Table of Contents
Invest in Turkey
Since the last decade, Turkey has been the main attraction to foreign investors like an investment hub. Let’s talk about the five reasons why such a huge number of foreign investors choose to invest in Turkey.
Turkey serves as a link between Europe and Asia, as well as the past and future, the traditional and the contemporary. For individuals who wish to live a happy life, this place is a haven of diversity and productivity. However, it’s also important to remember that Turkey is not only a nice place to live for its residents, but also a safe refuge for international investors. Consider the following reasons why foreign investors should sow the seeds of successful investment in Turkey.[1]
Helpful Link: Opening a Business in Turkey.
Top Reasons To Invest In Turkey
Turkey is recognized for its hospitality and geopolitical location, which has made it a significant hub for drawing local and foreign investors in a variety of industries, particularly tourism and real estate, which have piqued investor interest in recent years.[2]
Helpful Link: Investment Opportunities in Turkey’s Real Estate Sector.
One of the main reasons that investors preferred Turkey to invest was the beauty of its nature, a bridge between Asia and Europe, with a high percentage of the youth population, especially the values that characterize Turkey, which made it a focus of interest for foreign investors in general and turned it into a country open to investors and foreign capital.[2]
Before investing in a location, every investor considers why he/she is investing there, therefore we’ve compiled a list of compelling reasons for local and international investors alike to choose Turkey for investment. Some of these reasons are:
- Robust Economy,
- Large domestic and regional markets,
- Strategic Location,
- Favorable Demographics,
- Skilled and cost-competitive labor force,
- The continuous reform process,
- The liberal investment climate,
- Lucrative incentives,
- Advantageous R&D Ecosystem,
- Sectoral Opportunities.
Turkey is a country of exciting potential for investors, with a robust economy, government incentives, sectoral opportunities, and cost-effective labor. It is one of Europe’s most investor-friendly countries, ranking 11th out of 36 countries in the OECD‘s “International Tax Competition Index” for 2020.[3]
Helpful Link: What is the Best Investment in Turkey?
The Turkish economy posted record growth and climbed from 18th place to 13th globally from 2003 to 2019.[4]
Top Reasons Why Foreign Investors Should Invest in Turkey
Image Source: <https://www.invest.gov.tr/en/whyturkey/top-reasons-to-invest-in-turkey/pages/robust-economy.aspx>
The Turkish administration is committed to liberalizing economic and political institutions in order to create a solid and expanding foundation. Turkey’s economy has been undergoing a successful change for the past 18 years.[5]
Helpful Link: Is Turkey a Safe Country for Business?
- Turkey’s economy grew by 1.8 percent year on year in 2020.[6]
- The Turkish economy still improves despite the Corona Virus pandemic effects on the world.[5]
- The Turkish Statistical Institute has indicated that ₺5.1 trillion ($717.1 billion) are the gross domestic product (GDP) of the country last year (TurkStat).[6]
- The Turkish economy would rise 2.2 percent in 2020, according to a panel of 21 economists polled by the Anadolu Agency on Friday.[6]
The economy increased at a 5.9% annual rate in the fourth quarter of 2020, according to TurkStat data. GDP grew 1.7 percent calendar-adjusted over the previous quarter, according to the data. The only nations in the G20 with positive growth rates are Turkey and China. At current rates, last quarter’s performance boosted cumulative GDP by 16.8% over the previous year. In 2021, the average exchange rate between the US Dollar and the Turkish Lira was about 7.2.[5,6]
Turkey’s Population – 2021
Turkey’s current population growth rate is 1.09 percent, and it has been continuously decreasing year after year. Turkey’s present population of 84.34 million is expected to peak at 97.96 million in 2059, before starting to drop. By the end of the century, the population is expected to drop to 86.61 million.[5]
Turkey’s fertility rate is 1.99 births per woman, lower than the replacement rate of 2.1. The birth rate is 15.3 per 1,000 people, which is lower than in prior years. In the future years, Turkey’s falling fertility rate might result in a significant elderly population. On the other side, a growth in population might lead to more unemployment and marginalization.[5]
In 2010, the population was expected to reach 72.75 million, but it has now reached 76 million. According to these statistics, the country’s population has been continuously growing since the eighteenth century. Turkey’s growth rate is anticipated to slow as the twenty-first century progresses. Population growth will continue but at a lesser rate. In 2020, the population is anticipated to reach 83 million, with 90 million not expected until about 2035.[5]
Why Do Foreign Investors Choose to Invest in Turkey?
Is it a good idea to invest in Turkey? There are several reasons why foreign investors choose to invest in Turkey, some of them are as follows:
Unique Location & Easy Transportation: Turkey’s unique geographic location makes it a major tourist and trade destination. Flights to any nation are only a few hours away thanks to contemporary and simple travel alternatives.[3]
Fast and Easy Buying Process: For international investors, Turkey offers a quick and simple purchasing process. Purchasing real estate in Turkey is a simple, step-by-step procedure that takes less than a week to complete.[3]
Helpful Link: Purchasing a Company in Turkey.
High investment Potential: Turkey is a major international financial hub. A real estate industry that continues to expand and provides low-cost access to a competent workforce. In the near run, it’s profitable.[3]
Easy Payment Options: There are 120-month payment options available. On top of that, there are a variety of different payment methods for unfinished jobs.[3]
Strong Healthcare System: There are more cost-effective healthcare solutions in Turkey than in most European nations. It provides access to cutting-edge hospitals with world-class expertise, technology, and efficiency. Offering a variety of health insurance plans.[3]
Strong Economy: Turkey has the world’s 19th largest economy. It’s indeed extremely self-sufficient, manufacturing and producing a wide range of items for its use as well as serving as the primary source for others.[3]
Support For Foreign Investors: Investors have access to exceptional assistance and incentive opportunities. Foreign purchasers are free from paying VAT (assuming the property you purchase is not sold for at least a year).[3]
Low Expenses and Cheap Tax: Cheap yearly property taxes; up to 18% VAT deduction incentives; low water, power, and related utility costs.[3]
Helpful Links:
● Corporate Taxation in Turkey
● Types of Investment Funds in Turkey
Affordable Prices: Turkey offers diverse real estate options suitable for every budget. Also, due to the fact Dolar and Euro are in a strong position against the Turkish Lira, it’s very suitable for investment.[3]
Turkish Citizenship: Citizenship can be obtained through real estate investment alternatives, such as purchasing a property worth at least $250,000, purchasing a $500,000 real estate investment fund, putting opening a bank account in Turkey and depositing $500,000 in the bank account, or hiring at least 50 Turkish nationals.[3]
Countries with the greatest number of purchases in Turkey: Iraq, Iran, Russia, Saudi Arabia, Afghanistan, Kuwait, Germany, Jordan, Yemen, England, Azerbaijan, Palestine, Libya, Egypt, Kazakhstan, Sweden, Qatar, Ukraine, USA, and Lebanon.[3]
Top Reasons Why Foreign Investors Should Invest in Turkey
What Are The Top Reasons to Invest in Turkey?
There are several reasons why foreign investors choose to invest in Turkey, some of them are as follows:
Improved and Thriving Economy
Turkey’s economy was on the verge of collapse when the new century began, but since 2002, the country’s economy has been quickly improving. GDP, the country’s most significant metric, increased from 231 billion to 820 billion dollars over this time. Between 2002 and 2015, the country’s GDP increased by 5.1 percent on an annualized basis.[2,7]
According to IMF and OECD data, Turkey is predicted to be among the fastest-growing economies in 2012-2017. Turkey became the sixth-largest economy in Europe and the sixteenth-largest economy in the world in 2013, drawing more than $135 billion in international capital (foreign investment) during the previous ten years. Exports rose by more than 245 percent throughout this time.[2,8]
An Ever-growing Economy
Turkey climbed five places in terms of GDP and PPP since 2003, according to the International Monetary Fund, and was rated 13th among world economies in 2018. Furthermore, it aspires to surpass Italy and move up to 12th place by 2023. Turkey’s employment rate has risen substantially since 2008, due to the country’s open investment climate. Turkey’s labor market is constantly competitive due to its well-educated youthful population, which is the largest in Europe.[1,13]
The Increase Rate of Youth Population
When it comes to investing in a location that necessitates the presence of qualified youth and trained people, Turkey’s young population dwarfs that of European countries. Turkey is Europe’s most populated country, with a population of more than of it is young, ensuring that any investor launching a business in Turkey and investing in Turkey would not face labor shortages.[2]
Skilled and Competitive Workforce
Turkey has 29 million young people, including trained and certified employees, according to the Turkish Statistical Institute. Around 600,000 young people and 700,000 graduates from secondary schools, institutes, and vocational institutions graduate each year from around 200 universities. Those who are qualified for employment, fostering a competitive climate that encourages workers to be creative and perfect their craft.[2,9]
Tourist Attractions
Hundreds of touristic zones may be found across Turkey, whether you want to invest in the tourism industry or simply enjoy amazing historical sites and natural wonders anytime you choose. In the ancient peninsula, one may feel the essence of the Ottoman Empire, go back in time in Gobeklitepe, appreciate the stunningly gorgeous sunsets on Antalya’s beaches, ride a hot air balloon in Cappadocia, or forget about the world in the foggy highlands of Ordu.[1]
The Flexibility of The Investment Atmosphere in Turkey
Many nations have hurdles to detecting foreign investments, but Turkey, a member of the Organization for Economic Co-operation and Development (OECD), started erecting such barriers to international investors in 1997. Today, Turkey has reached a point where a new firm is formed every six days, and the government treats all investors equally, fostering a competitive atmosphere.[2]
Turkey has about 37.000 enterprises with foreign funding, according to the Ministry of Economy. Turkey also offers the option of appealing to international courts and tribunals to resolve intractable issues that foreign businesses face. This situation also boosted Turkey’s attractiveness to international investors.[2,10]
The Infrastructure of Turkey
One of the most important motivations for foreign investors to invest someplace is to offer the required infrastructure for investment and to lower transportation costs. When it comes to fundamental infrastructures, such as transportation, communications, electricity, and technical infrastructure, Turkey has seen a boom, making it a magnet for international investment. Three seamen were briefed in Turkey, which gave them extremely inexpensive marine transportation as well as a train network connecting them to Central and Eastern Europe.[2]
The Perfect Geographical Location
Turkey’s strategic location between Asia and Europe has long made it a natural connection between the two continents. Turkey has welcomed numerous business connections between the East and the West due to its geographic location. Turkey now has a strategic location that allows it to access over 1.5 billion people in Asia, Europe, and Africa, and it is the most dependable commercial transit point.[2]
Largest Power Plant and Energy Terminal in Europe
Turkey is a significant player in the energy exchange between Asia and Europe. It aids in the transmission of energy from east to west as well as the movement of cash from west to east. On the other hand, Turkey and its neighboring nations are home to 70% of the world’s energy sources, making them a vital hub for energy transmission to Europe, which is one of the world’s most significant energy consumption centers.[2,11]
Low Costs of Taxation in Turkey
The institutional profit tax on foreign investors has been cut from 33% to 20% in order to encourage businesses to invest in Turkey. Foreigners may be excluded from this tax entirely or partially in specific situations. Investors are also invited to participate in some of the state’s initiatives, such as land distribution and other incentive programs.[2,12]
Membership in the European Customs Union
The European Customs Union intends to expand economic opportunities and activity. Turkey has been a member of this customs union since 1996, and the members of the union have signed 20 free trade agreements. Through the signing of new agreements, these commercial connections are growing every day.[2]
Thriving Urban Life and Infrastructure Development
With Turkey’s increasing economy and infrastructure investments, a vast number of cities satisfy the standards of being a metropolis. Numerous areas in many cities are living up to the aspirations of individuals seeking a satisfying urban life as a result of urban gentrification.[1]
Turkish Passport and Citizenship
To obtain a Turkish passport or become a citizen, foreign investors had to purchase a real estate property valued at least 1.000.000$ but the minimum amount that must be paid for a real estate property has been decreased to 250.000 dollars in 2018. Even if you’re overseas, the process is quick and easy, taking no more than 30 days at most. Turkey is a cosmopolitan country where many foreigners and locals coexist peacefully while respecting each other’s culture and religion. Turkey is also recognized for its hospitality. Whether you choose to live in Turkey permanently or just for the summers or work you will feel at ease everywhere you go in Turkey.[1,14]
High Return on Investment (High ROI)
The first and foremost reason to choose Turkey for investment by foreign investors is the returns on investment (sometimes as high as 150%) investors are getting over the years. In terms of return, Turkey is heaven for investors.
Rules Favorable For Foreign Investment Porpuses
Turkey is considered a very safe place for foreign investors. As per the Foreign Direct Investment (FDI) Law of Turkey, foreign investors are free to make direct investment and this makes a big difference in freedom for foreign investors compared to any other nation. The most significant factor is that both foreign and domestic investors are treated equally. This equality is everywhere from tax to other business laws. This makes a big difference in freedom for foreign investors compared to any other nation. Possibly this is why within a year Turkey jumped up to 10th rank and ranked 33rd worldwide for ease of doing business in the last report of 2019.
Social Impact
Last but not the least, the social format of Turkey provides foreign investors with comfort. Even being a Muslim-dominated population, with the lowest living cost compared to any other country of Europe; Turkey is the most secular, open-minded, and progressive country among all Muslim dominant countries.
Large National Markets
According to data from the Turkish Statistical Institute, the number of Internet users has increased from 100,000 to 33 million, the number of mobile internet users has increased from 23 million to 70 million, the number of borrowers has increased from 16 million to 58 million, and the number of borrowers has increased from 16 million to 58 million since 2002. Furthermore, mobile phone users have risen from 33 million to 131 million. Turkey has a significant domestic market, as seen by the increase in international tourists from 13 million to 40 million each year.
The most important facts regarding Turkey’s strong features
Turkey is unquestionably a fantastic contender for business and investors, a country that is high on the list of foreign businesses looking to make money in a stable market. With all of the necessary business instruments, Turkey ranks among the world’s most important business destinations, alongside the United States, China, and Japan, to name a few.[15] Here are some of the most important aspects of Turkey to consider while deciding whether or not to invest in the country:
- Turkey’s business climate is protected by a stable economy,
- Prosperous commercial areas attract a big number of international investors,
- International conventions and double tax treaties provide protection for Turkish businesses and activities,
- Small and medium enterprises will be sustained by an appealing tax structure and a range of tax benefits,
- Procedures for registering a company in Turkey have been simplified. In only a few days, the company will be up and running,
- Possibility of getting specific permissions and licenses in a timely way,
- Turkey’s automobile, tourism, agricultural, energy, and technology industries are all profitable,
- Istanbul, Turkey’s commercial hub, is the major draw for international investors, yet specific incentives are also available to investors launching businesses in other parts of the country.
What is the foreign direct investment law in Turkey? Law No. 4875, which went into effect in 2003, defines foreign direct investment in Turkey. This phrase refers to foreign investors who establish a corporation or a branch of their company in Turkey, or who buy stock in a Turkish company.
Investment incentives in Turkey
Turkey has had two major incentive programs since 2016, one dubbed “Super Incentives” and the other called “Center of Attraction.” The first was established to promote research and development in any technical field, while the second was established to lure international investors to Turkey’s less developed regions by emphasizing employment and exports. Overall, Turkey’s investment incentives are designed to encourage long-term inward investment.[15]
Conclusion: Top Reasons Why Foreign Investors Should Invest in Turkey
So now you can understand why foreign investors prefer to invest in Turkey. Overall, investing in Turkey as a foreign investor with some caution is a smart decision to make.
These are compelling reasons for foreign investors to invest in Turkey. Furthermore, these factors provide several benefits, which have helped Turkey become an important hub for attracting local and international investors in general. We have noticed, particularly in recent years, that Turkey has sought to increase foreign investment by enacting a number of laws and regulations, as well as establishing a number of agreements, all of which will encourage international investors to invest in Turkey. Turkey’s motivating initiatives have shown positive results in a short period of time. Turkey is now among the most desirable countries in the world for foreign investment.
If you wish to make investments in Turkey or require legal services, our law office in Turkey can provide you with information and assistance. Please don’t be afraid to contact us.
References
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- Dada-Ami, A. (2021, February 15). Why Foreign Investors Choose Turkey – Top 10 Reasons Why Turkey? Turkey Property Beys. <https://turkeypropertybeys.com/reasons-foreign-investors-choose-turkey/>
- Robust Economy – Invest in Turkey. (n.d.). Presidency of The Republic of Turkey | Investment Office. Retrieved July 7, 2021, from https://www.invest.gov.tr/en/whyturkey/top-reasons-to-invest-in-turkey/pages/robust-economy.aspx
- 10 reasons why you should invest in Turkey 2021. (n.d.). Alhuda Real Estate. Retrieved July 7, 2021, from https://www.alhudarealestate.com/en/news/10-reasons-why-you-should-invest-in-turkey-2021
- Sahin, T. (2021, March 1). Turkish economy grows 1.8% in 2020. Anadolu Agency. <https://www.aa.com.tr/en/economy/turkish-economy-grows-18-in-2020/2160307>
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- Republic of Turkey Prime Ministry. Investment Support and Promotion Agency of Turkey (ISPAT). <http://abuja.emb.mfa.gov.tr/Content/assets/consulate/images/localCache/12/c869b797-70bf-4a4e-9d6c-7aab6a3a84c7.pdf>
- Turkish Cooperation and Coordination Agency. (2012). TIKA 2012 Annual Report. <http://www.tika.gov.tr/upload/oldpublication/tika2012AnnRep.pdf>
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- International – U.S. Energy Information Administration (EIA). (2017, February 2). U.S. Energy Information Administration. <https://www.eia.gov/international/analysis/country/TUR>
- KPMG.(2020). Investment in Turkey. Tax Services. <https://assets.kpmg/content/dam/kpmg/tr/pdf/2020/11/investment-in-turkey-2020.pdf>
- Yalcin, F. (2021, May 6). Turkey Ranks 11th Place Globally In Terms of GDP. Doingbusinessinturkey.Com. <https://doingbusinessinturkey.com/turkey-ranks-11th-place-globally-in-terms-of-gdp/>
- Turkish Citizenship by Investment: 5 Most Guaranteed Ways | MELARES. MELARES. Retrieved July 7, 2021, from https://www.melares.com/en/turkish-citizenship-by-investment
- Altunsoy, C. (2020, July 23). Invest in Turkey. Lawyer-Turkey. https://www.lawyer-turkey.com/reasons-for-investing-in-turkey
This article was published on 07.12.2020 and last edited on 07.07.2021. Images used in this article have been taken from free image-sharing services on the internet. Also, in this article, which is called; “Top Reasons Why Foreign Investors Should Invest in Turkey,” information freely shared on the internet was used, and necessary references were given in the article. We make every effort to offer accurate and current information. However, please do let us know if you find any errors in this article.
