Investing in Turkey - Why the time is right
As a place to invest, Turkey may not be at the top of your list just yet. But that’s where you could be making a huge mistake.
Here are all the reasons you should be looking to Turkey for your next business move, including vital stats and all the industries that are delivering credible results right now.
10 REASONS TO INVEST IN TURKEY
1. A SUCCESSFUL ECONOMY
With an economy that’s more than tripled its GDP to reach $784 billion in 2018, Turkey is a runaway success. Currently it’s the 13thlargest economy in the world. It has got stable economic growth and averaged an annual real GDP growth rate of 5.5% between 2002 and 2018. The Turkish economy is also expected to become one of the fastest growing economies among the OECD members between 2019-2024, showing $168 billion of exports and an increase of 366% between 2002 and 2018.
2. A DYNAMIC POPULATION
Turkey’s population is statistically the youngest in Europe, with half of the people under the age of 32. With a total population of 82 million, that’s a lot of youthful energy to be harnessed. These young people are also well-educated and multicultural – a boon for international business.
3. A QUALIFIED AND COMPETITIVE LABOR FORCE
Among the 32.3 million young Turkish people, more than 800,000 students graduate every year from more than 183 universities around the country. There are more than 985,000 high school graduates too half of whom have studied technical or vocational specialisms. This means there’s an increasingly skilled and productive labour market which is ready to take on the needs and challenges of modern business.
4. A LIBERAL AND REFORMIST INVESTMENT CLIMATE
Reforming at a fast pace Turkey is now the second biggest reformer among OECD countries, when taking into account its restrictions on FDI since 1997. It’s also a business – friendly environment where the average time needed to set up a company is just 6.5 days. With international arbitration, a guarantee of transfers, and highly competitive investment conditions, its and outward and forward-looking climate for business. There are around 65,500 companies with international capital, proving that this attitude and ethos is working.
Turkey has a new and highly – developed transportation infrastructure, as well as telecommunications and energy networks. Sea transport is highly reliable and low cost and railway transport links Turkey to Central and Eastern Europe. Well established transportation routes ensure direct delivery to most EU countries.
6. A CENTRAL LOCATION
Being a natural bridge between both the East-West and North-South axes. Turkey is an efficient and cost-effective base from which to reach most major markets. It has easy access to 1.7 billion customers across Europe, Eurasia, the Middle East and North Africa, and is within reach of multiple markets worth $27 trillion of GDP.
7. AN ENERGY CORRIDOR AND TERMINAL OF EUROPE
The country is an important energy termal, and a European corridor connecting the East and West. Its located close to more than 70% of the world’s proven primary energy reserves, as well as being close to the largest energy consumer – Europe. This makes Turkey a linchpin in the transit of energy, an energy terminal for the region.
8. LOW TAXES AND INCENTIVES
Turkey is incentivising new businesses, with a reduced Corporate and Income Tax which has dropped from 33% to just 20% (or 22% for years 2018 – 2020). The tax benefits are most notable in the Technology Development, Industrial and Free Zones, with a partial or total exemption from Corporate Income Tax as well as land allocation and a grant on an employer’s social security share. There is support for R & D and innovation, and incentives for strategic investments, large – scale investments, and regional investments.
9. CUSTOMS UNION WITH THE EU
A Customs Union with the EU has been in place since 1996, and there are Free Trade Agreements with 22 countries (with more on the way).
10. A LARGE DOMESTIC MARKET
At home in Turkey the market is promising too, with 72 million broadband internet users. 80.6 million mobile phone users, and 66.3 million credit card users. The country has a booming tourist market too, welcoming 45.6 million international visitors per year, and accommodating 211 million airline passengers (both based on the most recent figures from 2018).
TURKEY’S TOP INDUSTRIES
Turkey is terrific at tourism and is currently the 10thmost popular visitor destination in the world. It attracted almost 39 million tourists in 2017 thanks to its unique combination of history, culture, nature and climate. Hotels are struggling to keep up with the rate at which they’re needed, and there’s plenty of space for new building projects to help fulfil that need.
AGRICULTURE AND FOOD
A favourable climate and an abundance of arable land and water supplies has made Turkey an international home of agriculture – the 7thin the world, to be exact. The food industry employs almost 20% of the working population, and also accounted for 6.1% of Turkey’s GDP in 2016. Contributing to the success of Turkey’s food industry are the young population, a dynamic private sector economy, and substantial international visitors.
With its previously mentioned ideal geographical location for business, Turkey has invested in its business services. Engineering, architectural consulting, technical testing and call centres are all of a world class standard. Knowledge – based services such as accounting, legal advice and consulting are also well established and readily available.
ENERGY AND RENEWABLES
Turkey has become one of the fastest growing energy markets in the world, paralleling its economic growth over the last 15 years. In addition to having a huge domestic market. Turkey occupies a strategic location between a number of major energy consumers and suppliers, and thus serves as a regional energy hub. Opportunities for renewable forms of energy production – hydro, wind, solar, and geothermal – are abundant in Turkey, and encouraging policies backed by favourable feed – in traffic are expected to increase their share in the national grid in the coming years.
The Turkish financial sector proved resilient during the global financial turmoil in 2009 as well as the ensuing economic crisis thanks to the regulatory reforms and structural overhaul that the government implemented in the wake of the country’s own financial meltdown in the early 2000’s. In fact, the reforms in the sector boosted investor confidence so much that the industry has attracted USD 51 billion over the past 15 years. Banking dominates the Turkish financial sector, accounting for more than 70 percent of overall financial services, while insurance services and other financial activities also show significant growth potential. There are 51 banks in Turkey (33 deposit banks, 13 development and investment banks, and 5 participation banks). Out of the 51 banks, 21 hold significant foreign capital (30% of total assets are held by foreign investors).
MINING AND METALS
Harboring a large expanse of the western portion of the Tethyan – Eurasian Metallogenic Belt – which is an ophiolite extending from the Alps to south-eastern Europe through Turkey, the lesser Caucasus, Iran, and the Himalayas on to China – Turkey offers proven potential for mining investors. As the least exploited portion of the belt, Turkey stands out as a very promising region for companies engaged in mineral extraction. Mining in Turkey has mainly been limited to surface excavations, meaning huge potential with deep drilling is awaiting international investors.
Turkey is one of the most promising real estate markets in Europe, and the mantra “location, location, location” rings especially true for this country. Strategically situated at the crossroads of Europe, the Middle East, and Central Asia, and home to almost 81 million people, Turkey offers great opportunities for real estate developers and investors by combing a large construction sector with growing commercial and industrial output.
The post originally appeared in Alea Journal