Turkey closure of a pledged property;
• transfer of real estate or rights in rem or secu- rity interests as a result of mergers or de-merg- ers; and,
• acquisition of rights in rem or security inter- ests in real estate located investment areas including but not limited to organised indus- trial zones, industrial zones, technology devel- opment zones and free zones.
Representative offices On July 3 2012, the Regulation Regarding the Implementation of the Foreign Direct Investment Law was amended. These amendments improve the legal regime applicable to representative offices by clarifying many of the uncertainties observed under the former regulation. The Undersecretariat of Treasury has been
replaced by the Ministry of Economy as the com- petent authority issuing establishment permits for representative offices. Under the former regime, the relevant regulator examined and concluded applications by foreign companies operating in the financial services industry, which are subject to additional regulation. Under the new regime, the Ministry of Economy is authorised to conduct a centralised process in consultation with the competent regulator. This significantly reduces the bureaucracy around the establishment of rep- resentative offices as the Ministry serves as a hub (but not as the sole authority on establishment permits) and the entire process is managed by the Ministry in a manner which results in a single per- mit being issued after obtaining the favourable opinion of the regulator. Additional application documents have been provided as attached to the new Regulation in order to make the examination process more time efficient. Under both the for- mer and new Regulations, the first establishment permission may be granted for a maximum of three years. Another improvement is the introduction of a
period of grace of up to 60 days before the cancel- lation of the representative office’s establishment permit. The former regime provided for an imme- diate cancellation of the licence if the authorities established that the representative office was in breach of its permit conditions.
Modernisation of the capital markets A number of projects have been developed by the
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Several types of transactions by foreign investors no longer require approval from the local governor
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Central Registry Agency (CRA) for the purposes of improving Turkey’s capital markets and increas- ing their competitiveness. One such project is the Capital Markets Data
Bank Project. This purports to collect, examine, model and provide all data with regard to the Turkish financial markets from a single source, in particular detailed data on investors and securities kept in the Central Dematerialisation System and the e-CRA Information Portal. The intention is to make such data available to regulatory and super- visory bodies and other governmental institutions to be used in their decision-making processes, as well as to rating agencies for their analyses of the Turkish capital market. The Corporate Management and Investor
Relations Portal (e-Governance Portal) is a mobile corporate management application. It establishes prompt, continual, reliable and direct informa- tion exchanges between companies and sharehold- ers through internet, electronic communication and mobile applications. It is also expected that online investor meetings, electronic board meet- ings, general assembly meetings and electronic voting will be able to be held over the e- Governance platform.
Next steps The aforementioned incentives are expected to assist in maintaining and potentially increasing the current appetite of foreign investors for doing business in Turkey by providing a business friend- ly, reliable and transparent legal and administra- tive system. Nevertheless, many believe that the real chal-
lenge will be in achieving a successful transition of the practitioners (in particular government offi- cers and public servants) to the new regime. Others believe that the changes are promising but further steps are needed, in particular in the field of data protection. Although the Turkish Constitution, Criminal Code and Civil Code pro- vide for different layers and categories of protec- tion for personal data and privacy, many analysts feel the absence of a specific data protection regu- lation. A draft data protection law has been under debate since 2003. Increased criticism regarding the absence of a code in force encourages advo- cates of the draft and increases expectations that it will finally be adopted as law in 2013.
About the author Ceyda Aydin is an associate at Ersoy Bilgehan. She is a qualified lawyer admitted to the Istanbul Bar Association. She primarily focuses on M&As, banking and finance, project finance, securitisation and derivatives. She has experience in negotiating and drafting transaction documents
including joint-venture agreements, subscription agreements, share purchase agreements, shareholder agreements and facility agreements as well as licences and distribution agreements pertaining to projects. Aydin speaks English and French.
Contact information
Ceyda Aydin Ersoy Bilgehan
Maya Akar Center, Buyukdere Cad. No:100-102 K:26 34394 Esentepe, Istanbul, Turkey T: +90 212 213 23 00 F: +90 212 213 36 00 E:
info@ersoybilgehan.com W:
www.ersoybilgehan.com
www.iflr.com
IFLR|FOREIGN DIRECT INVESTMENT 035
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