Investing in Türkiye

By Frank-Jürgen Richter

September 12, 2023

Türkiye is a country located in the border of Southeast Europe and Asia, with a population of 84.1 million people. The country’s working age population has grown substantially over the years. Türkiye’s GDP has also registered robust growth. Between 2000 to 2022, its GDP grew from US$274.29 billion to US$905.99 billion – a growth of 10.62% from 2021 values. GDP per capita of the country has also flourished, recording a 9.88% growth in 2022.

Türkiye has also positioned itself as a strong investment destination due to its impressive growth performance and structural reforms implemented over the past decade and a half. In 2021, EY ranked the country as the 5th most popular FDI destination over all of Europe. Between 1980 to 2002, investments flowing into Türkiye stood at a mere US$15 billion, while the country attracted a staggering US$240 billion of FDI during the 2003-2021 period.

The country suffered a recent setback when it was hit by a massive earthquake in the beginning of February 2023. At least 230,000 buildings were damaged or destroyed across 11 provinces in Türkiye with reports of 3 million people being displaced by the earthquake. The country now has a daunting task of disposing hundreds of millions of tons of rubble, which is 10 times more than the last big Turkish earthquake of 1999. A preliminary assessment done under the aegis of the UNDP, World Bank and the European Union, reveals that the Turkish government estimates the recovery and reconstruction costs for Türkiye at US$103.6 billion, equivalent to 9% of Türkiye’s forecasted GDP for 2023.

The country has a herculean task at hand of embarking on a recovery, while charting a path to continuous growth. Will it be capable to bring about structural reforms to serve as a start-off hub for global investments and bring about sustainable growth? 

Such and many more topics will be discussed at the Horasis Global Meeting, which is scheduled to take place in Gaziantep, Türkiye between 22-23 October 2023. The meeting will bring together world’s best-known business leaders, who along with government officials and representatives from international organizations will brainstorm with senior members of the Horasis Visions Community to find solutions to critical challenges facing corporations and societies today.

FDI Strategy of Türkiye

Notwithstanding the impacts of the earthquake, Türkiye is bouncing back from its losses. Reconstruction work has already begun and trade and industrial production in the earthquake-affected region have been partly restored. Inflation has decreased, but still remains high, while energy prices have declined somewhat in recent months. 

Türkiye developed its FDI Strategy (2021-2023) with the intention to increase their share in global FDI inflows to 1.5% in 2023, in accordance with the country’s 11th Development Plan. The aim of this strategy is to increase Türkiye’s FDI performance, both in terms of quantity (share received from the global FDI market) and quality (added value of the investments).

To achieve the goal of the FDI strategy, Türkiye has developed 11 strategies with the aim to increase the attractiveness of bringing in quality FDI in critical sectors such as transportation, logistics, digital and ICT infrastructure. In accordance with the strategy, Türkiye has plans to improve its supplier base through matchmaking platforms and support programs. Additionally, the country also plans to enhance its policy and support mechanisms to improve the investment ecosystem in the country, making it viable for foreign investors. 

Furthermore, as part of the strategy, Türkiye also intends to monitor and evaluate the progress of its FDI strategy through the implementation of a 3-tier approach which will be convened under the chairmanship of the Vice President.

Why Invest in Türkiye?

The Turkish economy is poised for growth. Its economy is expected to grow at 3.6% in 2023 and 3.7% in 2024. The country also ranks 11th globally in terms of purchasing power parity, making it a strong contender of having a robust domestic economy. 

Foreign investors also get access to a large domestic market of 85 million Turkish people with a strong income per capita, along with free access to 476 million people across 28 countries with whom Türkiye enjoys various free trade agreements. 

Türkiye sits at a strategic location between Europe and Asia. This makes the country a key hub for trade and commerce. The country has also implemented sweeping reforms, making it easier to setup business. It also has treaties with 87 countries to avoid double taxation for international investors. 

Türkiye is a market that cannot be ignored, and investors are responding accordingly.