YASED Voiced the Expectations of International Investors:
A Better Investment Environment, More Greenfield Investment
The leading representative of international investors in Turkey – YASED, brought the 7 issues to public attention as priority issues for international investments.
International Investors Association - YASED pointed out the below-mentioned priorities.
We, as International Investors Association – YASED, stand as one of the principal organizations, which strive to enable Turkey to step up to the status she deserves among developed countries, and to attain a better business and investment environment. To maintain the continuation of the exceptional performance Turkey has demonstrated in recent years with regard to international direct investment (IIDI) inflows, and elicit these investment inflows to be used as a major leverage for the development of our country, are among our fundamental objectives.
Our association, representing around 85 percent of the international investments in Turkey, is keeping up its activities aimed at attracting high value-added greenfield investment that will generate employment to Turkey, further satisfying the existing investors, and configuring Turkey as a major investment location of the world. YASED is highlighting the steps to be taken to this end, through its members’ contributions and research studies, and sharing these with the public.
The annual average FDI inflow level of US$ 1 billion of the 1990s was finally broken in 2005 and 2006; and at first US$ 10 billion and then US$ 20 billion levels were accomplished. The inflows achieved in the early months of 2007 indicate that the trend will continue this year as well. The sustainability of these levels in and after 2008 depends on the ability to attract greenfield investments. We consider that becoming an attractive investment location for greenfield investment, which will consequently play a significant role in enhancing the competitiveness of our country, increasing its technology/know-how capacity and generating employment is closely related to the solution of the following issues.
On the eve of general elections, the issues, which we believe should be the essential items of political parties’ programs for reinforcing Turkey’s competitiveness and buttressing her investment base are the following:
Unregistered economy and Transparency
We consider that the measures to be taken urgently and decisively for impeding the unregistered economy, which more or less punishes the law-abiding companies, and which we acknowledge as the primary problem of Turkey, will significantly contribute to the healthy operation of the Turkish economy. We believe that aiming for a Turkey, where there is a more fair income distribution, wider tax base, and where unfair competition is avoided, by fighting with unregistered economy is a priority. On the other hand, we also share the opinion that it is essential to set the rules in away so that they are clear and comprehensible, and do not include any context that would require subjective interpretations, which otherwise lead to discriminative implementations, and secure transparency so that the executive units put these rules into practice clearly, without interpretation and as laid down by the law.
Taxes and incentives
Steps that will be taken to lower indirect taxes, which we can be depicted as a heavy burden on investors, would be an undertaking that would receive support from all investors – both foreign and domestic – for impeding the unregistered economy. Development of incentive mechanisms and streamlining of the tax system are key elements of this undertaking.
Employment and training
Compared to its competitors, employment taxes in Turkey constitute a significant disadvantage against turning mergers and acquisitions, which make up the majority of IDI inflows to Turkey today, into greenfield investments. Efforts to be given to secure the qualified workforce necessitated by investors should also be evaluated as an indispensable element of this concern. Foreign language education and vocational training should be set as priorities in education and training for configuring the workforce in accordance with existing requirements
Intellectual and Industrial Property Rights - Trademark Protection
International integration is not attainable, unless international standards are adopted. Infringement of intellectual and industrial property rights harms Turkey’s prestige considerably. Adoption of international standards on the subject of laws and regulations, and particularly the implementation of these, should be set as one of the targets. On the field of Trademark protection, bringing an end to the deception of consumers should also be prioritized. It is essential to fix the shortages experienced in the implementation of regulatory amendments made recently on data protection. The accomplishment of a legal reform is extremely important, regarding the protection of these rights
Research & Development
One of the most significant and permanent pillars of improved competitive power is technology and R&D. The increases made in recent years in the funds allocated for R&D incentives from the budget, is pleasing. We wish that the efforts given for sustaining, extending and securing the effective use of these incentives continue; so that Turkey’s R&D capacity increases and investments oriented on this area, are attracted
All these issues should be taken up with priority in order to ease the problems of the existing investors and to attract greenfield investment in the coming term. Furthermore;
Making Turkey an attractive destination particularly for greenfield investments
The continuity of IDI inflows, which have increased substantially in recent years, in the medium- and long-term depends on whether or not Turkey will become a base for greenfield investment. Attracting high value-added, technology and production oriented investments is of critical importance for Turkey’s future. Investment Promotion and Support Agency of Turkey should, in this framework, carry on its works more effectively than ever. Turkey should develop competitive tax and incentive systems to pave way for greenfield investment inflows to Turkey. We ought to develop advantages over our competitor countries, if we are in request of large and employment-generating greenfield investment.
European Union
Progress to be achieved in all of the above-mentioned issues will actually be developments that will open way for Turkey’s EU membership talks. Achievement of these developments, and Turkey’s success in ranking permanently among the top investment locations of the world, depends on the success of the talks to be carried out with the EU, for full membership.
It is extremely important to watch over the priority of the issue, by not letting the EU membership issue to drop from the agenda, continuation of the efforts given for the negotiation process and lobbying activities. Securing Turkey’s harmonization with EU standards in all aspects, and attracting greenfield investment to the country through harmonization and improvement efforts, should take place among the priority issues of the economic program.
Serious steps to be taken on the issues voiced here are of crucial importance regarding the enlargement of the existing investments of the international investors operating in Turkey and attracting greenfield investment to our country.
YASED – International Investors Association