Tariffs and Import Taxes

The introduction of Turkey’s Customs Union with the European Union (EU) in 1996 resulted in substantial revisions to Turkey’s tariff regime. Turkey now applies the EU’s common external tariff for third country (including US) imports, and imposes no duty on nonagricultural items from EU and European Free Trade Association ( E F TA) countries. Turkey eliminated its mass housing fund surcharge on all imports except for some agricultural products . Consistent with its WTO commitments, Turkey maintains high border protection on many agricultural goods and food products. 

Import Licenses

 Turkey requires import licenses for some agricultural commodities, which are issued, based on domestic supplies. The government also re q u i res certification that quality standards are met for importation of human and veterinary drugs and certain foodstuffs. Import certificates are necessary for most products requiring aftersales service, including telecommunications and electro n i c equipment and vehicles. Importers are also required to establish repair facilities in all seven regions of Tu r k e y. Some telecommunications equipment related to radio frequencies require type approvals.

Standardization

Inspection is carried out only for some agricultural products which has mandatory standards in exports/imports. The agricultural products within the scope of the 70 standards are subject to inspection in exports/imports. These inspections are performed by the General Directorate of Standardization for Foreign Trade in compliance to the standards which are parallel to the OECD and ECE standards. Industrial products are also subject to inspection by the Turkish Standards Institute (TSE). 

Import/Export Documentation

Turkish documentation procedures follow the European Union system. All commercial shipments must be accompanied by customs declaration form, a commercial invoice, a certificate of origin and a bill of lading or airway bill, depending on the method of shipment used. 

Temporary Entry

 A material may be temporarily imported to Turkey without duties and tax if it is to be used in the production of a product that is to be exported. Temporary admission of goods intended for re-export in their original is permissible free of import duties and taxes with the approval of the Undersecretariat of Foreign Trade. Books, newspapers, magazines, catalogues, pamphlets, brochures, and similar advertising materials are exempt from customs duty. Samples of no commercial value are admitted duty free. Samples with commercial value may be imported into Turkey under the temporary importation system. 

Labelling/Marking Requirements

All packages, cases, and bales must bear shipping marks, numbers, dimensions and the gross weight of the merchandise. Packages and the bills of lading that are to be shipped through Turkey should be marked “In Transit”.

Prohibited Imports

According to the Turkish Customs Regulations, imports of certain products such as; narcotics, some dyes, gambling machines and equipment, etc. are prohibited. Also, imports in the context of Vienna Convention on Protection of Ozone Layer and its protocols are prohibited. On the other hand some imports are required to have the permission of certain institutions. For example, imports of some petroleum products are required to have the permission of Ministry of Energy and Natural Resources, General Directorate of Petroleum Affairs.

Distribution and Sales Channels

Marketing of most foreign products in Turkey is through foreign suppliers’ agents or distributors. Depending on the location of the products’ consumers/end-users, most distributors have a dealer network throughout the country or in areas where the product is most used. 

Use of Agents / Distributors

Unless a firm’s interests are large enough to warrant opening an office in the country, the most effective means of selling in Turkey is through a local representative. When dealing with government tenders, an agent is an absolute necessity in view of bureaucratic procedures and the language barrier. Under Turkish Law Agency Agreements private contracts between two parties and their stipulation vary according to mutual consent. Agents/distributors are appointed either for the whole country or for specifically designed areas or types of business.

Franchising The Turkish National Franchising Association-Ulusal Franchising Dernegi-(UFRAD) which is a member of International Franchising Association (IFA) acts as a meeting point for franchisers and franchisees. In legal framework, franchising is considered in the same category as foreign investment. The government agency responsible for reviewing foreign franchise transactions is the General Directorate of Foreign Investment of the Undersecretariat of Treasury. Foreign franchise proposals are generally favourably received in view of their potential for employment opportunities, transfer of technology and know-how, and the positive effects of their competition/role modelling on local quality standards. 

Direct Marketing

Especially for those firms whose sales potential is large enough to warrant it, a local affiliate is the best possible way selling to the market without an agent or distributor.

Joint Ventures/Licensing

The government authority in charge of joint ventures/licensing is the U n d e r s e c retariat of Tre a s u ry, General Directorate of Fore i g n Investment. Especially in large urban centres a highly sophisticated infrastructure exists in terms of legal support as well as financial or consultancy services which may be required by potential foreign investors or joint venture partners.

Establishing an Office

Under the Foreign Investment Law, foreigners may invest in Turkey, engage in commercial activities, participate in partnerships, purchase shares, open branch offices, and establish liaison offices. The General Directorate of Foreign Investment (GDFI) of the Undersecretariat of Treasury is responsible for implementing foreign investment regulations. 77 A foreign company is free to choose between a corporation (Anonim fiirket-A.fi.-), private limited company (limited liability company), or branch office in Turkey. The A.fi. form is more suitable for larger projects since corporations can attract a large number of shareholders and are preferred by banks for credit purposes. The limited company form is more convenient for sales and distribution enterprises. Selling Techniques Once a firm appoints an agent, the agent or distributor expects - and should receive- full support with regard to literature, technical i n f o rmation and advertisement material. Possible govern m e n t buyers and potential private sector buyers should re c e i v e catalogues and other literature clearly indicating the name and address of the local agents/distributors. Both agents and, if possible their principals, should periodically visit existing customers. The detailed information can be found on the web site of The Undersecretariat of Treasury http://www.treasury.gov.tr Especially in larger Turkish cities international trade promotional events such as fairs, exhibitions, and seminars are a common method of sales promotion. These fairs are also opportunities for companies to observe the competition since all major foreign and local suppliers participate in such events. 

Advertising and Trade Promotion

Chambers of Commerce and Industry, various associations, and specific sectoral publications serve as potential channels for advertisement. TV commercials or ads in major newspapers are also highly effective.

Sales and Customer Services

Local agents/distributors should have the required service and maintenance ability. Through personal contact the potential customer should be convinced about this ability. It is a further advantage if the firm has established its own office in Turkey and has servicing facilities throughout the country’s major centres. For some of the industrial and consumer products, establishment of a minimum number of service centres is a legal obligation. 

Public Procurement

For the adoption of the principles of tendering contained in the EU acquis, studies related to the amendment of Public Procurement Law No. 2886 are completed and a new law covering the norms of the WTO and the Directives of the EU has been prepared by the Ministry of Public Works and Resettlement, the Ministry of Finance and related institutes and institutions, Within the prospect of harmonisation with the EU acquis, the new law on Public Procurement (No. 4734) is adopted on 04.01.2002 and it is published in Official Journal on 22.01.2002 with a Public Procurement Contracts Law (No. 4735) to replace the former Law on Public procurement No. 2886 of 8 September 1983. In pursuant to Article 53 and Temporary Article 5 of the Public Procurement Law No. 4734 the President and the Members of the Public Procurement Board have been appointed. After the new law being published in the Official Journal, upon a draft law proposal amending certain articles of the mentioned law, certain articles of the Law No. 4734 were amended by the Law No. 4761 on 12.06.2002. By these amendments, the new procurement law has been fully aligned with the international standards, particularly with the EU acquis.

Need for a Local Attorney

English-speaking attorneys specialised in commercial law, investment legislation, joint ventures, corporate law, tax law, bankruptcy law, public finance, banking corporations, criminal law, civil law, patent and trade mark applications and in other areas are available for consultation by business people.