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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

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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. • T he Agency • Turkey With Some Key Figures • Top Reasons to Invest in Turkey - PowerPoint PPT Presentation

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Page 1: Republic of Turkey Prime Ministry Investment Support and Promotion Agency of Turkey ISPAT Investment  Climate  of  Turkey Ahmet  İhsan Erdem Vice President  -

Republic of TurkeyPrime Ministry

Investment Support and Promotion Agency of

TurkeyISPAT

Investment Climate of Turkey

Ahmet İhsan ErdemVice President -

Head of Investor Services Department

Page 2: Republic of Turkey Prime Ministry Investment Support and Promotion Agency of Turkey ISPAT Investment  Climate  of  Turkey Ahmet  İhsan Erdem Vice President  -

AGENDA

• The Agency• Turkey With Some Key Figures• Top Reasons to Invest in Turkey• Investment Environment• Turkey & Arab Countries Relations

Page 3: Republic of Turkey Prime Ministry Investment Support and Promotion Agency of Turkey ISPAT Investment  Climate  of  Turkey Ahmet  İhsan Erdem Vice President  -

The Agency

Page 4: Republic of Turkey Prime Ministry Investment Support and Promotion Agency of Turkey ISPAT Investment  Climate  of  Turkey Ahmet  İhsan Erdem Vice President  -

Established in 2006

Attached to the Prime Ministry andReports 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

2 offices (Ankara – Istanbul)

REPUBLIC OF TURKEY PRIME MINISTRYINVESTMENT SUPPORT AND PROMOTION AGENCY

invest.gov.tr

ANKARA ISTANBUL

Page 5: Republic of Turkey Prime Ministry Investment Support and Promotion Agency of Turkey ISPAT Investment  Climate  of  Turkey Ahmet  İhsan Erdem Vice President  -

REPUBLIC OF TURKEY PRIME MINISTRYINVESTMENT SUPPORT AND PROMOTION AGENCY

invest.gov.tr

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.

Website & Mobile Apps

Page 6: Republic of Turkey Prime Ministry Investment Support and Promotion Agency of Turkey ISPAT Investment  Climate  of  Turkey Ahmet  İhsan Erdem Vice President  -

REPUBLIC OF TURKEY PRIME MINISTRYINVESTMENT SUPPORT AND PROMOTION AGENCY

The International Network

invest.gov.tr

Page 7: Republic of Turkey Prime Ministry Investment Support and Promotion Agency of Turkey ISPAT Investment  Climate  of  Turkey Ahmet  İhsan Erdem Vice President  -

REPUBLIC OF TURKEY PRIME MINISTRYINVESTMENT SUPPORT AND PROMOTION AGENCY

invest.gov.tr

• 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

Page 8: Republic of Turkey Prime Ministry Investment Support and Promotion Agency of Turkey ISPAT Investment  Climate  of  Turkey Ahmet  İhsan Erdem Vice President  -

Turkey With Some Key Figures

Page 9: Republic of Turkey Prime Ministry Investment Support and Promotion Agency of Turkey ISPAT Investment  Climate  of  Turkey Ahmet  İhsan Erdem Vice President  -

Turkey is the 17th largest economy in the World

(6th when compared to EU Countries – IMF/2013)

Page 10: Republic of Turkey Prime Ministry Investment Support and Promotion Agency of Turkey ISPAT Investment  Climate  of  Turkey Ahmet  İhsan Erdem Vice President  -

will continue to increase and reach 93,4 million in 2050

76,667,864

Page 11: Republic of Turkey Prime Ministry Investment Support and Promotion Agency of Turkey ISPAT Investment  Climate  of  Turkey Ahmet  İhsan Erdem Vice President  -

Turkey has the largest youth population when compared to

the EU countries

Page 12: Republic of Turkey Prime Ministry Investment Support and Promotion Agency of Turkey ISPAT Investment  Climate  of  Turkey Ahmet  İhsan Erdem Vice President  -

57 million credit cardusers (2013)

70 million GSM users (2013)

33 million broadband internet subscribers (2013)

Page 13: Republic of Turkey Prime Ministry Investment Support and Promotion Agency of Turkey ISPAT Investment  Climate  of  Turkey Ahmet  İhsan Erdem Vice President  -

Turkey is the 17th largest automotive producer in the World and 6th largest when compared to the EU countries

(OICA 2013)

Page 14: Republic of Turkey Prime Ministry Investment Support and Promotion Agency of Turkey ISPAT Investment  Climate  of  Turkey Ahmet  İhsan Erdem Vice President  -

Turkey is the largest TV manufacturer in Europe

Page 15: Republic of Turkey Prime Ministry Investment Support and Promotion Agency of Turkey ISPAT Investment  Climate  of  Turkey Ahmet  İhsan Erdem Vice President  -

Turkey is the 8th largest steel producer in the World and

2nd largest whencompared to the

EU countries

Source: Worldsteel Association, 2013

Page 16: Republic of Turkey Prime Ministry Investment Support and Promotion Agency of Turkey ISPAT Investment  Climate  of  Turkey Ahmet  İhsan Erdem Vice President  -

INTERNATIONAL TOURIST ARRIVALS

Country 2012(million)

1. France 83.02. USA 67.03. China 57.74. Spain 57.75. Italy 46.46. Turkey 35.77. Germany 30.48. UK 29.39. Russia 25.710. Malaysia 25.0

Source: UNWTO

Out of World’s top 100 best hotels 22 are from Turkey (TUI Holly, 2012)

Turkey is the 6th most visited holiday destination in the World (2012)

Page 17: Republic of Turkey Prime Ministry Investment Support and Promotion Agency of Turkey ISPAT Investment  Climate  of  Turkey Ahmet  İhsan Erdem Vice President  -

Top reasons to invest in Turkey

Page 18: Republic of Turkey Prime Ministry Investment Support and Promotion Agency of Turkey ISPAT Investment  Climate  of  Turkey Ahmet  İhsan Erdem Vice President  -

One of the biggest emerging economies

invest.gov.trSource: IMF

GDPGROSS DOMESTIC PRODUCT

5% annual average growth in the last 11 years

0

300

600

900820

516 488

351312 277

198 190132 99

53

2013 GDP (Current Prices, $Billion)

Turke

y

Chile

Russ

iaSlo

vakia

Polan

dKo

rea

Braz

ilSo

uth Af

rica

Roman

iaCz

ech R

ep.

Mexico US

Hung

ary

EU28

Japan

0

1

2

3

4

54.9 4.6

4.3 4.1 4.0 3.7 3.5 3.4 3.4

2.6 2.51.8

1.1 1.1 0.9

Average Annual Real GDP Growth (%) 2002-2013

Page 19: Republic of Turkey Prime Ministry Investment Support and Promotion Agency of Turkey ISPAT Investment  Climate  of  Turkey Ahmet  İhsan Erdem Vice President  -

Source: OECD Economic Outlook No.93

Turke

y

Austral

iaMex

ico

Slova

k Rep

.

Icelan

dPo

land US

Swed

enAust

riaSp

ain

Hunga

ry

Finlan

d

Denmark UK

Belgium

Greece

German

yJap

an0.0

1.0

2.0

3.0

4.0

5.0

6.05.1

4.8

3.6 3.6 3.5 3.4 3.3 3.32.9 2.8 2.8 2.8 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

Average Annual Real GDP Growth (%) Forecast in the OECD Countries

2012-2017

Turkey will be the fastest growing economy among the OECD countries

invest.gov.tr

GDP GrowthFuture Projection by the OECD

Page 20: Republic of Turkey Prime Ministry Investment Support and Promotion Agency of Turkey ISPAT Investment  Climate  of  Turkey Ahmet  İhsan Erdem Vice President  -

Turkey is located in the center of the most promising markets of the World

4h

You can access to multiple markets from Turkey

(Total 56 Nations, 1,5 Billion People $ 25 Trillion GDP)

Page 21: Republic of Turkey Prime Ministry Investment Support and Promotion Agency of Turkey ISPAT Investment  Climate  of  Turkey Ahmet  İhsan Erdem Vice President  -

Multinational Company

Number of Countries Managed from Turkey

Coca Cola 90 GE Healthcare 80 Microsoft 76 Intel 67 Unilever 36 Verifone 30 Schneider Electric 27 Ericsson 22 Cargill 20 Pfizer 20 Volvo 18 BASF 18 PepsiCo 14 P&G 11 LG Electronics 9 Adobe 9

invest.gov.tr

Turkey as Regional Hub

Page 22: Republic of Turkey Prime Ministry Investment Support and Promotion Agency of Turkey ISPAT Investment  Climate  of  Turkey Ahmet  İhsan Erdem Vice President  -

Source: TURKSTAT

Exports

invest.gov.tr

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 20130

20

40

60

80

100

120

140

160

36

152Billion USD

Manufacturing industry constitutes 93% of Turkey’s total export

Page 23: Republic of Turkey Prime Ministry Investment Support and Promotion Agency of Turkey ISPAT Investment  Climate  of  Turkey Ahmet  İhsan Erdem Vice President  -

invest.gov.trSource: TURKSTAT, Products with 2-digit HS Codes, EU includes 27 countries (new members in 2004 were included in 2002 figures), *Data for 2012

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

Exports

Page 24: Republic of Turkey Prime Ministry Investment Support and Promotion Agency of Turkey ISPAT Investment  Climate  of  Turkey Ahmet  İhsan Erdem Vice President  -

Customs Union with the EU:

There is free circulation of goods between Turkey and 28 European Union member countries.

Source: Undersecretariat of Foreign Trade, * In ratification process

EU Customs Union and FTAs

invest.gov.tr

1. Albania 7. Israel 13. Switzerland 19. Jordan 25. Moldavia*2. Bosnia & Herzegovina 8. Lichtenstein 14. Syria 20. South Korea3. 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*

Free Trade Agreements with 25 countries:

Page 25: Republic of Turkey Prime Ministry Investment Support and Promotion Agency of Turkey ISPAT Investment  Climate  of  Turkey Ahmet  İhsan Erdem Vice President  -

Investment Environment

Page 26: Republic of Turkey Prime Ministry Investment Support and Promotion Agency of Turkey ISPAT Investment  Climate  of  Turkey Ahmet  İhsan Erdem Vice President  -

invest.gov.tr

National Treatment

=

Guaranteeof Transfers

Access to Real Estate

International Arbitration Employment

of Expatriates

Freedom to Invest

Protection Against Expropriation

The New Commercial Code

Structural Reforms

Corporate Income Tax

%20

Page 27: Republic of Turkey Prime Ministry Investment Support and Promotion Agency of Turkey ISPAT Investment  Climate  of  Turkey Ahmet  İhsan Erdem Vice President  -

Structural Reforms

Source: World Bank Doing Business Reports

Romania

Russia

Bangladesh

Bulgaria

Poland

Morocco

Cameroon

Turkey

Guatemala

25 27 29 31 33 35 37 39

27

29

30

30

31

36

37

38

39

Turkey in 2003Improving Doing Business:

Number of days to set up a company

Turkey

UK

Germany

Russia

Switzerland

Czech Republic

Japan

Spain

India

Poland

China

05101520253035

6.0

12.0

14.5

15.0

18.0

19.5

22.0

23.0

27.0

30.0

33.0

Turkey in 2013

Page 28: Republic of Turkey Prime Ministry Investment Support and Promotion Agency of Turkey ISPAT Investment  Climate  of  Turkey Ahmet  İhsan Erdem Vice President  -

Incentive System

NEW INCENTIVE SYSTEM

1. General Incentives 2. Regional Incentives

3. Incentives for large-scale Investments

4. Incentives for Strategic Investments

VAT Exemption Custom Duty Exemption

VAT Exemption Custom Duty Exemption Tax Deduction Employer’s share for

insurance premium payment

Land provision

VAT Exemption Custom Duty Exemption Tax Deduction Employer’s share for

insurance premium payment

Land provision Interest Support (except 1st

and 2nd regions)

VAT Exemption Custom Duty Exemption Tax Deduction Employer’s share for

insurance premium payment

Land provision Interest Support VAT Refund

Page 29: Republic of Turkey Prime Ministry Investment Support and Promotion Agency of Turkey ISPAT Investment  Climate  of  Turkey Ahmet  İhsan Erdem Vice President  -

FDI inflows to Turkey

invest.gov.trSource: The Central Bank of Turkey & Ministry of Economy

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

5.6 6.78.8

11.715.0

16.119.1

21.9

25.2

29.5

33.837.0

‘000 Number of Companies with Foreign Capital

1923-2002 (80 years) 2003-2013 (11 years)0

15

30

45

60

75

90

105

120

135

15

137FDI Inflows ($ billion)

More than 4.000 of them are from Arab

countries

Page 30: Republic of Turkey Prime Ministry Investment Support and Promotion Agency of Turkey ISPAT Investment  Climate  of  Turkey Ahmet  İhsan Erdem Vice President  -

Increasing Confidence in the Turkish Economy

invest.gov.trSource: The Central Bank of Turkey & Ministry of Economy Source: Respective rating agencies

Turkey’s Sovereign Credit RatingsS&P Moody’s Fitch JCR

Scale Jan 2010 Feb 2010 Mar 2013 Scale Dec

2009Jan

2010May 2013 Scale Dec 2009 Jan

2010Nov

2012 Scale Jan 2010

Feb 2010

May 2013

A A2

A AAA+

AAA AAA-

A- A3

A- A+

A A-

BBB+ Baa1 BBB+ BBB+

BBB Baa2 BBB BBB BBB- Baa3 Turkey BBB- Turkey BBB- TurkeyBB+ Turkey Ba1 Turkey BB+   Turkey BB+ BB Turkey Ba2 BB BB   TurkeyBB- Turkey Ba3 Turkey BB- Turkey BB-  Turkey B+ B1 B+ B+ B B2 B B B- B3 B- B-

CCC+ Caa1

CCC+

CCC

CCC Caa2 CCC CCCCC- Caa3 CCC- CSD Ca DDD D

D

Investment Grade by Fitch in Nov 2012

Investment Grade by Moody’s in May 2013

Investment Grade by JCR in May 2013

Page 31: Republic of Turkey Prime Ministry Investment Support and Promotion Agency of Turkey ISPAT Investment  Climate  of  Turkey Ahmet  İhsan Erdem Vice President  -

Turkey & Arab CountriesBilateral Economic Relations

Page 32: Republic of Turkey Prime Ministry Investment Support and Promotion Agency of Turkey ISPAT Investment  Climate  of  Turkey Ahmet  İhsan Erdem Vice President  -

FDI inflows to Turkey

invest.gov.trSource: CBRT

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 10.078

Page 33: Republic of Turkey Prime Ministry Investment Support and Promotion Agency of Turkey ISPAT Investment  Climate  of  Turkey Ahmet  İhsan Erdem Vice President  -

Major M&As in TurkeyM&As deals with over $100 million

invest.gov.trSource: Deloitte, E&Y

Year Acquirer Origin Target Sector Stake Deal Value (US$ million)

2005 Saudi Oger Saudi Arabia Türk Telekom Telecommunication 55% 6.550,0

2007 National Commercial Bank Saudi Arabia Türkiye Finans Katılım Bankası Financial Services 60% 1.080,0

2008 Abraaj Capital UAE Acıbadem Sağlık Hizmetleri Healthcare 54% 586,7

2013 Commercial Bank of Qatar Qatar AlternatifBank Financial Services 71% 448,0

2007 St, Martin's Property Kuwait Cevahir Shopping Center Real Estate 50% 393,0

2012 Burgan Bank Kuwait Eurobank Tekfen Financial Services 99% 359,0

2006 Saint Gobain Isover ve Alghanim Industries France-Kuwait İzoGlass Sanayi ve Ticaret A.Ş. Insulation 61% 171,3

2007 Abraaj Capital Limited UAE Acıbadem Sağlık Hizmetleri Healthcare 22% 162,5

2007 National Bank of Kuwait Kuwait Turkish Bank Financial Services 40% 160,0

2007 Global Investment House Kuwait FFK Fon Leasing Financial Services 60% 120,0

2013 Jadwa Investment Company Saudi Arabia Cemre İnşaat Construction 37% 100,0

Page 34: Republic of Turkey Prime Ministry Investment Support and Promotion Agency of Turkey ISPAT Investment  Climate  of  Turkey Ahmet  İhsan Erdem Vice President  -

ON

Page 35: Republic of Turkey Prime Ministry Investment Support and Promotion Agency of Turkey ISPAT Investment  Climate  of  Turkey Ahmet  İhsan Erdem Vice President  -

Thank you very much for your attention..