How attractive is Turkey for foreign investment

Safe investment has always been a concern for the investors. In the recent years, Turkey has become one of the most popular investment hubs along with such giants like Dubai, Singapore, London, etc. The historical background, architecture and foreigner friendly economy has allowed tremendous inflow of foreign capital into the Turkish economy. In this article, we will go through the current economic state of Turkey to see whether it’s worth investing in Turkey or not.

First, let us briefly introduce the Turkish economy and its position in the global economy. (Global economic association authorities present the following figures)

Booming economy; tripled its GDP, reaching USD 851 billion in 2017, from USD 231 billion in 2002 (TurkStat)
Stable economic growth with an average annual real GDP growth rate of 5.8 percent between 2002 and 2017 (TurkStat)
Promising economy with a bright future as it is expected to become one of the fastest growing economies among the OECD members during 2018-2019 with an average annual real GDP growth rate of 5.0 percent (OECD)
13th largest economy in the world and 5th largest economy compared with the EU in 2017 (GDP at PPP, IMF WEO)
Institutionalized economy fueled by USD 193 billion of FDI in the last 15 years (CBRT)
A dynamic and mature private sector with USD 157 billion worth of exports and an increase of 335 percent between 2002 and 2017 (TurkStat)

Second, investors are heading to Turkey for the strategic advantages of the region that is located in the middle of Europe and Asia.

A natural bridge between both East-West and North-South axes, thus creating an efficient and cost-effective outlet to major markets

Easy access to 1.7 billion customers in Europe, Eurasia, the Middle East and North Africa
Access to multiple markets worth USD 25 trillion of GDP

Third important factor is the dense population of Turkey of 81 million where it has the largest youth population compared with the EU. Half of the population is under the age of 31. Young Turkish individuals are characterized by their curiosity and capability to follow up the trends rapidly. This may also explain why the new products in the market get so much attention and are sold once introduced to the Turkish market. The human capital and purchasing power adds significant advantages to the consumption of the local market. The purchasing power is depicted by the average annual per capita income of about $ 10,500 after tax deductions.

Another vital characteristic of Turkey is the infrastructure and transportation. Turkish government is extremely careful when providing infrastructure through an excellent plan to prevent any chaos due to the dense population.

The Turkish government has spent a huge amount of its capital on new and highly-developed technological infrastructure in transportation, telecommunications and energy. Turkey enjoys a wide variety of transportation especially in the big cities. Moreover, it is a pride for Turkey to have a well-developed and low-cost sea transport facilities with a big number of shipping companies who are ready for the shipping is one of the most prominent specifications of the country. Consequently, it increases the import and export of goods.

Lastly, due to close trading ties with EU, Turkey has well-established transportation routes and direct delivery mechanism to most of the EU countries.

E-commerce is also present with a high level of credibility and security. Turkey has more than 50 million credit card users, more than 50 million Internet users and more than 73 million mobile users.

Turkey has always been the center of tourism and the government is spending so much effort on making the country more and more attractive for both tourism and foreign investments. Tourism injects around 70 billion to Turkish economy that forms 8.3% of the total GDP. The government has set a flexible conditions for all foreign investors equally. Such investment environment is business-friendly with an average of 6.5 days to set up a company (World Bank Business Report 2018). There are more than 58000 companies with foreign capital in Turkey at the moment.

We cannot ignore the role played by the official Turkish authorities to encourage and motivate foreign investors. Several laws have been placed to encourage investment in Turkey and facilitate the granting of citizenship to investors, as they are granted Turkish citizenship.

Overall, the current economic of Turkey seems to show dynamic and thriving trend. The constant flow of tourists and foreign investments along with numerous export activities will always keep the economy on the float. Even after radical devaluation of Turkish Lira in 2018, the economy was still operating at previous level, and now we can see significant recovery of Turkish Lira.

How attractive is Turkey for foreign investment

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