Communique concerning the
Foreign Capital Framework Decree - Part III
Source: Official Gazette - Aug 24th, 1995 Official Gazette Date:
August 24, 1995, as amended by communique No. 3 published in the Official Gazette
dated June 27, 1996, No: 95/2 The purpose of this Communique is to explain
the principles concerning the application for and implementation of permits
to be granted according to the Foreign Capital Framework Decree which is
annexed to the Decree dated June 7, 1995 - No:95/6990.
Registration of Capital and Endorsement of
Permission Certificate
Foreign Personnel Employment Foreign Credits Securities Transactions
Payment
of Foreign Partner Capital Share –
cont. a) Capital in Kind Appraisal of equipment to be imported
as the capital in kind shall be made by experts to be assigned by GDFI, UT.
In the determination of the Turkish Lira value of the equipment subject to
the appraisal, current foreign exchange purchase rate applied by the
Central Bank of Turkey on the actual import date, claimed in the Customs
Declaration, of the materials imported, is taken as the basis. Registration
of an amount to be agreed between the investing parties, not to exceed the
calculated amount through the above-mentioned method is also possible.
Travel and accommodation expenses of the experts and the appraisal fee, to
be determined by the GDFI, UT, shall be met by the company importing the
equipment. Letter of registration of GDFI shall be attached to the
application to be made to the Ministry of Industry and Trade for the
conversion of the capital-in-kind, which is actually imported and duly
registered. b) Capital in Cash Foreign capital to be paid in cash either be
transferred from abroad through banks as foreign exchange or brought in as
cash, should be declared at the Customs during the entrance into the
country. Foreign exchanges thus brought into the country are purchased by
banks against the issue of a foreign exchange purchase receipt on which an
explanatory note is inserted as the reason of transfer . If requested, the
foreign exchanges transferred from abroad, without being converted into
Turkish Liras, can be kept in Banks at the foreign exchange deposits
accounts to be opened in the name of the company to be established or the
shareholders who transfers his/her shares or the company which increases
its capital and, can be paid to the beneficiary as foreign partner's capital
share. For the foreign capital kept in foreign exchange deposits account,
bank concerned shall prepare a receipt stating the name of both the foreign
capital company and the foreign partner, the country from which the foreign
exchange was transferred, currency amount, US Dollars equivalent, and the
TL equivalent calculated by applying the foreign exchange purchase rate of
Central Bank of Turkey on the date the foreign exchange deposits account
was opened. An original or certified copy of these receipt shall be sent to
the GDFI by the company for which the foreign exchange account was opened
within a month from the opening date. Original or certified copy of the
receipt related to foreign exchange deposits account, or an original or
certified copy of foreign exchange purchase receipt in case the foreign
capital brought from abroad converted into Turkish Lira, or an original or
certified copy of declaration document, if foreign currency is brought in
as cash shall be submitted to the Ministry of Industry and Trade during
application and to the GDFI, UT during registration of company's capital
and endorsement of permit certificate. Exchange rate differences in favor
or against, arising from foreign exchanges kept in foreign exchange
deposits account, shall belong to the company or to the shareholder who
transfers his/her shares. c) Other Capital Apart from capital in kind and
capital in cash stated above, transferable profits, dividends, amounts
arising from sales and liquidation and compensation, amounts to be paid for
license, know-how, technical assistance, management and franchising
agreements, payment of foreign credits principal and interests, as well as
existing assets and receivable of foreign shareholder, specified in Article
5 of the Decree dated June 7,1995 and No: 95/6990, shall be taken into
account as actual inflows and thus recorded, if these are added to
company's capital as the foreign partner share of capital. Top
Registration
of Capital and Endorsement of Permission Certificate Article 11- Enterprises shall apply to the GDFI,
UT with the following documents for the registration of foreign capital and
endorsement of permit certificate: 1. Original of the Permission
Certificate, 2. Trade Registry Gazette of Turkey in which either the
establishment of the company or the capital increase of the company was
published, 3. Original of the foreign exchange purchase receipt or its copy
certified by either notary public or the bank, if the foreign currency
brought from abroad was converted into Turkish Lira; original of the
document drawn by bank or a copy certified by either notary public or bank,
if the foreign exchange was kept in the foreign exchange deposits account,
4. Copies of relevant pages of Partners Share Book certified by notary
public in the case of transfer of shares. Top
Foreign
Personnel Employment Article
12- Work permit shall be issued to foreign citizens as administrative and
technical personnel to be employed in private sector enterprises in Turkey,
provided that such personnel have sufficient technical and administrative
knowledge. Work permit shall also be issued for the foreign representatives
of branch offices which are being established, in order to execute the
establishment procedure at the Ministry of Industry and Trade. The
enterprises wishing to employ foreign citizens shall apply to the GDFI, UT,
with the following documents. 1. Foreign Personnel Application form. 2. For
the foreign personnel: Copy of passport certified by notary public, If the
person in question is a foreign partner representative, confirming
documents, Copy of Marriage Certificate if the foreign personnel is married
to a Turkish citizen, Copy of Diploma(s), Other information and documents.
3. For the enterprise which will employ foreign personnel: Copy of the
Establishment License received from the Ministry of National Education for
private schools , Copy of the operation or investment certificate, if any,
received from the Ministry of Tourism for administrative personnel to be
employed by tourism enterprises, Certificate to be obtained from the
related legal entity stating that the enterprises (including consortiums),
have undertaken the job which was put to international bidding by public
sector enterprises, Previous year's balance sheet and profit/loss table
certified by the Tax Office and the company's export incentive and
investment incentive certificate, if any. Top
Foreign
Credits Article
13- Enterprises with foreign capital may freely secure foreign credits
which they will use for both in their investments and operations without
any permission from GDFI, UT. Foreign credits secured shall be registered
in the related units of the Undersecretariat of Treasury in accordance with
the Foreign Exchange Legislation.
Securities
Transactions Article
14- Purchase and sale of stocks traded on stock exchanges, and other
securities representing partnership of persons or entities established
abroad (including investment trusts and funds abroad) via banks and
intermediary institutions authorised by capital market legislation does not
require any authorisation. But, when a person living abroad who owns 10% or
more equity of a company established in Turkey wishes to participate in the
board of directors or shareholders meeting of that company, the GDFI must
be informed of the participation. Purchase of shares that are not traded on
stock exchanges and other securities representing partnership with persons and
entities established abroad are subject to Article 3 of this regulation. Top
