Istanbul Financial Center Initiative

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Transcript Istanbul Financial Center Initiative

Investment Support and Promotion Agency of Turkey
Istanbul Finance Centre
23 April 2013
Investment Support and
Promotion Agency of Turkey
Global economy, emerging markets & Turkey
 World’s economic centre of gravity is shifting towards emerging markets
 Emerging markets share of the world economy
Twenty years ago less than one third, today they constitute almost half
of the world economy
Turkey to become one of the top 10 economies in the world (and 2nd
in Europe) during 2030-2050.
 Emerging markets contribution to world economic growth
In 2012, they’ve constituted around 80% of the world economic growth
Contribution of US was around 10%, down from 21% in 1980s
Turkey’s growth rates were 9% & 8.5% in 2010 & 2011, respectively and
2.2% in 2012 (year of soft landing).
 FDI into emerging markets
More than half of the global FDI now goes to emerging markets.
In Turkey, more than $122 Bln FDI during 2003-2012 vs. $14.8 Bln
during 1980-2002
Investment Support and
Promotion Agency of Turkey
Istanbul – A very attractive global city
1. Istanbul is the financial heart of Turkey and Turkey is the economic heart of
the region (60 countries within 4 hours of flight from Istanbul)
2. The “coolest” city by Newsweek with more than 10 million tourists per year.
3. An attractive location due to local economy, skilled labour force, advanced IT
infrastructure and strategic location.
4. Istanbul would rank among the top 50 economies had it been an independent
state. In 2025, its GDP will reach around $367 billion at purchasing power
parity (source: PWC)
5. Population of more than 13 million people, half of which is under age 30.
6. Largest concentration of higher education in Turkey with 40 universities.
7. Advanced business and technological infrastructure.
8. At the centre of financial and commercial crossroads; 7 hour time difference
both to Tokyo and New York.
9. Direct access to more than 150 international destinations with Turkish
Investment Support and
Promotion Agency of Turkey
Istanbul – Already home to global companies
GE Healthcare – relocated regional
headquarters to Istanbul from London .
Coca Cola – regional headquarters
in Istanbul covering Russia, Central
Asia, the Middle East and Africa.
Microsoft – regional headquarters
in Istanbul managing operations in 76
International Finance Corporation – Istanbul hosts their first Operations
Center outside of Washington DC. They manage their operations in Central and
Eastern Europe, Southern Europe, Central Asia, the Middle East and North Africa
from their Istanbul base.
GlaxoSmithKline – regional headquarters recently moving to Istanbul from
Dubai managing 30 countries.
UN Agencies – opening regional offices in Istanbul.
Investment Support and
Promotion Agency of Turkey
Istanbul as Financial Centre Project
 Announced in 2009 by the Government.
 Vision: Istanbul shall first become a regional financial centre and ultimately a
global financial centre.
 300 representatives from more than 80 organizations participated in the
 8 working committees were formed; supervised by Deputy Prime Minister Ali
 Legal Infrastructure
 Markets & Instruments
 Taxation
 Regulatory & Supervisory Framework
 Technology
 Infrastructure
 Marketing & Promotion (ISPAT)
 Human Resources
Investment Support and
Promotion Agency of Turkey
Istanbul as Financial Centre Project
 An action plan consisting of 71 items to turn Istanbul into an international
finance centre is being implemented.
 For a copy of The Strategy and Action Plan for Istanbul International Finance
Centre, please go to
Investment Support and
Promotion Agency of Turkey
Istanbul – Fit for an international financial centre
 Increasing FDI inflows to Turkey, particularly to Istanbul, provides lucrative
opportunities for financial investors; $15 Bln during 1980-2002 compared to
$122.7 Bln since 2003. More than 33,000 foreign companies.
 Favourable tax system; corporate tax rate is 20% and strong financial
regulatory and supervisory system.
 Strong banking sector, not a single bank was bailed out during the recent
financial crisis. Capital adequacy ratio close to 18% and banking sector
asset size to GDP is below 100% (Bank loans to GDP 55%); a substantial
growth opportunity. ROE @ 17.9% and NPL @ 2.9% (from 17.6% in 2002).
 New Turkish Commercial Law has taken effect on 1 July 2012, bringing more
transparency how companies operate in Turkey, not limited to listed ones.
 Accession country to the EU and harmonization of Turkish legislation with that
of EU acquis.
 Bilateral treaties promoting cross border investments and preventing double
 One of the well functioning market economies in its region and probably the
largest and most liquid financial markets in the region.
Investment Support and
Promotion Agency of Turkey
Istanbul – Fit for an international financial centre
 Recent developments:
Asset management industry (Law no:6322). Exemption for foreign
funds (based on IM exemption model) as well as venture capital
investment trusts. Total AUM in mutual funds @ around 3% compared
to more than 20% for Brazil, South Korea and South Africa.
New Capital Markets Law and Borsa Istanbul (BIST)
Private Pension System: Public contribution to private pension savings up
to 25% and capped at 25% of annual gross minimum wage.
Insurance System: Regulations to enhance risk management systems to
improve the financial position of the insurance system.
Revenue sharing certificates (Sukuks):
instruments with substantial growth rates.
Tax advantages for Angel Investors: Tax deductions up to 75% of their
Withholding tax: To be reduced for longer maturities and no withholding
tax on equity transactions for mutual funds with assets more than 75%
in equity investments
Investment Support and
Promotion Agency of Turkey
Attached to the Prime Ministry and
Reports directly to the Prime Minister
2 offices (Ankara – Istanbul) and global
coverage in close to 20 countries
Established in 2007
Private sector approach
Multi-lingual, professional and dedicated
project directors, International
representatives network worldwide
Guidance on; Laws, Regulations, Site
Selection, Sectoral Reports, Local Market
Players, Potential Partners
Investment Support and
Promotion Agency of Turkey
Confidential, Free of Charge
Ahmet Iplikci
Senior Advisor, ISPAT UK
E: [email protected]
T: +44 7540 359 215
Investment Support and
Promotion Agency of Turkey