Turkey's Investment Office, formerly known as the Investment and Promotion Agency of Turkey (ISPAT) and rebranded under the presidential governance system that took effect after the June 24, 2018 elections, has ramped up efforts to ease bureaucratic processes for local and foreign investors. Thus, the latest Investment Office initiative includes investment coordination units in all ministries with which investors engage during investment processes. These units will receive applications for permits, licenses and other necessary documents and coordinate all related procedures, the Investment Office's Arda Ermut said Sunday.
In an evaluation of the Turkish investment environment and technology investments in the country, Ermut stressed that technology investments are top priority for the office, recalling that Turkey has taken various political and practical steps to enhance such investments.
Ermut indicated that a number of regulations, including legislative amendments and incentive schemes, have been implemented in coordination with the Industry and Technology Ministry and all other stakeholders and stressed that incentives provided for research & development (R&D) projects have been updated in accordance with investor expectations.
"The information and communication technologies market in Turkey was TL 113.8 billion in 2017, rising to TL 131.7 billion last year, an increase of 15%. This year, the sector is expected to record 5% growth to 10%," Ermut said and added that employment in the sector is presently 139,000 and 21% of employees work in R&D operations.
Number of R&D centers on the rise
The head of the Investment Office highlighted that subsectors of the automotive industry, pharmaceuticals, chemicals, petrochemicals, aerospace and information technologies are R&D-intensive sectors. Many global companies have significant R&D centers in Turkey, having conducted important projects. "At the beginning of 2018, global companies operating in Turkey had 118 R&D centers; the number has risen to 170 today," Ermut said.
R&D-focused investments by foreign investors have continued so far this year, he observed. "Together with the industry and technology minister, we have been meeting technology-oriented companies in Germany and inviting them to invest in Turkey. German companies create added value for the Turkish economy as their technology investments have continued this year. One of the most featured projects is German carmaker Mercedes Benz's modernization project worth TL 1.2 billion," he said.
Regulations to protect investments
In reference to introducing framework legislation to protect private investments and investors in the action plan announced after the Coordination Council for the Improvement of Investment Environment (YOİKK), Ermut explained that the draft bill to protect private investment has become binding for all public institutions.
The Investment Office and the Presidency of the Budget and Strategy are cooperating to finalize the bill, and the legislation will be completed after consultations with public and private stakeholders are completed in the months to come.
The latest legislation, Ermut stressed, will bring important regulations protecting investments and ensuring predictability in bureaucratic processes. "We aim to introduce principle-based provisions to boost protection of private sector investments and increase the foreseeable nature of bureaucratic procedures," he said, adding, "We are establishing investment coordination units at each relevant ministry to receive applications for permits, licenses, certificates or other necessary documents and to coordinate all relevant processes."
Coordination units in every related ministry will ensure that investment-related processes are handled in a correct, quick manner, eliminating delays to acquire necessary documents.
The Investment Office head also indicated that all necessary legislative amendments will include the participation of the private sector representatives and will be introduced with due consideration of the costs incurred by investors.
Thanks to the dedicated work of relevant ministries and NGOs and coordinated by the board in the recent period, Turkey ranked 43rd in the World Bank's Ease of Doing Business list for 2019, climbing 17 places compared to the previous year. According to the World Bank report, Turkey received 74.33 points out of 100, improving 4.34 points compared to the previous year. Moreover, 2.4% of the 5.7% average economic growth in the last 17 years came from investments.
Ermut also announced that an investment-monitoring system would be formed to identify areas most in need of investment and follow applications of qualified investments in public institutions. "Investments that are in compliance with the criteria set for prioritized investments will be categorized as "projects supported by the Investment Office," Ermut said. The Investment Office will operate as a single-stop office to expedite the process for highly qualified projects.