Because of the on going talks to the accession to the EC, Turkey is now on the upswing. The above mentioned Positions have been discovered already by numerous Investors. Even in the property market Turkey has shown itself to be of continued interest to many interested parties. Many regions have developed themselves into top locations of the property market whereby the prices are still affordable. This Situation is comparable with Spain 15 – 20 year earlier.

The economic integration between Turkey and the EU is, thanks to the customs union, which is working now for almost 10 years. Turkey is the only country which together with the EU, before its participating, stepped in, in a customer union. The EU is holding a big contingent of foreign Investments in Turkey. She is also one of the head trade partners of this country.

The progress of the participating procedure, accompanied by important structure reforms in the Turkish economy, will encourage more foreign investors, which will reflect in the economic respect between Turkey and the EU positively.

The biggest capital of Turkey is there young and well educated employers. At the same time Turkey is a leading country by selecting its students to go abroad for a higher education, including the USA. In this field Turkey is ranked 5th in the world. It is expected that this will add considerably contribute to human capacity not only in Turkey, but also in the whole region. A country with 72 million inhabitants, which has a per head earnings of 4,172 US Dollar in the last year, is a respectable market for each multinational business establishment. If we compare this with a view to the gross domestic product and the purchasing power by per head earnings in Turkey, it’s laying almost by 8000 US Dollar.
 

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Turkey is one of the most popular vacation destinations of the European tourist.
Only a few years back, mainly Germans spent their vacation on the Turkish Riviera; in the meantime others were crowding onto the beaches between Izmir and Anamur. A few destinations have already become overcrowded and cannot expand further. Alanya however, is by far the most popular vacation resort for Europeans. This is not a surprise, because almost everyone can speak German or English, even more now you can hear Scandinavian languages more often. However, the Turkish Riviera still today offers the best possibilities for Investment, because in a lot of spheres this region can be developed. Here are some reasons why this could also be attractive for you:

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All kinds companies can be established in Turkey. For the launching of a business it is officially required a minimum capital for:

A.S/SA (Joint stock Company) = 50.000 YTL
LC (Limited Company) = 5.000 YTL

Establishment Process

A brief outline regarding the procedures and necessary documents for the establishment
of a joint stock or a limited company is provided below:

The right time can assure success

Already in 2003 permissions for investment were dispersed for about total 4.6 million US Dollars to European Investors.

At the end of 2004 there are already about 9.606 Firms operating in Turkey. The European firms are well represented in the service sector and in the procreating Industry. They invest mostly in the west and south part of Turkey: Istanbul, Antalya, Izmir, Ankara, Mugla and Bursa.

Diversification of the countries:
Germany 506 Companies
England 200 Companies
The Netherlands 193 Companies
USA 154 Companies
Greece 80 Companies
Switzerland 43 Companies

In total there were recorded about 732, 1 Million US Dollar of foreign capital in Turkey.
Until the 31/12/2007 new contracted Investments can stake out a claim of funding for the time of 5 years. This funding will accomplished after ending of the Investment.
 

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Taxes
The Turkish tax system shows a marked split landscape for taxes and tributes.

Wage tax
The income tax in Turkey is moving between 15 and 35 per cent; it depends on the amount of the annual income. In the course of this, the progression will rise with the next step.
ncome tax exemption on the salaries for services carried out in the Free Trade Zone (FTZ) will be applicable until 31/12/2008 for firms that obtained an operation license before 06/02/2004. Accordingly their employee salaries for their services carried out in FTZ are not taxable until 31/12/2008.

Corporate Tax
Legal entities, also even capital companies, have pay duties in according of their trade commercially profit assessment attained profits to the regulation of the corporate tax law (Kurumlar Vergisi Kanunu).
The effective corporate tax it’s amounted by 33 %. This rate is comprised of the legal tax rates of 30 %, which will be levied with a tax rate of 10 %.

Modelled after the incoming tax law, Companies which have their seat in Turkey, have to pay duty of their worldwide obtained profits. (World earnings principle).

The person taxation in the since of corporate tax will be increasingly carrying out by executive order, policies and edicts. One characteristic of the Turkish law is also the liability of the share holder respectively in relation to (not in complexity) their share, for tax accounts receivable in case of insolvency of the business venture.

VAT Tax
The VAT tax (Katam Deger Vergisi) Deliveries of goods and services are subject to VAT at rates varying from 1% to 18%. The general rate applied is 18%. VAT payable on local purchases and on imports is regarded as “input VAT” and VAT calculated and collected on sales is considered as “output VAT”. Input VAT is offset against output VAT in the VAT return filed at the related tax office by the 20th of the following month. If output VAT is in excess of input VAT, the excess amount is paid to the related tax office. On the contrary, if input VAT exceeds the output VAT, the balance is carried forward to the following months to be offset against future output VAT. With the exception of a few situations such as exportation and sales to an investment incentive holder there is no cash refund to recover excess input VAT.


Property tax
The legal basis of this kind of tax is set in the Immoveable property tax law (Emlak Vergisi Kanunu) from 1970. This law has been changed in 1982 and 2002 in some considerable points. The Immoveable property tax (Emlak Vergisi) contain two kinds of taxes in Turkey, that is so say the building tax (Bina Vergisi) and the property tax (Arazi Vergisi).


Property Tax (Also known as Real Estate Tax)
Buildings and land owned in Turkey are subject to real estate tax at the following rates:

Residences 0.1%
Other buildings 0.2%
Land 0.1%
Vacant land ( but allocated for construction purposes) 0.3%
Farming lands 0%

The rates are applied twice for property located in the Metropolitan Municipality areas

Also in Turkey when you buy and sell a property, a tax levy is applied on the amount registered in the Land register and this amounts to 2.5%, which is divided between the buyer and seller.
The tax will be payable as soon the purchase is completed.
 

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Banking and Insurance Transaction Tax
Banks and insurance companies are exempt from VAT but are subject to BITT (Banking and Insurance Transaction Tax) at a rate of 5%, which is due on the gains of such companies from their transactions. The purchase of goods and services by banks and insurance companies are subject to VAT but is considered as an expense or cost for recovery purposes.
 

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Investors in Turkey can absolutely look on a very attractive market.
The appeal lies especially in the good support for investors in the market place.
 

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