From the Undersecretariat of Treasury :

COMMUNIQUE CONCERNING THE FOREIGN CAPITAL FRAMEWORK DECREE

(Official Gazette Date: August 24,1995)

No: 95/2

The purpose of this Communique is to explain the principles conceming the application for and implementation of permits to be granted according to the Foreign Capital Framework Decree which is annexed to the Decree dated June 7, 1995, No: 95/6990.

Field of Activity

Article 1- Real persons and legal entities residing abroad may engage in all types of industrial, commercial, agricultural and other fields aimed at the production of goods and services, provided that such activities are listed in permits and/or incentive certificates granted by the General Directorate of Foreign Investment (GDFI), Undersecretariat of Treasury (UT), and published in the Trade Registry Gazette of Turkey.

Provisions of related legislation are reserved on the matters regarding the banks and establishment, operation permits and all sorts of transactions subject to special regulations, of financial institutions whose main fields of activities are money, capital markets and insurance.

Applications regarding the above-mentioned activities shall be made to the GDFI, UT and to the authorities stated in their special regulations.

Investment and Commercial Activities

Article 2- Real persons and legal entities residing abroad, shall apply to GDFI, UT with the following documents for establishing a joint-stock or limited company, (the companies to be established with the purpose of carrying out Built -Operate- Transfer projects shall be in the status of joint-stock companies) and branch offce in compliance with the Turkish Commercial Code for the purpose of making investments and caryying out commercial activities in Turkey.

1. For legal entities residing abroad;

a) Certificate of activity,

b) Activity Report for previous year (including balance sheet and field of activity for the previous year.

2. For real persons residing abroad;

a) Copy of passport, b) Detailed commercial and industrial background and verifying documents.

Certificate of Activity and a copy of passport shall be certified by either the related Turkish Consulate or in accordance with the provisions of the Convention on the Abolishing the Requirement of legalization for Foreign Official Documents Approval Obligation, prepared on the basis of the Hague Conference on Intemational Private Law. If the copy of the passport is certified by a Notary Public in Turkey, no other certification is required.

3. Letter of Intend by the real person or legal entity residing abroad stating that the required capital for the desired field of activity to be realized in Turkey shall be

transferred into the country.

4. Application fonn prepared in accordance with the sample in Appendix.

5. Draft Articles of Association of the company to be established.

6. Proforma invoices, prospectuses and catalogues of machinery, equipment end material to be imported together with three copies of global lists which include FOB (Currency of the Country of Origin), FOB (US Dollars), CIF (Turkish Liras) values and Customs Duties and Charges.

7. Documents required by the Incentive Legislation if investment is considered to benefit from the incentive measures.

8. Power of attomey given by shareholders to the person who will be the contact person in the course of application procedure (power of attomey should be certified by a notary public or in the manner mentioned above)

9. Other documents end information considered to be of value.

Participations

Article 3- Real persons and legal entities residing abroad,shall apply to GDFI ,UT with the following documents in order to become shareholders of a newly established company or to purchase shares from existing companies in Turkey : (Excluding portfolio investments to be made in accordance with the Foreign Exchange Legislation)

1. For legal entities residing abroad: a) Certificate of Activity, b) Activity Report of the previous year (including previous years balance sheet and field of activity).

2. For real persons residing abroad: a) Copy of passport, b) Detailed information relating his/her commercial and industrial background and verifying documents.

Certificate of Activity and a copy of passport shall be certified by either the related Turkish Consulate or in accordance with the provisions of the Convention on Abolishing the Requirement of Legalization for Foreign Offcial Documents Approval Obligation prepared on the basis of the Hague Conference on Intemational Private Law. If the copy of the passport is certified by a Notary Public in Turkey, no other certification is required.

3. Letter of Intend by the real person or legal entity residing abroad stating that the required capital for the desired field of activity to be realized in Turkey, shall be transferred from abroad,

4. The following documents related to the existing company to which the real person and legal entity residing abroad shall become shareholder or will purchase shares from:

a) Balance sheets and profit/loss tables for the last five years approved by the related Tax Offce (in case the application is made in the second half of the year, balance sheet and profitloss table as of the end of the sixth month of that year, certified by the company concemed, should be annexed), b) Trade Registry Gazette of Turkey in which the final version of the company's Articles of Association was published, c) Severance Indemnity obligations as of the date of application, d) Current capacity report and, if any, investment incentive certificate for industrial companies e) Application form prepared in accordance with the sample in Appendix

5. Power of attomey given by shareholders which is certified by either notary public or in the manner described above, if transfer of shares are processed through third persons. In transfer of shares, the value of shares are freely determined between the parties. However, when it deems necessary, the GDFI, UT can make an evaluation or may assign other institutions for such an evaluation. If, as a result of evaluation a situation of impediment is determined, permit shall not be given.

The transfer of shares between the foreign shareholders are realized freely without any further authorization. However, GDFI, UT should be informed about this transfer within one month following the date of transaction. A copy of Share Book which is certified by notary public together with the documents stated above conceming the new foreign shareholder shall be attached to the application. Transfer of shares between local shareholders are not subject to permits, either.

Liaison Office Activities

Article 4- Legal entities resident abroad, shall apply to GDFI, UT with the following documents in order to establish a liaison office in Turkey :

1. Letter of Commitment stating that all expenditures of the liaison office will be met by foreign currency to be transferred from abroad,

2. For legal entities resident abroad;

a) Certificate of Activity (certified as stated in Article 2 of this Communique), b) Previous year's Activity Report (including previous years balance sheet and fields of activity),

3. Detailed information conceming the activities of the liaison office in Turkey, number of personnel to be employed and expenditures to be incurred within a year,

4. Power of Attomey to be given to the person who will be in charge of running the liaison office.

All expenditures of /iaison offces to be opened by legal entities resident abroad shall be met by the foreign currency transferred into Turkey from abroad. The liaison offices can not engage in any commercial activity and in any field ot her than the activity permitted. Moreover, these offces can not apply for transfer of profits and similar transfers, excluding the closure and liquidation of the liaison office.

Indirect Participations

Article 5- Enterprises with foreign capital, operating in Turkey, may participate in existing companies or to be established, provided that they are granted the necessary permits. Application for the permits shall be made to GDFI, UT, together with the previous year's balance sheet and profit/loss table, Trade Registry Gazette of Turkey in which the final version of the Articles of Association was published, capacity report and copy of the incentive certificate of the company, if any.

In case there is an alteration in capital participation ratios of the company to be participated, the information will be submitted to GDFI, UT within a month after the date of alteration in capital share amounts (Except the portfolio investments to be realized in accordance with the Foreign Exchange Legislation).

Capital Increase

Article 6- In case the existing foreign capital companies wish to increase their capital;

a) If the participation ratios of the foreign partner is not changed, application shall directly be made to the Ministry of Industry and Trade without a need for further permission from GDFI, UT. Within one month following the realization of capital increase these companies shall apply to the GDFI, UT, together with Trade Registry Gazette of Turkey which the capital increase was published and the documents specified in Article 11 of this Communique for registering their capital increase.

The Ministry of Industry and Trade shall notify the Undersecretariat of Treasury following the permission of capital increase.

b) If there will be a change in foreign partner's participation ratio, following the capital increase, foreign capital companies shall apply to the GDFI, UT with the following documents for obtaining permission.

1. Trade Registry Gazette of Turkey in which the final version of capital increase was published, 2. Detailed information about sources which will meet the capital increase, 3. Decision of the Board of Directors of the company, 4. Other information and documents if it deems necessary which may be required by the GDFI.

At the capital increase of enterprises with foreign capital, increased capital is paid in the amounts and within durations specified in the Turkish Commercial Code.

Existing foreign capital companies are free to use advance capital from their local or foreign partners for their future capital increases. The advance capital brought from abroad by foreign partner may be kept in the foreign exchange deposits account to be opened in the name of the company and may be used without prior authorization Foreign exchange rate on the date when the foreign exchange deposits account was opened will be applicable during the conversion of these foreign currencies into corporation capital in the future. In case of cancellation of capital increase, the advanced capital received from foreign partner, shall be refunded in accordance with the Foreign Exchange Legislation.

License, Know How, Technical Assistance, Management and Franchising Agreements

Article 7- Public and private sector enterprises shall apply to the GDFI, UT with the following documents for the registration of license know-how, technical assistance, management and franchising agreements to be made with persons and legal entities residing abroad:

The Agreement shall be certified either by the Turkish Consulate or according to the provisions of the Convention on Abolishing the Requirement of Legalization for Foreign Offcial Documents Approval Obligation prepared on the basis of the Hague Conference on Private Intemational Law.

1. Three copies of the original Agreement signed by the parties and the Turkish version certified by notary public,

2. Documents verifying the existence of the plants where the goods and services stated in the Agreement shall be produced and, documentation of verification if the patent of the produd in question is registered.

License, know-how, technical assistance, management and franchising agreements to be signed between the Turkish public and private sector enterprises and persons or legal entities resident abroad shall become effective only after the registration of these agreements by GDFI, UT.

Payments arising from the implementation of these agreements shall be transferred , abroad through banks on the basis of terms of the Agreement registered by GDFI., UT.

Transfer of Profits, Dividends and Capital Shares

Article 8- Following the deduction of the taxes in accordance with the current tax laws, from the profits and dividends corresponding to the shares of foreign shareholders of foreign capital entities, the net amount will be transferred abroad on condition that the concemed parties submit to banks three copies of the documents specified below for the period in question. Following the transfer, Banks shall submit a copy each from these documents together with a copy of the foreign exchange sales receipt on the amount transferred to the Central Bank of Turkey and GDFI, UT.

1. Tax statement, balance sheet and profit/loss table approved by the relevant tax office,

2. Tax assessment and/or collection receipts,

3. Profit distribution table.

However, following the ending of the previous fiscal year, branches and limited and joint-stock companies, which resolved distribution of profts as stipulated at their annual ordinary general assembly or shareholders meeting held in accordance with the Turkish Commercial Code, may actualize transfer of profits provided that among the above mentioned documents tax assessment and/or collection receipts will be submitted later on. to the related bank.

Article 9- In the case that shares of foreign shareholder of enterprises with foreign capital are either partially or wholly sold to the persons and legal entities resident in Turkey, the amounts received or liquidified in case of liquidation, will be transferred through banks concemed, provided that the permission for sale or liquidation is obtained from GDFI, UT.

Payment of Foreign Partner Capital Share

Article 10- Each real person or legal entity resident abroad should bring in a minimum of 50.000.-US Dollars to establish corporations, become partners in existing companies or establish branch offces. If the number of the foreign shareholders is exceeding one, the minimum amount of foreign capital is calculated by multiplying 50.000.-US Dollars by the number of fore)gn shareholders. Participation ratios of foreign shareholders in the minimum amount can be freely determined.

Furthermore, in determining the company's capital and participation amounts, it is an obligation to confirm with the minimum capital and participation amounts specified in the Turkish Commercial Code. Real persons and legal entities resident abroad pay their capital shares in the following manner on the basis of the permission of GDFI, U T.

a) Capital in Kind

Appraisal of equipment to be imported as the capital in kind shall be made by experts to be assigned by GDFI, UT. In the determination of the Turkish Lira value of the equipment subject to the appraisal, current foreign exchange purchase rate applied by the Central Bank of Turkey on the actual import date, claimed in the Customs Declaration, of the materials imported, is taken as the basis. Registration of an amount to be agreed between the investing parties, not to exceed the calculated amount through the above-mentioned method is also possible. Travel and accommodation expenses of the experts and the appraisal fee, to be determined by the GDFI, UT, shall be met by the company importing the equipment.

Letter of registration of GDFI shall be attached to the application to be made to the Ministry of Industry and Trade for the conversion of the capital-in-kind, which is actually imported and duly registered.

b) Capital in Cash

Foreign capital to be paid in cash either be transferred from abroad through banks as foreign exchange or brought in as cash, should be declared at the Customs during the entrance into the country. Foreign exchanges thus brought into the country are purchased by banks against the issue of a foreign exchange purchase receipt on which an explanatory note is inserted as the reason of transfer.

If it is requested, the foreign exchanges transferred from abroad, without being converted into Turkish Liras, can be kept in Banks at the foreign exchange deposits accounts to be opened in the name of the company to be established or the shareholders who transfers hislher shares or the company which increases its capital and, can be paid to the beneficiary as foreign partner's capital share.

For the foreign capital kept in foreign exchange deposits account, bank concemed shall prepare a receipt stating the name of both the foreign capital company and the foreign partner, the country from which the foreign exchange was transferred, currency amount, US Dollars equivalent, and the TL equivalent calculated by applying the foreign exchange purchase rate of Central Bank of Turkey on the date the foreign exchange deposits account was opened.

Original or the certified copy of the receipt related to foreign exchange deposits account, or original or certified copy of foreign exchange purchase receipt in case the foreign capital brought from abroad converted into Turkish Lira, original or certified copy of declaration document, if foreign currency brought in as cash, shall be submitted to the Ministry of Industry and Trade during application and, to the GDFI, UT during registration of company's capital and endorsement of permit certifcate. Exchange rate differences in favor or against, arising from foreign exchanges kept in foreign exchange deposits account, shall belong to the company or to the shareholder who transfers his/her shares.

c) Other Capital

Apart from capital in kind and capital in cash stated above, transferable profits, dividends, amounts arising from sales and liquidation and compensation, amounts to be paid for license, know-how, technical assistance, management and franchising agreements, payment of foreign credits principal and interests, as well as existing assets and receivable of foreign shareholder, specified in Article 5 of the Decree daed 0 )azette No: 19117 and, dated May 25, 1986, is hereby repealed.

Entry into Force

Article 18- This Communique shall enter into force on the date of its publication.

Execution

Article 19- The Undersecretariat of Treasury shall execute the provisions of this Communique. The registration of foreign capital and endorsement of permit certificate:

1. Original of the Permission Certificate,

2. Trade Registry Gazette of Turkey in which either the establishment of the company or the capital increase of the company was published,

3. Original of the foreign exchange purchase receipt or its copy certified by either notary public or the bank, if the foreign currency brought from abroad was converted into Turkish Lira; original of the document drawn by bank or a copy certified by either notary public or bank, if the foreign exchange was kept in the foreign exchange deposits account,

4. Copies of relevant pages of Partners Share Book certified by notary public in the case of transfer of shares.

Foreign Personnel Employment

Article 12- Work permit shall be issued to foreign citizens as administrative and technical personnel to be employed in private sector enterprises in Turkey, provided that such personnel have suffcient technical and administrative knowledge.

Work permit shall also be issued for the foreign representatives of branch offices which are being established, in order to execute the establishment procedure at the Ministry of Industry and Trade.

The enterprises wishing to employ foreign citizens shall apply to the GDFI, UT, with the following documents.

1. Foreign Personnel Application form filled in according to the sample in Appendix.

2. For the foreign personnel:

- Copy of passport certified by notary public,

- If the person in question is a foreign partner representative, confirming documents,

- Copy of Marriage Certificate if the foreign personnel is married to a Turkish citizen,

- Copy of Diploma(s),

- Other information and documents.

3. For the enterprise which will employ foreign personnel:

- Copy of the Establishment License received from the Ministry of National Education for private schools,

- Copy of the operation or investment certificate, if any, received from the Ministry of Tourism for administrative personnel to be employed by tourism enterprises,

-Certificate to be obtained from the related legal entity stating that the enterprises (including consortiums), have undertaken the job which was put to intemational bidding by public sector enterprises,

- Previous year's balance sheet and profit/loss table certified by the Tax Office and the company's export incentive and investment incentive certificate, if any.

Foreign Credits

Article 13- Enterprises with foreign capital may freely secure foreign credits which they will use for both in their investments and operations without any permission from GDFI, UT. Foreign credits secured shall be registered in the related units of the Undersecretariat of Treasury in accordance with the Foreign Exchange Legislation

Securities Transactions

Article 14- Real persons and legal entities residing abroad (including investment trusts and investment funds abroad) can freely purchase and sell all sorts of securities and other capital market instruments through banks and intermediary institutions authorized by the Capital Market Legislation without any need for further permission from the Undersecretariat of Treasury.

According to Article 11 of Foreign Investment Frameworlk Decree No:95/6990 and dated June 7,1995, real persons and legal entities resident abroad, who purchase the shares registered at the Stock Exchange are free to participate in the Board of Directors and General Assemblies of the enterprises of which they are shareholders, without any need for permission from GDFI, UT.

Reporting

Article 15- Enterprises with foreign capital which are permitted either in accordance with the provisions of this Communique or on the basis of former legislation, are obliged to submit all types of information and documents conceming their activities, upon request of the GDFI, UT.

Situation of Existing Foreign Capital Enterprises

Article 16- Enterprises operating in accordance with the Decree No: 92/2789 and dated March 4, 1992 are subject to the provisions of the Decree No: 95/6990 and dated June 7,1995 and, the provisions of this Communique, thereafter.

Repealed Provisions

Article 17- Communique No:1 conceming Foreign Investment Framework Decree published in the Offcial Gazette No: 19117 and, dated May 25, 1986, is hereby repealed.

Entry into Force

Article 18- This Communique shall enter into force on the date of its publication.

Execution

Article 19- The Undersecretariat of Treasury shall execute the provisions of this Communique.