Travelers recently voted Istanbul the world’s top travel destination for 2014. However, Turkey is also an increasingly attractive place to invest and do business.
A range of factors combine to mean that the Turkish business environment has a positive outlook in the immediate through to medium term. The country has established a habit of stable and resilient economic growth. Turkey is consistent appearing in predictions about the next up-and-coming economies (for example, have a look at this BBC article about the “MINT” economies).
With 76 million people, $167.6 billion in exports, and $242.9 billion in imports, Turkey is hard to ignore in terms of sheer volume alone. Turkey has a very large domestic consumption base, which is attractive to businesses and investors alike. In the last five years, Foreign Direct Investment has grown from just over $1 billion per year to an average of $13 billion. Turkey has jumped up 16 spots on the World Economic Forum’s Global Competitiveness Index over the last decade, currently sitting at number 44 out of 148 countries ranked.
Here are the top reasons you should consider doing business in Turkey.
1. Profitable Opportunities
Turkey has experienced steady economic growth over the last decade. Combined with a young, educated and sizeable population, this means business opportunities in Turkey are positive and plentiful. Turkey’s geographic location means it is well positioned to become a regional hub for a range of sectors. Turkey has easy access to 1.5 billion customers in Europe, Eurasia, the Middle East and North Africa.
Around 37,000 companies in turkey have been established by foreigners, with around 22,000 operating out of Istanbul.
2. Favorable Taxes and Incentives
Businesses enjoy competitive tax rates in Turkey, with clear and understandable tax requirements. Companies established by foreigners and Turkish citizens are subject to the same tax system and payment obligations, with mechanisms available to dispute tax assessments. The Turkish government has established special investment zones to actively encourage business development via significant tax advantages and infrastructure.
3. Government and Structural Support
The Turkish government has steadily removed restrictions on foreign investment to create an investor-friendly environment. Customs Unions and Free Trade Agreements further reduce barriers and costs for businesses. Recently introduced angel investment schemes mean that accessing local financing is also relatively straight-forward and increasingly easier for young companies.
The government has set itself lofty goals to reach by 2023, the 100th anniversary of the Turkish Republic being founded. These address a wide range of factors, but include aims to become one of the top ten economies in the world by 2023, as well as the fifth largest tourism destination.
In pursuance of these goals, the government has undertaken wide reaching structural reforms. These have been further motivated Turkey’s participation in an European Union accession process. In general terms, these reforms have increased the role of the private sector in the Turkish economy.
4. Equal Standing for Foreigners
Turkish citizenship or residence permits are not required to form a company in Turkey. When forming a company, foreigners and Turkish citizens face the same process, document requirements, and fees. Once a company is formed, foreigners also face the same rights and obligations. As a result, company formation in Turkey is a significantly simpler process than some other countries in the region, with far less onerous requirements on foreigners. There are also no minimum thresholds in Turkey regarding employing local staff, or establishing local partnerships.