By Dilara Zengin and Tuba Sahin
Turkey is fast on its way to becoming an attractive hub for entrepreneurs, according to the head of Turk Telekom -- Turkey’s only integrated telecommunications service provider -- on Monday.
"Thanks to the government’s actions to support the expansion of the entrepreneurial ecosystem and the incentives it provided, Turkey is rapidly moving forward in becoming an attractive entrepreneurship center," CEO Paul Doany told the World Business Angels Investment Forum of which Anadolu Agency is the Global Communication Partner for 2017.
"The government have actually introduced important incentives into the market that generates good opportunities for people to get money and also for investors," Doany said, adding the support given to entrepreneurs played an important role in a developing economy.
The government's incentives for the so-called "angel investors" -- wealthy individuals putting up their own money to back small and medium-sized businesses -- created a "major transformation" in Turkish market, he added.
Doany underlined the "important" role of angel investors and corporate ventures in the development of the country's economy "through their investments in and support given to the innovative ideas that lead the way to the emergence of new business areas along with increased employment opportunities".
He said collaboration with entrepreneurs offered corporate ventures an opportunity "to provide the most innovative products and services for the ever-changing needs of their clients while also allowing the entrepreneurs the benefit of launching their business ideas with the power of a corporation".
"When we consider that the corporate ventures are more flexible and faster than venture capital funds, I can say that they are more effective in contributing to the country’s economy," he added.
Doany also stressed the "very significant place" enjoyed by angel investor networks and institutional investors in the country's economy "as they enable entrepreneurs to access the capital and know-how they needed in order to transform innovative ideas into productive ventures and also ensure capital holders access attractive business ideas to invest in".
Under a system introduced in 2013 by the Undersecretariat of Treasury to encourage angel investments in Turkey, angel investors can benefit from tax incentives for their investments.
"The law regarding the promotion of angel investments was enacted in 2012 and the system was launched in 2013 with the secondary legislation.
"It aims to introduce a new instrument for small to medium-sized enterprises at their early development stages and having funding difficulties, increase professionalism and improve business culture and ethics among angel investors, make angel capital an institutionalized and trustworthy source of finance, and make angel investments attractive through state supports," according to the Treasury.
Accordingly, 75 percent of the participation shares of qualifying Turkish resident joint stock companies or private venture companies held by "business angels" can be deducted from the business angels' annual income tax base.
In order to get a deduction from their taxable income, investors must hold acquired stocks for at least two years, and meet the requirements of the Angel Investment Law and regulations.
The maximum annual deductable amount is 1 million TL (around $271,000).