Turkey: Investing

FDI in Figures

Following the economic and political crisis of 2001, which led to the collapse of its banking system, Turkey concluded a significant macro-economic stabilization plan with the IMF, in 2002. Within this stable political context, also characterized by a gradual improvement of the country’s economic results, FDI influx to the country was enormous. However, due to the global financial crisis and the suffocation of the privatization process, the trend has been reversed: since September 2008, the FDI influx into Turkey has been decreasing.

In 2009, Turkey, with 6 billion of FDI, has been demoted to 32nd place in world’s destinations, i.e. 12 places dowtn from 2008.

The effects of the crisis can still be felt. In the first half of 2010, FDI flux totalled 3.2 billion USD, or a quarter less than on September 1st 2009. The estimate for 2011 is 7.5 billion USD. In this way, the influx should not return to their earlier lever before two years from now. The state has undertaken many legislative reforms in order to attract FDI (tax exemptions and other incentives), such as creating the Prime Ministry “Investment Support and Promotion Agency of Turkey”, showcasing the efforts made to attract foreign operators.

Why You Should Choose to Invest in Turkey

Strong Points

- A geographical strategic location;
- A well developed industrial basin;
- A country whose calling is to join the EU club by 2015-2020;
- A rapidly developing consumer middle class;
- A Flexible labor law, which favors investment and low labor costs;
- A sustained growth influenced by a modern and dynamic private sector;
- A strong increase in productivity in recent years;
- A legal framework close to European standards and favorable to investment.

Weak Points

- The slowing down of economic and political reforms observed;
- A strong dependenc on hydrocarbon imports and on exports;
- An uncertainty regarding the exchange rate;
- A disturbing deficit of the balance of current payments;
- Insufficient and sometimes obsolete, infrastructures;
- An informal sector difficult to reduce.

Government Measures to Motivate or Restrict FDI

Since 2003, investors are no longer obliged to acquire a minimum interest.
Nevertheless, the government encourages investments in the form of Build Operate Transfer (BOT) (law n° 4283 of 16 July 1997). It favors investments in the High Tech, textiles, services (health, education, transport), telecommunications, shipbuilding, electronics and biotechnologies sectors. Export-oriented projects are also promoted.
Decree n° 24 810 of 9 July 2002 defines public aid for investment.

Bilateral Investment Conventions Signed By Turkey

Turkey has signed bilateral conventions with nearly 80 countries. In the Mediterranean basin, Turkey has signed bilateral conventions with Algeria, Egypt, Israel, Spain, Greece, Lebanon, Morocco, Portugal and Tunisia. 44 conventions can be downloaded on the UNCTAD website: click here to download these conventions. They define the framework of protection for foreign investment in Turkey for each of the signatory countries.

Procedures Relative to Foreign Investment

Freedom of Establishment

Guaranteed

Acquisition of Holdings

Possible

Obligation to Declare

Foreign investors only have to inform the General Directorate of Foreign Investment (GDFI) through the under-secretariat of State to the Treasury.

Competent Organization For the Declaration

Turkish Treasury

Requests For Specific Authorizations

In some sectors considered to be strategic such as petroleum, the media (radio and TV) and tourism, acquisitions are limited to a certain amount (law n° 6326 of 1954).

Investment Opportunities

Investment Aid Agency

Invest in Turkey
DEIK

Tenders, Projects and Public Procurement

IHALE, Public Procurements
Tenders Info, Tenders in Turkey
Globaltenders, Tenders & Projects from Turkey
DgMarket, Tenders Worldwide

Other Useful Resources

IGEME

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