders, and we try to actively participate in reshaping the Turkish economy and business environment in parallel with the needs and demands of our members.
We develop big projects not only for Istanbul, but also for the whole country. Several years ago, we developed the “Eastern Anatolia Tourism Focused Development Project” in cooperation with other public institutions. One of our biggest and most recent projects is the “Istanbul Technology Development Zone,” which is expected to become operational in 2013, attract 1,000 companies, and create $10 billion worth of value-added in high-tech industries.
We also focus heavily on improving Turkey’s foreign economic and commercial relations.
What sort of regulatory changes do you think still need to be made to improve the business environment in Turkey?
Although the Turkish business environment has improved remarkably over the last decade, I believe there are still some urgent issues ahead of us. Reducing the tax burdens on employment further, increasing the flexibility of the labor market, combating the informal economy, substantially reforming our judicial system, making the intellectual property rights system more effective, and eliminating some bureaucratic procedures will improve Turkey’s business environment much further and make the country more attractive and competitive for doing business.
What are the most important recent changes to the Turkish Commercial Code that foreign investors should be aware of?
From July 2012, it will be possible to establish a joint stock company with only one shareholder, as opposed to the five shareholders required in the current law. This shift represents an attitude in favor of SMEs, which will have the opportunity to be discharged from unlimited responsibility by forming a joint stock company. It has some important implications for foreign investors as well, since they no longer have to find partners in order to fulfill the minimum partner requirement. There is also a possibility for existing companies to restructure as single shareholder companies without the risk of dissolution.
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