Istanbul Financial Center Act passed by Parliament

According to the law, it aims to increase the financial competitiveness of the Republic of Turkey on the international stage, contribute to the development and deepening of products and services with the financial markets, strengthen the integration with the international financial and capital markets, and this means making of the Istanbul Finance Center (IFC) one of the leading global financial centers.

Provisions relating to the scope, management and functioning of IFC, activities carried out at IFC and incentives, discounts, exceptions and exemptions to these activities are also regulated.

Referring to relevant laws in defining financial activities; banking, capital markets, insurance, leasing, factoring and similar markets under It is stated that securities, derivative instruments, payment systems, electronic money and similar activities, services and transactions can be carried out as financial activities in IFC. The management company is defined as “a limited company incorporated by the Turkey Wealth Fund to exercise the functions and authorities conferred by law and operating in accordance with the provisions of private law”.

A certificate of participation will be given by the Finance Office of the Presidency.

With the exception of the operation and management of all infrastructures and superstructures, the leasing of sections and autonomous areas and areas assigned to the competent institutions in accordance with the functions determined in the zoning plan, all roads, squares, green areas, parks and similar public service positions at IFC. All types of management activities will be carried out by the management company for 20 years.

Under the Property Law, the powers of the council of apartment owners, the council of island representatives and the council of collective representatives of buildings will be used by the management company for 20 years for properties in IFC.

Participants will receive a certificate of participation by the Finance Office of the Presidency to work in the area of ​​the office. The procedures and principles relating to the participant certificate, including issues relating to the issuance of the participant certificate, the conditions for waiving the participant certificate, the suspension and cancellation of the participant certificate, will be regulated in the implementing regulation.

“Single Office”

A “one-stop shop” will be established in which the relevant units of public institutions and organizations will be in charge of making requests for permits, permits, licenses and similar approvals relating to the activities of the participants, as well as for the permission and approval of their employees and their dependents. , and streamline these application processes.

At a one-stop shop, representatives of the Ministry of Labor and Social Security, the Ministry of the Environment, Urbanization and Climate Change, the Ministry of Treasury and Finance, the Ministry of the Interior, the Ministry of Commerce and, if deemed necessary by these, ministries, its affiliated, related or related organizations or public institutions and organizations under the control of these ministries, organizations and representatives of the relevant district municipality.

The one-stop shop will be administered and managed by the Finance Office of the Presidency, without prejudice to the provisions of applicable legislation, in order to monitor from a single source the work and transactions to be carried out at the IFC and ensure coordination between the institutions and organizations at the one-stop shop. . In case of need, different ministries, institutions and public organizations can also be included in the one-stop shop. The procedures and principles relating to the operation of the one-stop shop will be regulated in the implementing regulation.

Financial services provided by financial institutions to non-residents upon obtaining a participant certificate will be considered exports of financial services, provided that the service is ultimately used abroad.

Exports of financial services will not be considered as derivative transactions carried out by financial institutions on their own and on their own, activities, services and operations that take the savings of residents abroad through the purchase or sale of assets in their portfolios.

75 percent of income earned in connection with the export activities of financial services carried out at IFC by financial institutions that have received a certificate of participation will be deducted from the income of legal persons in determining the basis for calculating corporation tax, provided that they are presented separately in the Corporate Income Tax return. Transactions and cash received in favor of these transactions are deducted from the Tax on Banking and Insurance Transactions; Transactions related to the activity will be exempt from all types of fees and documents issued in connection with these transactions will be exempt from Stamp Duty.

The actual net value of the monthly salary paid to staff employed by financial institutions that received the IFC participant certificate; 60 percent of those who have at least 5 years of professional experience abroad and 80 percent of those who have at least 10 years of professional experience abroad will be exempt from Income Tax. The exemption indicated in this context will apply to the salary income of staff who did not work in Turkey in the last 3 years before starting work at IFC.

IFC’s real estate leasing operations will be exempt from all types of fees and documents issued in connection with these operations will be exempt from Stamp Duty. The provisions of this article also apply to participants’ regional treasury and financial management centers operating in at least 3 countries.

There will be no obligation to keep accounts and books in Turkish

The Ministry of Treasury and Finance will be authorized to make regulations, irrespective of the provisions of the Tax Procedure Law and the Turkish Commercial Code, on the maintenance and editing of the books that participants must keep and the documents that they will issue currency abroad.

Participants will not be required to maintain all types of transactions, contracts, communications, accounts and books in Turkish, organized in the framework of their activities with each other and with IFC.

Participants will be able to freely choose the law in all types of transactions and contracts that are subject to private law, provided that their activities are not contrary to the legislation to which they are subject, within the scope of the activities they carry out at IFC.

These provisions will also apply to participants’ regional treasury and financial management centers operating in at least 3 countries.

Employment of foreign personnel

Active participants in IFC and in the regional treasury and financial management centers of active participants in at least 3 countries will be able to employ foreign personnel with a work permit issued by the Ministry of Labor and Social Security in accordance with the International Labor Law. Applications for work authorization to be made within this scope will be considered exceptionally.

IFC real estate may only be used for the purposes specified in its project and management plan. The Ministry of the Environment, Urbanization and Climate Change will be authorized to make, have and approve all types and scales of land use plans, subdivision plans, land use planning, geological and geotechnical surveys, microzoning, maps and design projects. urban at IFC.

IFC’s management plan and operating plan will be prepared by the management company and recorded ex officio.

If the participant certificate is canceled for any reason, the participants’ lease agreement to operate at IFC will automatically expire. If the lease agreement is registered in the deed, the registration will be canceled at the request of the management company.

The procedures and principles relating to the application of the law and other matters will be regulated in the application regulation issued by the President.

Exemption from corporate taxes and fees

In IFC’s first period of operation, the IFC discount rate for income earned from financial services export activities carried out at IFC between 2022 and 2031 by financial institutions that received certificates of participation in order to encourage reallocations and make the Competitive IFC on a global scale. will be applied at 100 percent.

Financial activity fees, which must be collected at the headquarters and branches of financial institutions that have obtained a participant certificate, will not be charged for 5 years from the effective date of the law.

The Vice President of the Grand National Assembly of Turkey, Nimetullah Erdoğmuş, interrupted the meeting after the proposal was accepted. Erdoğmuş closed the meeting for tomorrow at 14:00 because the committee was not in office after the break.

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