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Advantages and Criteria of Being an International Trading Company

HAKKI CIHAN TURK

In accordance with subparagraph (k) of Article 3 of the Export Regime Decision dated 22/12/1995 and numbered 95/7623, acquiring and revocation of the status of an international trading company and responsibilities of international trading companies are arranged under the Decree on Status of International Trading Company (Export: 2004/12) published in the Official Gazette dated 08/12/2014.

At least TRY two million of paid-in capital,
Customs declaration exceeding 100 million US Dollars, or actual exports equivalent to this threshold in the previous calendar year.

Companies meeting these conditions may fill out the application form attached to the Decree in order to acquire the status of an international trading company and may lodge an application before the Undersecretariat of Foreign Trade (General Directorate of Exports).

The submitted files and documents shall be deemed correct until otherwise proven. Upon request, the companies not included in the decision regarding these companies may acquire the international trading company status. Their fulfilment of the aforementioned criteria has been established by examining their conditions 12 months before such application.

At the end of examination by the Undersecretariat of Foreign Trade, the companies determined to have the necessary conditions will be given the “international trading company” status. They will be published in the Official Gazette.

Advantages of the international trading company status are;

Benefiting from the deferral-cancellation application in terms of tax legislation, despite the fact that they are not manufacturers,
Sufficiency of only a 4% collateral indication to retrieve the VAT of exports,
Claiming refunds below ₺4.000 in terms of VAT refunds without the requirement of receiving customs declaration confirmation,
Securing financing of exports, benefiting credits from Eximbank providing a lower interest rate without any intermediary bank,
In relation to customs legislation, benefiting from certain exceptions; for example, condition of a certain number of employees is not considered to obtain an authorised economic operator status, the manufacturer condition is not regarded, export and import performance criteria are not established, a part of the documents to be presented to customs are not required for international trading companies,
Prioritisation of international trading companies in granting state aid for exports,
Lower rates of collateral in imports are required for the inward processing regime.

State aids for exports, export incentives and export grants are carried out by the Ministry of Economy and general secretariats of exporter unions. As examples of these state aids; the following is subsidised and covered by the Support and Price Stabilisation Fund in the form of grants:

To increase competition power in international markets and to ensure compliance with environmental, quality and human life legislations; 50% of expenditure up to $25.000 per document which is made concerning the quality, environmental documents, human life and property safety and security indicators (ISO, CE etc.) and analysis reports of agricultural products,
Rental expenses up to $120.000 per year at the rate varying from 50% to 90% of the offices, stores and warehouses that will be opened abroad for export purposes,
Advertising and promotional expenditures up to $250.000 per year at the rate ranging from 60% to 90%, which are made abroad for export purposes,
Expenses at the rate of 70% per trip and up to $7.500 related to abroad visits for market research,
To create action plans on foreign market entry strategies, expenses at the rates varying from 60% to 75% and up to a maximum of $200.000 per year made about reports on sector, country, foreign company or trademarks prepared by international organisations, and consultancy services for foreign company acquisitions including financial and legal consultancy,
70% of membership fees up to $10.000 for e-commerce sites not targeting end consumers,
To develop clusters and increase the international competitiveness of SMEs, 75% of expenses up to $1.200.000 per project for education, consultancy, foreign market research trips and purchase delegations to be carried out within projects organised by co-operation companies with participation of at least ten companies.

The Legislation and Institution of an International Trading Company

Communique for International Trading Company Status (Export 2004 / 12),

Article 1: “International trading company” status may be given every year to joint-stock companies whose paid-in capital is at least two million new Turkish Liras (2 trillion old Turkish Liras) and which have performed actual exports (FOB) at least 100 million US Dollars in the previous calendar year on customs declaration basis (excluding transit and free export), on condition that they have applied for that until the last day of January every year, or such status may be renewed for companies already holding international trading company status.

To be able to obtain the status of an international trading company, companies that meet the requirements of the first paragraph of this article are required to apply before the Undersecretariat of Foreign Trade (General Directorate of Exports) by filling out the application form attached to the annexe with the documents mentioned in the form. The information and documents submitted shall be deemed correct until otherwise proven.

Upon request, the companies not included in the decision regarding international trading companies may acquire the international trading company status. Their fulfilment of the criteria mentioned above has been established by examining their conditions on the date 12 months before such application.

Article 2: Companies that have the necessary conditions will be given the status of “international trading company after examination of the Undersecretariat of Foreign Trade (General Directorate of Exports)” and will be published in the Official Gazette. The status of the international trading company shall be valid as of its publication until the publication of the decision on the international trading companies for the following year.

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