№ 4875. Direct Foreign Investments Law

Article 3 — a) Investment freedom and national treatment

Unless otherwise is foreseen by international contracts and special law provisions;

1- Making direct foreign investments in Turkey by foreign investors are free.

2-Foreign investors are subject to equal treatment with local investors.

b) Expropriation and nationalization

As per current regulation, direct foreign investments cannot be expropriated or nationalized unless it is required by public interest and unless its equivalents are paid.

c) Transfers

Net profit, dividend, sale, liquidation, sale and compensation amounts, amounts to be paid against license, management and similar contracts along with external loan and interest payments arising from the activities and proceedings of foreign investors in Turkey, can be freely transferred to the overseas throughout banks or private financial institutions.

d) (Cancellation: By the decree of Constitutional Court dated 11/3/2008 and numbered E.: 2003/71, K.: 2008/79)

e) Resolution of disputes

For the resolution of disputes arising from investment contracts subject to private law and for the resolution of the investment conflicts arising from public service listings and contracts made by foreign investors with the management; they can apply also national or international arbitration or other dispute resolution ways besides authorized and certified courts, provided that the terms included in the related regulation are formed and the parties are agreed.

f) Value determination of capital out of cash

Value determination of the capital out of cash is made pursuant to Turkish Commercial Law provisions. In the event that the securities of the companies established in foreign countries are used as investment tools, the evaluations of authorities certified for value determination as per regulation of country of origin or the experts to be determined by country of origin courts or international assessment establishments, are taken as basis.

g) Foreign employees employment

Foreign employees to be employed in the companies, branches and establishments to be established within this law, are authorized for work permit by the Ministry of Labor and Social Security.

Related to the regulation to be prepared jointly by Ministry of Labor and Social Security and Undersecretary of Treasury as per 23rd article of law related to the work permit of foreigners numbered 4817 and dated 27.2.2003; the description of the main personnel to be permitted within the scope of the indicated regulation and the companies and establishments to be included within this scope and other basis and procedures with special qualities related to the work permit, are determined.

(b) Clause of the first paragraph of 14th article of Law numbered 4817 is not applied to the personnel, who will be employed within this scope. The situations, in which first paragraph of 13th article of Law numbered 4817, will be applied to the foreign main personnel to be employed, are determined by the regulation to be prepared.

h) Contact offices

The undersecretary is authorized to give permission for the companies, which are established as per foreign country laws and to open a contact office provided that they will not have any commercial activities in Turkey.