Turkish Law Blog
The Recent Changes in the Turkish Foreign Direct Investment Regulations
Transition to the Electronic System and Application Procedures
The Regulation to make Amendment to the Regulation for Implementation of the Foreign Direct Investment Law (‘the Regulation’) has been published in the Official Gazette on 1 June 2018. The Ministry of Trade (‘the Ministry’) aims to digitally receive the forms that required to be filled rather than on paper form. This article looks into the primary alterations that were made on the Regulation for Implementation of the Foreign Direct Investment Law (‘the Primary Regulation’).
The Regulation places new definitions for the following new terms, respectively, `electronic signature`, `electronic signature regulations’, ‘electronic certificate service providers’, ‘electronic incentive implementation and foreign investment Information System (E-TUYS)’, ‘User’, ‘qualified electronic certificate’. The Regulation allows the firms and branches within the scope of the Foreign Direct Investment Law (‘the Law’) to login to the E-TUYS via the qualified electronic certificate holder users that they authorised, and they are required to fill and save the information electronically in the ‘Investor’, ‘Shareholder List’ and ‘Subsidiaries’ sections. The firms and branches must submit their activities annually through E-TUYS.
According to the altered article 5 of the Primary Regulation, the firms and branches that are within the scope of the Law must update the relevant sections of E-TUYS within one month in the following circumstances;
- If there is an increase or a decrease in the capital amount;
- If a payment made due to the capital increase or share transfer;
- If the current domestic or foreign shareholders made a share transfer between each other or to any domestic or foreign investor that is out of the firm.
The firms that have full domestic investment and that are out of the scope of the Law must fill and submit the information under the ‘Investor’, ‘Shareholder List’ and ‘Subsidiaries’ sections within one month beginning from the date the share transfer took place in the following circumstances;
- If a foreign investor participated in the firm, or;
- If a share transfer takes place in favour of a foreign investor who is out of the firm by way of participating to the firm’s capital increase, and the firm enters into the scope of the Foreign Direct Investment Law.
The new article 9 of the Primary Regulation provides that the users must obtain a qualified electronic certificate to use E-TUYS. The firms must submit an authorisation application to use this system. The following documents are required to submit the application;
- The application form that is signed by the person or persons who is/are authorised to represent the firms and branches that are within the scope of the Law;
- The original or a notary public approved a copy of the signatory circular which is issued for the person or persons who is/are authorised to represent the firms and branches within the scope of the Law;
- The original Turkish letters of undertaking that are issued by a notary public for each user separately, and that is signed by the person or persons who is/are authorised to represent the firms and branches within the scope of the Law; and
- User Authorisation Form that is signed by the person or persons who is/are authorised to represent the firms and branches within the scope of the Law.
The General Directorate of Incentive Implementation and Foreign Investment (‘the General Directorate’) sends an email stating the result of the authorisation application to the email address that was declared by the user.
EXTENSION OF AUTHORISATION TERM
The authority of the user is limited to the term that is stated in the letter of undertaking. The extension application of the authorisation term must be made separately for each user. According to the amended article 12 of the Primary Regulation, new E-TUYS letter of undertaking and user authorisation form must be filled and submitted to the General Directorate. It is not required to submit other documents that are currently valid.
ANNULMENT OF THE AUTHORITY
The user’s authority shall be annulled upon the application to the General Directorate by the firms and branches that are within the scope of the Law. The applicant must submit the dismissal letter issued by a notary public. On the other hand, the user has a right to waive the authority. The Ministry has ex officio power to annul the authority of the qualified electronic certificate holders where juridical capacity is limited, absence, death or loss of firms’ and branches’ legal status that are within the scope of the Law and in other circumstances where necessary.
The Ministry accepts applications regarding the firms and branches that are within the scope of the Law via electronic system as of 1 June 2018. E-TUYS is now must be used by the foreign companies in Turkey. The new system allows users to manage the process rapidly, make applications and change the company/branch details online where it helps the government officials to keep digital records rather than on paper forms. The following link provides the full text of the Regulation: http://www.resmigazete.gov.tr/eskiler/2018/06/20180601-1.html