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Preparing to export

Start-up considerations

Consultation and bespoke research

Visit: https://www.great.gov.uk/ for guidance on how to research overseas markets as well as a range of other important issues for exporters.

Researching the Turkish market

As a large country, you should carefully research market entry requirements in specific regions of Turkey, using both desk research and market visits.

You will need to determine whether:

  • there is a market for your product or service

  • your pricing is competitive

  • you need to localise your product

  • to adapt your business model

  • your brands/trademarks will work in a Muslim market, taking into account cultural/religious considerations

  • to network with an active British business group in Turkey

The questions listed here should help you to focus your thoughts. Your answers to them will highlight areas for further research and also suggest a way forward that is right for your company. You may then want to use this as a basis for developing a formal Turkish strategy, although this may not be necessary or appropriate for all companies:

Your aims:

  • Do you wish to buy from Turkey, sell to Turkey or both?

  • Do you wish to establish your own company presence in Turkey (for example through a corporate or non-corporate entity, direct sales, appointing a local agent, online selling, licensing or franchising)?

  • Do you need to be involved in Turkey at all?

  • Do you see Turkey as part of a wider plan including e.g. other Middle Eastern markets now or in the future?

Your company:

  • Can you carry out a detailed SWOT analysis of your company?

  • What are the unique selling points for your product or service?

  • Do you know if there is a market for your product or service in Turkey?

  • Do you know if you can be competitive in Turkey?

  • Are your competitors already in Turkey? If so, what are they doing?

  • Do you have the time and resources to handle e.g. the demands of communication, travel, product delivery and after-sales service?

Your knowledge:

  • Do you know how to secure payment for your products or service?

  • Do you know where in Turkey you should start?

  • Do you know how to locate and screen potential partners, agents or distributors?

  • Have you carried out any Turkey-specific customer segmentation, and do you know how to best reach potential customers in-market?

It is unlikely that you will have the answers to all these questions at the outset and these ‘knowledge gaps’ could form the basis for further research and investigation. Some of these questions will require quantitative research in your sector, while others involve more contextual and cultural considerations.

Talking to other people in your industry and regularly visiting Turkey will give you access to the most current advice, and such experience can often lead to new insights and form the basis for further research.

There is also some useful guidance on developing a marketing strategy, customer segmentation, competitor and SWOT analysis etc. on the https://www.great.gov.uk/ site – and the IOE&IT and British Chamber can help too.

There may be trade shows held in Turkey each year, which could be useful to test product viability in the market. The DIT Tradeshow Access Programme at: https://www.gov.uk/guidance/tradeshow-access-programme provides funding in the form of grants for eligible businesses to attend overseas trade shows.

The funding helps your business gain:

  • market knowledge

  • experience in attending and getting the most from overseas trade shows

  • advice and support from trade experts

Visit the DIT events portal at: https://events.trade.gov.uk/ to find upcoming events and missions.

Find out more about marketing your goods and services for Turkey at: https://www.great.gov.uk/.

Contact the DIT team in Turkey at: https://www.gov.uk/government/world/organisations/department-for-international-trade-turkey#contact-us for events and company launches at British Embassy locations.

The great.gov.uk website (https://www.great.gov.uk/) has guidance for new, occasional and frequent exporters, as well as tools and sources of other information to meet your exporting needs.

 

Setting up a business entity in Turkey

The main types of company in Turkey are:

  • limited liability company (LLC) which is appropriate for small and medium-sized enterprises (SMEs)

  • joint stock company (JSC), which is more suitable for large-scale investors – shareholders can be either real persons or legal entities

  • foreign businesses can also open a liaison office

  • UK companies based abroad whose capital is divided into shares can open branches in Turkey

You should seek legal advice as the tax and legal obligations of each business structure can differ. Consult local lawyers (https://www.gov.uk/government/publications/turkey-list-of-lawyers) to avoid costly mistakes and ensure you start out in the way that is best suited to your sector of activity.

Visit: https://www.great.gov.uk/ for guidance on how to research overseas markets as well as a range of other important issues for exporters.

Turkey’s Foreign Direct Investment (FDI) Law is based on the principle of equal treatment, allowing international investors the same rights as local investors.

LLCs and JSCs are the most common types of company in Turkey. The Turkish Ministry of Customs and Trade has a Central Registry Record System (MERSIS) for business registration. See: http://english.gtb.gov.tr/commerce/domestic-trade/central-trade-registry-system-mersis.

See the Turkish Investment Support and Promotion Agency (ISPAT) for details on the registration and establishment of a company in Turkey, at: http://www.invest.gov.tr/en-US/investmentguide/investorsguide/Pages/EstablishingABusinessInTR.aspx.

Direct exports and sales in Turkey

Direct exports means you supply your products direct to the customer. You handle all the logistics of marketing, selling, sending overseas and getting paid.

There are bureaucratic requirements, language obstacles and transactional issues in Turkey that will require careful planning to overcome. You may therefore wish to use an agent or distributor, in which case you should look closely at their:

  • local business reputation

  • financial resources

  • regional coverage

  • marketing ability

DIT’s trade specialists can help you identify local representatives for your products in Turkey. See: https://www.gov.uk/overseas-customers-export-opportunities.

Online selling to Turkey

DIT’s E-Exporting programme at: https://www.gov.uk/guidance/e-exporting can help you export your products to Turkey.

Check out online marketplaces in Turkey at: https://selling-online-overseas.export.great.gov.uk/, where DIT has negotiated listings at better-than-commercial rates.

Licensing or franchising in Turkey

Franchising is experiencing strong growth in the Turkish market, particularly in fast-food and clothing outlets. More information on franchising in Turkey can be found at the Turkish National Franchising Association, Ulusal Franchising Dernegi (UFRAD). See: http://ufrad.org.tr/ (site not in English).

Visit also the international section of the British Franchise Association at: http://www.thebfa.org/international for more information on franchising.

[Source – DIT/ gov.uk]

 

Getting finance to fulfil an export contract in Turkey

Overall, Turkey ranks 60th out of 190 economies in the World Bank’s 2018 Doing Business ranking, and 77th for ease of getting credit. See: http://www.doingbusiness.org/data/exploreeconomies/turkey.

The Turkish banking sector is the second-largest banking system in ‘Emerging Europe’ after Russia, and is well capitalised and highly liquid. This allows flexibility to provide financing for investors in the country. In addition to banks, the Turkish credit market allows investors access to project financing through leasing and factoring companies.

To make it easier to fulfil an export contract and grow your business, schemes are available to UK companies selling products and services to Turkey. Contact your bank or specialist financial organisations for assistance.

UK Export Finance (UKEF) has significant risk capacity (https://www.gov.uk/guidance/country-cover-policy-and-indicators#turkey) to support exports to Turkey. Contact one of UKEF’s export finance advisers at: https://www.gov.uk/government/publications/find-an-export-finance-manager, for free and impartial advice on your finance options.

 

Getting paid in Turkey

You may wish to talk to a specialist about finance, including how to get paid in Turkey. This could be a bank, an accountant or you can contact the DIT team in Turkey at: https://www.gov.uk/world/organisations/department-for-international-trade-turkey#contact-us, or their strategic partner The British Chamber of Commerce in Turkey (BCCT) at: http://www.bcct.org.tr/, to help find a financial adviser in Turkey.

Your contract will specify the terms for payment. If there is any dispute you will need to go through the Turkish legal system for resolution.

Transferring money from Turkey

You should be aware that Turkey has a dual banking system, with conventional western banks as well as a number of Islamic banks based on Shariah law, which prohibits the payment of interest in favour of profit-sharing.

You can import or export up to US $10,000 or equivalent amount of foreign currency. Any amounts exceeding that must be declared.


 

 

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