Turkey’s Economy and Investment Potential
With its large economy, Turkey ranks 19th among the world’s largest economies. The country has maintained a balanced contribution from both the industrial and service sectors, which continue to drive its economic growth.
According to the World Bank, Turkey has shown impressive socio-economic development, overcoming many challenges throughout its history. Despite setbacks like the 2008 Global Recession and political turmoil, the country has emerged as a resilient player by implementing effective strategies.
The Growth of Turkey’s Economy
Since 2000, the Turkish government has introduced several reforms to uplift underprivileged sectors, boosting employment and economic stability. Between 2002-2015, the poverty rate fell significantly as Turkey opened its doors to foreign trade and finance and reformed its economic policies to align more closely with European standards.
Turkey faced difficulties like the COVID-19 crisis, which severely impacted key sectors such as tourism, a major economic contributor. According to the European Bank for Reconstruction and Development (EBRD), Turkey’s GDP was expected to drop by 3.5% during the pandemic. However, the EBRD projected a strong rebound of 6% in GDP by 2021, highlighting Turkey as a promising global investment destination.
Turkey’s population stands at 8.2 crore (82 million) as of the first half of 2020, with a life expectancy of 77.2 years. The country also has a significant youth population, ensuring a steady supply of skilled labor for industries.
Incentives for Foreign Investors in Turkey
Turkey offers numerous incentives to attract foreign investors. These incentives vary depending on the type and scale of investment made. For instance, investors can benefit from VAT-free and customs duty-free machinery purchases for all investments, regardless of the region.
Regional Investment Incentives
Investments made in underdeveloped regions benefit from higher incentives. These include property tax exemptions, income tax withholding, reduced interest rates, land allocation, VAT refunds, and customs duty exemptions.
Project-Based Incentives
To encourage investments in specific sectors that need economic support, Turkey offers project-based incentives. These include energy support, infrastructure incentives, purchase guarantees, property tax exemptions, and social security support.
Why Invest in Turkey?
After the COVID-19 pandemic, investors worldwide began diversifying their portfolios to reduce dependency on a single country like China. Turkey, with its strong economic projections and attractive incentives, stands as a top choice for such diversified investments.
Promising Sectors for Investment in Turkey
Shopping Malls
Cities like Istanbul and Ankara have great potential for shopping malls due to their tourism appeal and urban lifestyle. With only 453 shopping malls as of 2019, there is still significant untapped potential for investment in this sector.
Technology
Turkey has made significant progress in technology, creating opportunities for investment in software development, biotechnology, electronics, and nanotechnology.
Textile
The textile industry in Turkey presents lucrative opportunities for investors. Turkey is a strong alternative to China for ready-to-wear apparel and related technologies, making it a significant area for investment.
Real Estate
The real estate sector in Turkey offers multiple advantages to investors. Investing in real estate above $250,000 qualifies foreign buyers for Turkish citizenship, providing a significant benefit. Besides, residency permits are not required for purchasing homes, making the process easier for foreigners. With a trusted real estate agency, buyers can secure a luxury home that serves as a vacation spot, an investment property, or a steady source of rental income.
Environment and Recycling
Turkey, a signatory to the Kyoto Protocol, has allocated over 8 billion Euros to environmental and recycling initiatives, encouraging foreign investments in this sector by offering attractive incentives.
Conclusion
Turkey is a growing nation with substantial untapped potential for growth and investment. Whether you are considering global investment options or looking for assured returns, Turkey offers promising opportunities across various sectors. To make the most of these opportunities, it’s essential to seek legal guidance and professional advice for your investment journey.
Interested in investing in Turkey? At Aegean Locations, we provide expert assistance to help you navigate the investment landscape in Turkey, including opportunities in real estate and other high-potential sectors. Contact us today to learn how we can help you make the most of Turkey’s vibrant economy.