Investing in Turkey: A Comprehensive Guide
Turkey has been a popular destination for investors over the years due to its unique geographic position and growing economy. The country has a strategic location between Europe and Asia and acts as a bridge for trade and commerce. Here’s a comprehensive guide on why you should consider investing in Turkey, what investment options are available, and what to keep in mind when making your investment.
Why Invest in Turkey?
1. Booming Economy – Turkey’s economy has been growing at a steady rate over the years, boasting a GDP of approximately $755 billion in 2020 as per World Bank estimates. The country has a stable government and regulatory environment that fosters entrepreneurship and foreign investment.
2. Diversified Economy – The Turkish economy is well diversified, with a balance in agriculture, manufacturing, and services sectors. This stable diversity ensures that any risks or fluctuations in one area do not affect the economy as a whole.
3. Market Access – Turkey’s strategic location near the crossroads of Europe and Asia makes it an important trading hub. The country has excellent logistics infrastructure, including modern airports, ports, and railways, which makes it an attractive location for businesses looking to expand their supply chain.
4. Competitive Labor Market – The Turkish workforce is young and vibrant, with a high level of education and technical skills. Labor costs are also affordable compared to western countries, making it an ideal destination for setting up manufacturing units.
5. Government Support – Turkey has taken several steps to attract foreign investment into the country. These initiatives include tax incentives, the introduction of free zones, and significant investments in infrastructure development.
1. Real Estate – Real estate investment in Turkey has gained considerable momentum in recent years. Property prices are still relatively low, and the government has introduced a citizenship by investment program, which allows foreigners to obtain Turkish citizenship by purchasing property worth over $250,000.
2. Stocks and Bonds – The Istanbul Stock Exchange (Borsa Istanbul) is the country’s main trading platform, which offers a range of investment opportunities across various sectors. Bonds issued by Turkish companies and government organizations are also widely available and offer fixed returns.
3. Agriculture – Agriculture is an essential sector in Turkey, contributing significantly to the country’s GDP. Investments in the agricultural sector, including livestock, dairy, and horticulture, have been significant in recent years, driven by the government’s support and incentives.
4. Manufacturing – Turkey’s manufacturing industry has been growing at a steady rate over the years due to its competitive labor market and strategic location. The country is a significant exporter of goods with its primary trading partners being the EU, United States, and MENA countries.
5. Energy – Turkey is highly dependent on energy imports, making its energy sector a significant focus for the government. Investments in renewable energy, including wind and solar, have been gaining traction in recent years.
Q. Are there any restrictions on foreign ownership of businesses in Turkey?
A. No, there are no restrictions on foreign ownership of businesses in Turkey. However, there are certain sectors where foreign ownership is either limited or prohibited, including banking and telecommunications.
Q. How easy is it to obtain licenses and permits for starting a business in Turkey?
A. Obtaining licenses and permits in Turkey is relatively easy and straightforward. The government has streamlined the process in recent years, reducing the time required to obtain approvals.
Q. What is the maximum foreign investment limit allowed in Turkey?
A. There is no maximum limit for foreign investment in Turkey. However, certain sectors may have restrictions on the percentage of foreign ownership allowed.
Q. Is it easy for foreigners to obtain a work visa in Turkey?
A. Yes, it is relatively easy for foreigners to obtain a work visa in Turkey. The process is straightforward, and the government has introduced several initiatives to attract skilled foreign professionals to the country.
Q. What tax incentives are available for foreign investors in Turkey?
A. The Turkish government provides various tax incentives for foreign investors, including a 50% corporate income tax exemption for up to 10 years for investments above $1 billion and a 35% income tax reduction for R&D investments. In addition to this, certain sectors have specific incentive schemes, such as the supporting scheme for the film industry.
Turkey is an ideal destination for investors looking to diversify their portfolio across several sectors. The country’s booming economy, competitive labor market, and government support make it an attractive destination for foreign investment. With the range of investment options available and a streamlined approval process, it is relatively easy for investors to enter the Turkish market. Venture into Turkey today, and you may reap significant rewards in the years to come.