The Turkish economy is a dynamic economy that has earned the trust of international economic actors and investors. Furthermore, the private sector plays an important role in the economic sphere; additionally, the public economic sector is concerned with work organization, the implementation of a free foreign trade policy, as well as the freedom to exchange money. Turkey’s GDP of roughly 736.716 billion dollars has made it the world’s seventh-largest economy. By 2023, Turkey hopes to be the world’s tenth-largest economy. Its financial policies have aided the Turkish economy this year, causing it to grow faster than Moody’s International predicted in its report on global economic and credit estimates for 2020-2021.
Despite the current state of the Turkish currency, the Turkish economy has routinely outperformed predictions over the last two decades. However, the Turkish budget showed a one-billion-dollar surplus in January of the following year, according to data supplied by the Turkish Ministry of Finance. One of the most fundamental weaknesses in the Turkish economy is how quickly news affects investors, destabilizing them. In early statistics, manufacturers’ confidence in the US economy sank to its lowest level since the global financial crisis, according to Bloomberg News. Index values below 100 indicate pessimism. Following the announcement of a series of financial measures to dissuade enterprises from laying off people, the Turkish Central Bank’s data showed a fall in the utilization rate of manufacturers’ capacity.
1. Construction and Real State Sector
The Turkish real estate market is viewed as a safe investment by many. The world’s attention is now on Turkey, whose housing market is still developing. The market is concentrated on domestic Turkish property transactions but heavily weighted towards overseas real estate holdings. As a result, many overseas homebuyers are drawn to Turkey. Turkey has great weather, a strong cultural identity, magnificent scenery, and substantial infrastructure investment. But, as in any other real estate market, knowledge is power. So let’s look at the Turkish property market’s performance, key investment regions, and ideas for adding value to your portfolio.
Turkey is a vast country with many property investors. Foreign investors continue to profit from investments in Turkey. Investors like Bursa, Ankara, Mersin, and Antalya. Read this post to learn how to evaluate your capital in real estate investing. The Turkish real estate market is booming. Despite the pandemic, the sector has prospered, attracting both domestic and foreign investment. Istanbul is a favorite of foreign investors and a popular city in Turkey. Istanbul is thus the most discussed city. Expats rush to Istanbul to buy a home. Housing costs in Istanbul vary by region. In order to discover the greatest property for your budget and lifestyle, you should conduct your research. Get support from overseas real estate businesses in Turkey. Turkey’s strategic location draws constant attention. One of the world’s most valuable countries due to its burgeoning real estate market and strategic location. Large-scale constructions are typical in Turkish realty. Turkish enterprises also track changing real estate trends with technology. If you want to succeed in real estate investing, watch the Turkish market!
Turkey’s property market is one of Europe’s brightest. The 83 million Turkish people living at the crossroads of Europe, the Middle East, and Central Asia is huge for developers and investors.
Turkey’s automobile industry began in the early 1960s. These alliances matured into a full-fledged industry with design expertise and massive manufacturing capacity during a period of rapid industrialization and innovation. Since 2000, OEMs have invested over USD 15 billion in Turkey. These investments boosted their manufacturing capacity, putting Turkey at the heart of international OEMs’ global value chains. Value-added manufacturing makes today’s Turkish auto sector efficient and competitive. It satisfies and exceeds international quality requirements.
Turkey is the world’s ninth-largest automobile manufacturing and engineering base, based on average exports. Turkey is a global manufacturing, export, and engineering hub. Turkish car production is located on Izmit, Bursa, Ankara, Izmir, and Aksaray. Taking advantage of Turkey’s strategic location and easy access to transportation, major automakers invest heavily to expand their operations. This sector has moved Turkey to 5th in Europe and 9th globally in terms of vehicle production. (2020) In the first half of last year, the auto sector shipped $11.7 billion to Turkey; in the same period this year, it exported $14.4 billion, up 22.4%. To beat the previous record of $24.7 billion established in 2008, Turkey’s auto exports are predicted to cross $27 billion in 2017.
3. Information Technology
Turkey’s information and communication technologies (ICT) sector has developed into a critical component of the economy, with exports to the EU, MENA, Asia, and North America exceeding USD 1 billion. The EU receives almost 80% of Turkey’s IT and communications technology exports in software, hardware, equipment, and services. Since the early 2000s, international investment has boosted employment in the sector to 143,000. Today, about 20% of ICT employees work in R&D, and nearly 70% are under the age of 35. An surge in university graduates in engineering and IT has boosted Turkey’s skill pool. In 2019, the relevant fields graduated over 59,000 for the first time. Turkey’s regional competitiveness is maintained through a skilled workforce and low labor costs. The Turkish government has made various efforts to stimulate investment in the ICT sector. The R&D Law, passed in 2008 and revised in 2016, outlines the government’s support for R&D and contains an incentive package. These include corporate tax benefits, VAT exemptions, and help with Social Security contributions.
According to the research, domestic products have a stronger weight in the information technology service and software categories.
- Domestic products make for 76 percent of overall output in the information technology services industry.
- Domestic information technology-software items account for 71% of overall output.
The Turkish government prioritizes this sector to attract telecom investment. Last year, the government budgeted $ 5 billion for this purpose. Turkey plans to deploy 5G mobile internet by 2020. 5G will target the automotive, media, entertainment, energy, health, and agriculture industries. 5G will target the automotive, media, entertainment, energy, health, and agriculture industries. Fiber optic solutions are gaining market share as Turk Telekom, TTNet, and other ISPs invest in infrastructure. The cybersecurity industry is also expected to grow, as corporations and governments continue to invest more in ICT security. Information that belongs to persons and is confined to the Turkish government is protected by this system. This system protects identity, certificates, mobile security, system security, data security and application security. The Turkish government has also increased investment on cyber security hardware and software. The Turkish National Police and the Turkish Army will continue to develop their cyber security technology to implement these measures. To protect governmental institutions and companies from cyber-attacks, the Ministry of Transport, Maritime Affairs, and Communications has established numerous (cyber incident response teams). The government’s cyber security initiatives are led by BTK, TUBITAK, and the Ministry of Communications and Transportation.
Turkey, whose textile production dates back to the Ottoman Empire, remains a major role in the global textile and garment sectors. Textile exports ranked fourth globally in 2020, accounting for roughly 3.3 percent of overall exports. Exports of textiles and apparel have more than doubled since 2000. The majority of Turkish textile and garment exports go to Europe, with Germany, the UK, and Spain being the top five destinations. In 2019, these three countries exported items worth over $9 billion. The Turkish economy is strongly reliant on textiles. This nearly 10% of GDP industry ranks highly in manufacturing, employment, investment, and macroeconomic indices. Start a company that makes textiles of all kinds to benefit from the growing textile industry. If the Turkish market is saturated, exporting textiles to similar cultures is simple.
Consider the following issues that could make or shatter Turkey’s textile hopes in the future:
Economic Stability: Low economic growth puts enterprises under pressure, weakening capacity development plans and profitability. The Turkish economy developed rapidly between 2000 and 2013, but now it appears to be stagnating. Inflation and currency constraints may make restarting double-digit growth more challenging. Countries like Vietnam and Bangladesh show how to achieve economic stability. The epidemic has shown how economic shocks may devastate any society, but especially one in decline. Economic growth and price stability are essential if Turkey is to play an important role in global supply chains.
Production and trade expenses: Turkey’s labor costs are far higher than its competitors. In 2020, the average monthly wage in Turkey was 298.7 USD, compared to 159.3 USD in Vietnam, 94.2 USD in Bangladesh, 221.9 USD in China, and 126.7 USD in Egypt. However, cutting logistics and transportation costs can help Turkey compete in global value chains. Despite similar dollar costs, Turkey surpasses Vietnam, Bangladesh, and Egypt in terms of lead time and hours necessary for border compliance. Reduced border compliance costs only benefit Turkey.
Proximity to Europe and the United States: While Turkey’s proximity to Europe and the United States has benefited the country, other textile centers in the region, such as Egypt, are rapidly catching up. Growing commercial ties between Europe and the US, and Vietnam and Bangladesh, implying that proximity is simply one aspect of commerce. En outre, large-scale Chinese textile investments in Egypt and Ethiopia would benefit these countries, further damaging Turkey’s location dynamics. Expanding network economies, employing its vertically integrated supply chain, will only benefit its textile sector and global competitiveness. Attracting significant amounts of foreign investment will also be crucial.
A strong commitment to sustainability: Turkey is one of the world’s largest suppliers of organic cotton. In 2020, Turkey and Kyrgyzstan shared third position with 10% each. Demand for organic cotton from India, Kyrgyzstan, and Turkey is likely to rise as garment chains replace Xinjiang cotton. Turkey is also one of the few countries that has banned the use of GMOs in agriculture, considerably boosting cotton quality while maintaining one of the world’s highest farm productivity rates. The exceptional quality of Turkish cotton is renowned to attract global consumers (Source: Textile Exchange Organic Cotton Market Report, 2020). Future focus on sustainability of materials and supply networks will give Turkey an advantage.
Recent trade shifts away from China will assist several rivals. As China loses its global value chain dominance, the industry will become more dynamic and varied. This decision will greatly boost Turkey’s economy. The textile and garment industries have played a vital part in the development of Turkey’s economy. Faced with rising competition and shifting global dynamics, Turkey must protect its position in the global textile value chain.
Turkey is now one of the world’s most popular tourist destinations, owing to its historical artifacts and riches that tell the story of mankind’s greatest events. As a result, they have always been and will be icons of beauty and magic. In 2021, tourism reached record numbers in a range of industries, as tourists traveled to Turkey for a variety of reasons; some came to learn about the country, while others were emotionally linked and wanted to seek sanctuary there.
On the other hand, Turkey is working to improve tourism, particularly maritime tourism, by addressing port shortages, particularly in Istanbul. Marine tourism returned to Istanbul last year after a four-year absence, with over 80 ships slated to arrive in 2021. A new cruise port in Yenikapi, Istanbul, is being built alongside the Galata port project, which is expected to open in March 2021 and accommodate 500 cruise ships. With an average of 4,000 passengers, this number may surpass two million. Including employees and crew, the total is expected to be higher. It would reintroduce marine tourism to Istanbul and Turkey. Antalya ranked second in terms of tourists last year, with a 17.14 percent increase in international visitors compared to 2018.
6. Hazelnut Farming
Turkey grows and processes most of the world’s hazelnuts, hence its hazelnut output is considerable. Several estimates place its market share at 70-80% of global hazelnut output. In the east and west of Turkey, where the soil is unsuited for most other crops and the terrain is steep, hazelnuts are cultivated (steeps higher than 20 percent). Hazelnuts also minimize soil erosion in areas with high rainfall. In the region’s social and economic structure, hazelnut farming provides revenue for 2.3 million producers (5 percent of the country’s population). Turkey produces and exports over 80% of the world’s hazelnuts. Unfamiliar with Hazelnuts? They’re a sweet-flavored Turkish nut that grows easily. This nut is also called Filberts. Growing and exporting hazelnuts is one of the finest ways to invest in Turkish agribusiness. This nut merely needs to find potential customers and start talking about export requirements.
Turkey hazelnut’s price has fluctuated over time. Hazelnuts cost $6.68 in 2017 and $5.77 in 2018 per kg before 2019. The export price increased by 11.673 percent in 2019 to $6.44 per kilo. Turkey hazelnut exports to Mexico, Serbia, Poland, Ecuador, and New Zealand had high return markets in 2019. There are three types of Turkish hazelnut exports:
- Filberts (Corylus spp.) or hazelnuts, fresh or dried, shelled (HS code 080222)
- Filberts or hazelnuts “Corylus spp.,” fresh or dried, in-shell (HS code 080221)
With tenth-best mineral resources in the world, Turkey is a component of the Tethyan-Eurasian Metallogenic Belt. The administration is determined to expand mining operations to new heights. Toutefois, impending legislative framework amendments may help Turkey overcome its bad reputation. Instead of exporting ore, the government recently announced that it will focus on mine processing. By 2023, the mineral sector expects to contribute USD15 billion to Turkey’s exports, which will total USD500 billion. Natural stones dominate Turkey’s mining exports. In 2018, mining exports accounted for 71% of total stone and metal ore exports (such as chrome, zinc, and copper). Manufacturing minerals (such boron and feldspar) made for 21% of overall mining exports.
Turkey’s mineral wealth includes zinc, copper, marble, and chrome. The government’s comprehensive incentive package shows it favors international investment, especially in mining. Turkey is trying to minimize its dependency on imported oil by resurrecting lignite and coal-fired power plants. As a result, new lignite/coal-fired power plant expansion plans were developed, as well as plans to refurbish aging state-owned power plants sold to private investors. Several small to medium-sized mining and exploration businesses are trying to collect precious metals from the ground for the Turkish government and people.
8. Car Rental Service
A growing economy, greater convention tourism, and improvements in civil aviation, according to Ali Ekici, Avis’ deputy general manager in Turkey. He expects premium car rental to develop rapidly. Increasing capital, employment, and technological improvements are expected to more than triple the Turkish automotive rental industry’s volume in the next five years. Even yet, its scale is dwarfed by that of Europe’s car rental business. Dan Ekici, deputy general manager of the local Avis branch, estimates 145,000 daily individual and business rentals. According to Ekici, the value of rental cars used this year was $3 billion. He claimed that legal regulation was required to keep up with the last decade’s growth. According to Ekici, Turkey has 2 rental cars per 10,000 people. In certain EU countries, it reaches 50.
A car in Turkey costs 1.3 euros per person. Ekici said the figure was unacceptable compared to other EU countries, with Hungary having a 3.5-fold higher figure. According to him, the domestic rental industry lags well behind its European competitors. Turkey has around 130,000 long-term rental cars. 2007 commercial vehicle rental laws reduced domestic parking lot capacity by 20–25%. One company in Europe owns as many rental cars as Turkey “he said. According to the economist, as the country’s economy grows, so does business travel and conference tourism. Increasing the number of airlines operating in the country also encourages company growth. Domestic travel climbed by 53% in the last three years, while international travel increased by 33%. Long-distance business travels are preferred by flying, then renting a car. Airport car rental is also growing in number.
9. Good Service Delivery
Turkey is catching up to the rest of the globe with home delivery. People want more products delivered to their homes. The majority of nearby small companies do not offer delivery. While Turkey has a few modest local delivery firms, the most are food-only. Local deliveries, package delivery, and supermarket deliveries are all lucrative business options. To start an internet business in Turkey, you’ll need a website and a mobile app. Along with regulatory requirements, you must partner with local businesses, wholesalers, and grocers. Your mobile app’s development and maintenance team need not be based in Turkey if the product and business are registered there.
10. Cleaning Services
The need for cleaning services is enormous in Turkey. Turkey attracts a lot of tourists, therefore keeping the city clean is important if you want to keep them coming back. Starting a cleaning business in Turkey and making a good profit will be fantastic. Another business that doesn’t cost the earth to get started is this one. You don’t have to start big and work your way up.
How is the Economy of Turkey?
Turkey’s economy is classified as an emerging market economy by the International Monetary Fund. Economists and political scientists call Turkey a newly industrialized country. Turkey, with an anticipated 83.4 million people in 2021, has the world’s 20th nominal and 11th PPP GDP. In addition to agriculture and textiles, the country produces cars and heavy equipment. Turkey’s economy has changed dramatically in the last two decades. Employment and income have risen since 2000. Recent changes in external and internal variables have slowed Turkey’s economic growth. The country is also dealing with an increase in Syrian refugees and a slowdown in economic reforms.
The Benefits of Turkish Investments:
- Turkey is the commercial hub for the world’s top twenty largest economies.
- A vital link between Europe and Asia
- A driving force that connects Asia and Europe via new highways
- Tourism throughout the year
- The Crossroads of History and Cultures
- Civilization’s cradle
- The embodiment of a young population, expanding employment, and a burgeoning economy
- A modern nation that has entered the defense manufacturing industry and is making significant strides in space and aviation development
- The country that assists the world the most, regardless of race, religion, or status. A Companionable Turkey.
What is the Currency of Turkey?
The Turkish Lira, TL, sign code TRY, is the country’s officially declared currency. It is used in Turkey and the Turkish Republic of Northern Cyprus. The sign was created by Tulay Lale and is a combination and manipulation of the letter ‘L’s in the shape of a half anchor and the embedded double-striped letter ‘T’ tilted at a 20-degree angle. The emblem was chosen following a countrywide competition that concluded with seven nominees in front of the Central Bank and was to be revealed as the official symbol of the Turkish Lira in March 2012 by Prime Minister Recep Tayyip Erdogan.
The new Turkish Lira depicts the Turkish Republic’s founder, Mustafa Kemal Atatürk. Converting your home currency to Turkish liras To book a trip, simply visit any of the country’s ATMs or local Turkish banks. Credit and debit cards, Visa, MasterCard, American Express, and other payment methods are quickly withdrawn. The value of the Turkish lira has fluctuated for years. In 2021, 1 TRY Equaled 8,82 USD and 10,32 EUR.
Why Investment in Turkey is a Good Idea?
Turkey’s hospitality and geographic location have made it an important hub for drawing local and foreign investors in a variety of areas, particularly in the tourist industry and the property market, which has sparked investor interest in the region. In addition to the attractiveness of the country’s natural assets, investors were drawn to Turkey by the country’s ideals, which characterize Turkey and have made it a country welcoming to foreign investment and capital in general. The question every investor asks before investing is, “Why did I invest here?
These findings offer ten solid reasons for local and international investors to consider investing in Turkey,” says the report.
An Efficient and Competitive Economy, Turkey’s economy nearly crashed at the start of the new millennium, but it has since accelerated. During this time, the country’s GDP climbed from 231 billion to 820 billion. Between 2002 and 2015, the country’s GDP increased by 5.1% annually. Turkey is expected to be one of the fastest-growing economies between 2012-2017, according to IMF estimates (OECD). Turkey’s economy rose to be the sixth largest in Europe and the 16th largest globally in 2013, garnering over $ 135 billion in foreign investment. Exports increased by around 245% throughout this period.
The Adaptability of Turkey’s Investment Climate, Many countries struggle to identify foreign investments, but Turkey, an OECD member, began imposing such restrictions on foreign investors in 1997. Today, a Turkish enterprise is created every six days, and the state treats all investors equally, encouraging competition. The Turkish Ministry of Economy reports roughly 37.000 foreign-funded enterprises. Turkey also allows foreign investors to examine international courts and tribunals. It also improved Turkey’s appeal to foreigners.
Infrastructure, One of the key reasons for foreign investors to invest somewhere is to offer the required infrastructure for investment and to cut transportation costs. Turkey has experienced a surge in basic infrastructures, such as transportation, communications, power, and technical infrastructure, making it a magnet for global investment. Three seamen were briefed in Turkey, which provided them with very cheap ocean transportation as well as a railway network connecting them to Central and Eastern Europe.
The Ideal Geographical Location, Being situated between Asia and Europe, Turkey has always been a natural bridge between the two. Due to its geographical location, Turkey has welcomed various East-West trade lines. Today, Turkey is the most reliable economic transit point for over 1.5 billion people throughout Asia, Europe, and Africa.
Turkey’s low taxation costs, To encourage international investors to invest in Turkey, the institutional profit tax has been decreased from 33% to 20%. In rare circumstances, foreigners are free from this tax entirely or partially. Investors are also encouraged in some sectors allotted by the state, such as land allotment and other incentive measures.
Here you can find more information related to investments and properties in Turkey, Realty Group Blogs.
Is Investment in Turkey Easy as a Foreigner?
Yes, it’s easy depending on their budget.
With its geographic, economic, and demographic makeup, Turkey has emerged as a viable investment option in recent years. The promotion and encouragement of foreign investment are at the heart of current economic strategies. This is a mistake. Many changes have been made to the foreign investment regulations as a result of this, making it more desirable to invest in Turkey and making the job of the investor easier. Foreign investors can now conduct nearly all of their business remotely by designating a proxy in Turkey, rather than traveling to Turkey directly, as a result of recent economic and legal reforms. They can perform a few of the processing procedures online. They don’t have to travel as much or deal with bureaucratic procedures to start a business in Turkey quickly and cheaply.
Foreign investors in Turkey have a wide range of possibilities when it comes to making investments. According to the investor’s method of arrival in Turkey, several investment opportunities are advised to him or her. If the investor is a real person, he or she will arrive as follows:
- The ability to be a real-life partner in an established Turkish business
- Can take up the shares of a Turkish company to become a partner, able to buy a house.
- Possesses the ability to make long-term investments and to purchase securities.
A legal person who invests as a legal person comes to the meeting as:
- Can start a new business
- Open a new brand.
- Possesses the capability of opening a liaison office and of joining forces with a Turkish firm via an overseas entity.
The best form of investment to make depends on the investor’s goals and expectations, to get the highest return at the lowest expense.
In the Joint Liability company, the liability of any shareholder is limited to the capital subscribed and paid by shareholders to conduct business under a specified trade name. There’s no necessity for a certain amount of money upfront. Real persons must be all contributors. The Statutes determine the equity and liabilities of shareholders. There must be at least one actual person or a legal entity and up to fifty shareholders for this type of company to be formed, and the responsibility of shareholders is limited to the capital that the shareholders have subscribed for and paid in full. The minimum capital required for the establishment of a company per person is 10,000TL, and the minimum capital required for a two-person firm is 12,500TL.
The Limited Liability Company, An individual or legal body must form the company, and the liability of shareholders is limited to the amount of capital they have subscribed and paid. These companies must have at least 10,000TL in capital to start, and 12,500TL if there are two founders.
To manage a firm under a certain brand name, Limited Partnership corporations are formed. Unless a shareholder’s duty is restricted to the capital they contributed and paid, all shareholders are liable for all debts and obligations. Financing is available only to legally formed organizations. There’s no necessity for a certain amount of money upfront. The Statutes determine the equity and liabilities of shareholders.
What is the Best Way to Get Citizenship in Turkey?
As a country with a rich history and cultural legacy, Turkey serves as a role model for stability and prosperity. It has welcomed people from all over the world and provides numerous services for those who want to settle in Turkey and reap the benefits of Turkish nationality. People seeking stability, particularly from the Arab world and the Middle East, have been drawn to Turkey as a result of the country’s progress on all levels, and Turkish officials have been enthusiastic about granting Turkish citizenship to those who qualify. There are regulations on means of getting Turkish nationality that apply to all foreigners in specific ways that we’ll describe, and recently benefits relating to economic investment, particularly in real estate, have been added. The government follows these laws when dealing with foreigners.
The authorities have established four distinct paths to becoming a citizen, each with its own set of criteria that must be met:
- Obtaining a work permit and residing in Turkey for five continuous years.
- Turkish citizenship is conferred in exceptional situations, usually by holders of university degrees.
- Investing at least $250,000 for three years.
After three years of marriage to a Turkish national or a Turkish national, you can apply for Turkish citizenship if you meet the following requirements:
- Proof that the motive is pure, that the marriage is built on solid principles, and that the goal is to start a family, not just for the sake of starting a family.
- There is nothing to suggest otherwise.
- The foreign spouse is not a danger to the security of Turkey or the public.
Here you can find more information, Turkish Citizenship by Investment Process and Guide