The Law on Istanbul Financial Center (the "Law") was published in the Official Gazette on June 28, 2022, with Law No. 7412 by the Turkish Grand National Assembly, to regulate the principles and procedures regarding the financial activities of companies that have obtained a participation certificate from the IFC. Subsequently, the Istanbul Finance Center Regulation (the "Regulation") entered into force through its publication in the Official Gazette on July 7, 2023.
Objective
The primary aim of the Regulation is to bolster Türkiye's competitive strength within the global financial arena by fostering the growth and deepening of financial markets, products, and services while reinforcing integration with international finance and capital markets. It offers comprehensive guidelines pertaining to the management, operations, issuance of participant certificates, and the overall functioning of the one-stop office for the IFC. This dedicated center was established to advance these objectives and ensure the seamless implementation of the relevant Law.
Scope and Key Definitions
Management Company: The management and operation of the IFC are delegated to a managing company responsible for ensuring the proper functioning of the IFC in line with its established purpose. The plan and project are registered with the land registry and can be modified if needed during implementation. The managing company also establishes conditions for leasing, operating, or utilizing the real estate and common areas within the IFC in accordance with their intended purpose, managing and running them in compliance with these conditions. Additionally, it determines the scope and amount of management fees, common area expenses, and other management costs to be borne by the participants, tenants, and real estate owners.
Leasing: Office spaces within the IFC can only be leased and used by participants, and the management company exclusively handles leasing processes and transactions for independent units and areas. These include negotiations, preparation, execution, and amendments of lease contracts, as well as the collection of rent and security deposits and payment of such collected amounts to the respective property owners. However, property owners within the IFC may allocate office spaces to public institutions and organizations or their subsidiaries and partners, provided they apply for a participant certificate.
Participant Certificate: To operate in the IFC and benefit from the provisions of Law No. 7412 and other relevant legislation, obtaining a participant certificate is mandatory. The Regulation, in Articles 10-16, governs the evaluation of participant certificate applications, development of new evaluation methods, issuance of participant certificates to eligible applicants, rejection of ineligible applicants' applications, suspension and/or cancellation of participant certificates, and the determination and modification of the form and content of the participant certificate. The competent and authorized body for handling these matters is the Finance Office, affiliated with the Presidency.
One-Stop Bureau: The one-stop bureau is a unit where relevant departments of public institutions and organizations collaborate to facilitate and expedite the process of applications for permits, licenses, authorizations, and similar approvals related to the activities of participants and participant candidates, as well as permits and approvals for the dependents of these employees. As needed, the one-stop bureau comprises representatives from various ministries and relevant district municipalities.
Conclusion
In conclusion, the Law of Istanbul Financial Center and the subsequent Regulation aim to strengthen Türkiye's position in the global financial arena. The IFC serves as a dedicated center to foster the growth and deepening of financial markets, products, and services, while enhancing integration with international finance and capital markets. The Regulation provides comprehensive guidelines for managing, operating, and issuing participant certificates for companies within the IFC.
Overall, the Law and Regulation create a framework for the successful development and functioning of the Istanbul Financial Center, aiming to enhance Türkiye's competitiveness and attractiveness in the global financial landscape. By providing clear guidelines, streamlined processes, and designated management, the IFC seeks to be a hub for international financial activities, benefiting both Türkiye's economy and its integration with the global financial community.
You can read the Regulation here (available only in Turkish).
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
