PRESIDENT ERDOĞAN UNVEILS ECONOMIC STABILITY SHIELD PROGRAM - Assolombarda
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ISSUE
NEWSLETTER
74
APRIL’20
PRESIDENT ERDOĞAN UNVEILS
ECONOMIC STABILITY
SHIELD PROGRAM
Page 2
TURKEY IS WELL
14 RULES PREPARED TO WEATHER
TO AVOID POSSIBLE EFFECTS
COVID-19 OF COVID-19 Page 6
Page 4
INDICATORS
PROVE
TURKEY’S
AMAZON RESILIENT
WEB SERVICES ECONOMY Page 7
MAKES
ITS FIRST
ACQUISITION TURKISH
IN TURKEY
GAMING
Page 9 INDUSTRY Page 10
FDI NEWS HIGLIGHTS OF
THE TURKISH
ICT SECTOR
Page 11
Page 12
NEWSLETTER April’20 NEWSLETTER April’20
PRESIDENT
ERDOĞAN
UNVEILS
ECONOMIC
STABILITY CREDIT
SUPPORTS
The Credit Guarantee Fund limit
will be increased from TRY 25
SHIELD
billion to TRY 50 billion. Loan
priority will be channeled to
companies and SMEs that need liquidity
Principal and interest rate and that are showing a collateral deficit
PROGRAM
payments of companies having due to the negative effects of recent
cash flow problems due to developments.
COVID-19 outbreak precautions
will be postponed for a minimum of 3 Social credit packages will be
Message Amid the global COVID-19 pandemic, Turkey months. Additional financial support will be incentivized under the most
increased all its efforts to combat the economic effects available if required. favorable and advantageous
conditions for citizens.
from the
of the virus by unveiling further stimulus packages.
President Recep Tayyip Erdoğan unveiled a TRY 100 Inventory financing support The mortgageable amount for
Investment billion Economic Stability Shield Program that includes will be available for exporters houses under TRY 500,000 will be
incentives mainly on tax, credits, and labor related in order to protect capacity raised from 80% to 90%, meaning
utilization rates.
Office
topics. the minimum down payment has
been reduced to 10%.
As a global investment hub,
Turkey has been managing
TAX INCENTIVES Principal and interest rate
payments of artisans and
Companies that default in
April, May, or June due to the
measures taken against the
the COVID-19 situation since craftsmen to Halkbank for
Tax declaration, VAT discount, and April, May, and June will be spread of the virus will have
its inception. Policymakers,
social security payments for April, postponed for a period of 3 a “force majeure” note on their credit
regulators, and all economic
May, and June have been postponed months free of interest. record.
authorities are vigilantly
following the developments for a period of 6 months in the
and are taking all necessary following sectors: retail, iron & steel, automotive,
measures to reassure the logistics, transportation, cinema & theater,
LABOR INCENTIVES
markets. accommodation, food & beverage, textile, and
event organization.
In this vein, President
Recep Tayyip Erdoğan has
recently unveiled a TRY 100 Accommodation tax will be delayed Minimum wage support will The Ministry of Family, Labor,
billion-Economic Stability until November. continue. and Social Services will provide
Shield Program as part of financial support of TRY 2
the stimulus plan to mitigate billion for needy families.
the effects of COVID-19 on The easement rights and revenue share
our economy and to ensure payments related to hotel rentals for Flexible and remote working The 2-month compensation
stability in economic activity. April, May, and June were postponed models will be utilized to allow working period will be
for a period of 6 months. for operations to continue increased to 4 months to
As always, the Investment efficiently. provide sustainability in
Office is at your service during employment.
these challenging times. VAT has been lowered to 1% from 18%
for a period of 3 months on domestic The lowest pension wage will Follow-up programs including
flights. be increased to TRY 1,500. social services and periodical
President, Investment Office homecare visits will be initiated
Burak DAĞLIOĞLU for the elderly who are above
Tax declarations containing payments 80 years old and live alone.
stemming from deductions such as The Eid payment for the retired
withholding will be postponed for a will be paid at the beginning of
period of 3 months. April.
02 03
NEWSLETTER April’20 NEWSLETTER April’20
14 RULES
TO AVOID COVID-19 1
Wash your
2
Practice social
3
Cover the mouth
The number of coronavirus cases in the world continues hands frequently distancing. Keep and nose with
to increase, with the pandemic ushering in a host of with soap and a distance of at tissues when
disruptions to daily lives and business operations. water for at least least 3-4 steps coughing or
20 seconds, (approximately sneezing; use
Find below 14 rules to help scrubbing 2 meters) from the inside of
slow the spread of COVID-19:
thoroughly. people when the elbow if
possible. no tissues are
available.
4 5 6 7 8 9
Avoid close Do not touch Cancel or Spend the first Ventilate your Wash your
contact, such as your eyes, postpone your 14 days at home environments clothes
shaking hands mouth, or nose travels abroad. on your return frequently. with normal
and hugging. with your hands. from abroad. detergent at 60-
90°.
10 11 12 13 14 In case of
symptoms, call
Clean your If you have cold Do not share any Stay hydrated, If you have
frequently used symptoms, stay of your personal eat a balanced symptoms such as
the coronavirus
surfaces, such away from the belongings, such diet, and pay fever, dry cough, hotline:
as door handles, elderly and from as towels. attention to your and shortness of
184
light fixtures, patients with sleep patterns. breath, wear a mask
and sinks with chronic diseases. Do and immediately
water and not go out without contact a healthcare
detergent daily. wearing a mask. provider.
04 05
NEWSLETTER April’20 NEWSLETTER April’20
TURKEY IS INDICATORS The financial market volatility
stemming from COVID-19 reached
WELL PREPARED PROVE
historic levels in March, with all
three of the major indices in the US
TO WEATHER
TURKEY’S
posting their worst daily percentage
declines since 1987’s Black
POSSIBLE EFFECTS Monday. Recession concerns caused
OF COVID-19
RESILIENT
downward revisions in global growth
expectations for 2020. In such a
The Minister of Treasury situation, indicators show that the
and Finance Berat Albayrak
ECONOMY
Turkish economy is likely to be one
announced that Turkey has of the least-affected economies from
addressed all aspects of the road the possible effects of COVID-19.
map that is being implemented
in order to support sectors
that may be affected by the
COVID-19 prevention measures. Positive GDP Growth in 2019 Highest Monthly Profit
The Turkish Statistical Institute in Banking Sector
(TurkStat) announced the quarterly According to the Banking
GDP growth in Turkey for the Regulation and Supervision Agency
Borsa İstanbul introduced a Turkey has recovered swiftly
October-December 2019 period. (BDDK) data, Turkey’s banking
series of measures in early- from crises, market volatilities,
Thanks to a sharp recovery in private sector posted a net profit of TRY
March to limit the extreme and recessions in the past and
consumption and a rise in credit 7.9 billion in January, an increase of
volatility in the markets and is well prepared to weather any
impulse, Turkey recorded a strong 147.2 percent compared to January
the sharp changes in prices. further financial turmoil. The
GDP growth of 6 percent in the final 2018’s TRY 3.2 billion profit. Thus,
Accordingly, the price margin fear factor caused by COVID-19
quarter of 2019, which brought the the sector has reached its highest
for determining price limits of is likely to generate a negative
full year growth up to 0.9 percent. monthly profit figure of all time and
the shares traded on Borsa sentiment shock, severely
is off to the best annual start in its
Istanbul have been reduced depressing consumption,
Accordingly, Turkey’s GDP at current history.
to 10 percent in all groups. tourism revenues, and in-store
prices has more than tripled since
Also, the price change retail sales globally. However,
2002, reaching USD 754 billion in Rising Services and
triggering circuit breaker has the large domestic market is a
2019. The Turkish economy grew Automotive Exports
been reduced to 5 percent valuable asset for the Turkish
by an average 5.3 percent annually According to the Ministry of Trade,
downwards in all groups. As economy, and the country will
during the 2003-2019 period. exports increased by 2.31 percent
for the circuit breaker call offset the negative sentiment
to USD 14.655 billion in February.
period, it has been increased by the real income gain from
The strong growth performance of Motor vehicles accounted for a
to 30 minutes. the plunge in oil prices.
Turkey in the final quarter of 2019 large portion of the exports. In
brought the full year growth into the first two months of the year,
positive territory. This trend suggests automotive exports amounted to
a strong signal, implying that the USD 4.923 billion.
The Central Bank of the While COVID-19-related risks Turkish economy is returning to its
Republic of Turkey (CBRT) will reverse the improvement long-term potential growth track. Meanwhile, TurkStat announced
cut its benchmark interest in global growth sentiment, the 2018 International Trade in
rate by 100 basis points to domestic factors that Turkey’s New Economy Program, Services Statistics (ITSS) report.
9.75 percent in a special determine growth momentum announced last September, targets The report shows that services
monetary policy meeting in Turkey show that low GDP growth rates of 5 percent in exports in Turkey increased by
held on March 17. CBRT dependency on externally- each of the following three years 9 percent to USD 33.8 billion in
also announced that it funded credit, dynamic starting from 2020. 2018.
would provide lira liquidity domestic demand, steps taken
with an interest rate of 150 by the government, the fall in Quite Mild FX Pass-Through in Inflation
basis points lower than the bank lending rates, and other Much lower than expected and staying within the CBRT’s forecast path,
benchmark one-week repo cyclical factors are all likely to Turkey’s annual inflation in February 2020 rose slightly to 12.37 percent
rate through repo auctions diminish the possible future from 12.15 percent in January 2020, removing concerns of possible price
with maturities of up to 91 impact of COVID-19-related pressures. The core CPI receded 0.2 percent month-on-month, indicating that
days. risks to the Turkish economy. price pressures remain contained and that FX pass-through has been quite
mild. This also showed that inflation in Turkey has reached its cyclical peak
and will fall gradually to single digits again in 2020.
06 07NEWSLETTER April’20 NEWSLETTER April’20
PRESIDENT
President Recep Tayyip Erdoğan
officially opened the Kınalı-Çatalca
Section of the Northern Marmara
ERDOĞAN Highway during a ceremony held on
March 8, 2020.
OPENS “We offer the Kınalı-Çatalca section
of the Northern Marmara Highway to
KINALI-ÇATALCA your service. Our citizens will have
the opportunity of uninterrupted and
SECTION OF
safe travel with the commissioning
of different stages of the motorway”
said President Erdoğan.
THE NORTHERN The highway includes 2 junctions,
MARMARA
12 bridges, 3 viaducts, 2 tunnels,
14 underpasses, and 9 overpasses.
258 km of 400 km of the Northern
HIGHWAY Marmara Highway has been
completed so far.
POSITIVE TESFED
REGULATIONS BECOMES
REGARDING FOUNDING
DATA MEMBER OF
PROTECTION EUROPEAN
ENCOURAGE AMAZON ESPORTS
WEB SERVICES
POTENTIAL MAKES ITS FIRST FEDERATION
INVESTORS ACQUISITION Representing over 100
million gamers and
Investment Office President Burak
Dağlıoğlu spoke on March 5 at the
IN TURKEY bringing together 23
national associations and
Turkish Personal Data Protection federations from all over Europe, the
Amazon Web Services (AWS) made its European Esports Federation (EEF)
Law & EU General Data Protection
first acquisition in Turkey by investing in was launched on February 21, 2020
Regulation Conference organized by
Turkish data processing company Data in Brussels, Belgium. Turkey Esports
the International Investors Association
Row. Based in San Francisco, Data Row is Federation (TESFED) has been
(YASED) in İstanbul.
a subsidiary of İstanbul-based TeamSQL elected as a founding board member
Inc. and is focused on the querying, in the first meeting, receiving 19 of
Stating that YASED has made great
processing, and visualization of data. the 22 eligible votes.
contributions to increasing Turkey’s global
competitiveness, Dağlıoğlu talked about our efforts to attract new investments to
AWS is a subsidiary of e-commerce TESFED was established in April
what the Investment Office is doing for the Turkey, we see that the subject of data
giant Amazon.com. Jeff Bezos founded 2018 in Turkey under the Ministry
promotion of Turkey’s investment climate is very noticeable, and we predict that
Amazon in 1994 as an online bookstore of Youth and Sports to represent
abroad. investments in companies related to data
in the US and now it is the biggest Turkish e-sports in national and
[handling and protection] will increase in the
internet retailer in the world. Amazon international platforms.
Dağlıoğlu stated that as a result of YOIKK future”, he added.
launched its activities in Turkey in 2018
(Coordination Board for the Improvement
as a subsidiary of the group’s European Turkey’s gaming market generated
of the Investment Environment) studies, Among the attendees of the conference
affiliate based in Luxembourg. revenue of USD 853 million in 2018,
which YASED also participated in, Turkey were YASED Chairperson and Boeing Turkey
rose to 33rd among 190 countries in the Managing Director and Country Executive making it the 18th largest gaming
The Turkish e-commerce market market in the world in terms of
World Bank’s 2020 Ease of Doing Business Ayşem Sargın, Chairman of the Turkish Data
reached a volume of USD 12 billion in revenue. With 30 million active users
Index. “The correct use of personal data is Protection Authority Faruk Bilir, and Digital
2018, with an average annual growth of and 600 large and small companies,
one of the most important issues. During Transformation Office President Ali Taha Koç.
33 percent since 2014. Turkey’s gaming industry’s yearly
growth is forecasted at 15 percent.
08 09NEWSLETTER April’20 NEWSLETTER April’20
TURKISH Higlights of the
GAMING INDUSTRY Turkish ICT Sector
With a population of 83
million as of 2019 and with
half under the age of 32.4,
What makes Turkey
Turkey is the youngest attractive for
country on the European
ICT companies?
USD 30
continent.
1 billion million Fixed and mobile broadband subscriptions
in Turkey have exceeded
Export amount of Turkey’s Number of
gaming market in 2018. active users. 74 million in 2018
– an impressive penetration rate of
90 percent.
The e-commerce market in Turkey continues to grow with an
average annual growth of 33 percent since 2014, reaching
TRY 59.9 billion in 2018.
15% 600+
Percentage of forecasted
annual growth.
Number of companies in the
ecosystem including indies.
Fintech hub
Turkey is transforming into a
with over 200 companies
and an online payment market
that has already hit USD 30 billion.
18th Turkey’s public cloud market reached
USD 97 million
Turkey’s rank in and its data center market reached
global gaming industry. USD 400 million in 2017.
In startups, Turkey has also jumped up to the
1 League among
st
European countries in 2019,
based on the USD 102 million angel
investing and venture capital funding for
3 rd 94 deals.
Turkish startups across
Turkey’s rank globally
in terms of gaming The female population in Turkey is 41.4 million
time spent on PC in 2019, and according to the Sustainable
(highest in the world Development Indicators, the share of women in
with 70%). executive positions increased to
16.3 percent in 2018.
10 11NEWSLETTER April’20 NEWSLETTER April’20
FDI NEWS EVENTS
The main partner of Skoda Transportation,
PPF, and the Sabancı Group signed a
letter of intent to purchase the shares of
Temsa Transportation Vehicles as a 50:50
partnership structure.
Personal care manufacturer Özen, a
subsidiary of Yıldız Holding, was sold to
Following President Recep Tayyip Erdoğan’s
Daio Paper Corporation, one of the largest Kuala Lumpur, official visit to Malaysia in December 2019,
paper producers in Japan, for TRY 153 MALAYSIA the Investment Office co-organized a
million. Özen includes brands such as
seminar with the Federation of Malaysian
Komili Bebe, Baby Star, and Rozi.
Manufacturers (FMM) to brief FMM members
on Turkey’s investment opportunities.
German Boehringer Ingelheim (BI), a
pharmaceutical giant operating in Turkey
for the past 25 years, announced plans
to accelerate its investments in Turkey,
particularly local investment projects.
Ankara-based Mobiliz, which was acquired
by Turkish fund Mediterra Capital in 2012,
is being sold to GPS Bulgaria, Bulgaria’s
most important cloud-based business
partner. Founded in 2004, Mobiliz is one Investment Office Country Advisor Rahim
of the two largest companies in vehicle Dubai, UAE Albayrak delivered a presentation on Turkey’s
tracking systems in Turkey having over 350 investment climate at a joint investor meeting
thousand vehicles. in Dubai co-organized by the Pakistan
Business Council, the Turkish Business
Council, and the Investment Office.
12 13TURKEY:
HUB FOR
INNOVATION
AND GROWTH
Easy access to multiple markets of
$25 trillion GDP, $7.8 trillion trade,
1.7 billion people.
ACCESS TO Russia
MULTIPLE MARKETS GDP: $1.5 trillion
Import: $0.2 trillion
Population: 100 million
Europe
GDP: $19.5 trillion
Import: $6.5 trillion Central Asia & Caucasus
Population: 700 million
GDP: $0.3 trillion
Import: $0.1 trillion
Population: 100 million
MENA
GDP: $3.6trillion
Import: $1.0 trillion
Population: 800 million
• Booming economy reaching USD 784 billion in
2018, up from USD 231 billion in 2002.
• One of the fastest growing OECD economies
between 2014-2025, with an estimated
average annual growth rate of 4.7%.
• USD 209 billion of FDI between 2003-2018, while
the total amount of FDI attracted between 1923-
2003 stood at USD 15 billion.NEWSLETTER April’20 NEWSLETTER April’20
AVERAGE ANNUAL REAL GDP GROWTH (%) HIGHLIGHTS
(2003-2018) • 13th largest economy in the world with USD 2.2 trillion (GDP at PPP).
(IMF, 2018)
Turkey
Ireland • The fastest growing economy in Europe and one of the fastest
Poland growing economies in the world with an average annual
Israel GDP growth rate of 5.3% over the past 16 years.
Slovak Republic
(TurkStat, 2003-2018)
Chile
S. Korea • The largest bus producer and the 2nd largest commercial vehicle
Iceland producer in the EU.
Latvia (OICA, 2018)
Australia
Luxembourg • 2nd largest steel producer in the EU and 8th in the world.
Estonia (Worldsteel, 2016)
Czech Republic
New Zealand • Among top 6 holiday destinations in the world with over
Mexico 46 million international tourists in 2018.
Sweden
(UNWTO & Ministry of Culture and Tourism)
Slovenia
Turkey
Switzerland
Canada
United States
Hungary was the SOPHISTICATED
Norway
fastest growing CONSUMER BASE
Austria
Germany economy of the
United Kingdom OECD members A population of 83 million, Largest
Netherlands
Belgium
during half of which is under the age of around 32.4. youth
Spain 2003-2019, (2019, TurkStat)
population
France
with an average 72 million compared
Finland with the
Denmark annual growth broadband internet subscribers and EU.
80.6 million mobile phone subscribers.
Japan rate of (2018, TurkStat and ICTA)
(Eurostat)
Portugal
5.3%
Italy
Greece
Source: IMF World Economic Outlook
(October 2018)
SKILLED AND
217
CUMULATIVE FDI INFLOWS DEDICATED LABOR FORCE
TO TURKEY (USD BILLION)
• Investment incentives as well as R&D support.
(USD BILLION)
• Equal treatment to national and global investors Over 32.3 million More than
guaranteed by law. young, 800,000 students
• 6.5 days to set up a company in Turkey, while it well-educated graduate annually from over
takes an average of 8.5 days in OECD high-in and motivated professionals. 183 universities.
come countries. (World Bank Doing Business 2018) 2003-2019 (2018, TurkStat) (2018, CoHE)
16 17NEWSLETTER April’20 NEWSLETTER April’20
TURKEY’S INFRASTRUCTURAL
DEVELOPMENT
According to the World Bank, Turkey ranks
3rd globally in Public-Private Partnership
(PPP) projects.
200 million
Annual passenger
capacity once all stages
USD are completed of the
newly commissioned
127 billion Istanbul Airport in Turkey.
Total value of PPP contracts in Turkey
during the 2003-2018 period.
175 5,600 km
Total number of PPP Total length of new
projects in Turkey during motorway (toll roads)
the 2003-2018 period. projects in Turkey.
44,300 11,800 km
Number of new hospital beds in 32 Total length of new high-speed
integrated health campuses across Turkey. railway projects in Turkey.
35% For more info
invest.gov.tr/en/Sectors/Pages/infrastructure.aspx
Expected growth in
Turkey’s total installed
power generation capacity
from 2018 to 2023 (from
88 GW to 120 GW).
18 19NEWSLETTER April’20 NEWSLETTER April’20
Turkey is a perfect
investment destination Turkey’s economic
with its strategic location and motivated and
qualified workforce. Global investors are invited to dynamism –
be a part of Turkey’s economic and social growth.
perfect match for
innovation culture
Following the Toyota Way,
we implemented the Toyota
Production System to
produce
high-quality We believe 3M’s innovation culture built on 3M Science and Turkey’s economic
motor vehicles dynamism is a perfect match. 3M’s global manufacturing and technological legacy,
combined with the skills and dedicated work of our Turkish employees, will
in Turkey. continue to strengthen 3M and the Turkish economy. We thank the Investment
Office for its valuable assistance and guidance throughout our decision and
investment processes.
Toshihiko KUDO Hak Cheol SHIN
President & CEO, Former Executive Vice President -
Toyota Motor Manufacturing Turkey International Operations, 3M
Two factories Turkey is a dynamic and promising
market with its young population 45 years of The core of the Turkish
national economic agenda,
and over and great location. It has a strategic
importance for Nestlé and offers
experience
and the key value for
investors, is a dedicated
3,000 direct
interesting opportunities for us to grow effort to promote innovation,
as a domestic
and invest. We are proud to be here enhance competitiveness,
for more than 100 years and to make and encourage investment in
employees contributions to the development of global value chains. Dow has
the Turkish food industry and Turkish
consumers’ tastes over the years. manufacturer over 45 years of experience
as a domestic manufacturer
in Turkey
We are convinced that there is still in Turkey, and our new joint
great potential to grow our business venture with AKSA is a key
even more and to contribute to the example of how we can bring
Félix ALLEMANN development of the Turkish economy. together raw materials, a
Former Chairman & CEO, Nestlé Turkey Having established our first factory in high-skilled workforce, and
Turkey in 1927, today, we are carrying most importantly a booming
out local production in Turkey together Andrew N. LIVERIS downstream customer industry.
with two factories and more than 3,000 Former Chairman & CEO, DOW With a strong, pro-business
direct employees. We are committed government in Turkey, the
to offering high-quality products to our investment environment
consumers that are healthy, nutritious, makes sense. And it is also
and tasty. easy to operate, thanks to the
Investment Office President
and his entire team.
20 21NEWSLETTER April’20 NEWSLETTER April’20
WHO WE ARE WHAT
• To present investment
opportunities to the investors and
provide assistance during all the
WE
stages of their investments.
• To serve as the reference point
for international investors and the
point of contact for all institutions
DO
engaged in promoting and
attracting investments at national,
Investment Office is the official organization that: regional and local levels.
• To offer free-of-charge services
including market information
• Promotes the investment environment of Turkey and and analyses, site selection,
provides assistance to investors. B2B meetings, coordination with
relevant governmental institutions,
and facilitate legal procedures and
• Reports directly to the President. applications such as establishing
OUR
business operations, incentive
applications, obtaining licenses
GLOBAL
and work permits.
LOCATIONS
HOW
WE
HELP
UK
GERMANY
ITALY JAPAN
USA
SPAIN S. KOREA
TURKEY
S. ARABIA
• Multilingual (Turkish, English, German,
UAE
French, Italian, Arabic, Spanish, Chinese,
Japanese and Korean) QATAR
• One-Stop-Shop approach
SINGAPORE
• Result-oriented
• Private sector approach with full confidentiality
• Focusing on high-tech, value-added and employment
generating investments.
22 23OUR
NEW WEBSITE
HAS
LAUNCHED!
BRAND NEW WEB SITE
LOOK
Investment Office, the official investment advisory body of Turkey, is a knowledge-center for foreign
direct investments and a solution partner to the global business community at all stages of investments.
It provides customized guidance and qualified consulting before, during and after entry into Turkey.
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