Table of Contents
Discover the Advantages of Investing in Turkey: A Gateway to Global Opportunities
Turkey's emergence as a leading investment destination is supported by its unique mix of geographical advantages, economic strength, and demographic benefits. This guide highlights why Turkey is an attractive option for investors aiming to explore opportunities in a rapidly changing global environment.
Strategic Geopolitical Location: Your Bridge to Diverse Markets
At the crossroads of Europe, Asia, and Africa, Turkey presents unparalleled access to a vast and diverse market. This strategic position opens up a gateway to 1.3 billion people across a 4-hour flight radius, encompassing a combined GDP of USD 28 trillion. The nation's pivotal location facilitates operations across 16 different time zones, from Tokyo to New York, making it an efficient and cost-effective hub for businesses aiming to penetrate major markets.
Turkish Airlines, with connections to 342 destinations in 121 countries, exemplifies Turkey's global reach. This extensive network has attracted leading corporations like Nestle, Toyota, Ford, and Hugo Boss. These companies leverage Turkey's logistical prowess to serve both regional and global markets, highlighting its role as a critical hub for international business.
Economic Resilience and Growth: A Testament to Investment Potential
Turkey's economy showcases impressive growth, with an average annual GDP increase of 5.4% from 2003 to 2022. Advancing from the world's 18th to the 11th largest economy, Turkey's fiscal discipline, reduction in public debt, and vibrant private sector underscore its economic stability and growth prospects. With a GDP expansion from USD 236 billion in 2002 to USD 906 billion in 2022, Turkey presents a strong case for investment.
Demographic Dividend: A Young, Dynamic Workforce
Turkey's demographic profile offers a stark contrast to the aging populations observed in many European countries. With a median age of 33.5 years and a population projected to reach 93.5 million by 2050, Turkey boasts a young, dynamic, and well-educated workforce. This demographic advantage positions Turkey as an attractive destination for investors, offering a strong labor pool and a lucrative domestic market. The steady population growth ensures a sustained demand for goods, services, and innovation, underpinning the country's economic momentum.
Skilled Labor: Educated and Competitive
Turkey's labor market is robust and dynamic, with the country boasting the second-largest labor force in Europe, comprising around 34.3 million people. The vitality of Turkey's labor force is a direct consequence of its youthful demographics. With a significant portion of its population in the working-age bracket, Turkey has seen the most substantial labor force growth among EU countries.
The educational infrastructure in Turkey has undergone rapid expansion, leading to an increase in the number of higher education institutions across the country. This educational proliferation has resulted in Turkey having a growing number of university graduates, with more than 8 million students enrolled in higher education and over 900,000 university graduates each year. Among these graduates, Turkey prides itself on its world-class engineering education, which has been instrumental in transforming its young and large labor force into a highly skilled and competitive workforce. This is a testament to Turkey's commitment to harnessing its demographic dividend and preparing its population for the challenges of the modern economy.
Attractive Incentives for Investors
Turkey’s investment incentives program is both comprehensive and competitive, tailored to support both greenfield and brownfield projects. The program spans a wide array of instruments designed to minimize initial costs and expedite investment returns. These incentives are especially beneficial for projects within priority sectors that are crucial for technology transfer and economic development.
The Turkish government also extends substantial support for research and development, innovation projects, and employee training initiatives. Exporters, benefit from a range of grants, incentives, and loans. Major companies like Ford, Nestle, Fiat, Novartis, Bosch, and Mercedes have already availed themselves of these incentives, bolstering their operations and growth within Turkey.
The Investment Office's Incentives Team is pivotal in navigating these opportunities. They possess a deep understanding of the investment incentives authorities and offer a suite of services that include:
Preparing preliminary financial calculations for investment projects
Creating tailor-made information packages on available incentives
Assisting with the application process for investment incentives
Providing communication in the investor's language
Supporting further expansion and business plans
These services are not only comprehensive but are also provided free-of-charge and on a confidential basis, ensuring that investors can access and leverage these incentives with confidence and ease.
For a detailed understanding of the range of incentives Turkey offers, you may find the table showing Incentives Provided by The Ministry of Industry and Technology below, which outlines the various support mechanisms available to investors.
GENERAL INVESTMENT INCENTIVES | REGIONAL INVESTMENT INCENTIVES | STRATEGIC INVESTMENT INCENTIVES | PROJECT-BASED INVESTMENT INCENTIVES |
VAT Exemption for Machinery Customs Duty Exemption | VAT Exemption for Machinery VAT Exemption for Construction Customs Duty Exemption Corporate Tax Reduction Social Security Premium Support (Employer’s Share) Land Allocation Interest Rate Support | VAT Exemption for Machinery VAT Exemption for Construction Customs Duty Exemption Corporate Tax Reduction Social Security Premium Support (Employer’s Share) Land Allocation Interest Rate Support | Cashback Support VAT Exemption for Machinery VAT Exemption for Construction Customs Duty Exemption Corporate Tax Reduction Social Security Premium Support (Employer’s Share) Income Tax Withholding Support Qualified Personnel Support Energy Support Interest Rate Support Capital Contribution Support Land Allocation Infrastructure Support Purchasing Guarantee Facilitation of Permit Procedures |
Diverse Sectoral Opportunities: From Automotive to Agrofood
Turkey's economy is not only robust but also diverse, offering a wealth of opportunities across multiple sectors where the country holds competitive advantages.
Automotive: Since 2000, global brands have invested a total of USD 18 billion in the Turkish automotive industry, underscoring its significance on the international stage. In 2023, Turkey manufactured 1.4 million vehicles, establishing it as the 12th largest automotive producer globally. This achievement highlights the industry's robust infrastructure and its pivotal role in the global automotive sector.
Machinery: Turkey stands as the largest producer of TVs and white goods in Europe, commanding a market of USD 34 billion and boasting exports worth USD 28 billion. This sector represents Turkey's industrial prowess and export-oriented industrial strategy.
Defense & Aerospace: In 2022, Turkey allocated USD 10.6 billion to defense expenditures, underscoring the growth and development within its defense and aerospace sector. The total export value from the Turkish defense and aerospace industry reached USD 3 billion for the same year, reflecting its increasing significance on the global stage. Additionally, the civil aviation services in Turkey reported a total turnover of USD 35.8 billion, with the defense and aerospace industry's turnover hitting USD 12.2 billion. This was supported by a civil aviation fleet that included 642 aircraft, demonstrating Turkey's substantial capabilities and infrastructure in the aerospace domain.
Energy: The energy market in Turkey is valued at USD 66 billion, characterized by growing demand and strategic positioning as an energy hub. The sector also has vast untapped renewable energy potential, signaling opportunities for sustainable investment. Major players such as Siemens and BP significantly contribute to the industry
Infrastructure: Throughout the 1986-2022 period, Turkey has engaged in public-private partnership (PPP) projects with contracts valued at USD 195 billion. These ventures span across 265 total PPP projects, showcasing the nation's commitment to collaborating with the private sector in enhancing its infrastructure.
Financial Services: As of 2022, Turkey's financial services sector boasts a total asset size of TRY 22.6 billion, reflecting the robustness and depth of the market. The Turkish banking sector, with a capital adequacy ratio of 19% as of November 2022, demonstrates strong financial health and stability. Furthermore, the total asset size of the Turkish banking sector accounted for 128% of the GDP in 2021, highlighting its significant contribution to the national economy. The sector also continues to see an expansion in Islamic finance, aligning with Turkey's vision to broaden its financial services landscape.
Agrofood: The agrofood sector in Turkey is a market behemoth valued at USD 103 billion, with exports amounting to USD 19 billion. Turkey exports to approximately 200 countries, illustrating the sector's vast reach and the country's pivotal role in the global food supply chain.
Turkey's diversified economic structure provides investors with a variety of sectors to consider, each with its distinct competitive edge and potential for growth. These sectors underscore the nation's economic vitality and the wide range of investment opportunities that are available, reflecting Turkey's strategic emphasis on industrial and technological development.
Conclusion: Why Invest in Turkey?
Turkey's strategic geographical location, robust economic growth, and favorable demographics make it a standout choice for investors. The country's ability to serve as a bridge between continents, combined with its economic resilience and demographic vitality, presents a unique blend of opportunities for growth and expansion. As Turkey continues to evolve and adapt, its investment landscape promises to offer diverse and rewarding prospects for global investors.
Frequently Asked Questions (FAQ)
Why is Turkey considered a strategic investment destination?
Turkey’s unique geographical location at the crossroads of Europe, Asia, and Africa provides unparalleled access to diverse markets, making it a strategic hub for businesses aiming to reach a vast and varied customer base.