Istanbul International Financial Center

One of the oldest cities of the world, Istanbul is the center of history, culture, art and science. It is also home to millions of young, dynamic entrepreneurs. Istanbul, located at the crossing point of East and West, is now transforming its features into an economic value and getting ready to assume a new title: Istanbul International Financial Center.

Following the global crisis, at a time when international investments fell and the search for a new financial structure is in progress, it is very important for Istanbul to come forward with a competitive structure. In consideration of Turkey’s strong presence in terms of economic and financial development in Eastern Europe, Middle East and Central Asia, it is possible to say that Istanbul has the potential to become a regional, and then global financial center.

Positive developments in the Turkish economy in the last decade have brought Turkey and Istanbul to the forefront. Thanks to its geographical location, Istanbul has a potential to become a financial attraction point with its strategic advantages such as rich resources, proximity to important markets, labor force, competitive and diversified sectors. In this perspective, Istanbul hit the road to become a regional financial center in the next 10 years and an international financial center in 30 years.

The global business cycle and Turkey’s recent performance clearly show that making Istanbul an international financial center with the joint efforts of the financial sector is a realistic vision.

The vision of Istanbul International Financial Center project is defined as “Istanbul will become a regional, and then a global financial center”.

Strategies aimed at developing the conditions required for Istanbul to rank among the leading financial centers of the world were covered in the Ninth Development Plan for the years 2007-2013 under the title “Istanbul International Financial Center”. Istanbul International Financial Center Strategy and Action Plan (Strategy and Action Plan) was approved by the Supreme Planning Board’s decision no. 2009/31 dated September 29, 2009, and went into force after being published in the Official Gazette no. 27364, dated October 2, 2009. The administrative structure was regulated by the Prime Ministry’s Circular no. 27568 dated May 1, 2010. 

IIFC Strategy and Action Plan consisting of 71 articles, prepared within the framework of Istanbul Financial Center Project carried out under the coordination of the Republic of Turkey Ministry of Development states priorities and actions aimed at developing a legal infrastructure up to international standards, adding to the diversity of financial products and services, simplifying and increasing the efficiency of the taxation system, improving the regulatory and supervisory framework, strengthening the physical and technological infrastructure, providing a training infrastructure to meet the requirement for qualified human resources, and creating an organizational structure that will realize promotional and monitoring activities worldwide.  

In consideration of the Strategy and Action Plan, IFC-Istanbul High Council (High Council), IFC-Istanbul National Advisory Committee (National Advisory Committee), IFC Istanbul Coordination Office (Coordination Office), Working Committees, and IFC International Advisory Committee (International Advisory Committee) to advise the High Council were established in order to coordinate, support and carry out the activities of Istanbul International Financial Center.

Finally, “Istanbul International Financial Center Priority Conversion Program” included in the Tenth Development Plan covering 2014-2018 aims at making Istanbul rank among the top 25 in the Global Financial Center Index, and making Turkey rank among the top 30 in the Financial Development Index by the year 2018.

This program includes the following components:

  • Establishing a new IIFC administrative structure,
  • Increasing the diversity of financial products and services,
  • Strengthening the legal infrastructure,
  • Improving the physical infrastructure in the cluster regions,
  • Strengthening the technological infrastructure,
  • Improving the qualified human resources, and
  • Developing participation banking and Islamic financial system.

“Strengthening the Technological Infrastructure” constituent is under the responsibility of Borsa Istanbul.

Within the scope of the works realized in order to achieve the target of making Istanbul an international finance center, which was included in the Ninth Development Plan, Strategy and Action Plan for Istanbul International Financial Center (Strategy and Action Plan) was approved with the High Planning Council Decision dated September 29, 2009 and numbered 2009/31 and became effective following its publication in the Official Gazette dated October 2, 2009 and numbered 27364.

Priorities and actions have been determined in this Strategy and Action Plan towards creating an operating infrastructure of law at international standards, increasing financial product and service diversity, simplifying and activating the tax system, improving the regulating and supervising environment, strengthening the physical and technological infrastructure, ensuring an education infrastructure that would meet the requirement of qualified human resources, and creating an organization structure that would perform world scale promotion and monitoring.

By also taking the Strategy and Action Plan into consideration, an IFC-Istanbul High Council (High Council), IFC-Istanbul National Advisory Committee (National Advisory Committee), IFC-Istanbul Coordination Office (Coordination Office), and Working Committees have been established in order to coordinate, support, and carry out the activities of the Istanbul International Finance Center (IFC-Istanbul) as well as an IFC-Istanbul International Advisory Committee (International Advisory Committee) to advise the High Council.

IFC-Istanbul High Council

The High Council has been formed with the participation of the Minister of State in charge of the State Planning Organization, the Minister of State in charge of the Treasury Undersecretariat, the Minister of Justice, the Minister of Finance, the Minister of Transport, the IFC-Istanbul Coordinator, and a high level representative to be elected by the National Advisory Committee from among its members; under the presidency of the Minister of State chairing the Economy Coordination Committee and the Deputy Prime Minister.

The High Council shall be assigned with the duties of directing the activities of the relevant agencies and organizations, creating strategies, taking the necessary measures for the solution of problems, evaluating and deciding on the reports and recommendations received from the International Advisory Committee, National Advisory Committee, Coordination Office, and working committees, monitoring implementations, and approving the annual work plans submitted by the Coordination Office with the aim of achieving the target of transforming Istanbul into an international finance center.

The High Council shall be authorized to form new working committees in situations it deems necessary and the working procedures and principles of working committees shall be determined by the High Council upon the recommendation of the Coordination Office

The High Council shall convene on an ordinary basis in the months of March and September and it may be called for extraordinary meeting by the Chairman whenever it is deemed necessary.

IFC-Istanbul National Advisory Committee

The National Advisory Committee has been established under the Presidency of the Ministry of State in charge of the State Planning Organization, with the participation of ;

The Undersecretaries of the State Planning Organization, Treasury, Ministry of Justice, Ministry of Finance, Ministry of National Education, and Ministry of Transport,

The Governor of Istanbul and the Mayor of the Metropolitan Municipality of Istanbul,

The Presidents of the Central Bank of the Republic of Turkey, the Banking Regulation and Supervision Agency, the Capital Markets Board of Turkey, the Istanbul Stock Exchange, the Istanbul Gold Exchange, and the Investment Support and Promotion Agency of Turkey,

The Presidents of the Union of Chambers and Commodity Exchanges of Turkey, the Istanbul Chamber of Commerce, the Istanbul Chamber of Industry, the Banks Association of Turkey, the Participation Banks Association of Turkey, the Association of Insurance and Reinsurance Companies of Turkey, and the Association of Capital Market Intermediaries of Turkey,

The General Directorates of Turkish Derivatives Exchange, the ISE Settlement and Custody Bank, and the Central Registry Agency.

In addition, the Chairman shall be authorized to invite the representatives of public and private sector organizations related to the agenda of the meeting whenever s/he deems necessary.

The National Advisory Committee shall be assigned;

to assist in the creation of consensus between private sector organizations and professional organizations that operate within the financial system and the public sector,

to evaluate compliance with the Strategy and Action Plan during the stage of preparation of the legislation amendment works that might take place related to the IFC-Istanbul Project,

to monitor and evaluate the works performed at the working committees and to present opinions to the High Council with regard to the reports prepared as a result of these works, and

to make recommendations to the working committees concerning the works to be performed by them.

The National Advisory Committee shall convene a reasonable period in advance of the High Council meetings with an agenda to be determined by the Chairman by obtaining the opinions of the Committee members and the Chairman shall be authorized to call the National Advisory Committee for extraordinary meetings whenever it is deemed necessary.

IFC-Istanbul Coordination Office

The IFC-Istanbul Coordinator is the Undersecretary of the State Planning Organization.

The Undersecretaries of the State Planning Organization and Treasury shall appoint a deputy undersecretary each as IFC-Istanbul Deputy Coordinators to assist in coordination activities. The IFC-Istanbul Coordinator shall assign his/her deputies to represent him/her whenever s/he deems necessary.

The State Planning Organization shall be obliged to establish units, procure personnel, and take the necessary measures with regard to financial matters in order to perform the duty of coordination and the relevant organizations shall provide the necessary assistance and support to the Undersecretariat of the State Planning Organization in fulfilling this obligation.

The IFC-Istanbul Coordinator shall be responsible for organizing the activities of the High Council and the National Advisory Committee and for the performance of these activities in coordination in line with the Strategy and Action Plan.

The IFC-Istanbul Coordinator shall be responsible for efficient coordination of the IFC-Istanbul Project promotion activities to be carried out primarily in regional countries in international platforms by cooperating with the relevant agencies. Promotion activities to be carried out within this scope shall be supported by the Investment Support and Promotion Agency of Turkey.

The Coordination Office shall form an internet portal (IFC-Istanbul Portal) that would provide promotion and information services in Turkish and English. The relevant agencies shall be responsible for performing the duties assigned to them by the Coordination Office on a timely basis in order to enable maintaining the contents of this portal enriched and updated and the IFC-Istanbul Coordinator shall be authorized to decide on creating this portal in other languages as well.

An IFC-Istanbul Action Monitoring System shall be established with the aim of monitoring the actions included within the Strategy and Action Plan, and information transfer to this system shall be realized in specified formats and at designated times by organizations in charge.

The Coordination Office shall prepare the progress reports on a regular basis at six month period intervals and share them with the public. The realization states of the actions contained in the Strategy and Action Plan as well as the indicators and the progress made towards becoming a finance center shall be monitored and evaluated in the report.

The Coordination Office shall be responsible for the coordination of the works related to the Strategy and Action Plan, which shall be renewed after three years, and for the preparation of the new draft.

The term of duty of the IFC-Istanbul Coordinator shall continue until a new appointment is made within the scope of the new Strategy and Action Plan.

The Istanbul Development Agency shall also support the activities of the Coordination Office if requested by the IFC-Istanbul Coordinator.

The Coordination Office may perform those it deems appropriate from among the duties assigned to it through the channel of the working committees.

Working Committees

Eight working committees shall be established with the aim of carrying out the technical works concerning the IFC-Istanbul Project. These committees, the agencies which shall chair these committees, and the duty titles of the committee chairmen are given below:

a) Committee of Law (Ministry of Justice –Deputy Undersecretary),

b) Committee of Financial Markets and Instruments (Capital Market Board – Vice Chairman),

c) Tax Committee (Ministry of Finance – Deputy Undersecretary),

d) Committee of Regulatory and Supervisory Framework (Treasury Undersecretariat – Deputy Undersecretary),

e) Physical Infrastructure Committee (Metropolitan Municipality of Istanbul – Secretary General),

f) Technology Committee (Settlement and Custody Bank – General Director),

g) Promotion and Image Committee (Investment Support and Promotion Agency of Turkey - President),

h) Human Resources Committee (Undersecretariat of the State Planning Organization – Deputy Undersecretary)

The High Council shall be authorized to change the agencies, which shall chair the working committees, as well as the representation levels of the committee chairmanships.

The working committee chairmen shall be responsible for the establishment of committees, their regular meetings, and performance of their works in line with the specified duties. Within this context, all sorts of secretarial services such as arranging places for meeting organizations and reporting shall be performed by the agencies determined to chair the committees.

The organizations that shall take part in working committees shall be obliged to represent their organizations at the required level and provide all sorts of support.

The operation fields of the working committees shall be determined by the Coordination Office by obtaining the opinions of the National Advisory Committee and the chairmen of the working committees.

The information and document sharing among the working committees shall be carried out through the channel of the IFC-Istanbul Portal. The section to be created in the Portal for each working committee shall be managed by the agency to chair the relevant working committee.

The IFC-Istanbul Coordinator may organize meetings with the working committee chairmen whenever it is deemed necessary.

IFC-Istanbul International Advisory Committee

The International Advisory Committee shall consist of at least 15 members. These members shall be elected from among the higher level executives of the leading organizations of the finance world for a term of duty of one year. The High Council shall determine the Chairman from among the candidates to be nominated by the National Advisory Committee and the members from among the candidates to be nominated by the Chairman. Representatives of international organizations may also be invited to meetings.

The International Advisory Committee shall convene once in a year together with the High Council and the opinions and recommendations of the International Advisory

Committee members related to the IFC-Istanbul Project as well as the best practices in other finance centers shall be evaluated during the meeting. At the end of the meeting, the International Advisory Committee shall issue a final declaration containing the recommendations related to the activities that are required to be performed in the following period.

The Coordination Office shall guide the working committees in transforming the opinions and recommendations that arise during these meetings into concrete actions within the framework of the directives of the High Council.

The secretarial services of the International Advisory Committee shall be carried out by the Coordination Office.

The Istanbul International Finance Center Project is a project of Turkey. Active participation of public agencies and organizations, universities, and private sector and nongovernmental organizations in and their contributions to the works to be performed in order to realize the vision of transforming Istanbul into primarily a regional and finally a global finance center is required. Within this context, I hereby respectfully submit for your information and kindly request that the works be carried out within the framework of the administrative structuring and distribution of work, the outline of which has been provided above.

A set of criteria must be fulfilled in order to be an “International Financial Center”, and to offer a globally competitive business environment. Actually, Istanbul is a global city that satisfies all of these criteria…

Access to International Financial Centers

Istanbul’s proximity to both the East and the West is a remarkable advantage. As a geopolitically important center that unites London in the West with Singapore in the East, Istanbul is located at a spot that has the highest potential of bringing together investors and financial companies within the triangle of Central and Eastern Europe, the Middle East, and Central Asia. Thanks to this location, Istanbul has a time difference of maximum two hours with European, Eurasian and MENA countries. Its proximity to centers including London, Frankfurt and Zurich in terms of physical location and time zone is a significant facility for financial institutions that plan to open branches in Istanbul. The city’s convenient location in terms of time zone makes it easier for it to work with the world exchanges.,

Access to Clients

As a bridge that unites Asia and Europe, Istanbul’s central location allows a passenger to fly to 56 different countries and the other financial centers in the region in less than 4 hours. With Turkish Airlines flights, it is possible to access more than 260 international routes directly. In addition to the two airports in the city, the construction of a third airport, which is larger than both, has started. Thanks to the modern urban life, both the number of international conferences and other activities organized in Istanbul as well as foreign participation in these events have increased. Furthermore, the meeting halls of five-star hotels offer high-capacity meeting facilities. There are 50,000 hotel rooms in the city, and most of the hotels belong to international chains. Istanbul is the most crowded city of Turkey, and hosts large companies operating in a variety of sectors.

Qualified Labor Force

Turkey has a labor force of advancing education level. 33 percent of Turkey’s population of 77.7 million is younger than 20. 48 percent of Istanbul’s 14 (14.4)  million population is under 30. The financial sector employs a total of 180,000 people led by banks, employing 150,000. The target of establishing at least one university in every city led the number of universities in the country to more than double in the last couple of years, increasing to 181. With 49 universities, Istanbul is the leader in terms of the number of higher education institutions. The new target is to add to the qualified labor force for IFC Istanbul. Towards this purpose, universities are encouraged to train finance experts through post graduate programs. Also, effort is made to attract highly qualified labor force from abroad.

Regulatory Environment

In order to position Istanbul as an international financial center, novelties and improvements were planned in many fields, and a significant part of these have been already realized. The new Capital Markets Law is one of the most important steps taken in this respect. The new Turkish Commercial Code, on the other hand, went in force on July 1, 2012. As a country in EU-accession process, Turkey has already taken a long way with respect to the harmonization of the Turkish capital markets regulation with the EU acquis. New bilateral agreements that encourage cross-border investments and that prevent double-taxation are signed every day. The target is to harmonize tax, legal infrastructure, transparency and information mechanisms as well as financial sector regulations with international arrangements and practices, especially the EU acquis.

Business Infrastructure Facilities

Business infrastructure is the synthesis of a business plan and a business process. It consists of human resources, business process and operational infrastructure. As part of IFC Istanbul strategy, the living quality, security and transportation facilities in Istanbul will be improved, and the physical conditions that will satisfy the infrastructure requirements of financial institutions will be provided. New investments are made continuously in order to strengthen Turkey’s technology and communication infrastructure; offering fast, reliable, uninterrupted and low-cost electronic communication facilities. The most important feature of a financial center is bringing together supply and demand at a common spot. Financial products and services play a key role in this respect. Strategy and Action Plan for IFC Istanbul envisages that the necessary infrastructure be established for financial products and services, which have not yet been offered or have not reached adequate trading volumes in Turkish markets, that have high growth potential and that could make Istanbul an attractive financial center.

A Fair Business Environment

Efforts are in progress to establish an independent and autonomous “arbitration center” in Istanbul. Such arbitration center will be internationally competitive with respect to cost, speed, and finalization process of decisions. Parties will be allowed to select arbitrators of their choice, including those that are not included in the list of arbitrators accepted by the Arbitration Center. Provisions on arbitration in the Code of Civil Procedure and those of the International Arbitration Law will be combined and a single set of arbitration regulations will be prepared. Mediation system will also be improved so as to settle disputes in a short time, without referring to the court. The arbitration center will also offer corporate mediation. These draft regulations are expected to contribute to the IFC Istanbul project, and effort is made in order to accelerate their enactment. Turkey’s current taxation system, which is quite complicated, requires consultation services. However, the government is planning to put various regulations in force. Large companies are highly ethical taxation-wise. In general, Turkey acts within the framework suggested by the OECD. Effort is made in order to eliminate the discrepancies in implementing the laws. Market participants suggest specialized courts 

Corporate Tax Regime

The government is working towards making both the tax regulations and secondary legislation simple, comprehensible, predictable, and sustainable in order to; · encourage financial transactions in Turkey, · establish a sustainable and stable tax regime suitable for the macroeconomic conditions, · clearly define legal arrangements to secure the certainty and predictability of law, · decrease the share of indirect taxes in total tax revenues and to make the financial sector free from unfair competition due to unregistered operations, · put in place an efficient taxation policy Tax advantages are applied for angel investors, with tax discounts of up to 75% of their investments. Withholding tax will be discounted for long term investments while for investment funds 75% of whose assets are invested in shareholders’ equity, no withholding tax is applied. Corporate tax in Turkey stands at 20%, which is quite reasonable compared with international practices.

Individual Tax Regime

Individual tax rates are up to 35% of salaries, while 50% of dividend income is taxable. For Istanbul to become a financial center, the taxation regime must be simple, comprehensible, consistent, practical and measurable. Currently, the taxation regime is undergoing a change. The Strategy and Action Plan for IFC Istanbul project, prepared by the Turkish Ministry of Development, envisages a simple and efficient taxation system. Revisions are planned in the arrangements for foreign investors, and improving the taxation system as a whole is envisaged

Access to Professional Service Providers

Consultancy and support services by professionals are required for financial centers and participants. Such professionals include lawyers, accountants, tax consultants, advisors, arbitrators, and information technology teams. Numerous international companies prefer Istanbul for their regional administration offices since it is one of the most suitable cities of East Europe, Middle East and Central Asia in terms of access to professional services. The number of service providers for the financial sector is increasing rapidly. Turkish information technology provides services worldwide. On the other hand, there are improvements in the accounting services. The legal sector is enhancing. An increasing number of graduates of high quality universities join the legal sector.

Quality of Life

Istanbul is a prominent metropolitan city that has served as the capital of Roman, Byzantine and Ottoman Empires. People of many different cultures have been living in the city for centuries. Turkey’s education system is making a rapid progress. The government offers many education facilities in addition to numerous highquality private schools.

With a history of 8500 years, 72 museums, 5 empire palaces and 49 universities, Istanbul was designated as the most popüler congress city in the World in 2011 and 2012. Istanbul is a popular tourist destinaiton with more than 100 shopping malls, 4 historical bazaars, lots of restaurants and cafes offering best of local cousins as well as flavors from around the world in unique settings with breath taking views, 94,000 hotel bed capacity, 2 international airports and more than 10 million visitors annually. In addition, for long term settlement, cost of living in Istanbul is also quite attractive for financial sector employees.

According to a survey by Financial Times in 2011, Istanbul ranks first among livable cities. The survey takes into consideration current potential and level of improvement in cities, and Istanbul ranked above New York and London based on these criteria. Istanbul was elected as “the coolest city” by Newsweek and “Best Travel Destination” according to 2014 travellers’ choice TripAdvisor Awards.

Public trasportation is widely used in the city through subway and bus systems and continously being improved with a fast pace. Construction of a third airport as well as a third bridge between is under way. High speed train between Istanbul and the capital city Ankara as well as a railway system running under Bosphorous connecting European and Asian sides of Istanbul have recently become operational

Opportunities and Quality of Commercial Real Estate

Turkish real estate sector is growing rapidly. According to Sunday Times, Turkey is the 5th most attractive country for investment. Foreigners are now attracted to the metropolitan area rather than tourism areas. High-quality residential and office areas are offered. Demand is rising rapidly; the occupancy rate for high quality office buildings stands at 88%. As a result of the legal revisions, citizens of foreign countries are no more subject to limitations in acquisition of residential buildings. Construction technologies that will minimize earthquake and security risks will be used in regions where financial institutions will be operating and employees will be residing, so that the required office and residence stock will be provided, and real estate investments applying new technology will contribute to the city’s quality of life.

Construction of the complex in Ataşehir, which will host the headquarters of gigantic public banks such as Ziraat, Halkbank, and Vakıfbank currently based in Ankara, as well as those of Banking Regulation and Supervision Agency, Savings Deposit Insurance Fund and Capital Markets Board is in progress, and expected to be completed in 2015. This complex includes skyscrapers for private sector offices, hotels, residences and social facilities.

Operational Costs

In consideration of the current economic conditions, operational costs, including real estate and labor force costs, may influence finance companies’ decisions on location.

As the costs in financial centers located in developed countries are higher in general, financial centers in some emerging countries may offer more competitive conditions.

In spite of the fact that Turkey does not rank in higher echelons in terms of ease of doing business, its investment circle is expanding rapidly. Domestic and foreign investors are subject to the same legislation. The government applies incentives on investment, which are valid for both Turkish and foreign investors. Incentives include facilitating company incorporation, getting loans, and doing business with international companies.

Culture and Language

Istanbul hosts numerous international festivals, biennials, concerts, exhibitions and all kinds of artistic activities in its museums, art galleries, halls and cultural centers. Education reforms are adopted to facilitate foreign language education. Foreign language curriculum in primary education is improved. An intensive education of English, German and French is offered in both public and private schools, which multiply every day

- Ninth Development Plan

- Tenth Development Plan

- Official Gazette of the Republic of Turkey dated October 2, 2009 and No. 27364

- Official Gazette of the Republic of Turkey dated May 1 2010 and No. 27568

- Istanbul Financial Center Strategy and Action Plan

- Web Site of Turkish Republic Ministry of Development (

- Web Site of Istanbul Metropolitan Municipality (

- Brochure of Borsa Istanbul – Istanbul International Financial Center

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