Turkey

Market overview

Since 11 May, restrictions in Turkey have begun easing with malls and most businesses reopening. Cafes, restaurants and tourism facilities reopened from 1 June.

Most corporates and private companies are working from home where possible. President Erdogan has also issued a statement ordering public institutions and organisations to allow for alternating and flexible schedules for employees, and to enforce remote working where this is practical.

The Turkish government is planning for 'normalisation' and intending to abolish lockdown measures by mid-June.

President Erdogan has said the pandemic could become an opportunity for Turkish manufacturers, as global companies seek to shift production away from China. Go here for recent announcements on COVID-19 from the Presidency of the Republic of Turkey.

For more information on doing business in Turkey, visit myNZTE - our free online portal for curated, in-depth information and guidance.   


Supply chain, logistics and freight

Ports

The Turkish President has emphasised the need for Turkey to continue its production and ensure that its sea, land and air (freight) borders remain open.

Turkey intends to keep as many of its ports open as it can for the transit of goods in and out of the country.

www.utikad.org.tr provides updates on Turkish seaports (in Turkish). You can find up to date information on the air cargo transportation operations within Turkey on Turkish Airlines Cargo's website.

Freight and logistics

New Zealand trade with Turkey is mostly carried out via seaports, all of which remain open for trade. An additional roll-on, roll-off shipping line has been introduced between Romania and Istanbul to boost trade into Europe.

Some air freight transport in Turkey has slowed down due to increased hygiene and social distancing measures. Turkish Airlines-owned Turkish Cargo has announced that it will start using its passenger aircraft to carry goods, in addition to its entire fleet of 25 cargo planes, to meet the increased demand for its services.

With some land border crossings affected by movement restrictions, Turkey is trying to increase its rail capacity.

Turkey's International Freight Forwarders Association UND provides up to date international freight information on their website here.

Supply chain

Turkish distributors servicing New Zealand companies have noted the increasing cost of logistics. Airfreight costs from New Zealand to Turkey are double or triple the normal rate, and this is having an impact on supply chains throughout Turkey.

Turkey has tried to increase the volume of trade through its Georgian and Azeri land borders by lessening some of the measures on cargo truck drivers. Restrictions remain in place for drivers from Iraq and Iran, and trade volumes with these countries have dropped dramatically.

Customs and regulations

On 24 March, import tariffs on ethanol, disposable medical masks and ventilators were lifted by presidential decree.

On 20 May, Turkey introduced customs tariff increases for approximately 800 additional product lines, including construction equipment, agricultural machinery and food processing and packaging equipment. These changes do not apply to imports from EU customs union partner countries, but do affect imports from New Zealand.

We recommend that New Zealand companies look at how the changes in tariffs may affect their trade to Turkey, and contact NZTE's Istanbul office with any questions.

Advice to exporters

In terms of immediate activity, make the safety and wellbeing of teams your priority, and invest as needed to ensure a safe and healthy working environment. Many businesses are still allowing employees to work from home where this is possible. Check in with your business partners and see how they are doing and how you might be able to support them during this time.

Government support

On 18 March, the Turkish Government announced a number of measures in response to COVID-19 to ensure the impact on business is minimised.

The President introduced an Economic Stability Shield stimulus package, deploying 260 billion lira to reduce the economic impacts of the COVID-19 outbreak.

The measures that Turkey will put into practice in this framework are set out in this Turkish-language announcement and summarised below:

  1. The Government will postpone the April, May and June VAT and social security payments for six months – covering the retail, iron-steel, automotive, logistics and transportation, cinema, accommodation, food and beverage, textile/garment and event sectors.

  2. Turkey will not apply accommodation tax until November, and will postpone the easement rights and revenue share payments for hotel rentals for six months for April, May and June.

  3. Businesses affected by the measures against COVID-19 can delay loan principal and interest payments for a minimum of three months, and will be given additional financial support if necessary.

  4. Turkey will provide inventory financing support to exporters in order to maintain capacity during the temporary slowdown in exports.

  5. Turkish public bank Halkbank will postpone credit, interest and debt payments for three months for businesses and artists negatively affected by COVID-19.

  6. Turkey will increase its credit guarantee fund limit from 25 billion liras to 50 billion liras, and will give priority to SMEs with liquidity needs and collateral deficit.

  7. Reflecting the impact of the pandemic, firms that have defaulted/bankrupted in April, May and June will have a 'force majeure' grade in their credit registry.

  8. Turkey will postpone the periods of concise declarations containing payments of deductions made at source (such as withholding tax) for three months.

  9. Turkey ensured that the flexible and remote working models in its legislation are made more effective.

  10. To ensure continuity in employment, Turkey will increase its two-month compensation period to four months.

  11. Turkey will develop alternative channels in line with the priorities set both in production and retail in case of disruption in global supply chains.

Employment protection and bankruptcy

The Institution of Providing Jobs and Employees (İŞKUR) has begun to pay 60% of the gross salaries for companies that have had to shut down because of COVID-19 (for a three-month period), and for those who have had to decrease employee working hours (for a 12 month period). Eligible companies can apply on the İŞKUR website here.

On 22 March, by presidential order, all bankruptcy and financial executionary proceedings were stopped until 30 April, except for obligations regarding alimony and child support.

Central bank measures for exporters

To overcome liquidity shortages, Turkey Central Bank has launched the below measures for exporters:

  • Postponing open rediscount loan principal and interest payments with a maturity of April, May and June to October, November and December, with maximum maturity extended by one year.

  • Extending the commitment closing period for one year for rediscount credits that expired in April, May and June.

On 31 March, an additional 60 billion lira was released through better termed bank credits for the benefit of export-focused companies.

You can read a summary of the emergency tax measures for Turkish companies on PWC Turkey's website here.

Travel

While travel bans remain in place in Turkey, the government is slowly opening up passenger flights from certain countries, including Greece, Germany and Singapore.


Additional resources

Below you can find information and contact details for other New Zealand government and international agencies regarding their response to COVID-19.

New Zealand Government agencies

Covid19.govt.nz
COVID-19 helpline for businesses
Business.govt.nz
New Zealand Customs
Ministry for Primary Industries (MPI)
New Zealand Export Credit (NZEC)
MFAT Export Helpline
MFAT Safetravel
Callaghan Innovation
Immigration
Ministry of Health
WorkSafe New Zealand
myNZTE

Global agencies

World Health Organization (WHO)
Centers for Disease Control and Prevention (CDC)

Contact NZTE

We're available to talk to you about any issues your export business is facing due to COVID-19.

For existing NZTE customers, please contact your New Zealand-based Customer Manager.

If you're unsure who to contact or haven't worked with us before, you can call NZTE on 0800 555 888 or email below and one of our Customer Advisors will help you.