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December 20, 2020

Economy and Currency

Since Turkey's establishment in 1923 while the state played a leading role in industrialization until 1950, major political developments after the Second World War, such as the transition to a multi-party democratic system and commitment to the Western alliance with NATO, had a profound impact on the economy. The state intervention was made in the form of state loans to private firms and economic development was guided by five-year plans. Turkey\'s economy currently has a liberal market economy. Gross domestic product per capita in Turkey has left behind many European and Middle Eastern countries. 

Turkey's economy, while being the world's 18th largest economy in 2003 according to purchasing power parity, in 2017 it increased to 13th place. 

Turkey, having an average annual growth of 5.5% catch rate in the 2013-2018 period, has made significant growth in a short period of time, institutionalized economic instruments, attracted $ 180 billion of foreign direct investment in the last decade. Having purchasing power parity with Europe\'s 6th largest economy, Turkey, Fiscal policies with sound fiscal discipline, monetary policies in which the central bank has independent instruments, strong domestic market and entrepreneurial private sector have accelerated economic development by supporting investments and exports. 

With the entry into force of the Foreign Direct Investment Law No. 4875, international investors in Turkey, took the same rights and responsibilities with local investors, import and export transactions were harmonized. Foreign exchange transactions are bought and sold through foreign currency banks, other authorized institutions, and institutions authorized to sell foreign currency and investors open foreign currency accounts at banks and efficiently transfer money to foreign countries. 

In the absence of information and documents of monetary resources in the entrance to Turkey, the declarations made to the customs administration regarding the source of the carried cash shall be taken as a basis, although there is no obligation to declare cash and passengers cannot be forced to declare. It is possible for them to fill in the “Cash Declaration Form" and declare it to the customs administration upon request. 

The exchange rates market in Turkey is realized by the market by adopting a variable exchange rate regime according to supply and demand conditions. The value of the Turkish currency is determined by the market against foreign currencies. The official exchange rate is published daily in the country by the Central Bank of the Republic of Turkey. 

Foreigners can establish a company in Turkey can join the partnership and able to open branches or representative offices in Turkey. International investors can join a local company, can join all kinds of companies in Turkey, including limited liability companies and joint-stock companies. International investors are able to participate in the capital increase by local capital companies and transfer shares. However, within one month after the completion of the related transactions, they have to inform the Ministry of Treasury and Finance. While international investors have the right to transfer money abroad in the currency of their choice, in case of liquidation of the company through sales, there is no obligation to inform the Ministry of Treasury and Finance in advance. 

Nationalization and expropriation cannot be applied to commercial ac tivities unless it is in the public interest to protect the investments of foreign investors. 

International investors are able to employ foreign staff in investments to be made in Turkey, they can benefit from tax incentives, land allocation, insurance premium support and exemption, employer share support and investment incentives with the same rights as Turkish citizens. 

While people residing abroad are in the free state to transfer the immovable property sales or revenues derived from sales relating to real estate acquired in Turkey via banks, Turkey is trying to prevent double taxation via international tax agreements made with other countries. 

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