Question

can i get help with anew Market Selection and Analysis for the Company Kimray to enter turkey?

Answer 1

While there remain many opportunities for U.S. companies in Turkey, there are also challenges to entering or expanding in the market. Any market entry strategy for Turkey should begin with a thorough understanding of the costs and benefits of doing business in the country. In most cases, it is essential to visit the market to establish relationships with Turkish partners. Investing in these relationships early and routinely will increase the likelihood of a more successful venture.

Before entering the Turkish market, U.S. companies should consider their own resources, previous export or business experience abroad and long-term business strategy. For many companies, representation in Turkey by a Turkish agent, distributor, liaison office or partner will be key to their success. A local partner can provide knowledge of the local regulatory framework, language assistance and valuable business contacts. As business develops, companies may establish subsidiaries and make further local investments to expand their market share.

CS Turkey offers numerous programs and services to assist U.S. businesses in establishing a presence in this market and developing appropriate contacts. Staffed with experienced Commercial Specialists with dozens of years of collective industry and sector expertise, the CS Turkey team can tailor your business approach to the right audience and provide advice on your business strategy in Turkey.

Turkey’s foreign investment policy has changed from a screening system to a monitoring system. Foreign investors are no longer required to obtain permission or approvals. The 2003 Foreign Direct Investment (FDI) Law was passed to “encourage FDI; protect the rights of foreign investors; to define “investment” and “investor” in line with international standards; to establish a notification-based system for FDI rather than screening and approval; and thus regulate the principles to increase FDI through established policies.” This law establishes the treatment to be applied to FDI:
• There are no FDI related screening and approval procedures for setting up a business (company or branch) and share transfers except in some critical sectors. The conditions for setting up a business and share transfers are the same as for comparable local investors;
• There are no pre-approval requirements for most transactions - capital increase, change of business activity, etc. for foreign investment companies. Foreign capital companies follow the same procedures as local companies;
• There are no requirements for registration of licenses, know-how, royalty and technical assistance agreements;
• There are no minimum capital requirements;
• Foreign investors are able to form partnerships in Turkey. Any form of company included in the Turkish Commercial Code is acceptable for foreign investors;
• Valuations of international credit agencies as well as courts or competent authorities of the investor’s country will be accepted as valid in the determination of the share value for marketable securities that are contributed as capital in-kind. The law also confirms foreign investors’ existing rights;
• The foreign investment legislation is based on the principle of equal treatment for domestic and foreign investors. Foreign investors have the same privileges and obligations as domestic capital;
• Free transfer of profits, dividends, proceeds from sale or liquidation of an investment, fees and royalties, interest payments on foreign loans is clearly restated;
• National or international arbitration is allowed for disputes arising from contracts involving government concessions as well as for disputes arising from agreements subject to private law, provided that the conditions in the related regulations are fulfilled; • Foreign capital entities can employ foreign personnel in Turkey, provided that the work permits are obtained from the Ministry of Labor;
Liaison offices are special types of offices whose main activity is to conduct market research and feasibility studies and to research investment opportunities in the Turkish market on behalf of their head office. They are not allowed to carry on any commercial activity. Foreign investors are required to obtain permission from the General Directorate of Foreign Investment under the Turkish Treasury to open a liaison office in Turkey.
Initial permission is given for three years, which can be extended depending on the activities performed in the last three years and future plans of the head office.
A foreign company is free to choose between a corporation (Anonim Sirket--A.S, or "Societe Anonyme” type Corporation), limited liability company, or branch office as the form for its operations in Turkey. The “A.S.” form is more suitable for larger enterprises, since corporations can attract a large number of shareholders. The limited liability company form is more appropriate for the establishment of sales and distribution entities.