CHINESE INVESTMENTS INTO TURKEY

1. SEFA GUVEN Managing Partner YAYLA & GUVEN LAW FIRM E-mail: sefa.guven@yaylaguven.com Twitter:@sefaguven CHINESE INVESTMENTSINTO TURKEY

2. WHY INVESTMENT INTO TURKEY 1 ECONOMIC STRUCTURE 2 POPULATION 3 QUALIFIED AND COMPETITIVE LABOR FORCE 4 LIBERAL AND REFORMIST INVESTMENT CLIMATE 5 INFRASTRUCTURE 6 CENTRALLY LOCATED 7 ENERGY CORRIDOR AND TERMINAL OF EUROPE 8 LOW TAXES AND INCENTIVES 9 CUSTOMS UNION WITH THE EU SINCE 1996 10 LARGE DOMESTIC MARKET SEFA GUVEN Managing Partner YAYLA & GUVEN LAW FIRM E-mail: sefa.guven@yaylaguven.com Twitter:@sefaguven

3. Investment Legislation • The Encouragement of Investments and Employment Law No. 5084, • Foreign Direct Investments Law No. 4875, • International treaties • Double Taxation Prevention Treaties (Including China) • Social Security Agreements • Customs Union and Free Trade Agreements (FTA) (Including China) SEFA GUVEN Managing Partner YAYLA & GUVEN LAW FIRM E-mail: sefa.guven@yaylaguven.com Twitter:@sefaguven

4. Types of Companies Incorporatedcompanies: • Joint-stockcompany (A.Ş.) • Limited liabilitycompany (Ltd. Şti.) • Commanditecompany • Collectivecompany • Cooperativecompany Unincorporatedcompanies: • Joint-venture • Business association • Consortium I SEFA GUVEN Managing Partner YAYLA & GUVEN LAW FIRM E-mail: sefa.guven@yaylaguven.com Twitter:@sefaguven

5. WORK PERMIT • At least 5 Turkish employees • Thresholds • Partner (%20 share, 40.000 TL) • Reasonable salary • Occupation exceptions SEFA GUVEN Managing Partner YAYLA & GUVEN LAW FIRM E-mail: sefa.guven@yaylaguven.com Twitter:@sefaguven

6. Terms of Employment TYPES OF EMPLOYMENT CONTRACTS a) Employmentcontractsfor “temporary” and “permanent” work b) Employmentcontractsfor a “definiteperiod” or an “indefiniteperiod” c) Employmentcontractsfor “part-time” and “full-time” work d) Employmentcontractsfor “work-upon-call” e) Employmentcontractswith a trialperiod f) Employmentcontactsconstitutedwith a teamcontract SEFA GUVEN Managing Partner YAYLA & GUVEN LAW FIRM E-mail: sefa.guven@yaylaguven.com Twitter:@sefaguven

7. Terms of Employment TERMINATION 1) Termination with notification Duration of service Duration of notification period 0 - 6 months 2 weeks 6 - 18 months 4 weeks 18 - 36 months 6 weeks more than 36 months 8 weeks SEFA GUVEN Managing Partner YAYLA & GUVEN LAW FIRM E-mail: sefa.guven@yaylaguven.com Twitter:@sefaguven

8. Terms of Employment TERMINATION 2) Basing on justifiable and rightful reasons stated in the Labor Law without notification period • Reasons of health • Cases arising from immoral, dishonorable or malicious conduct or other similar behavior • "Force majeure” events that prevent the employee from working in the work place for a period exceeding one week. • Absence from work exceeding the notification period indicated in Article 17 of the Labor Law in case of the employee’s being taken into custody or due to his arrest SEFA GUVEN Managing Partner YAYLA & GUVEN LAW FIRM E-mail: sefa.guven@yaylaguven.com Twitter:@sefaguven

9. Imports by Country and Year ( Top 10 Country in Imports) • 2012 2011 2010 2009 2008200720062005 20042003 Country SEFA GUVEN Managing Partner YAYLA & GUVEN LAW FIRM E-mail: sefa.guven@yaylaguven.com

10. Exports by Country and Year ( Top 20 Country in Exports) • 2012201120102009200820072006200520042003Country

11. INTERNATIONAL AGREEMENTS BETWEEN TURKEY AND CHINA RELATING TO FOREIGN INVESTMENT • Trade Agreement(1974), • Economic, Industry and Technical Cooperation Agreement(1981), • Investment Promotion and Protection Agreement(1990), • Double Taxation Prevention Agreement(1995), • MOU for Establishing Trade Consultation Mechanism Between MOFTEC and UFT (1999), • Framework Agreement on Further Expanding and Deepening Bilateral Trade and Economic Cooperation Between the Turkey and China (2010, ratified on 12th January 2012, not promulgated in the Official Gazette yet), • The Memorandum of Understanding on Initiating Joint Study for Medium and Long Term Development Plan on Bilateral Trade and Economic Cooperation between Turkey and China (2010), • Memorandum of Understanding on Enhancing Cooperation in Infrastructure Construction and Technical Consulting Services in Third Countries Between Turkey and China (2010), • Memorandum of Understanding on the Composition of the Joint Working Group on New Silk Road Connection Between the Ministry of Commerce of the People’s Republic of China and the Undersecretariat of the Prime Ministry for Foreign Trade of the Republic of Turkey (2010). SEFA GUVEN Managing Partner YAYLA & GUVEN LAW FIRM E-mail: sefa.guven@yaylaguven.com Twitter:@sefaguven

12. Prevention of Double Taxation Agreement Between China and Turkey (1995) • Incomes from real estates are not included • Limitation with business place • Shipping,air and land transport (no double taxation) • Dividents (taxation in China plus maximum %10 in Turkey) • Interest arising inTurkey and paid to the Government of China or to the People’s Bank ofChina or to the Bank of China or to the Industrial Bank of ChinaInternational Trust and Investment Corporation shall be exempt fromTurkish tax; (For other banks %10) • Royalties (taxation in China plus maximum %10 in Turkey) • Independent personal services (having office in both countries, 183 days rule) as a rule in proportion to where resident gets income • Dependent personel service (taxation in Tukey if less than 183 days, payment is made from outside China) SEFA GUVEN Managing Partner YAYLA & GUVEN LAW FIRM E-mail: sefa.guven@yaylaguven.com

13. THANK YOU SEFA GUVEN MANAGING PARTNER YAYLA & GUVEN LawFirm E-mail: sefa.guven@yaylaguven.com • Foreign investment law, • Corporate law, • Commercial law, • Debt collection, • Business matters (private equities & venture capitals, joint ventures, mergers & acquisitions), • Capital markets law, • Project finance, • Aviation law • EmploymentLaw • IT Law