FDI in figures

Following the economic and political crisis in 2001, which led to the collapse of its banking system, Turkey concluded a significant macro-economic stabilization plan with the IMF, in 2002. From that date, FDI influx to the country has been enourmous. However, FDI flow decreased in 2008 and is expected to follow this trend until 2010. This drop is linked to the global economic crisis and caused the Turkish economy recession.

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 since the end of 2005;
- 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).

Finding assistance for further information

Investment aid agency

Invest in Turkey
DEIK

Other useful resources

IGEME