Turkish industrialists to establish zones in US, Argentina

METIN CAN
ISTANBUL
Published 18.02.2019 00:02

Industrial zones, which have reached 300 in Turkey, are continuing to expand abroad as well. Following Turkish industrial zones established in Africa, Europe and Asia, industrialists are now opening up in the U.S. and Argentina. The Turkish-American Business Association-American Chamber of Commerce in Turkey (TABA-AmCham) has taken action to establish an industrial zone in the U.S. with an investment of nearly $8 billion. Five hundred Turkish companies will operate in the industrial zone, which is to be built in Texas, while another industrial zone investment is planned for South America. There are already 50 applications for the industrial zone to be established in Argentina.

TABA Chairman Ali Osman Akat said that they aim to boost the brand value of Turkish companies and thus have a share of the U.S. market, adding that the trade volume between Turkey and the U.S. is nearly $8 billion in exports and $12 billion in imports, which corresponds to four per thousand of U.S. international trade volume.

The trade volume between the two countries reached about $20.68 billion in 2018. Turkey's exports to the U.S. were about $8.3 billion, while its imports amounted to around $12.38 billion, according to Turkish Statistical Institute (TurkStat) data.

Underlining that this is not the intended level of trade volume between Turkey and the U.S., Akat said, "Just as U.S. companies invest in our country, we want to go to the U.S. and have a bigger share of its market."

Ali Bayramoğlu, chairman of the TABA High Advisory Board, said that they would establish the industrial zone in the state that provides the best opportunities in the U.S. "If you do not follow developments in the world well, you cannot keep up with technological movements at the same time. You think you are growing, but you will actually be running around in circles. This is because a product that you produce for $10 and try to sell for $10.50 cannot help you grow," he said.

Turkey had established the first industrial zone abroad in Egypt in the early 2000s. Currently, there are about 10 industrial zones established by Turkish entrepreneurs abroad, especially in Kazakhstan and Bulgaria. With the industrial zones to be established in the U.S. and Argentina, Turkey will have industrial infrastructure operating on five continents.

According to the Presidential Investment Office, industrial zones are designed to allow companies to operate in an investor-friendly environment with ready-to-use infrastructure and social facilities. The existing infrastructure provided in industrial zones includes roads, water, natural gas, electricity, communications, waste treatment and other services.

Accordingly, there are 322 industrial zones in 80 provinces, 255 of which are currently operational, while the remaining 67 industrial zones are being constructed throughout Turkey.

In addition to the investment incentives scheme in Turkey (general investment incentives, regional investment incentives, large-scale investment incentives, strategic investment incentives, employment incentives, research and development support, et cetera), investors operating in industrial zones can benefit from a number of other advantages, according to the Investment Office.

These include no value-added tax (VAT) for land acquisitions; exemption from real estate duty for five years starting from the date of completion of plant construction; low water, natural gas and telecommunication costs; no tax payable in cases of merging and/or separation of plots; exemption from municipality tax for the construction and usage of the plant; and exemption from the municipality tax on solid waste if the industrial zone does not use the municipality service.

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