your guide in turkey

ABC CONSULTANCY - 1 -

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YOUR GUIDE IN TURKEY _______________________________


ABC CONSULTANCY

Having combined my law degree and experience in the legal consultancy branch with the management and organization experience of my husband in the Netherlands, we started ABC CONSULTANCY in 2001 in Turkey. Our aim and goal with ABC CONSULTANCY is to build a team of lawyers, accountants and business consultants under one roof to give the best quality of legal and business services for all foreign entities who are not familiar with and within Turkey. Although we started with granting sworn translation services, recommendations and all kind of advices to foreigners we developed ourselves and our services to give the quality and quantity of consultancy that we were used to from the Netherlands. After joining the BAR of lawyers in 2003 we had to expand ABC CONSULTANCY and our team to a wider location. ABC CONSULTANCY has today a monopoly position in Antalya and his wide region. We are proud to be the first organization in Antalya that has started to provide legal and business consultancy services to all kind of foreigners and foreign entities. Our best competitor was and still is ourselves.

Our services are flexible and wide ranging. We like to guide and assist all our clients, stand them by to meet the challenges of doing business in ever-changing economic climate of Turkey.

ABC CONSULTANCY approach to the client relationship can be summarized in two words: Trusted Advisor. As a trusted advisor, we maintain our vendor neutrality to ensure that our clients are receiving the best solutions without being influenced by our vendor ties.

We hope this handbook will give a first guide to the foreigner who steps in the world of Turkey.

We like to thank herewith our (trainee) Rabia Aslihan for her help in realization of this guide. Av. Selma REN Partner Lawyer ABC Consultancy


Preface

This guide has been prepared by ABC CONSULTANCY to assist and guide all kind of foreigners or foreign companies who are interested in Turkey. It reflects the current law or practices in Turkey till December 2005. This guide is not intended for definitive advice, but merely as an explanatory handbook. We would strongly recommend that receivers seek professional advice before making any decisions. Furthermore, it should also be kept in mind that Turkish regulations are subject to frequent change. A more recent copy is available on ABC CONSULTANCY website: www.abc-consultancy.com/guides.

Website www.abc-consultancy.comE-mail address [email protected]

[email protected]

Address Burhanettin Onat Cad. Emrah Apt. No: 106/5 Antalya - Turkey

Telephone and Fax numbers +90 242 3125444 (Tel) +90 242 3118070 (Fax) +90 533 9857469 (GSM Fax)

Turkey / Antalya December 2005


Index

Part I Guide for Expatriates in Turkey

Preface .......................................................................................................................................................3 1 The Visa ..............................................................................................................................................7

1.1 Obtaining Visa ...............................................................................................................................7 1.2 Selection of visa ............................................................................................................................7 1.3 The passport..................................................................................................................................9

2 Permits ................................................................................................................................................9 2.1.1 Residence permit ..................................................................................................................9 2.1.2 The work permit ..................................................................................................................10

3 The Turkish nationality ......................................................................................................................12 4 Real estate ........................................................................................................................................13

4.1 Buying Real Estates ....................................................................................................................13 Obtaining the Title of Deed .............................................................................................................13 The Public Notary..............................................................................................................................14 Power of Attorneys ............................................................................................................................14

4.2 Land to build on ...........................................................................................................................14 Joint ownership .................................................................................................................................14 Development plans............................................................................................................................14 Iskan 14

4.3 Apartments ..................................................................................................................................15 The Union of Apartment owners .......................................................................................................15 Maintenance man / doorkeeper ........................................................................................................15 Contribution payment ........................................................................................................................15

4.4 Cooperative society .....................................................................................................................15 4.5 Payments.....................................................................................................................................16 4.6 Selling real estate ........................................................................................................................16 4.7 Renting real estate ......................................................................................................................16 4.8 Electricity & water ........................................................................................................................17

5 Consumer Protection Rights .............................................................................................................18 5.1 Rights and Limitations .................................................................................................................18 5.2 Complaint and Appeal .................................................................................................................18

6 Customs Duties .................................................................................................................................19 7 Cars ...................................................................................................................................................20

7.1 Import of cars...............................................................................................................................20 7.2 Buying Cars .................................................................................................................................20

New car 20 Second hand car ...............................................................................................................................21

7.3 Selling Cars .................................................................................................................................21 7.4 Restrictions of a blue license plate ............................................................................................21 7.5 Renting a car ...............................................................................................................................21 7.6 Car Insurances ............................................................................................................................22 7.7 Other Issues ................................................................................................................................22

8 Bank & Finance .................................................................................................................................24 9 Marriage & Family issues..................................................................................................................25

9.1 Marriage ......................................................................................................................................25 9.2 Consummation of Marriage .........................................................................................................25 9.3 Divorcement ................................................................................................................................26

Children and Guardianship ...............................................................................................................26 Alimony regarding children................................................................................................................26 Indemnity...........................................................................................................................................26 Enforcement of the Turkish decision.................................................................................................27

9.4 Family Protection law ..................................................................................................................27 9.5 Other Issues related to Children..................................................................................................27


Adoption 27 10 General Legal Advice ..................................................................................................................28

Apostille stamp..................................................................................................................................28 Interrogation ......................................................................................................................................28 To lodge a complaint .........................................................................................................................28

11 Law of Succession.......................................................................................................................29 International testaments are valid in Turkey provided that they have been concluded in accordance to the National Law of the foreigner. ............................................................................................................29 12 Labor relations & Social security .................................................................................................31

12.1 Working employee ..................................................................................................................31 12.2 Social security SSK - BaMkur ...............................................................................................31

SSK 31 BaM-kur 31

12.3 Labor laws ...............................................................................................................................32 Employment contract.........................................................................................................................32 Notification period for termination of contract ...................................................................................32 Annual vacation.................................................................................................................................32

13 Doing Business............................................................................................................................34 13.1 Limited liability companies (LTD.) ...........................................................................................34 13.2 Joint Stock (A.S.) ....................................................................................................................34 13.3 Other business entities............................................................................................................35

Partnership (Unlimited) Company.....................................................................................................35 Limited partnership (Commandite Company) ...................................................................................35 Registered partnership ......................................................................................................................36 Partnership partially limited by shares ..............................................................................................36 Liaison offices....................................................................................................................................36 Joint venture......................................................................................................................................36

14 Tax issues in Turkey....................................................................................................................38 14.1 Income tax...............................................................................................................................38 14.2 Tax on expenditure .................................................................................................................39 14.3 Stamp duty ..............................................................................................................................40 14.4 Tax on enrichment ..................................................................................................................40 14.5 Double tax agreements ...........................................................................................................41

15 Investment incentives ..................................................................................................................42 Underdeveloped areas......................................................................................................................42 Free Trade Zones..............................................................................................................................42

Vocabulary................................................................................................................................................44 Index .........................................................................................................................................................48 Appendix A Addresses of ministries in Turkey ..................................................................................49 Appendix B Countries with reciprocity ...............................................................................................50 Appendix C Tapu example .............................................................................................................51 Appendix D Social security agreements ............................................................................................51 Appendix D Social security agreements ............................................................................................52 Appendix E Countries for which visa is not required .........................................................................53 Appendix F Treaties on the prevention of double taxation ................................................................54 Appendix G Foreign banks in Turkey.................................................................................................55 Appendix H Turkish banks abroad.....................................................................................................56 Appendix I Trade Commissions and businessmen associations.........................................................58 Appendix J Foreign embassies in Turkey .........................................................................................61 Appendix K Foreign consulates in Turkey .........................................................................................63 Appendix L Turkish consulates abroad ............................................................................................65 Appendix M Turkish embassies abroad .............................................................................................67 Appendix N Useful internet sites ........................................................................................................71 Appendix O Real Estate expertise of ABC CONSULTANCY ............................................................73 Appendix Q Copyright ........................................................................................................................74


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PART I LIVING AND WORKING IN TURKEY

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1 The Visa

Regardless of your purpose to Turkey, you have to obtain a visa in order to enter this country, unless the visa is not required due to legislation or mutual agreements. The kind of visa to enter the borders of Turkey is depending on your nationality and on your personal reasons, like scholarship, vacation, working, passing through, etc. This and the following chapter enclose the necessary information about the visa requirements and permits which are the bases for your stay in Turkey.

1.1 Obtaining Visa There are four kinds of entry visas for Turkey:

Multiple entry visa: This type of visa grants the right of multiple entry for a period of three, six or twelve months.

Single entry visa: this type of visa is valid for one year from the date of issue and grants the

right of one entry. Return visa: when leaving Turkey you have the choice to obtain a return visa before your

depart. This visa is valid for one year from the date of your departure from Turkey. Transit visa: This type of visa grants the right to pass through Turkey on the way to another

country. This visa has to be used within three months of the date of issue. The most common visas are the tourist/business visa, education visa and the work visa. You can obtain a visa at the Turkish Consular Office in your own country or at the borders of Turkey (like the Airport or the Customs). However, due to the existence of mutual agreements between Turkey and foreign countries, some citizens of these countries can enter Turkey without obtaining a visa. In these situations the foreigners belonging to these countries are exempted from the visa fee or do not require a visa. (See appendix E)

Also immigrants who come with the permission of the government, foreign ships crew, international land and air transportation civil servant/personnel and refugees are exempted to enter Turkey without a visa. You will risk a heavy money-fine/penalty and directly removal from Turkey if you stay without a valid visa in Turkey. (See also http://www.egm.gov.tr/hizmet.yabancilar.vize.asp, only available in Turkish)

1.2 Selection of visa The tourist/business visaThe tourist visa is a multiple entry visa which grants the right of multiple entry of Turkey. This visa remains valid for one year after receiving it; during this period you can leave and enter Turkey as much as you wish. However after it has been expired you have to leave the country. If you have a tourist visa you do not require a residence permit, unless you will stay longer than the duration of your visa.


Education visaApplications for the education visa can not be submitted from within Turkey. You have to obtain the visa at the local Turkish Consular Offices in your own country. The education visa will be affixed to your passport before you leave to Turkey. Without an education visa you will not be allowed to study in Turkey. Regardless of the degree of the education, you have to obtain an education visa for the period of study in Turkey, unless the following situations are applicable:

You have followed successfully a secondary education and/or an university and you want to extend your study in Turkey (by following a post graduate education or a master education) with an earlier education permit, provided the start of the date of the second education in less then one year,

You are a child whose parents are in the possession of a living and/or work permit; You are applying for the examination for foreigners (YS) to go to a post graduate education.

If your spouse and / or children will accompany you, their applications also have to be submitted at the same time as the application of yours. Besides having the education visa you need also to obtain a residence permit. You can obtain the residence permit by applying to the local Police Department in the place where you will study, within 15 days after your arrival in Turkey. Do not forget to bring all the documents for your study with you and bear in mind that the application has to be done within one month. It is possible that you have to extend your residence permit during your study. (See also http://www.egm.gov.tr/hizmet.yabancilar.ogrenci.asp, only available in Turkish) ABC reminder: You are not allowed to work during your study period in Turkey. The Turkish legal provisions prohibit your working during the education.

The work visaIf you have the intention to work in Turkey you need to apply for a work visa in order to obtain a work permit. Without a work visa (and workpermit) you will not be allowed to work in Turkey. If you live abroad Turkey you should make your work visa application through the local Turkish Consular Offices in your own country at least six weeks in advance. The Turkish Consular will forward the application to the Minister of Labor and Social Security for an outcome, in order to have a work permit. It is also possible to obtain a work visa within Turkey. If you have a valid residence permit on the basis of any kind of visa except education visa for at least six months and a work permit granted by the Ministry of Labor and Social Security, you can also apply for a work visa directly to the Ministry. The Ministry of Labor and Social security has to evaluate and conclude the application within ninety days. Besides having a work visa and a work permit you need also to obtain a residence permit. You can obtain the residence permit by applying to the local Police Department in the place where you will work and live, within 30 days after your arrival in Turkey. It is possible that you have to extend your residence permit during your stay in Turkey. ABC advice: Working in Turkey means obtaining a work visa, a work permit and a residence permit. (See for the permits chapter 2 or www.csgb.gov.tr)


1.3 The passport Entering the country without a valid passport is not possible, unless you have the permission of the Turkish Police Department there for. By lost of your passport you can contact the nearest embassy or consulate of your own country. They will be able to help you obtaining a periodical/emergency passport in order to leave Turkey. Depending on the circumstances of the illegal stay in Turkey the local civil service will appoint for you a place to stay until the lost of the passport has been investigated. The investigation will be held by the Ministry of Internal affaires. (see www.icisleri.gov.tr)

ABC advice: Keep always a copy of your passport and the official report of the Turkish police which confirms the lost or robbery of your passport.

2 Permits

2.1.1 Residence permit According to the Turkish regulations, the application for a residence permit should be made personally at the local Police Department of Foreigners. When the residence permit expires you should apply to the same authorities within 15 days in order to extend it. You have to also notify the Police Department within 15 days of all the changes in your marital status. Do not forget to have the details registered in your residence permit. If you loose your residence permit you have to inform the local Police Department of Foreigners immediately and obtain the new one. Residence Permit by workingIf you have obtained your work permit you are also obliged to have a residence permit, within one month of your arrival date to the country. Related to the period of working, you will obtain working commentary residence permits for a maximum of five years period. With the view of the Ministry of Foreign Affaires the Ministry of Interior can expire or shorten this period. You must receive your work permit before starting with your work. Residence Permit by educationAlso student foreigners who are in the possession of an education visa are obliged to obtain a residence permit for their period of study. You have to apply within 15 days after the arrival in Turkey. Do not forget to bring all the documents for your study with you and bear in mind that the application has to be done within one month. Residence Permit by owning or renting a houseIf you are the legal owner of a house or if you do rent a house you can obtain a residence permit on the condition of the existence of reciprocal agreement between the countries. (See appendix B for the countries with the mutual agreement) For the application of the residence permit you need to show your property title the Tapu or your house rent contract, which rent period is not lesser than 6 months. When your permit expires you should apply to the authorities within 15 days in order to extend it. Permit by marryingIt is also possible to obtain a residence permit by marrying a Turkish citizen. Do not forget to bring with you your marriage certificate. (See also www.iem.gov.tr, only available in Turkish)

ABC advice: Without a residence permit, you are not allowed to import your personal belongings into Turkey.


2.1.2 The work permit Types of work permit There are four types of work permits;

Limited work permit Unlimited work permit Independent work permit Permit based on exception

Limited work permitUnless provided otherwise in bilateral or multilateral agreements of which Turkey is a part of, you are initially entitled to apply for utmost one year work permit. The duration of the permit could be extended at the end of the one year period up to three years under the condition that you continue to work for the same employer. After the period of three years the work permit could be extended for six years for a job in the same work field, without the condition that you work for the same employer. This permit can be granted to the spouse and children once they have lived legally and continuously for five years in Turkey. Unlimited work permitAn unlimited work permit can be granted for an indefinite period of time, under the condition that you have lived legally and continuously for more than eight years and worked for more than six years in total in Turkey. This work permit allows to work without any specific type of undertaking, professionals, and regional limitation. Independent work permitAn independent work permit could be granted under the condition that you have lived legally and continuously for more than five years in Turkey. An independent worker is defined as a foreigner who works for him or herself even if he/she employs others. ExceptionThe Turkish legislation provides the possibility that some foreigners are excluded from the above described work permits, like EU member state nationalities. If you are an EU member state nationality, you can get a general or independent work permit without any time limitation. Even your spouse and children (regardless of their EU or non EU origin) can obtain a work permit. The time limit restriction will not be applied. We like to refer you to the law of working expatriates regarding other exception possibilities. The applicationThe general rule is that you have to apply for a work permit at the local Turkish Consular Office in your own country, at the same time with applying for the work visa. Under some conditions you can apply for the work permit within Turkey, directly to the Ministry of Labor and Social Security.

Head rule: Application in your own country You can apply for a work permit to the nearest Turkish Consular Office, under the condition that you or your employer have send the required documents mentioned at www.csgb.gov.tr within three days to the Minister of Labor and Social Security. The Department of the Ministry will determine his decision of approval on the views of the concerned authorities. The decision of the Department should be announced within 90 days conform the existing legislation. The practice is different. After receiving the work permit it is necessary to appeal for an entry visa within 90 days counting of the day of receiving the work permit. After entering Turkey you have also to obtain a residence permit at the local Police Department of Foreigners.


Exception: Application within Turkey The existing legislation offers the possibility to apply for a work permit within Turkey under the condition that you are in the possession of a residence permit on the basis of any kind of visa (except education visa) for at least six months and that you have obtained the requested work permit during the same period of the validity of your residence permit. (See also http://www.egm.gov.tr/hizmet.yabancilar.calisma.asp, only available in Turkish or www.calisma.gov.tr in English)

ABC Advice: There are consulting offices who can obtain your work permit for you. We would recommend you to assign them to take care of your work permit. It could save you a lot of time!


3 The Turkish nationality

Obtaining the Turkish nationality is possible by birth, by marriage or by the Law. By birth: If you are born or adopted within the borders of Turkey or if you are born outside the borders of Turkey, but have at least one Turkish parent.

By marriage: You can also obtain the Turkish nationality by marrying a Turkish citizen, under the condition that you stay married for at least three years. Only if you lose your own nationality by marrying a Turkish citizen, you can obtain the Turkish nationality direct after the marriage. You can apply to the local Police Department of Foreigners here for.

By Law: You can apply for the Turkish nationality at the Turkish Consulate of your country or, if you are in Turkey to the Ministry of Consul. According to the Turkish nationalization law you need to have fulfilled the conditions as described below:

To be of age 18 ; To have residence for at least five years in Turkey, without being less than six months abroad in

five years time; Having indications to settle in Turkey, like working in Turkey, marrying in Turkey, making capital

investments etc; Having a good behavior; Having a good health; To have the knowledge of the Turkish language, at least to express yourself and to understand

what is said; To take care and maintain yourself and your family.

ABC comment: Fulfilling the conditions by law do not always mean that you will obtain the Turkish nationality! It depends on the point of view of the Ministry of Consul if the governments sovereign rights are accepted or not.


4 Real estate

Increasingly foreigners are more and more interested in purchasing real estate property in Turkey. This is not surprisingly, if you look at the reasons: a very popular holiday destination, fast growing economy, stable market, growing foreign investments, reasonable real estate prices, etc. Although this chapter should give you the necessary information about the Turkish legislation regarding buying and selling of real estates, it does not. The reason is that the existing Law (article 35 of the Tapu Law) has been cancelled by the Turkish Highest Court in April 2005. Although the Highest Court has given the legislative Government a time of 3 months to bring a new substitute Law in force, they did not had the possibility to do so until now. However, there is a draft version of the substitute Law on the moment of printing of this handbook. We like to refer you to our website www.abc-consultancy.com for the necessary information about the draft. Although the new law is in preparation, it is expected that the old procedure of obtaining the Title of Deed (the Tapu) will be the same. That is the reason that we have paid attention to the old procedure in the first paragraph. The new law is expected to come into force in the beginning of 2006. Furthermore, the chapter gives you the necessary information about buying and selling at the Tapu, the possibilities at the Public Notary, renting of houses, right and obligations regarding apartments, cooperative houses and much more.

4.1 Buying Real Estates

Obtaining the Title of Deed If a foreigner may buy a real estate in the boundaries of Turkey is depending on the condition if there is reciprocity between Turkey and the country of the foreign buyer. Turkey has with the most of the West European Countries a reciprocity agreement. (See appendix B for the countries)

Although in the most of the West European countries the Public Notary is the authorized person who transfers the Title of Deed of a real estate, in Turkey the authorized person is the civil servant at the Land Registry Office (the Tapu office). In order to obtain the so called TAPU (the Deed) the buyer and seller in person or their representatives acting by a Power of Attorney has to undersign the sales agreement in front of the civil servant of the Tapu office. If you are foreigner you need a certified translator with you. (See appendix C for a Tapu example

Every sales agreement or provisional agreement or reserve agreements made outside the Tapu office is void. Unfortunately these agreements are not legally binding and therefore not enforceable. You just may use this kind of contracts and agreements as evidence in a debt recovery case. Be aware also of the fact that you will not be protected by the Law regarding third parties who have bought the real estate at the Tapu before you, although you had an earlier sales contract with the owner or the real estate agent. Before you may undersign the contract at the Tapu office, a written permission of the Ministry of Defense is required. The Ministry of Defense investigates if the purchased real estate is in the neighborhood of a military base. Turkish and foreign citizens are prohibited to buy a house in the first area of a military base. The buyer or seller (or his real estate agent) may apply for this permission at the Tapu office. The duration of this permission can take at least 3-5 months. At the end of this investigation it is possible that you are not allowed to buy a house in Turkey according to the Ministry of Defense. Therefore, it is not advisable to pay purchase amounts in advance.


A lot of foreign buyers have been mislead by real estate agencies / owners who have applied together for this permission, to make the buyer believe that he is already signed in the register as the owner of the real estate. The request is the first step for the title of deed of the real estate, but it is definitely not the Title of Deed (the Tapu) himself! It is possible that in the meanwhile of waiting for the permission the property owner / real estate agency sells his property to someone else. This third party in good faith is not obliged to be a ware of your purchase.

The Public Notary As here above explained you do not have the possibility to conclude an effective and valid sales contract in front of the Notary. But you have the possibility to conclude a promise to sell contract, which obliges the parties to sell and buy the real estate following to the provisions as stated in the contract. This notarized contract has two important issues, that if you do not fulfill these issues the contract has no value at all:

o You have to mention the total purchase amount o You have to let the contract registered at the Land Registry Office in order to have protection to

third parties.

Power of Attorneys Although the power of attorney is a common practice for buying and selling real estates, you should be much more careful by granting these powerful documents. It is advisable to have a good certified translator with you at the Notary, who is authorized to grant these powers. Furthermore, grant the power just for buying on your name or limit the power in time. Do not take everything granted what the real estate agent or translator tells you. It is also possible to discharge someone later for the given powers through a Public Notary. It is necessary to have a copy of the power of attorney document to do so. ABC advice: It is recommended to investigate the object on legal restrictions before you buy and pay anything in advance. ABC as a real-state expertise can helpful you fulfilling this investigation. (See appendix O)

4.2 Land to build on

Joint ownership Another issue to be careful of with buying real estate is the fact that you could be confronted with joint ownership in great plots of land. They share together one Tapu, but their share part may be transferred independently to the buyer.

Development plans Before you buy a house in building from a constructor or a piece of land from a real estate agent to build on, you should investigate the development plan and the building permit in order to know if your plans with the real estate are legitimate. The building permit on the other could be important to receive the Iskan (living permit) of the building. The Iskan is the permit given by the Municipality in order to receive the utility facilities, like water, electricity and telephone.

Iskan The Iskan means actually domiciliation permit in order to receive the normal utility facilities, like water, electricity and telephone. You have two kinds of Iskan given by the Municipality: the general Iskan and the private Iskan. The General Iskan is received by the constructor from the Municipality when the building permit and all other obligations of the constructor have been fulfilled according to the development plan. Hereafter the owner of the house may apply to the Municipality to get his private Iskan for the house/apartment that


he bought. You can apply with this document to have water, electricity subscription. (See paragraph 4.8) ABC advice: It is recommended to investigate the object on legal restrictions before you buy and pay anything in advance. ABC as a real-state expertise can helpful you fulfilling this investigation. (See appendix O)

4.3 Apartments

If you live in an apartment (vertical working) or houses within a site (couple of villas together in a villa park-horizontal working) you are submitted to the Apartment Law. Most of the apartment buildings or sites have common places like a garden, a swimming pool, the roof, stairs which need maintenance. The Apartment Law prescribes what your rights and obligations are as an owner or renter of an apartment.

The Union of Apartment owners Every apartment building with more than 4 floors must set up a union of apartment owners. The union will have at least a president and a vice-president to undertake the necessary actions for the general maintenance of the building and protect the rights of the owners. The union is obliged to have a general meeting once a year. All the decisions of the general meeting have to be written in the decision book (karar defteri) of the apartment building. The decisions will be taken in majority, unless the Law has provided different. For each apartment that you own, you have one vote. However, you may not have more than 1/3 of the votes, no matter how much floors you own. Also renters of an apartment in the building have a vote.

Maintenance man / doorkeeper Most of the buildings have a doorkeeper living in the building who is responsible for the maintenance of the common places of the building, like the elevator, stairs, swimming pool, and garden. The union of apartments is statutory obliged to pay the social security (SSK, see for more details chapter 12) of the doorkeeper.

Contribution payment Due to the services of the doorkeeper, the maintenance of the building as well as the swimming pool or garden or common use of heating, every apartment building has contribution payment. The height of this payment can change from one apartment to another. The Union of Apartments decides the height of the payments every year during the general annual meeting. Not using a common place does not exclude you not to pay the contribution. The Union of Apartment owners have the right to open a debt collecting case to an apartment owner or renter when he does not pay his contribution on time.

4.4 Cooperative society

The aim of building cooperative societies is to develop and build low budget houses with the collective contribution payments in terms for his members. All of the members constitute the general assembly and chooses the board of managers and book controllers. The assembly gathers once in a year in order to take the necessary decisions. Provided that the statutes of the cooperative do not have cohesive restrictions regarding foreigners you can join as a member the cooperative, but bear in mind that a person with a foreign nationality is not allowed (cohesive law) to be elected as a manager or book controller of a cooperative. This can be very annoying when you are confronted with mismanagement. Although it could be attractive to join a cooperative in order to become a house owner, the membership of a cooperative has his disadvantages that you have to be a ware of.


The practice shows that: there are always members in the cooperative that will not pay (on time) their membership

fee/contribution, which will lead to cash flow problems and slowing down of the realization of the buildings;

that the eventual contribution that the member pays is a multiple of the amount which as a lure

is initially represented. The initial money is reflected in Turkish Liras. The most of the members are extremely disillusioned because of the inflation and the mostly slowed down construction and disappearing money because of the mismanagement.

because of the cash flow problems, there are always internal quarrel on the general meeting of

the members

it takes years before the buildings are finished and delivered.

4.5 Payments

We would like to advise you to use a bank account for any payments to third parties in order that you have a piece of small evidence of payment. We recommend also that you transfer the purchase amount to the owner and not to an (real estate) agent and do not forget to mention the specifications of the purchase or the reason of the transfer in details to exclude any misunderstanding.

4.6 Selling real estate

The procedure regarding the selling of a real estate is the same as buying a real estate. The Title of Deed transfer has to be done in front of the land register officer (Title of Deed - Tapu register). According to the current law, the seller of the real estate, who sells his real estate within four years starting from the date of buying, is obliged to pay income tax over the profit that gained from the sell over a limited amount that changes every year. Ask your Municipality about it.

4.7 Renting real estate

You are able to rent a house by making a rent contract with the landlord. Parties are free to agree about the rent conditions, provided that the cohesive provisions of the Turkish Code of Obligation will be taken into account. It is common in practice that parties use the standard contract forms here for, which can be bought at the stationers. It is not allowed to rent a house in the forbidden military zone, unless you have permission there for from the Council of Ministry. If you rent a real estate for a long term it would be advisable to let the agreement registered at the Land Register office (the Tapu office), in order that you are protected to the actions of third parties. To do the registration at the Tapu, you need to have the written consent of the landlord. You have to pay brokerage commission if you rent a real estate through an agent. It is advised to agree (written) brokerage commission in advance. Just some items to remember before singing a rent contract:

Check if the landlord is the property owner according to the Tapu, or has a valid proxy to undersign any rent agreement on behalf of the owner(s);

Think about a notice term if you agree for a longer term than one year. If you do not agree about a notice term you cannot terminate the contract before the end of the contract without paying indemnity;

Be carefully of undersigning any blank document, or early evacuate conditions;


Check if the electricity, water bill and the apartment contribution has been paid by the former renter;

Check with the landlord if the real estate has both of the Iskan (see paragraph%%%%) in order to have subscription for the normal electricity and water in stead of the expensive construction electricity;

Negotiate about the conditions of advance payments, terms of payment, guarantee payments, and embody the conditions in the agreement

Read carefully all other special stipulations of the contract; have an independent translator with you!

ABC notice: ABC CONSULTANCY as real-estate expert can guide and stand you by every kind of agreements. (See appendix O)

4.8 Electricity & waterAccording to the new regulation that has been put into force in January 2005 it is not possible anymore to obtain water and electricity subscriptions for your house without that the real estate has an individual ISKAN (living permit). With this new regulation the Government strives after to decrease the illegal build real estates. You can obtain the Iskan at the local municipality in whose territory the real estate is located. The supplier of water is the local Municipality. Electricity is being supplied through a local electricity company. If you obtain or rent a new built house, you need besides the water and electricity subscription a connection to your house. The electricity firm or Municipality will charge a small amount for this connection. The most of the existing buildings have already a subscription for the public supplies. In this situation it is imported to control if the former house owner/ renter have paid his bills or not. Electricity, water and telephone bill will be invoiced per month. You can pay the invoice directly in cash to the supplier or through a bank assignment. If you do not pay the bill on time, the subscription of the public supplies will be disconnected immediately. The interest of a delayed invoice is very high. It is advisable to register public supplies such as water and electricity on the name of the renter.


5 Consumer Protection Rights

As a foreigner you have the same consumer protection rights as any other Turkish citizen. The Consumer Protection Law is applicable to any kind of movable goods (like jewelry, carpets, cars) that has been bought to consume it. This chapter describes in headlines the rights and obligations of a consumer regarding bad bargains, and defect products, and what kind of actions he can undertake.

5.1 Rights and Limitations

You are able as consumer to return your purchase within 30 days without giving any reason of returning to the seller (manufacturer or producer or supplier or agency or importer) provided that you did not use the product and you have the receipt. The seller is obliged to return the purchase amount. He cannot restrict this 30 day right, even not with signs or notice boards hanged in his shop telling no money return. Depending on the existence of a guarantee agreement you are able to bring your defect product after 30 days. Most of the electrical products have a guarantee document (the agreement) inside the package. It is very important to let these guarantee documents undersigned by your seller during or after the purchase. Restricted to the circumstances of the defect product the Law provides different kind of rights like the reparation of the defect, change the defect product with a non-defect one or even restitute the purchase amount, provided that you did not exceed the term of limitations mentioned in the Law. The term of limitations various from one till three years. For example: If the defect product has been several times in reparation for the same problem for at least 30 days in total, the seller is obliged to change it with a new one or to return the purchase amount to you. You are able to ask for indemnity of the manufacturer-producer, if you have damages caused by the defect product. Naturally the Law is not applicable to your situation, if you knew of the defect of the product.

5.2 Complaint and Appeal

You are able to take legal steps by applying to the Consumer Courts of Justice (or the Court of Commerce) provided that the value of the case exceeds the amount of 500 YTL. There are no legal costs charged for opening such a case. Besides the Consumer Courts of Justice you have the possibility to make a complaint or put a claim to the Consumer Protection Commission regarding your bad bargain or defect product. All cases beneath the 500YTL are under the competence of this Commission. These Commissions have been set up to investigate every kind of issues concerning defect products. You will find in all most every city with a Chamber of Commerce a Consumer Protection Commission. The decisions of the Commission are binding upon parties.


6 Customs Duties Head rule: Shipping of household goods and personal effects into Turkey is subject of customs regulations. All goods that enter Turkey have to be declared, unless you are official personnel of foreign government or personnel for specific duties based on mutual international agreements. They are exempt of the customs duties. You may enjoy this privilege likewise on condition that you stay for a minimum of two years. Household goods imported in this way must be owned by the expatriate and have been in possession for at least six months. Some goods are exempted from customs duties, like goods with a total value of under 100 euro, used household belongings of individuals, dowry of individuals by marrying a Turkish resident, personal goods acquired by inheritance, scholastic materials of foreign students coming to Turkey to study, motor vehicles or vehicles used for private road transportation, which are not more than three years old at the date of their purchase, and owned by individuals who have transferred their legal residence to the Customs Territory of Turkey. It is illegal to export antiquities and the penalty for this can be severe. Real antiquities may only be exported with a certificate from the Museum Directorate. It is advisable to check on this point before exporting any antique carpets or similar items which may be apprehended as antiquities at customs. A certificate may be obtained for certain items, e.g. imitations, confirming that they are not antique and in any case a receipt should be obtained from the seller.

ABC Advise: The Turkish customs legislation is complicated and subject to frequent changes. It is therefore advisable to employ a customs agent at the boarder or employ an international operating removable firms or contractors for bringing in your household goods.


7 Cars

This chapter is about buying, selling, importing cars and herewith other related issues. The term car implies automobiles, trailers and caravans that are attached to automobiles and jeeps.

7.1 Import of cars

You are allowed to bring in your private car into Turkey temporarily without paying any customs or import taxes. Land, sea and air transport vehicles other than automobiles, minibuses caravans and motorcycles are subject to normal import procedures on condition that a foreign exchange permit is presented and the usual customs duties and charges are levied. In order to benefit from the temporary exemption regime you should give a guarantee to obtain a Temporary Drivers License no II (triptique) from TURING; the Turkish Touring and Automobile Union which institution makes import of cars possible (See www.turing.org.tr).

The car with the foreign registration plate will be registered in your passport for the period of your stay in accordance of your visa. During this period you can leave the country (for example to the Greek islands) under the condition that you leave the car behind at the nearest Customs or take it with you. You will be subject to severe money penalties if you do not take out the car out of the country before your visa exceeds. The blue license plate

It is also possible that you bring in your car into Turkey in order to obtain a blue license plate (a Turkish registration plate), although the color of the plate is no longer blue. You are able to apply for a Turkish registration plate (the so called MA/MZ plate) at the TURING under the fulfillment of some conditions, like having a working permit, paying deposit or giving a bank guarantee letter. The deposit amount depends on what kind of mark the car has and which year the car is built.

Working persons Foreigners with a working permit are able to import their car tax free, under the provision that a bank guarantee or deposit has been paid. This payment will be refund back to them when they take the car out of the country again.

Retired persons As a non-employed person you are able to import a car tax free under the condition that you have a living permit and fulfilled other conditions like paying the deposit of the car. This sum will be refund to you when you take the car out of the country. You should consider the fact that you are obliged to leave the car at the Customs when you leave Turkey. This can be very annoying in practice.

Students Also student can import their personal car into Turkey tax free under the condition that they pay the bank guarantee or deposit, which will be returned back to them when they leave the country with the car again. Also in this situation, the car has to be left at the Customs when the person leaves Turkey for traveling.

7.2 Buying Cars

New car If you do not import a car, you still have the possibility to buy a car at a car dealer with or without paying tax. In both of the situation the car dealer will handle with the necessary bureaucracy at the TURING regarding the transfer of the car on your name and the blue license plate.


Second hand car If you buy a secondhand car in Turkey you have to conclude a purchase agreement with the seller at a local public notary. This purchase agreement has to be registered at the Vehicle Registration Department of the local Police Centre (the so called Trafik) in order to register the ownership of the car on your name. Every kind of purchase contract without the intervention of a notary is void. Also a secondhand car will have a MA/MZ registration plate. Because of the fact that this second hand car has been bought under the payment of the necessary tax through the former owner, you will not have to deal with TURING.

7.3 Selling Cars

The selling of a blue license plate car (which is imported or bought without tax payment) can only be concluded at the Consulate of the country of which seller is citizen of. Sales transactions concluded at Turkish Consulates are not accepted by TURING. You can sell this kind of cars only to foreigners who do not have any restriction. We like to refer you to the following paragraph. Selling blue license plate car which is imported or bought with the necessary tax payment can be transferred through the local Turkish public notary. This agreement has to be registered at the Vehicle Registration Department of the local Police Centre in order to register the ownership of the car on your name.

7.4 Restrictions of a blue license plate

You should consider the following facts before you buy a car with a MA/MZ registration plate that has been imported or bought without tax payment:

Selling of a MA/MZ registration plate car is only possible to another foreigner;

A Turkish legal entity (company) cannot own a car with a MA/MZ registration plate, even if the shareholders or general manager has a foreign nationality;

Turkish citizens with more nationalities are not allowed to buy or own MA/MZ registration plates;

Foreign nationality married to a Turkish citizen is not allowed to buy or have a MA/MZ

registration plate; Driving a car with a MA/MZ registration plate is restricted to the owner and his nearest family; It

is not allowed to be used by third parties or organizations.

Nowadays it is not possible anymore to give someone else a power of attorney to sell your car; you are obliged to sell it yourself or to deliver it to the Customs.

The selling of the car can only be done at the Consulate of the country that you are citizen of.

7.5 Renting a car

The procedure of renting a car in Turkey will be similar to any other renting procedure in West-European countries. Some ABC reminders regarding renting a car in Turkey:


Hire a car from a known Rent a car company and conclude always a written renting contract about all the issues that you have agreed with the renter. Even if you make any deals through the internet.

Check the car for any existing damages before you rent it. If there are any damages have them

noted in the agreement. This will prevent you to be liable for existing damages. Verify the current dealer regarding the speed limit possibilities on the Turkish highways.

Be sure that the car has all risk insurance for both of the parties. Every Rent a car company

operates with different insurance policies. Keep in mind to read the small letters!

7.6 Car Insurances

Third Party InsuranceAccording to the Traffic law every car owner is obliged to conclude a legally Third Party Insurance. This insurance will only cover the damages of the third-party which has been caused by your car. Not concluding Third party Insurance will be punished by money-fines. Casco InsuranceThe Casco insurance is a voluntary insurance that you can conclude with any assurance company in Turkey. The insurance policies and also the rates can vary form company to company. It is advisable to ask different assurance companies for proposals. Some insurance policies have limited their insurance payments to the driver and his family. The insurance companies do not refund any insured sum when the incident has been caused by another person than the driver! ABC Reminder: Read the small letters carefully before you undersign any insurance policy and especially not if it is not in your own language

7.7 Other Issues Driving License RequirementsYou must have an international driving license in order to drive a vehicle in Turkey. Such licenses are issued on the basis of bilateral or multilateral international agreements. Drunk DrivingAny driver, found guilty of driving under the influence of drugs or alcohol, may lose his driving license immediately. The penalty involved for driving under the influence of alcohol may vary from revoking the license till prison sentence. Being involved in a car accident under influence of alcohol or drugs will also be effective on the refunding of your insurance sum. Even if you are not drunk, but you are involved in an accident or incident (like robbery), you have to have an official report from the authorities and alcohol report in order to apply to your insurance company. Car accidents, Theft or DamageNever under absolutely no condition move the car from in the event of an accident. The police will not make an official report when the car is moved. Statements will be taken from the parties. As this report can be important in any future court case, it may be advisable to have a lawyer present while it is prepared. It is also required for any claims for repair under insurance.

Within the borders of the Municipality the Traffic Police (154) is competent to make an official report. Outside the borders of the municipality the Gendarme is the competent authority (156). The parties who


are involved with the car accident may not leave the place of the accident, without the permission of the authorities. All such incidents must be properly recorded so that entries in the passport of the owner of the car can be cancelled in order to allow him to leave the country. Cars that are determined by the customs offices to have been damaged in an accident or cars that require maintenance in order to leave the country are delivered to a repair garage approved by the Customs for a reasonable period for repair which must be documented. The owner of the car or the item that has been stolen during the period of stay in Turkey is not required to pay tax on the stolen car/item, and the guarantee on the car/item is cancelled.


8 Bank & Finance Opening a Bank account Individuals and legal entities may open fixed term deposit and demand deposit bank accounts in Turkish Lira at Turkish banks. Fixed deposit accounts earn interest. You need to obtain a tax number at the local Tax office before you can apply for a bank account. For opening a bank account on behalf of a company, you need to submit the name and official signatures of the manager who is officially the representative of the company. Other entity documents and authorizations will be required. Credit cards and cheques The Turkish banking legislation has no general rules on credit card issues. Therefore many Turkish banks apply different rules for issuing credit card and cheques, like residence permit, work permit, signature of a guarantor. (See appendix G and H for banks in Turkey and abroad) Money transfers You have to use a SWIFT or an IBAN (International Bank Account Number) in order to transfer money from one account to another. IBAN is the standard for the bank account number of the beneficiary in cross-border payments. The IBAN contributes for a faster processing of the payments and give efficiency advantages to companies and banks. The constituent and his bank can control in a simple way if the account number of the beneficiary is correct, irrespective of the country. The indication of the IBAN in foreign country tasks, and moreover the BIC (Bank Identifier Code) of the bank of the beneficiary is also obliges keen in a regulation of the European Association. Both data has to be mentioned on invoices which are sent to the border. Turkey has inserted the IBAN in 2004, and put into force in 2005. Still today the SWIFT transfer is an often used system in Turkey. You can ask your personal Swift or IBAN number at your bank. Limitations There are no limitations regarding the amount of transfers from one country to another, provided that you have fulfilled tax regulations, like income tax, company tax, etc. Internet possibilities Most of the Turkish banks have nowadays possibilities of internet banking. Ask the details and the possibilities before you open a bank account.


9 Marriage & Family issues The name of the heading tells you enough about the content of this chapter.

9.1 Marriage

The conditions of marriage are depending on the joint national Law of parties to be married. If parties do not have joint nationalities the applicable law is the law of the joint land where in they domicile. However, even if this rule is not applicable the Turkish law will be applied. The Turkish process Law is applicable regarding the solemnization (execution) of the marriage. Application It is possible as foreigner to marry in Turkey in front of the Civil servant of the Municipality, provided that you have the necessary papers with you. The following documents will be requested for the solemnization of the marriage of a foreigner:

Document of your own country that you are able to marry, provided with an Apostille stamp A birth certificate, provided with an Apostille stamp; Certified translation of your passport; 4 passport photographs; A blood test and a detailed health report.

It is advisable to let you informed beforehand at the Municipality regarding the requested documents. After the solemnization of the marriage you will obtain a certificate. The General Consulates Due to international agreements the solemnization of a marriage at the Consulates is valid.

9.2 Consummation of Marriage

This paragraph is important for those of you who are married to a Turkish spouse, even if you have married out side the borders of Turkey. Do not take for granted that the goods (like real estate, bank accounts, companies, etc) are joined possession. De current Law regarding consummation of marriage is in force since January 2002. The former law is also in force for the marriages and the gained goods / properties before this date. Situation before 1 January 2002 All Turkish parties who are married before 2002 are married under the separate estate arrangementunless the spouses concluded a different marriage settlement in front of the Notary, like marrying under equal terms.

Situation after 1 January 2002 According to the current law you will be married to the regime of gained property during the marriage. This means that goods which has been gained before marriage, goods from inheritance, or goods not obtained through labor will not be in community of property. Marriage settlement at the Notary You may conclude before or during your marriage a different marriage settlement with your spouse at the local Public Notary in order to not to be married according to the statutory regime of gained properties. You have the following possibilities:


- Separate estate arrangement; there is no shared community of goods. The goods have one owner. - Partial community of property; in this settlement parties divide some goods to be shared (like a car, house, bank account) from other goods. - Community of goods; you are married in equal terms, the goods before or after the marriage are shared. If you do not have a separate agreement signed at the Notary you are married

9.3 Divorcement

According to the International Private Law, the conditions of divorce are depending on the joint national Law of parties. If parties do not have joint nationalities the applicable law is the law of the joint land in which they domicile. In the end, if this rule is not applicable the Turkish law will be applied. The divorce case has to be opened by putting a request at the Family Court (or in the absence of the Family Court at the Asliye Court) of the municipality where the respondent domicile or you both have domiciled in the past 6 months. You have to state a reason of divorce and proof it with evidence like documents, pictures, statements of evidence, etc. The most common reason of divorcement is that the marriage has been broken down irretrievably. It is also possible that, provided that you have been married for at least one year, you agree on the terms of divorcement. Matters like children, alimony, sharing of the common goods have to be settled unanimously. Children and Guardianship During the divorcement the custody of children under the age of 18 has to be settled. The judge will place a child under one of the parents guardianship if parents do not agree unanimously about it. In practice, the custody of children under the age of 7 will be given to the mother. The judge will decide a visit settlement in favor of the other parent who does not have the guardianship over the children. Also grandparents may request a visit settlement in favor of them to see their grandchildren. Alimony regarding children The height of the monthly alimony regarding the children is depending on the expenses of the children, like education costs, maintenance, clothing, vacation, etc. The alimony regarding children ends with the majority of the child, unless the child claims that the alimony should be carried on due to his education. Alimony regarding wife/husband During or even before the divorce case the judge may decide for alimony pendente lite for the party who is living in poverty. The alimony for the wife/husband is depending on the cost of maintenance and living of the wife/husband after the divorce. The monthly income, financial situation, social level of partners, social structure and work capacity of partners will be taken into account by determining of the height of the alimony. The height of this alimony can be changed by a decision of the court due to change of the financial situation of the parties. You will lose your right on the alimony if you remarry someone else. Indemnity You are able to ask indemnity due to your loss during the divorcement or even within one year after the decision of a divorce. It is depending on judges judicial notice if he decides in your favor or not. There are two kind of indemnity claims; material and immaterial claims. Material claims are claims regarding goods, bank accounts, used dowry money, etc. Immaterial claims are claims like deep grief and misery that you have suffered or endured during your marriage, missing your vocation because of the marriage, etc.


Enforcement of the Turkish decision The Turkish divorcement decision has to be executed in your own country according to domestic law of your country. The Turkish decision has to bear an Apostille stamp before you can execute in your own country. We like to refer you to chapter 10 about Apostille stamps.

9.4 Family Protection law

Since 1998 family members, (the spouse, children or other relatives who are living under one roof) are protected against marital violation by the Law of 4320. In accordance of a complaint to the Public Prosecutor of one of the members of the family, the judge can take the necessary decisions and provision to protect the family members who suffer from the violation, under review of the circumstances of the case. The most used provision is to banish the person from the house who harms the family (members) or goods. The decision and provisions of the judge will be carried out by the Police under the supervision of the Public Prosecutor. The judge can also decide provisionally alimony for the maintenance of the family.

9.5 Other Issues related to Children

Adoption You are able to apply to the Court to adopt a child in Turkey under the fulfillment of the following conditions:

The couple has to be married for at least five years or being older than 30 years; The unmarried person, can adopt a child under the condition that he/she is older than 30 years; The age difference between the adopted child and the adopted person has to be at least 18

years; The adopted child has to be maintained (education, health, living) by the person(s) who is/are

going to adopt him for one year; You need to have the allowance of the parents of the child, stated in front of the court.

Besides these statutory conditions the judge will take the adoption regulations of the national Law of the foreign petitioners in account for his judicial notice. Further more matters like the reasons of adopting, the social status, financial situation, health and the marital situation of the petitioners will be investigated by the judge.

Children born of wedlock A child born of wedlock must be registered by the parents at the Registrar of Population (the Municipality) on the place where the parents domicile or where the marriage has been executed. Children born of wedlock have the same statutory rights as children born during a marriage. Not registering the child to the Registrar does not mean that the child will not be subject to the same provisions of a child who is born during a marriage. The law of inheritance will also be applied to children born of wedlock who are accepted (recognized) by the father or by a decision of the court as family.


10 General Legal Advice

Apostille stamp Every kind of foreign document to be used at the Court has to bear an Apostille stamp. An Apostille stamp is an international stamp given under the provisions of an international agreement between the countries, to accept the foreign document in the domestic Law without questioning the content of the document. The foreign document with the Apostille stamp has to be translated certified and notarized before use. The institution that provides the Apostille stamp varies from one country to another. In the most countries the administration of the Civil Court is providing the Apostille stamp. Also in Turkey Court decisions will be Apostilled by the administration of the Civil Court. Apostille stamp for other documents than court decisions can be provided by the department of the Province. Interrogation For an official to question you as an accused person, a summons to provide a statement must be sent. To prevent this summons from being ignored, the request can be given as a court order. During the statement, your identification will be verified by the clerk and you will be told of what you are being accused of. The accusation must be made very clear. Anyone who has to give a statement before an officer, public prosecutor or judge has the right to a lawyer of his own choice. If you have a lawyer, the lawyer must be present when you give your statement. As a part of your defense right you have the right to see any statement of the prosecutor. If you do not have a lawyer, you may ask to have one appointed by the Bar Association. Furthermore, you have the opportunity to give your statement to your lawyer personally and privately, before you are questioned. The lawyer should be present throughout the questioning. An accused person has the right to remain silent, and the police or Prosecutor who is questioning him is obliged to inform the accused of this. You may also ask for a translator if you do not speak Turkish. To lodge a complaint You are able to lodge a complaint against a person to the nearest police department or directly to the public prosecutor. The public prosecutor must investigate the circumstances of the claim in order to determine if there is a justifiable complaint or not. If there is a justifiable complaint the accused person will be interrogate and if necessary a prosecution will be started against him. Some prosecutions (crimes) are related to a complaint other are not. Prosecution connected with a complaint may be withdrawn by the complainant in order that the prosecution will be withdrawn in the same time.


11 Law of Succession The national law of succession of the deceased foreigner is applicable on the goods of the deceased foreigner in Turkey, with the exception of real estates. Real estates are in the exclusive competence of the Turkish Law. The Turkish Process Law is applicable regarding the decedents assets, the valuation of probate, etc. It is advisable to seek professional advice to support you in your inheritance and the necessary procedure in Turkey. International aspects, the consummation of marriage, underwritten testaments abroad may change the right of succession of parties! International Procedure According to the Law you, as a heir need a decision of any local court that you are the lawful heir of the deceased one. To open this request you need to have a certification of the death, a decision of the court of your own country that you are the lawful heir of the deceased person. It is possible that you even have a testament drawn up in your country. All the documents that you bring from your country have to bear an Apostille stamp. You need to translate the documents certified before you can use them at the court. (See chapter 10 for Apostille stamp) With the juridical decision of the Court, you are able to transfer the goods on your name according to the succession right given by the decision. The Rule Head Rule: According to the Turkish Succession Law the behind left spouse will heir part of the good, the child/children together part of the good. If there are no children, the behind left spouse will heir with the parents in law or when there are no parents in law with other family members in first degree of the deceased person. The Hereditary portion (legal share) The hereditary portion of the children is the half of their lawful right of succession. The lawful right of succession of the spouse cannot be deprived by the testator. The hereditary portion of the spouse is the total of the lawful right of succession. Real estate inheritance In case of a real estate inheritance, Turkish Succession Law will be applied to the real estate of the foreign testator/testatrix, unless parties have a written testament. Before you transfer the real estate on your name as heir/heiress you must pay the necessary succession tax to the tax office that the Land Registry Office (TAPU office) has shown you. The tax office will calculate the amount of the succession tax, according to the value of the real estate, provided that the value of the good has exceeded the threshold amount, which limit is subject to change every year. The value of the real estate will be given by the Municipality (See chapter 14 regarding tax and www.tkgm.gov.tr

Shares of a Capital company Also during the transfer of the shares of the company the heirs will pay succession tax above a ceiling value of the shares, determined by the government. Cars You will also deal with succession tax regarding motorized vehicles. The registration will be done at the local Police Department of the city where in the car was registered. Testament - The Will International testaments are valid in Turkey provided that they have been concluded in accordance to the National Law of the foreigner.


As a foreigner you may also make your own will in Turkey, provided that the will is made according to the Turkish Law. You can make your will in front of a public Notary or make a handwritten will left in custody to the Notary or to the Court. A will made in front of the Notary without two witnesses is void!


12 Labor relations & Social security

This chapter contents information concerning issues about labor. Foreigners are prohibited from some occupations in Turkey, although the legislation has been relaxed in 2003. Further more how the social security and the BaM-kur are regulated and what the labor law contains. All this is readable in this chapter.

12.1 Working employee

Nowadays it is possible that you can exercise more occupations in Turkey. The last modifications were in 6 September 2003. At the moment the following occupations are prohibited for foreigners:

State employees Law Medicine, permission may be granted to foreign medical doctors, under Law No. 3359 Dentistry Pharmacy Nursing Public notary Salvaging Wrecks from the sea Diving Fishing Piloting Being the captain of a ship, or sailors

However, under the current foreign capital legislation, properly approved projects and investments will not be subject to the restrictions described above. Similarly, certain exceptions have been introduced in the form of tourism incentives.

12.2 Social security SSK - BaGkurThe contribution payments to the governmental Social Security institutions (the SSK and BaMkur) are regarding health insurance payments and retirement benefits. These payments do not secure you for unemployment or for not worked days during an illness. SSK Your social security contribution has to be paid by your employer if you work legally as employee. You may qualify for an exemption if there is an international social security treaty between the two countries, prevented that your social security contributions are being paid in your own country. The applications to take advantage of this exemption can be done to the Social Security Directorate in Ankara. (See appendix D for the countries with a reciprocity agreement for the social security) Ba8-kur If you work as an independent employer you are obliged to pay your own social security contribution to the Bagkur. The payment of the contribution is compulsory, even if you have private health security insurance. The compulsory situations are:

the day of the start of your obligations if you have the obligation of incomes tax because of a commercial or self-employment;


the day of the establishment of the company if you are the organizer of a registered partnership, limited partnership, partnership partially limited by shares and joint stock companies, and from the day of that you are chosen to the board if you are the member of the board of a joint stock company;

the day of that you are registered in the craftsmen and artisans registrar servant if you are

exempt of the income tax and if your tax registration can not be find.

12.3 Labor laws Employment contract According to the Law parties are free to undergo an employment contract for a short or long term. The contract can impose a penalty clause provided that it is made in proportion for both sides.

Notification period for termination of contract The statutory provisions of the Labor Law are valid and compulsory, if parties did not agree a notification period by contract in favor of the parties. The statutory notification period is depending on the time of working legally for the employer. In practice, an employer may terminate an employment contract at any time by the notice period entitlement, without any reason, provided that the rights of the employer has been paid, like vacation, overwork hours, etc. The Labor Law has described some situations (like employing more than 30 personnel) where he must give a reason of termination of the contract. Annual vacation An employee has just after one year of employment vacation right of 14 days. The annual vacation periods are the statutory minimum limits and may be increased by parties. If the employment contract is terminated either by you or by the employer, the vacation entitlement in proportion has to be paid by the employer. (See http://www.abc-consultancy.com/english/labour_law .php)


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PART II DOING BUSINESS IN TURKEY

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13 Doing Business

In this chapter is described which business entities there are, how the social security is arranged, and how the businesses are implemented. Almost all sectors of the economy open to private domestic investors are also open to foreign participation. However some operational sectors have restrictions for the foreign investor, like broadcasting, aviation, maritime, transportation, petroleum, and mining with the aim of ensuring national security, public order and health, professional standards. Foreign direct investment regime of Turkey is mainly formulated by the Law No. 6224 of 1954 Concerning the Encouragement of Foreign capital, which is based on the principle of equal treatment for domestic and foreign investors. (See appendix I for a list of trade commissions and businessman association)

The most usual company kinds are capital stock companies. A capital stock company gets his power and reputation by his capital. Obtaining reputation by third persons, a good management and the form of the capital are important issues. The responsibility of the partners towards third persons is depending on how much capital they have invested in the company. There are two kinds of capital stock companies:

Limited Liability companies Joint stock companies

13.1 Limited liability companies (LTD.)

A limited liability company is a company that can be established by at least two (a maximum of 50) legal or natural entities under a trade name. The shareholders responsibility is restricted with the subscribed capital of the company. The minimum capital has to be 5.000 YTL. All partners are personally liable for the debts of the company up to a maximum for their contribution, however, partners are not held liable for the unpaid portions of the capital contributions of other partners. They are also directly exposed to the tax liabilities of the company, limited however, to their own shares. The capital of a limited liability company is not divided into shares of stock nor represented by share certificates. There is no board of directors for a limited company. The appointed manager has the general authority to run the company. The manager may be a shareholder or an outsider. Every shareholder has votes equal to his shares, but every decision has also to be taken with majority in person. The decisions in a Limited Liability Company with two shareholders have to be taken unanimously! The regulations of a joint Stock company will be applied to the Limited Liability Company with more than 20 members.

13.2 Joint Stock (A.S.)

A joint stock company is defined as a corporation having its own trade name and a predetermined amount of capital divided into shares. A joint stock company can be established with at least five


shareholders, who may be either real persons or legal entities. The capital stock must be a minimum of 50.000 YTL. The liability of the shareholder is limited to his capital. The structure and organization of joint stock companies are subject to regulation by the Turkish Commercial Code. The Joint Stock Company has a General Assembly and a Board of Directors and some times even a Board of (daily) Managers. The General Board of a joint stock company meets at normal and urgent cases. In normal circumstances the meeting has to take place within three months after every fiscal period and at least ones a year. A couple of times in a year the profits of a joint stock company will be spread, every time this happens there have to be a general board meeting. The majority of the votes count. One share is one right to vote. The founders of joint stock companies are afforded significant flexibility in drafting the articles of association, thereby serving the needs of the specific venture. Capital market Board regulations also apply to joint stock companies whose shareholders number is at least 250, or who have issued bonds or whose shares are quoted on the Istanbul Stock Exchange.

13.3 Other business entities

Besides the capital stock companies there are also other kinds. Those are de

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