Türkiye's Growing Appeal for International Investors
In recent years, Türkiye has emerged as a significant destination for international direct investments, attracting a remarkable $10.5 billion in 2024 alone. This growth is largely attributed to the country's strategic geographic position at the crossroads of Europe and Asia, coupled with economic reforms aimed at enhancing stability and investor confidence. Despite facing global geopolitical challenges, Türkiye has implemented policies that promote economic resilience, particularly in sectors such as real estate, technology, and energy.
The head of the Presidential Investment Office, Ahmet Burak Dağlıoğlu, emphasized Türkiye's role as a 'safe haven' for investors, highlighting the influx of major investments from global companies like BYD, Nordex, and Bosch. These investments underscore Türkiye's potential as a production and technology hub, further bolstered by significant contributions from countries like Abu Dhabi and Kazakhstan. The presence of approximately two million registered companies, including 15,000 with annual sales exceeding 10 million euros, presents a wealth of opportunities for foreign investors seeking robust business models and management structures.
Strategic Advantages and Investment Policies
Türkiye's attractiveness as an investment destination is reinforced by its relative political stability, a young and educated workforce, and its strategic location, which provides access to both regional and international markets. According to Yuksel Oksaak, a professor at Uludag University, these factors position Türkiye favorably compared to other emerging markets, especially as global supply chains evolve post-COVID-19 and amid the ongoing Russian-Ukrainian crisis. The Turkish government has actively encouraged investment through various incentives, including tax reductions and streamlined bureaucratic processes, which enhance the overall investment climate.
The Foreign Direct Investment Law No. 4875, enacted in 2003, has played a pivotal role in simplifying the investment process by removing the need for prior permission from international investors. This legislative framework has contributed to a 32% increase in foreign direct investment in the second quarter of 2024, reaching approximately $3.6 billion. The luxury real estate sector, in particular, has attracted significant interest, with foreign investors able to obtain Turkish citizenship through a minimum investment of $400,000 in real estate.
Future Outlook and Challenges
Looking ahead, Türkiye aims to further enhance its investment appeal through a new foreign direct investment strategy for 2024-2028, which seeks to improve both the quality and quantity of investments. The goal is to increase Türkiye's share of global direct investment to 1.5% by 2028, with a focus on attracting 12% of these flows to its competitive region. However, challenges such as high inflation rates, potential sanctions on Russia, and the impact of shifting U.S. policies could pose risks to Türkiye's investment landscape.
Despite these challenges, Türkiye's dynamic market, coupled with its ongoing reforms and strategic initiatives, suggests a promising future for international investors seeking opportunities in a stable and growing economy.
