THE REPUBLIC OF TURKEY PRIME MINISTRY Investment Support ... · Why invest in Turkey? Turkish...
Transcript of THE REPUBLIC OF TURKEY PRIME MINISTRY Investment Support ... · Why invest in Turkey? Turkish...
THE REPUBLIC OF TURKEY PRIME MINISTRY
Investment Support and Promotion Agency of Turkey (ISPAT)
The Investment Climate and the Mining Sector in Turkey
M. İlker Aycı, President of ISPAT
March 4, 2013 PDAC, Canada
ANKARA ISTANBUL
The Republic of Turkey Prime Ministry Investment Support and Promotion Agency
• Attached to the Prime Ministry and • Reports directly to the Prime Minister
• 2 offices (Ankara – Istanbul)
• 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
• Confidential, Free of Charge
2
The International Network
ISPAT
3
Dynamic, Stable & Attractive Economy
Strong Domestic Market
International Hub to Access Multiple Markets
Investment Friendly Business Environment
Why invest in Turkey?
4
Source: IMF World Economic Outlook, April 2012;
5,2
4,8 4,7 4,6 4,5
3,9 3,8 3,7 3,6 3,5
3,4
2,3
1,5
1
2
3
4
5
6
Average Annual Real GDP Growth (%) 2002-2011
5
774
514
448
408
279 248 239
215 190
165 140
96
54
0
100
200
300
400
500
600
700
800
2011 GDP (Current Prices, $Billion)
Booming economy reaching $774 billion in 2011 up from $230 billion in 2002
Why invest in Turkey?
Source: IMF World Economic Outlook, April 2012
Fastest growing economy in Europe
6
9,2
7,5
6,3 6,2
5,5
4,3 4,2 3,9
2,7
1,3
0,4
8,5
2,7
3,6
6,5
4,0 4,3
3,3
4,4
1,7 1,7 1,7
0
1
2
3
4
5
6
7
8
9
10
Tu
rkey
Brazil
Ko
rea
In
don
es
ia
Mexic
o
Ru
ssia
Slo
vakia
Po
lan
d
Czech
Rep
.
Hu
ng
ary
Bu
lgaria
2010 2011
Annual Real GDP Growth (%)
Why invest in Turkey?
Source: OECD Economic Outlook No.91, June 2012
5,2
4,8
3,6 3,6 3,5 3,4 3,3 3,3
2,9 2,8 2,8 2,8 2,7 2,6 2,6 2,5 2,5 2,4 2,3 2,3 2,2 2,2 2,1 2,1 2,1 2,0 1,9 1,9 1,8 1,8 1,7 1,7 1,6 1,4
1,2
0,0
1,0
2,0
3,0
4,0
5,0
6,0
Turk
ey
Chile
Austr
alia
Norw
ay
Mexic
o
Kore
a
Slo
vak R
ep.
Esto
nia
Icela
nd
Luxem
bourg
Pola
nd
Isra
el
US
Irela
nd
Sw
eden
Czech R
ep.
Austr
ia
OECD
Spain
New
Zeala
nd
Hungary
Canada
Fin
land
Sw
itzerland
Denm
ark
Neth
erlands
UK
Italy
Belg
ium
Fra
nce
Gre
ece
Slo
venia
Germ
any
Port
ugal
Japan
7
Average Annual Real GDP Growth (%) Forecast in the OECD Countries 2012-2017
Turkey will be the fastest growing economy among the OECD countries in the near future
Why invest in Turkey?
4h
Strong Domestic Market and an International Hub
Why invest in Turkey?
National Treatment
=
Guarantee of Transfers
Access to Real Estate
International Arbitration Employment of
Expatriates Freedom to Invest
Protection Against Expropriation
The New Commercial Code
Corporate Income Tax
9
Investment Friendly Business Environment with Structural Reforms
Why invest in Turkey?
Global Competitiveness Index
Year Number of Countries
Turkey’s Rank
Turkey’s Rank
(Percentile)
2004 104 66 63,5
2005 117 66 56,4
2006 125 59 47,2
2007 131 54 41,2
2008 134 63 47,0
2009 133 61 45,9
2010 139 61 43,9
2011 142 59 41,5
2012 144 43 29,8
Source: WEF
Structural Reforms: Yielding Results & Increasing Competitiveness
Why invest in Turkey?
Turkish Mining Industry
11 SOURCE: General Directorate of Mineral Research and Exploration
Boron Salts
Marble
Na-Feldspar
Bentonite
Pumice
Perlite
Diatomite
Barite
Chromium
Silver
Gold
Phosphate
Copper
Iron
72,00%
40,00%
19,14%
13,40%
9,74%
8,70%
4,81%
4,73%
1,44%
1,06%
0,67%
0,57%
0,29%
0,03%
Turkey is one of the richest
countries in the world in terms
of minerals.
It possesses the largest
reserves of several minerals.
Mining reserves in Turkey (as a percentage of world reserves)
12 SOURCE: Ministry of Energy, USGS
Turkish Mining Industry
Turkey’s share of world production
Turkish Mining Industry
Foreign trade of major commodities (2011)
Turkey is strong in
exports of
▪ Gold jewelry
▪ Natural stones and cement
Major trade
imbalances in
▪ Coal
▪ Copper
▪ Aluminum
PPI is a composite index that
measures the effects of
government policies on the
investment attractiveness.
SOURCE: Fraser Institute
Turkish Mining Industry
Policy potential index for mining (score out of 100 in 2012)
Turkey is an investment friendly destination for mining companies
0
10
20
30
40
50
60
70
Canada Australia Turkey Brazil South
Africa
Russia Kazakhtan India Zimbabwe
70 65
50
38 35
28 23 21
13
▪ Low sea freight rates in Turkey supported due to availability of excess container capacity on the Turkey – China route
▪ Overall processing cost increase in SA driven by power tariffs
2010 cost comparison USD per metric tonne (real 2011)
2020 cost comparison USD per metric tonne (real 2011)
59 64
25
47
31
21
Mining costs
Processing costs
Royalties
Inland transport
Sea freight
Other
158
4
34
3
194
6
55
2
* Underground mines with ~1 million metric tonne
75 70
36
52
34
18
Mining costs
Processing costs
Royalties
Inland transport
Sea freight
Other
172
5
41
4
241
10
66
2
Turkish Mining Industry
Comparison of Turkish and South African CIF China cost base for comparable mines*
SOURCE: Nithia Capital Resources
2004 2005 2006 2007 2008 2009 2010 2011 2012
138 188
236
318
409
478 537
627 687
Source: Ministry of Economy
Turkey wants to see more companies investing in exploration, exploitation, and refining facilities
Turkish Mining Industry
Number of Companies with Foreign Capital in Mining
NEW INCENTIVE SYSTEM
1. General Incentives 2. Regional Incentives
3. Incentives for large-scale Investments
4. Incentives for Strategic Investments
VAT Exemption
Custom Duty Exemption
VAT Exemption
Custom Duty Exemption
Tax Deduction
Employer’s share for
insurance premium
payment
Land provision
VAT Exemption
Custom Duty Exemption
Tax Deduction
Employer’s share for
insurance premium
payment
Land provision
Interest Support (except
1st and 2nd regions)
VAT Exemption
Custom Duty Exemption
Tax Deduction
Employer’s share for
insurance premium
payment
Land provision
Interest Support
VAT Refund
In the 6th Region: income withholding tax and employee’s share for insurance premium payment
The New Incentive Scheme
17
• V.A.T. Exemption (for the imported and domestically provided Machinery and Equipment)
• Customs Duty Exemption (for the imported Machinery and Equipment)
• Reduced Corporate Income Tax (C.I.T. between %2 - %10)
• Social Security Premium Support (Both Employer’s and Employee’s Share, for 2 – 12 years)
18
• Land Allocation • Interest Support • Income Tax Withholding Allowance • VAT Refund for Construction Expenses • Rates of instruments determined in a
descending rate in 6 regions scaled from the most developed to the least developed regions
The New Incentive Scheme
“Specific Priority Investments” Incentives for Mining Investments in the mining sector can enjoy special privileges, and will be supported by the more attractive instruments of Region V regardless of their location. Strategic Incentives Mining investments can also benefit from stronger supports than other incentives under the “Strategic Incentives” scheme, regardless of the region, provided that they meet the below criteria: • to be made for the production of intermediate and finished
goods with high import dependency and of these goods more than 50% are supplied by imports
• to have a minimum investment amount of TRY 50 million • to create a minimum added-value of 40% • to possess an import value of at least USD 50 million during the
past one year, for goods to be produced
19
The New Incentive Scheme
ON
THANK YOU FOR YOUR
ATTENTION www.invest.gov.tr [email protected]