INVEST& RESIDENCY
Experts in Investment Management Travel
We specialise in premium corporate travel services for the Investment Management business community. Our Travel Specialists understand the needs, challenges and idiosyncrasies of your business, from the multiple changes and the last minute requests to the need for superior attention to detail, quick response times, complex data capture and pro-active solutions.
Our job is to make your travel experience the best it can be, allowing you to focus on the purpose of your trip.
What we do
We’re no ordinary travel management company. We’re specialists and we’re deliberately different.
For your travellers it’s about more than getting from A to B. Whether it’s a day trip to a portfolio company or a multi-destination funding roadshow, it’s about the entire experience of the journey, from the initial booking to arriving back at your front door.
You want simplicity, ease and great service. We are here to ensure that happens.
In-house 24/7: Wherever you are, whenever you need us, we are on hand.
How do we work?
Our promise to you is supported by our company values.
These values guide everything we do and how we work for you, our client.
Teamwork:
With our office , you can be assured that wherever your travellers are, we will be on hand to assist. All Travel Specialists use the same system, meaning whenever and wherever you speak to Dmc Turquia, you will receive the same high standards and white glove service, no matter what.
Ambitious:
When Dmc Turquia was founded, we had a vision of setting the standard for high end travel. With clients over the years ranging from in business to in entertainment, we have done just that. Nothing is too much, not request too great, and we continually go above and beyond to make the impossible possible.
Genuine:
Building a long term partnership is the best way to continually meet your aims and objectives. We do not shy away from difficult conversations and will always advise you on the best course of action. Our Account Management team will work tirelessly to find improvements and savings on your travel programme, always putting you and your travellers first.
Who do we work with?
Executive Assistant
- Investment Management r-Travel Specialist who know your sector and your challenges.
- A partner to work as an extension of your team.
- Mobile & desktop technology helping you to keep top of all your travelers and any disruption.
Road Warrior
- DMC Turquia Specialists working behind the scenes to find sold out seats and better value fares.
- VIP upgrade and amenities on your flights, hotels and more.
- ‘Above & Beyond’ Travel Specialists who find you added value, including waivers and favors.
- DMC Turquia, your essential travel companion with real-time access to all your travel information.
Procurement
- Experienced strategic Account Managers with investment management Experience
- DMC Turquia Specialists reporting with detailed information of travel spend and trends, including industry benchmarking data.
- Giving you a consistent experience by DMC Turquia Specialists
- Traveler tracking and security alerts by DMC Turquia Specialists
We have local buying power
When you partner with DMC Turquia, premium corporate travel services come as standard – and competitive rates are part and parcel of your package. Wherever you are in the world, wherever you want to go in Turkey, you can use our local buying power to your advantage. Our close network of suppliers guarantees access to extremely competitive airfares, hotel rates and ancillary services.
INVESTMENT GUIDE
ESTABLISHING A BUSINESS
Turkey’s FDI Law is based on the principle of equal treatment, allowing international investors to have the same rights and liabilities as local investors.
The conditions for setting up a business and share transfer are the same as those applied to local investors. International investors may establish any form of company set out in the Turkish Commercial Code (TCC), which offers a corporate governance approach that meets international standards, fosters private equity and public offering activities, creates transparency in managing operations and aligns the Turkish business environment with EU legislation as well as with the EU accession process.
Turkey has introduced reforms with a view to making it easier to do business in order to enhance the investment environment, eliminating red tape in setting up a business and minimizing costs and procedures. To this end, establishing a company is now only carried out at Trade Registry Offices located in Chambers of Commerce and designed to be a ‘one-stop shop’. The process is completed within the same day.
Company Types under TCC and Alternative Forms
There are corporate and non-corporate forms for companies under the TCC, which states that companies may be established under the following types:
- Joint Stock Company (JSC)
- Limited Liability Company (LLC)
- Cooperative Company
Although some financial thresholds (i.e., minimum capital) and organs differ from each other, the procedures to be followed for establishing a JSC or an LLC are the same.
- Collective Company
- Commandite Company
Although companies may be established according to these five different types, JSC and LLC are the most common types chosen both in the global economy and Turkey.
Establishing a Company
When establishing a company in Turkey, one needs to adhere to the following rules and regulations:
- Submit the memorandum and articles of association online at MERSIS
Pursuant to the Trade Registry Regulation, trade registration transactions must be fulfilled through MERSIS (Central Registry Record System).
MERSIS is a central information system for carrying out commercial registry processes and storing commercial registry data electronically on a regular basis. A unique number is given to legal entities that are actively involved in business. Online establishment of new companies is possible on MERSIS, and already-established companies may operate through the system after the transfer of their records.
- Execute and notarize company documents
The following documents are required for registry application at the relevant Trade Registry Office:
- Articles of incorporation signed by all the founders before Trade Registry Office’s authorized personnel or a Notary Public (four copies, one original)
- In case the foreign partner is a real person, the required documents are:
For each real person shareholder, two copies of their passports
- In case the foreign partner is a legal entity, the required documents are:
- The Certificate of Activity of the legal entity designated as the shareholder issued by the relevant authority in the investor’s country. The certificate must bear information regarding the current status and signatories of the company.
- Resolution(s) of competent corporate organ of legal entity shareholder(s) authorizing the establishment; if there will be any specific condition for the prospective company to be incorporated (name of the company, field of activity, etc.) it must be stated in the resolution for the sake of clarity.
- In case a legal entity is going to be appointed as a member in the board of directors of the prospective company to be incorporated, the name of the real person who will act in the name of the legal entity and the legal entity board member’s appointment must be stated within the same or with a separate resolution for the sake of clarity.
- If the process is going to be followed by proxy, a notarized copy of a power of attorney authorizing the attorneys who will follow up the application before the competent Trade Registry Office and other official authorities in order to proceed with the application (where applicable).
- Notarized signature declarations (two copies)
- Notarized identity cards of the company managers (one copy)
It should be noted that, except the first item above, all the necessary documents that will be issued and executed outside Turkey must be notarized and apostilled or alternatively ratified by the Turkish consulate where they are issued. The original executed, notarized, and apostilled documents must be officially translated and notarized by a Turkish notary.
- Obtain potential tax identity number
The company must obtain potential tax identity numbers for non-Turkish shareholders, and non-Turkish board members of the company from the relevant tax office. This potential tax identity number is necessary for opening a bank account in order to deposit the capital of the company to be incorporated.
The documents required by the tax office are as follows:
- Petition requesting registration
- Articles of association (one original)
- Copy of the tenancy contract showing the registered address for the company
- If the process is going to be followed by proxy, a power of attorney must be issued specifically showing the authority to act on behalf of the company before the tax authority in order to obtain a tax identity number or potential tax identity number.
- Deposit a percentage of capital to the account of the Competition Authority
0.04 percent of the company’s capital must be paid to the account of the Competition Authority via Trade Registry Office pay office.
- Deposit at least 25 percent of the startup capital in a bank and obtain proof thereof
25 percent of the subscribed share capital must be paid prior to the new company registration. The remaining 75 percent must be paid within two years. Alternatively, the capital may be fully paid prior to registration.
However, the requirement to pay 25 percent of the capital during establishment before the registration of the company is not applicable to limited companies. Subscribed capital for limited companies may be paid in during the 24 months following the establishment of the company.
- Apply for registration at the Trade Registry Office
The founders may apply for registration after gathering the following documents:
- Petition requesting registration
- Four copies of incorporation notification form
- Articles of incorporation signed by all the founders before Trade Registry Office’s authorized personnel or a Notary Public (four copies, one original)
- Payment made to the bank account of the Competition Authority (0.04 percent of the company’s capital)
- For each person authorized to represent the founders of the limited liability company, two copies of the signature declarations
- Founders’ declaration (one original)
- Chamber of Commerce registration form (two different forms for two different shareholder types: real person shareholder or legal entity shareholder)
- The written statement of non-shareholder members of board of directors that states acknowledgement of this duty
- Bank certificate of the paid-in minimum capital deposit (at least 25 percent of subscribed capital). If there will be any capital contribution in kind:
- The expert report regarding the capital in kind
- The statement of the relevant registry indicating there is no limitation on that capital in kind
- The document indicating the annotations have been done to relevant registries regarding the capital in kind
- The written agreements between founders, other persons, and the founding company regarding the foundation of the company
Following completion of the registration phase before the Trade Registry Office, the Trade Registry Office notifies the relevant tax office and the Social Security Institution ex-officio regarding the incorporation of the company. The Trade Registry Office arranges for an announcement in the Commercial Registry Gazette within approximately 10 days of the company registration. A tax registration certificate must be obtained from the local tax office soon after the Trade Registry Office notifies the local tax office.
A social security number for the company must be obtained from the relevant Social Security Institution. For the employees, a separate application has to be made following the registration of the company with the Social Security Institution.
- Certify the legal boks
The Trade Registry Office authorized personnel will certify the following books during the establishment process.
- Journal
- Ledger
- Inventory book
- Share ledger
- Manager’s meeting minutes book
- General assembly meeting minutes book
- Follow up with the tax office on the Trade Registry Office’s company establishment notification
The Trade Registry Office notifies the tax office and the Social Security Institution of the company’s incorporation. A tax officer comes to the company headquarters to prepare a determination report. There must be at least one authorized signature in the determination report. Trade Registry Officers send the company establishment form, which includes the tax number notification, to the tax office.
- Issuance of signature circular
On the day the company is registered at the Trade Registry Office, the signatories of the company must issue a signature circular before the Trade Registry Office authorized personnel.
- Move certain documents to electronic format / E-TUYS system
The following documents that were previously submitted in printed form to the General Directorate of Incentive Implementation and Foreign Investment (GDIIFI) by companies and branches established in Turkey by foreign investors may now be received electronically.
- Activity Information Form for FDI
- FDI Capital Data Form
- FDI Share Transfer Data Form
The information in these forms will only be received electronically via a web-based application called E-TUYS that was developed to expand the data system about FDI and help obtain up-to-date information faster, and is managed by the GDIIFI. Therefore, these forms will no longer be received in printed format.
Branch Office
- No shareholder.
- Not an independent legal entity. Its duration is limited to the duration of the parent company.
- No capital requirement, however, it would be wise to allocate a budget for the operations of a branch office.
- A branch office may be incorporated only for the same purposes as those of the parent company.
- Repatriation of branch profit is allowed. The branch profit transferred to the headquarters is subject to dividend withholding tax at a rate of 15 percent, which may be reduced by Double Taxation Prevention Treaties.
An application with the following documents must be submitted to the relevant Trade Registry Office for the registration of a branch:
- Petition (must be signed either by an authorized signatory under the company seal or by proxy; if signed by the latter, then the original or the notarized copy of the power of attorney must be attached to the petition)
- The resolution of the competent organ of the parent company to open a branch
- A certified original copy of the parent company’s articles of association
- Certificate of Activity of the parent company or any equivalent documentation that sets forth registration and current status of the parent company
- A power of attorney granted by the parent company in favor of its resident representative, assigning full representation and accountability
- Five copies of the Establishment Declaration Form (the related fields must be filled and signed by the authorized person)
- Two copies of the power of attorney stating the representative in Turkey
- If the branch representative is a Turkish national, a notarized copy of his/her ID card. If not, a notarized copy of the authorized representative’s passport translated into Turkish
- Two copies of the signature declarations of the branch representative under the branch title
- A letter of commitment (must be signed by authorized person)
- A Chamber Registry Declaration Form Statement to be obtained from the Trade Registry Office (including photographs of the branch representatives)
It should be noted that all the necessary documents that will be issued and executed outside Turkey must be notarized and apostilled or alternatively ratified by the Turkish consulate where they are issued. The original executed, notarized, and apostilled documents must be officially translated and notarized by a Turkish notary.
Liaison Offices
Any company incorporated under the laws of a foreign country may establish a liaison office (aka representative office) in Turkey upon obtaining a license from the Ministry of Industry and Technology, provided that the company does not engage in any commercial activities in Turkey. To establish a liaison office, the following documents should be submitted to the Ministry of Industry and Technology, General Directorate of Incentive Implementation and Foreign Investment (GDIIFI).
- Application form*
- Statement outlining the works to be conducted by the liaison office, an undertaking that the office shall not engage in any commercial activities*, and proof that the signatory to the statement is fully authorized by the company
- A certificate of activity issued by the foreign country and verified by the relevant Turkish Consulate or in accordance with the provisions of the Hague Convention Abolishing the Requirement of Legalization for Foreign Public Documents (the Apostille Convention)
- A certificate of activity issued to foreign companies or balance sheet and income statement
- A certificate of authorization issued to the individual(s) appointed to conduct the activities of the liaison office
- A power of attorney in the event that the procedures for establishing the liaison office are carried out by another representative
*May be obtained from the Ministry of Industry and Technology
In the event that the original documents are submitted to GDIIFI, copies of the same shall be approved by GDIIFI. The originals shall be returned to the applicant.
During the initial application for liaison offices, licenses are granted for a maximum of three years within the scope of the declared activities. Liaison offices willing to extend their term of operation shall apply to GDIIFI before the expiration of their terms of operation. GDIIFI may conclude applications for the extension of their tenure based on the nature of activities of the office over the previous year, business plan, the company’s future objectives in Turkey, existing and anticipated amount of expenditure and the number of employees. The tenure of operation of offices licensed to conduct market research or promotion of foreign company products or services shall not be extended.
Applications for establishment and tenure extension shall be concluded in fifteen working days from the date of application provided that the requested information/documents is/are complete and accurate.
Applications submitted by foreign companies to set up a liaison office to conduct financial activities subject to special legislation such as money and capital markets or insurance shall be evaluated by competent agencies such as the Capital Markets Board of Turkey and the Banking Regulation and Supervision Agency – both being the duly authorized bodies pursuant to special legislations. The ministry may conclude foreign companies’ applications to set up liaison offices in other industries that require licenses for operations or similar authorizations, if necessary, upon consulting competent bodies that are duly authorized to issue such permits or licenses.
Copies of tax registration and tenancy agreement for the liaison office shall be submitted to GDIIFI within a maximum of one month. Liaison offices shall notify GDIIFI of any changes with regard to the office representative(s) or foreign company title within a maximum of one month following the change. Liaison offices shall produce a new tenancy agreement comprising the new address, the certificate of authorization of the newly appointed representative or the document(s) related with the change of title of the foreign company.
In the event that a liaison office terminates its operations, it shall furnish GDIIFI with a statement of termination to be obtained from the relevant tax office. Offices may not claim transfers of funds except for balances that remain outstanding upon termination and liquidation thereof.
OBTAINING A WORK PERMIT
- Initial Application
One can file an application to obtain a work permit in Turkey either while located in Turkey or abroad.
In the case of applications filed abroad, foreigners are required to file an application at a consulate of the Republic of Turkey in the country of which they are a citizen or a permanent resident. The application should be accompanied by a labor contract, letter of assignment, or a document stating company partnership. The employer in Turkey is required to file an online application and submit the required information and documents to the Ministry of Family, Labour and Social Services, either in person or via mail, within ten business days following the date of the candidate’s application to a consulate. The consulates of the Republic of Turkey and the ministry will execute online the procedures for the work permit applications filed abroad.
Foreigners whose applications are approved by the Ministry of Family, Labour and Social Services must enter Turkey within a maximum of hundred and eighty days after the date the work permit is issued. In the case of applications filed in Turkey, with the exception of residence permits issued for education in Turkey, foreigners who hold residence permits with a remaining term of at least six months, or employers thereof, may file work permit applications. Such foreigners are not required to submit an application to the consulates of the Republic of Turkey. The documents required for the application must be submitted to the Ministry of Family, Labour and Social Services, either in person or via mail, within a maximum of six business days after the online application.
The Ministry of Family, Labour and Social Services concludes the procedures regarding work permit applications in consultation, where necessary, with relevant ministries and authorities. The procedures regarding duly submitted work permit applications are concluded by the ministry within a maximum of thirty days provided all required documents are submitted in full. If the ministry determines that required documents are missing, the applicant is notified to submit the documents in question. In such cases, the thirty-day period commences on the date on which the missing documents are submitted to the ministry. In the case of applications filed abroad, the ministry forwards the affirmative or negative decision regarding the work permit application to the relevant consulate of the Republic of Turkey (via the Ministry of Foreign Affairs), which notifies the applicant. In the case of applications filed in Turkey, the ministry notifies the foreigner or the employer. Foreigners who are granted residence and work permits from consulates and enter the country are required to register to the Address Registry System in Turkey within a maximum of twenty business days following the date of entrance.
The methods and principles concerning work permits to be issued to foreigners to be employed in Turkey vary by the relevant sector, such as education, housekeeping services, health services, tourism, aviation, entertainment, and others, as well as with respect to foreign direct investments, special foreign direct investments, professional services, and liaison offices. The following information covers the methods and principles regarding work permit applications concerning foreign direct investments.
1.1. Documents required from the employer at the time of the initial application
- Work permit application letter (The letter must be scanned and submitted as part of the online application; it must also be submitted in hardcopy, signed by the employer).
- Foreign personnel application form (The form filled online must be printed, and a hardcopy signed by the employer and the foreigner must be submitted to the ministry. If the signed form is unavailable, the employment agreement executed by and between the parties must be submitted. The application will not be processed in the absence of a signed form or a labor contract.)
- The Trade Registry Gazette of Turkey, detailing the current shareholding and capital structure of the entity (The document must be scanned and submitted during the online application).
- A balance sheet and a profit/loss statement for the most recent year, certified by the tax office or certified public accountant (The document must be scanned and submitted during the online application).
- Information and documents stating that the entity is subject to Special Foreign Direct Investments* (These documents must be scanned and submitted during the online application).
- A document stating that entities (including consortiums) awarded international tenders by government agencies or organizations have been contracted for the awarded job from the relevant agency or organization (The document must be scanned and submitted during the online application).
- In the case of legal entities that are to employ foreign specialists in the field of engineering, architecture, contracting, and consulting services, a payroll document stating that Turkish engineers/architects/city planners are employed for the same occupation (The document must be scanned and submitted during the online application).
- Notarized power of attorney for the person authorized to file the online application as a user on behalf of the entity or organization to employ the foreigner, or a document attesting to the employment of the user at the applicant entity or organization (The document must be scanned and submitted during the online application).
- Documents required from the foreigner at the time of the initial application
- In the case of applications filed in Turkey, a copy of the residence permit issued for other than education purposes with a term of at least six months remaining as of the date of application (The document must be scanned and submitted during the online application).
- If a foreigner who files a work permit application does not hold a valid residence permit, the foreigner is required to file an application to the consulates of the Republic of Turkey in the country of which he/she is a citizen or a permanent resident, submitting his/her labor contract or a document attesting to company partnership. However, if the company meets at least one of the criteria required for Special Foreign Direct Investments*, the work permit application can be filed directly with the Ministry of Family, Labour and Social Services provided that the foreigner to be employed with key personnel status is currently staying in Turkey on a legitimate basis (by submitting a copy of the passport showing the visa and entrance date, or a letter obtained from the Police Department). Other key personnel who are granted work permits in this context are required to obtain work visas from consulates of the Republic of Turkey, and enter the country with that visa.
- In the case of foreigners who are key personnel, the documents and information specified in article 10/b of the Regulation on the Employment of Foreign Nationals with Foreign Direct Investments (The documents must be scanned and submitted during the online application).
- Copy of the passport (where the passport is not printed in the Latin alphabet, a sworn translation or an official certified translation must be attached. The document must be scanned and submitted during the online application).
- Sworn translation or an official certified translation of the diploma or provisional graduation certificate (The document must be scanned and submitted during the online application, as well as submitted in hardcopy).
- In addition to the abovementioned documents, foreigners who file an application for work permits within the framework of professional services and who hold a degree from abroad must file a “Diploma or Provisional Graduation Equivalency Certificate” obtained in accordance with the “Regulation on the Equivalency of Diplomas from Foreign Higher Education Institutions” (The document must be scanned and submitted during the online application).
2. Application for Extension
Applications for extension of the work permit must be filed by the foreigner or the employer directly with the Ministry of Family, Labour and Social Services, by submitting the original copy of the previous work permit, along with the application form and the documents specified in the appendix of the implementation regulation.
The work permit and term extension applications must be first submitted online. In order for the work permit or term extension applications filed online and pre-approved by the system to be valid, the application form print-out with barcode, generated online, must be signed by the foreigner and the employer, and submitted, along with the other documents specified in the appendix to the regulation, to the Ministry of Family, Labour and Social Services within a maximum of six business days following the pre-approval of the online application, either in person or via mail.
Term extension applications should be filed at most two months in advance of the expiration date of the permit. Extension applications filed within a maximum of fifteen days following the expiration of the work permit will also be processed. The term extension applications filed thereafter are subject to the principles applicable to foreigners who file an application for the first time. In the case of work permit term extension applications filed with a valid residence permit (as with first-time applications filed while in Turkey), the required documents must be submitted to the Ministry of Family, Labour and Social Services within six business days following the online application.
Term extensions for a period of two years may be filed for an existing work permit following the statutory one-year work permit term provided they are for employment with the same entity or enterprise and for the same profession. At the end of the statutory three-year work permit term, the existing work permit may be extended for a further three years, for employment with any employer, for the same profession. Foreigners who have resided in Turkey for at least eight uninterrupted years on a legal basis, or foreigners who have a total of eight years of employment with a work permit, may file applications for indefinite work permits.
OBTAINING A RESIDENCE PERMIT
Foreigners who intend to extend their stay in Turkey beyond the time limit prescribed in their visa, those who need a visa exemption or intend to stay for more than ninety days must obtain a residence permit.
- Short-Term Residence Permit for Foreigners
To apply for a short-term residence permit, foreigners who own real estate in Turkey or intend to establish a business or business connections in Turkey must submit the following documents to the relevant Provincial Directorate of Immigration Administration (Göç İdaresi) once an application is submitted through the e-residence system. Short-term residence permits are issued for a maximum of two years as a principle. A residence permit is invalidated if it is not used within six months.
- Initial Application
- Residence permit application form
- The original and a copy of the passport or travel document
- Four biometric photographs
- Proof of sufficient and sustainable financial resources for the duration of the stay
- Applicant’s residence ownership deed*
- An invitation letter or documents issued by the person/business to be contacted**
- Valid medical insurance (one of the following shall be sufficient):
- Proof of access to health services in Turkey within the scope of bilateral social security agreements
- Provision document issued by the Social Security Institution
- Document regarding the application made to the Social Security Institution to be covered by the general health insurance
- Private health insurance
- Application for Extension
Applications for an extension of the residence permit may be made to Governors’ Offices within sixty days prior to its expiration, but under no circumstances should this be done after the expiry date.
To obtain extension, foreigners are required to apply for a residence permit through the e-residence system. The completed application and required documents should be sent to the related Provincial Immigration Administration Office (Göç İdaresi) in Adana, Ankara, Antalya, Aydın, Bursa, Gaziantep, İstanbul, İzmir, Kayseri, Kocaeli, Mersin, Muğla, Samsun, Şanlıurfa or Tekirdağ by mail within five business days.
- Residence permit application form
- Notarized copy of the passport or travel document
- Four biometric photographs
- Submission of the previous residence permit document
- Proof of sufficient and sustainable financial resources for the duration of the stay
- Applicant’s residence ownership deed*
- An invitation letter or documents issued by the person/business to be contacted**
- Valid medical insurance (one of the following shall be sufficient):
- Proof of access to health services in Turkey within the scope of bilateral social security agreements
- Provision document issued by the Social Security Institution
- Private health insurance including the extension period
*Required for foreigners owning immovable property in Turkey
**Required for foreigners who intend to establish business or commercial connections in Turkey
- Long-Term Residence Permit for Foreigners
For a long-term residence permit, foreigners who have continuously resided in Turkey for at least eight years should submit the following documents to the relevant Provincial Directorate of Immigration Administration (Göç İdaresi):
2.1. Application*
- Residence permit application form
- The original and a copy of the passport or travel document
- Copy of the previous residence permit document
- Four biometric photographs
- Proof that the applicant has not received any social aid from governmental institutions and organizations in the last three years
- Proof of sufficient and sustainable financial resources for the duration of the stay
- Police record document
- Valid medical insurance (one of the following shall be sufficient):
- Proof of access to health services in Turkey within the scope of bilateral social security agreements
- Provision document issued by the Social Security Institution
- Document regarding the application made to the Social Security Institution to be covered by the general health insurance
- Private health insurance valid for a minimum of one year
*Long-term residence permits are issued indefinitely. Therefore, no extension application is required.
ACQUIRING PROPERTY AND CITIZENSHIP
What Foreigners Looking to Acquire Real Estate in Turkey Need to Know
- In Turkey, acquisition of property ownership titles may only be approved upon registration at the land registry directorates.
- Preliminary real estate contracts, issued by notaries or entered into by natural persons in writing, do not confer transfer of property per se. They only serve as a commitment for the transfer of ownership; the property in question does not change hands by means of such instruments.
- Burdens such as mortgages, liens, and similar types of restrictions that may exist with regard to the said property that would prevent the sale thereof should be checked prior to the initiation of procedures at the respective land registry directorate.
- Inquiries about properties may be made online at parselsorgu.tkgm.gov.tr, where specific details of the city, district, quarter/village, map section, and plot may be used to look up the property. Basic information on the real estate property, including its current status, is thus accessible online from anywhere in the world. Personal information of the owner remains inaccessible, however.
- Foreign nationals do not need to have a residence permit as a pre-condition to acquire real estate in Turkey. In addition, foreigners who acquire property in Turkey are granted renewable short-term residence permits under Law No. 6458 on Foreigners and International Protection.
- A natural or legal person intending to acquire real estate in Turkey is required to apply to the General Directorate of Land Registry and Cadastre together with the owner of the property. In addition, they may call the Alo 181 Call Center, offering service around the clock, or visit randevu.tkgm.gov.tr to make an appointment without having to visit the directorates’ offices in person.
- Turkish companies with foreign capital, on the other hand, should first file an application at the Provincial Directorate of Planning and Coordination (PDPC) at the local governor’s office where the real estate is located. Once granted a positive response from PDPC, they should then apply to the Land Registry Directorate. These companies may apply in person, via post, or e-mail.
- Foreign natural persons
- Foreign legal persons
- Turkish companies with foreign capital
Article 35 of Law No. 2644 on Land Registry sets out provisions on the acquisition of real estate by foreign natural and legal persons. Article 36 sets out provisions on companies with foreign capital.
Countries whose nationals are eligible to acquire real estate in Turkey are determined by the Cabinet of Ministers, who may also stipulate special conditions for acquisitions if deemed necessary.
Legal Restrictions on Acquisition of Real Estate by Foreign Natural Persons
- If granted permission, natural persons of foreign origin may acquire any real estate in areas where private property is allowed (residential, commercial, land lot, agricultural etc.).
- If the real estate acquired does not include any previously built construction, the owner of the foreign origin is to apply to the relevant public administration within two years in order to develop a project.
- A natural person of foreign origin may acquire real estate and limited rights in rem anywhere in Turkey of up to 30 hectares. The Cabinet of Ministers may grant larger areas if deemed appropriate.
- Natural persons of foreign origin may not acquire and lease real estate within prohibited military zones or military security zones. However, they may acquire and lease real estate within special security zones upon permission of the governor’s office.
- Total acquisition by natural persons of foreign origin may not exceed ten percent of the total district area where private property is allowed. Foreigners’ request for acquisition shall not be permitted in case the ten percent limit is exceeded.
Acquisition of Real Estate and Limited Rights in Rem by Legal Persons
In Turkey, only trading companies established according to the laws of their respective countries and having legal personality may acquire real estate and limited rights in rem as foreign legal persons. Legal persons other than such trading companies (foundations, associations etc.), on the other hand, may not acquire real estate and may not have rights in rem.
Acquisition of real estate by trading companies established in foreign countries according to the laws of their respective countries and having legal personality, on the other hand, may be granted in exceptional cases and is deemed possible only when stipulated under the provisions of international conventions or special laws. Among the specific codes inclusive of provisions on this matter are Law No. 6491 on Turkish Oil, Law No. 2634 on Tourism Incentive, and Law No. 4737 on Industrial Zones.
NOTE: With respect to mortgages, an exception is stipulated whereby there is no limitation as to the mortgages to be created over the property in favor of foreign natural and legal persons.
Acquisition of Real Estate and Limited Rights in Rem by Companies with Foreign Capital Established in Turkey
Companies established in Turkey as a legal entity are considered under the category of foreign-owned companies in accordance with the following conditions:
- Foreign investors hold fifty percent or more of the shares, or
- Foreign investors are entitled to appoint and dismiss the majority of the board of directors
These companies may acquire property and limited rights in rem in order to engage in activities set forth in their articles of association.
For this purpose, companies are required to apply first to the governor’s office where the property is located.
On the other hand, if the real estate intended for acquisition is located in a prohibited military zone or a military security zone, the real estate acquisition shall be subject to the permission of the General Staff; and if the property is situated in the private security zone, it shall be subject to the permission of the governor’s office of the respective region.
In the event of positive settlement of the application to acquire real estate, the governor’s office shall inform the company/enterprise and the Land Registry Office in writing so that the registration may be fulfilled.
The following procedures do not require permission from the governor’s office, therefore the application to the Land Registry Office may be directly made without seeking permission.
- Creation of mortgage
- Acquisition of real estate within the scope of cashing out a mortgage by the beneficiary of a mortgage
- Transfer of real estate ownership and limited rights in rem arising out of company mergers and demergers
- Acquisitions in organized industrial zones, industrial zones, technology development zones, and free zones
- Acquisitions realized due to the transactions considered as loan within the framework of the relevant banking legislation or for the purpose of collection of receivables.
Inheritance
In Turkey, foreigners’ right of inheritance is protected. In the event of a foreigner’s death, the real estate owned by them shall pass to their inheritors. If the inheritor is eligible to acquire the real estate (if they are eligible in terms of nationality and if the total limitation conditions per person and throughout the country allow), the inheritor may then keep the inherited property. Otherwise, such person is to transfer the real estate immediately. Otherwise, the Ministry of Treasury and Finance shall sell the real estate and reimburse the price to the inheritor.
Right to Acquire Turkish Citizenship Through Real Estate Purchase
Natural persons of foreign origin are granted the right to acquire Turkish citizenship by means of exceptional procedures upon purchase of real estate worth USD 250,000 and more.
For this purpose, foreigners:
- Shall purchase real estate worth at least USD 250,000
- Shall state, in the application for acquisition, that they purchased the real estate for this purpose, the title deed should state this purpose, and the foreigner shall declare that they shall not sell the real estate for three years in the section of the form where declarations are made.
Once the land registry procedures are complete, the foreign national may apply to the relevant administrations to claim the right of residence or citizenship by submitting the certificate of eligibility to be issued for the owner.
Requirements for Land Registry Procedures
- Land registry of the real estate or information on the village/quarter, map section, plot, building, and independent section
- Photo ID or passport issued by the country of which the foreigner is a citizen (notarized and certified translations should be submitted for ID cards and passports issued in alphabets other than the Latin alphabet)
- If the procedure involves representation, document regarding representation (order regarding guardianship, letter of authorization, power of attorney etc.)
- Document on the current market value of the real estate issued by the relevant municipality
- Mandatory earthquake insurance policy for the buildings
- A photo of the seller and two photos of the purchaser (taken within the last six months, size 6×4 cm)
- Certified interpreter if a party does not speak Turkish
Power of Attorneys Issued Abroad
If the procedure is to be conducted by a third person authorized by means of a power of attorney issued abroad, the power of attorney must include the authorization relating to the procedure to take place. Besides, the power of attorney shall meet the following conditions:
- Issued by Turkish consulates at their discretion over real estate
- Issued by competent authorities entitled to issue power of attorneys abroad
- Issued in the language of the country where it is issued
- Includes photo (with a clear seal and signature over the photo)
- Includes the apostil, if issued in a country that is a party to the Hague Convention
- Should have certification of the signature of the official signing the power of attorney by the relevant authority and the signature and seal of such authority should be certified by the Turkish Consulate if the power of attorney is issued in a country that is not a party to the Hague Convention
The application should also provide notarized and certified Turkish translation of the power of attorney that meets the required criteria.
Exceptional Acquisition of Citizenship
With (b) prepended to the first paragraph of Article 12 of the Law No. 5901 promulgated on July 28, 2016;
- Those who obtain a residence permit further to (j) of the first paragraph of Article 31 of the Law No. 6458, by investing within the scope and amount determined by the President
- Foreigners holding the Turquoise Card
may acquire Turkish citizenship based on the resolution of the President of the Republic of Turkey.
Scope and amounts determined as per the new regulations published in the Official Gazette on September 18, 2018 are defined below. Foreigners who meet any of the following criteria may be eligible for Turkish citizenship, subject to the decision of the President of the Republic of Turkey:
- Made a minimum fixed capital investment of USD 500,000 or equivalent foreign currency or Turkish lira, as attested by the Ministry of Industry and Technology
- Acquired a property worth a minimum of USD 250,000 or equivalent foreign currency or Turkish lira with a title deed restriction on its resale for at least three years, as attested by the Ministry of Environment and Urbanization
- Created jobs for at least 50 people, as attested by the Ministry of Family, Labor and Social Services
- Deposited at least USD 500,000 or equivalent foreign currency or Turkish lira in banks operating in Turkey with the condition not to withdraw the same for at least three years, as attested by the Banking Regulation and Supervision Agency
- Bought at least USD 500,000 or equivalent foreign currency or Turkish lira worth of government bonds with the condition that they cannot be sold for at least three years, as attested by the Ministry of Treasury and Finance
- Bought at least USD 500,000 or equivalent foreign currency or Turkish lira worth of real estate investment fund share or venture capital investment fund share with the condition that they cannot be sold for at least three years, as attested by the Capital Markets Board of Turkey
INVESTMENT ZONES
There are three different special investment zones in Turkey:
- Technology Development Zones – Technoparks
Technology Development Zones (TDZ) are areas designed to support R&D activities and attract investments in high-technology fields. There are 84 TDZs, of which 63 are operational and 21 have been approved and are currently under construction.
Advantages of TDZs
- Profits derived from software development, R&D, and design activities are exempt from income and corporate taxes until December 31, 2023.
- Sales of application software produced exclusively in TDZs are exempt from VAT until December 31, 2023. Examples include software for system management, data management, business applications, different business domains, the internet, mobile phones and military command and control systems.
- Remuneration for R&D, design and support personnel employed in the zone is exempt from all taxes until December 31, 2023. The number of support personnel covered by the exemption may not exceed 10 percent of the total number of those involved in R&D, though.
- Investments for the production of technological products developed based on the outcome of R&D projects conducted in the TDZ may be made in the TDZ if deemed suitable by the operator company and allowed by the Ministry of Industry and Technology.
- 50 percent of the employer’s share of the social security premium will be paid by the government until December 31, 2023.
- Customs duty exemption for imported products and stamp duty exemption for applicable documents within the scope of R&D, design, and software development projects.
- Organized Industrial Zones
Organized Industrial Zones (OIZ) are designed to allow companies to operate within an investor-friendly environment with ready-to-use infrastructure and social facilities. The existing infrastructure provided in OIZs includes roads, water, natural gas, electricity, communications, waste treatment and other services.
There are 353 OIZs in 81 provinces, 258 of which are currently operational, while the remaining 95 OIZs are being constructed throughout Turkey. In addition, more than 67,000 companies produce in over 32,000 parcels while more than 2 million people are employed through the OIZs.
Advantages of OIZs
In addition to the investment incentives scheme in Turkey (general investment incentives, regional investment incentives, large-scale investment incentives, strategic investment incentives, employment incentives, R&D support, etc.), investors operating in the OIZs may benefit from the following advantages:
- No VAT for land acquisitions.
- Exemption from real estate duty for five years starting from the date of completion of the plant construction.
- Low water, natural gas, and telecommunication costs.
- No tax is payable in cases of merging and/or separation of plots.
- Exemption from municipality tax for the construction and usage of the plant.
- Exemption from the municipality tax on solid waste if the OIZ does not avail of the municipality service.
- Free Zones
Free zones (FZ) are special sites deemed outside the customs area, although they are physically located within the political borders of the country. FZs are designed to boost the number of export-focused investments. Legal and administrative regulations in the commercial, financial and economic domains that are applicable within the customs area are either not implemented or partially implemented in FZs.
There are a total of 19 Free Zones in Turkey located close to the EU and Middle Eastern markets, 18 of which are active and 1 is at the stage of establishment. FZs are strategically located at points that grant easy access to international trade routes via ports on the Mediterranean, Aegean Sea, and the Black Sea.
Advantages of FZs
- 100% exemption from customs duties and other assorted duties.
- 100% exemption from corporate income tax for manufacturing companies.
- 100% exemption from value-added tax (VAT) and special consumption tax.
- 100% exemption from stamp duty for applicable documents.
- 100% exemption from the real estate tax.
- 100% income and corporate tax exemption for certain logistics services to be offered at the FZs, provided that they are export-oriented.
- 100% exemption from income tax on employees’ wages (for companies that export at least 85% of the FOB value of the goods they produce in the FZs.
- Goods may remain in FZs for an unlimited period.
- Companies are free to transfer profits from FZs to abroad as well as to Turkey, without restrictions.
- Exemption from title deed fees when acquiring and selling a property.
- VAT exemption during construction, design, settlement, and approval processes.
- Ready infrastructure exempt from VAT and other taxes.
Import permit for second-hand, used machinery.
TAX GUIDE
Turkey has one of the most competitive corporate tax rates among OECD member countries. The Turkish corporate tax legislation has noticeably clear, objective, and harmonized provisions that are in line with international standards. The Turkish tax legislation may be classified under three main headings:
- Income Taxes
The Turkish tax legislation includes two main income taxes, namely personal income tax and corporate income tax.
1.1. Personal Income Tax
Real persons’ income is subject to personal income tax. Income is defined as the net amount of all earnings and revenues derived by an individual within a single calendar year. An individual’s income may consist of one or more income elements listed as follows:
- Agricultural profits
- Business profits
- Salaries and wages
- Income from independent personal services
- Income from immovable property and rights (rental income)
- Income from movable property (income from capital investment)
- Other income and earnings
Individual income tax rates vary from 15% to 40%. Individual income tax rates applicable for 2021 are as follows:
Income Scales (TRY) (Employment Income) | Rate (%) | Income Scales (TRY) (Non-Employment Income) | Rate (%) |
Up to 24,000 | 15 | Up to 24,000 | 15 |
24,001-53,000 | 20 | 24,001-53,000 | 20 |
53,001-190,000 | 27 | 53,001-130,000 | 27 |
190,001-650,000 | 35 | 130,001-650,000 | 35 |
650,001 and over | 40 | 650,001 and over | 40 |
1.2. Corporate Income Taxes
In case income elements specified in the Income Tax Law are derived by corporations, taxation is applicable on the legal entities of these corporations. Corporate taxpayers defined in the law are as follows:
- Capital companies
- Cooperatives
- Public economic enterprises
- Economic enterprises owned by associations and foundations
- Joint ventures
In Turkey, the corporate income tax rate levied on business profits is 25% for 2021, and 23% for 2022.
- Taxes on Expenditure
2.1. Value Added Tax (VAT)
The generally applied VAT rates are set at 1%, 8%, and 18%. Commercial, industrial, agricultural, and independent professional goods and services, goods and services imported into the country, and deliveries of goods and services as a result of other activities are all subject to VAT.
2.2. Special Consumption Tax (SCT)
There are four main product groups that are subject to SCT at different tax rates:
- Petroleum products, natural gas, lubricating oil, solvents, and derivatives of solvents
- Automobiles and other vehicles, motorcycles, planes, helicopters, yachts
- Tobacco and tobacco products, alcoholic beverages
- Luxury products
- Unlike VAT, which is applied on each delivery, SCT is charged only once.
2.3. Banking and Insurance Transaction Tax
Banking and insurance company transactions remain exempt from VAT but are subject to a Banking and Insurance Transaction Tax. This tax applies to income earned by banks, such as loan interest. Although the general rate is 5%, some transactions, such as interest on deposit transactions between banks, are taxed at 1%. No tax has been levied on sales from foreign exchange transactions since 2008.
2.4. Stamp Duty
Stamp duty applies to a wide range of documents, including contracts, notes payable, capital contributions, letters of credit, letters of guarantee, financial statements, and payrolls. Stamp duty is levied as a percentage of the value of the document at rates ranging from 0.189% to 0.948% or is collected as a fixed price (a pre-determined price) for some documents.
- Taxes on Wealth
There are three kinds of taxes on wealth:
- Property taxes
- Motor vehicle tax
- Inheritance and gift tax
Buildings, apartments, and land owned in Turkey are subject to real estate tax ranging at a rate between 0.1% and 0.6%, while Contribution to the Conservation of Immovable Cultural Property is levied at a rate of 10% of this real estate tax. Motor vehicle taxes are collected on the basis of fixed amounts that vary according to the age and engine capacity of the vehicles each year. Meanwhile, inheritance and gift taxes are levied at a rate of 1% to 30%.
SECTORS
Explore untapped investment opportunities across a variety of industries in Turkey.
AGROFOOD
Home to the headwaters of the Tigris and Euphrates Rivers, Turkey’s agricultural sector today is echoing the prosperity of ancient Mesopotamia. With its favorable geographical conditions and climate, large arable lands, and abundant water supplies, Turkey is considered to be one of the leading countries in the world in the field of agriculture and food.
Turkey has a robust agriculture and food industry that employed almost 18 percent of the country’s working population and that accounted for 6.6 percent of the country’s GDP in 2020. The sector’s financial contribution to the overall GDP was USD 47.3 billion in 2020.
The strengths of the industry include the size of the market in relation to the country’s young population, a dynamic private sector economy, substantial tourism income, and a favorable climate.
Turkey is the world’s 10th largest agricultural producer and is the world leader in the production of figs, hazelnuts, quinces, and apricots. The country is also number one global exporter of quinces, raisins, and flour. Turkey boasted production of 22.9 million tons of milk in 2019, making it the leading milk and dairy producer in its region. In addition, Turkey has an estimated total of 11,000 plant species, whereas the total number of species in Europe is 11,500.
This bountiful production allows Turkey to maintain a significantly positive trade balance thanks to its position as one of the largest exporters of agricultural products in the Eastern Europe, Middle East, and North Africa (EMENA) region. Globally, Turkey exported about 1,800 kinds of agricultural products to more than 190 countries in 2020, accounting for an export volume of USD 18.8 billion.
Turkey has significant investment opportunities in agribusiness subsectors such as greenhouse production, animal and plant-based proteins, seeds, walnuts and almonds, pet food, infant food, and aquaculture, among others.
Turkey is looking to position itself as the preferred option for being the regional headquarters and supply center of top global players in the agricultural sector. Turkey offers a set of incentives for potential agribusiness investors to encourage investment in the sector.
AUTOMOTIVE
The foundation of Turkey’s automotive industry dates back to the early 1960s. During a period of rapid industrialization and progress, this key sector transformed itself from assembly-based partnerships to a full-fledged industry with design capability and massive production capacity. Since 2000, original equipment manufacturers (OEM) have invested over USD 15 billion in their operations in Turkey. These investments significantly expanded their manufacturing capabilities, which in turn led Turkey to become an important part of the global value chain of international OEMs. Meeting and exceeding international quality and safety standards, today’s Turkish automotive industry is highly efficient and competitive thanks to value-added production.
As part of its commitment to transforming its automotive industry, which has historically been a key economic driver in integrating the Turkish economy with the global value chain, and to its vision of making Turkey an economic powerhouse, Turkey has recently introduced its own locally-developed born-electric car built upon strength stemming from the country’s long-standing know-how in the area.
Accordingly, Turkey’s Automobile Joint Venture Group, known as TOGG, will produce five different models on a joint platform with fully-owned intellectual and industrial property rights by 2030. The first of these Turkish vehicles are expected to hit the market in 2022.
- Leveraging a competitive and highly-skilled workforce combined with a dynamic local market and favorable geographical location, the vehicle production of 9 global OEMs in Turkey has increased by almost five times from 300,000s in 2002 to over 1.5 million units in 2018. This represents a compound annual growth rate (CAGR) of around 10 percent during that period. Over the past five years alone, MAN has increased its production by 143 percent, Toyota by 95 percent, Ford by 52 percent, and Fiat by 35 percent.
- Significant growth posted by Turkey’s automotive sector led to Turkey becoming the 15th largest automotive manufacturer in the world and 5th largest in Europe by the end of 2018.
- Turkey has already become a center of excellence, particularly with respect to the production of commercial vehicles. By the end of 2018, Turkey was the number two producer of commercial vehicles (CVs) in Europe.
- Proven as a production hub of excellence, the Turkish automotive industry is now aiming at improving its R&D, design, and branding capabilities. As of 2019, 184 R&D and design centers belonging to automotive manufacturers and suppliers were operational in Turkey.
- Notable examples of global brands with product development, design, and engineering activities in Turkey include Ford, Fiat, Daimler, and AVL. Ford Otosan’s R&D center is one of Ford’s three largest global R&D centers, while Fiat’s R&D center in Bursa is the Italian company’s only center serving the European market outside its home country. Meanwhile, Daimler’s R&D center in Istanbul complements the German company’s truck and bus manufacturing operations in Turkey. AVL Turkey, which opened up its 2nd R&D center in Turkey, started to develop autonomous and hybrid vehicle technologies.
- Turkey offers a supportive environment on the supply chain side. There are around 1,100 component suppliers supporting the production of OEMs. With the parts going directly to the production lines of vehicle manufacturers, the localization rate of OEMs varies between 50 and 70 percent.
- Turkey is home to many global suppliers. There are more than 250 global suppliers that use Turkey as a production base, with 30 of them ranking among the 50 largest global suppliers.
- Auto manufacturers increasingly choose Turkey as a production base for their export sales. This is evidenced by the fact that 85 percent of vehicle production in Turkey was destined for foreign markets in 2018. More than 1.3 million vehicles were exported from Turkey to foreign markets in the same year. In addition, Turkey was the number one vehicle exporter to European markets with 1.1 million units in 2018.
CHEMICALS
Global sales of chemicals more than doubled over the past decade, driven in large part by emerging economies that accounted for around 80 percent of new chemical production capacity.
Chemical sales in Turkey have closely followed the global trend. Turkey is an attractive investment location for chemical companies with its robust market growth fueled by end-user markets and its competitive production costs. Turkey is also a regional production, management, and export hub for leading brands in the chemicals industry. Chemical giants such as BASF, Henkel, Bayer, Evonik, Linde, P&G, PPG, and Dow have been producing in Turkey for decades and have continued to grow over the years.
The sustained growth in customer industries in Turkey is also a source of strength. Turkey is the largest commercial vehicle producer in Europe, the 15th largest automotive manufacturer in the world, the 7th largest agricultural producer in the world, and the largest textile producer in Europe, accounting for 3 percent of global exports.
As part of the urban transformation project in Turkey, it is estimated that around 6.5 million residential units nationwide will be demolished and rebuilt over the next 20 years. Thus, Turkey’s construction industry, which is valued at USD 60 billion, is one of the fastest growing end-user markets for the chemicals industry in Turkey.
Another promising area in Turkey’s chemicals industry is the plastics sector, which accounts for almost 3 percent of global plastics production.
The significant gap between the capacity and the consumption of petrochemical products offers ample opportunities for local and foreign investors. There are also lucrative opportunities in Turkey’s surroundings that investors can tap into by utilizing the country’s strategic location and top-notch infrastructure.
The combination of a growing economy, a large domestic market, advanced infrastructure, a skilled and competitive workforce, and investor-friendly legislation ensure that manufacturers in Turkey’s chemicals sector stand to reap long-term returns from investing in one of the most promising emerging nations in the world.
DEFENSE & AEROSPACE
The Turkish defense and aerospace industry has been undergoing a profound transformation over the past decades. Having achieved unparalleled success in the industry in recent years, today Turkey has one of the fastest developing defense and aerospace industries in the world. The experience and emphasis on quality is evident among Turkish defense and aerospace companies as they undertake numerous endeavors, create products that are competitive worldwide, and assume important roles in international projects. With their qualified human resources and state-of-the-art technology infrastructure, Turkish companies bring global solutions to satisfy many countries’ local requirements. These Turkish companies conduct activities in many critical areas of the defense and aerospace industry, from original design development to domestic production, from modernization to modification, and from R&D to international projects.
During the establishment of the domestic defense industry infrastructure, the preference was to cooperate and co-produce with leading countries and associated companies. This enabled many defense projects like the MİLGEM battleship, the ALTAY Main Battle Tank, ATAK helicopters, and unmanned aerial vehicles (UAV) to be successfully developed by the national defense industry. Building upon this early experience, Turkey ventured forth with further indigenous projects, including the ANKA UAV, the HÜRKUŞ ground attack aircraft, the GÖKTÜRK satellite, a light utility helicopter, as well as a jet fighter aircraft. In addition, some important sub-systems and technology development projects have been initiated to support such programs. Today, thanks in part to many of the indigenous projects it has developed, the Turkish defense industry is quite mature in terms of its capabilities, quality, and proficiency. The Turkish defense industry both meets the needs of the Turkish Armed Forces and is a known player in the fiercely competitive international defense market. In the coming years, the industry’s share in domestic and overseas markets is set to increase as important national defense projects are completed.
Turkey is one of the largest defense spenders in the world. With defense spending exceeding USD 20 billion in 2019, Turkey ranked 16th among the world’s largest defense budgets. In the past decade, the defense industry’s turnover has more than tripled, reaching USD 10.9 billion in 2019. In parallel with Turkish aerospace and defense industry’s growth in the past decade, export and international cooperation opportunities have increased for Turkish companies. The industry’s exports increased from USD 600 million in 2007 to USD 3 billion in 2019. Thanks to its advanced and qualified production capacity, the sector received USD 12.2 billion in orders in 2018, while this figure rose to USD 10.67 billion in 2019. In addition, whereas defense projects with a budget of around USD 5.5 billion were carried out in 2002, the project volume has reached USD 55.8 billion to date, posting around a tenfold increase. Considering the projects that are currently in the tendering process, this amount is estimated to surpass USD 60 billion.
Over the years, Turkey has also emerged as an ideal place for civil aviation business. The number of airline passengers increased from 34 million in 2004 to 208.9 million in 2019, including 108.4 million international passengers. The size of the airline fleet increased from 162 to 515 between 2003 and 2018, reaching 546 in 2019. Meanwhile, the total number of civilian aircraft climbed from 626 to 1,404 between 2004 and 2018, while it rose to 1,501 as of 2020. During the same period, civil aviation revenue increased from USD 2.2 billion to around USD 19.5 billion as of 2019. Turkey is determined to position itself as a hub for civil aviation. A new airport has been constructed in Istanbul, and it is the largest airport in the world with a capacity of 200 million passengers per year and flights to nearly 350 destinations.
ENERGY
Demand for energy and natural resources has been increasing due to the economic and population growth in Turkey. It has posted the fastest growth in the OECD, with an annual growth rate of 5.5 percent since 2002. Since then, Turkey’s primary energy supply has shown a two-fold increase. Turkey’s growing economic performance has also been reflected on the country’s electricity generation infrastructure given the dramatic rise in the total installed capacity from 31.8 GW to 95.9 GW. To satisfy the increasing needs of the country, the current capacity is expected to reach 110 GW by 2023 through further investments to be commissioned by the private sector as underlined in the 11th Development Plan for 2019-2023.
The success of a privatization and liberalization program going on since 2002 has handed over all of the power distribution assets and 78 percent of the power generation assets to the private sector, creating revenues of USD 23 billion for the Treasury. In the same period, about USD 100 billion worth new public and private investments were completed in power generation, transmission, and distribution assets. Under the strategy to increase liberalization and competition in the market, the Energy Exchange Istanbul (EXIST), which is responsible for managing and operating energy markets, including power and gas commodities, was established in 2013.
Turkey is a net energy importer country. The import dependence has been the main driving force behind the formulation and implementation of new policies and investment models to commission local and renewable energy resources. Turkey has a substantial amount of renewable energy potential, and utilization of this potential has been on the rise over the last decade. As of end-2020, hydro, wind, and solar resources constitute the vast majority of the country’s renewable energy resources, accounting respectively for 30.9 GW, 8.8 GW, and 6.7 GW of the total installed capacity.
Turkey also has a substantial amount of coal reserves, totaling 17.3 billion tons and composed of mostly lignite. It is also worth mentioning that Turkey’s natural gas sector has been steadily improving. In order to increase security of supply and seasonal gas send-out capacity, Turkey has commissioned two Floating Storage Regasification Unit (FSRU) terminals in 2018 and opened up the first phase of the Tuz Golu (Salt Lake) Natural Gas Storage Facility. Another goal of these investments is to expand Turkey’s gas storage capacity to 11 bcm by 2023, up from its current capacity of 4 bcm.
FINANCIAL INVESTMENTS & STARTUPS
Turkey’s technological capabilities, supported by the ongoing reform process and customized incentives, have altogether created a thriving startup ecosystem in Turkey over the years. The Turkish startup ecosystem has all the key stakeholders in place, ranging from business angel networks to venture capital and private equity funds on the funding side, and from accelerators to technoparks, mentors and the government agencies on the supporting side.
- Turkey has a population of 83.6 million, with a median age of 32.7, giving the country the largest youth pool in the EU.
- This growing population is both digitally connected and active as evidenced by the fact that Turkey is the 10th largest market for Facebook, 6th largest market for Instagram, 6th largest market for Twitter, 3rd largest market for TikTok, 8th largest market for YouTube, and the 15th largest market for LinkedIn globally. Furthermore, Turkey is the 7th largest market for mobile apps, based on the total number of app downloads. With these figures, Turkey proves to be a perfect production and testing ground for technology developers.
- Turkey boasts one of the largest talent pools in Europe and the MENA region with around 1 million university graduates per year, including over 40,000 engineering and engineering trade graduates.
- While the Turkish startup ecosystem garnered record-high investments of USD 137 million in 2020, investments figures in the first half of 2021 have already exceeded USD 1 billion threshold, setting a new record for the year.
- In the past two years, the Turkish startup ecosystem created four unicorns: Peak Games, Trendyol, Getir and Dream Games.
- The US-based interactive entertainment company Zynga acquired the Turkish mobile game developer Peak Games for USD 1.8 billion in June 2020. Peak Games’ early-stage investors included Earlybird Ventures, Hummingbird Ventures, and Endeavor Global.
- Chinese e-commerce giant Alibaba acquired an 82 percent stake in Turkish e-marketplace Trendyol for USD 782 million in 2018. Moreover, Alibaba invested USD 350 million in Trendyol in a corporate round in March 2021, bringing Trendyol’s total valuation to USD 9.35 billion.
- Turkish grocery delivery company Getir raised USD 978 million in its Serie-B, C and D funding rounds in 2021. Getir’s valuation reached USD 7.5 billion in the last round that was finalized in June 2021. Getir’s investors include Sequoia Capital, Tiger Global, Silver Lake, and Mubadala Investment Company.
- In June 2021, mobile puzzle games developer Dream Games raised USD 155 million in a Serie-B funding round which carried the startup’s value to USD 1 billion.
- Turkey expects more unicorns to emerge in the near future with the help of a mature startup ecosystem, a large and young population with high-tech penetration rates, an affordable and a competent developer pool, an increasing investment trend in diverse sectors of industry, and successful exits to global companies.
- International financial investors are very welcomed to invest in the Turkish startup ecosystem, either directly or through funds to benefit from the next successful exit rounds.
ICT
Turkey’s information and communication technologies (ICT) sector has become an essential part of the economy with exports surpassing USD 1 billion to the EU, MENA, Asian, and North American regions. Turkey’s primary export destination, the EU, receives over 80 percent of Turkey’s IT and CT exports in software, hardware, equipment, and services.
With an estimate of USD 18 billion worth of international investments attracted since the early 2000s, Turkey’s employment in the sector has surpassed 143,000. Today, over 20 percent of employment in the ICT sector is R&D personnel, and nearly 70 percent of those employed in the sector are younger than 35.
Turkey’s talent pool is further supported by an increasing number of university graduates in engineering and ICT fields. In 2019 alone, the number of graduates in the specified fields passed 59,000. The availability of a qualified workforce and modest labor costs continue to make Turkey a competitive country in the region.
As the ICT sector is considered a priority sector by the Turkish government, various initiatives have been taken to promote investments in the area. The greatest indicator of these efforts is the R&D Law, first introduced in 2008 and then revised in 2016, entailing the government’s support areas in R&D and introducing an incentives package. The incentives package includes corporate tax exemptions, VAT exemptions, social security premium support, and more.
INFRASTRUCTURE
Turkey’s developing economy offers lucrative investment opportunities in infrastructure across a wide variety of sectors including transportation, healthcare, and energy. Between 1986 and 2021, contracts for 253 Public-Private Sector Partnership (PPP) projects with a total value of USD 159 billion were signed. The fact that more than half of these projects have reached financial closure in the past decade demonstrates Turkey’s growing expertise in this field in the best way.
Turkey has solid rationales for investment in infrastructure:
- The Turkish economy exhibits a robust annual GDP growth rate of 5.1 percent on average.
- Turkey’s 84 million strong population is growing by an additional 1 million every year; this is coupled with a rapid urbanization process that has resulted in more than 24 urban centers with populations over 1 million, and of which 9 of those have populations of over 2 million.
- Turkey’s growing international trade volume and strategic location compel the country to develop its infrastructure.
- As a bridge between the East and the West, Turkey leads the Middle Corridor at the heart of the Belt and Road Initiative (BRI).
- Hosting more than 600,000 foreign patients a year, Turkey has significantly improved the quality of its healthcare services and will continue to invest in healthcare infrastructure to catch up with OECD.
- From transportation to healthcare and to energy, ample opportunities from mega to micro projects are available in the pipeline.
- Turkey has favorable investment legislation for PPP investments that may be realized through various models, such as build-operate, build-operate-transfer, transfer of operational rights, etc.
- Turkey’s government provides various forms of support and incentives to accelerate the project development.
- Turkey’s investment climate is further strengthened by domestic and international laws that protect investments and provide international arbitration in cases of necessity.
- Turkey’s macroeconomic policies, investments, and more importantly, strong public finance management, support PPP investments that require guaranteed purchase.
LIFE SCIENCES
The healthcare sector and its related industries are considered to be of strategic importance in Turkey. This is especially true when taking into consideration these industries’ social and economic impacts. Turkey affirmed its commitment to healthcare reforms with the implementation of the Healthcare Transformation Program introduced in 2004 by the Ministry of Health. These reforms marked a significant improvement in Turkey’s healthcare system, and they have been backed by investments in R&D and innovation in the healthcare sector.
In 2020, the value of the global pharmaceutical market reached USD 1.2 trillion, with Turkey ranking at the 18th spot.
Some key facts and figures in the Turkish pharmaceuticals sector are as follows:
- In 2020, the Turkish pharmaceuticals market grew in value by 17.6 percent, reaching TRY 47.9 billion. Unit sales protected the line and hit 2.2 billion in the same year.
- Around 500 companies operate in the industry. As of January 2021, there are 83 drug and 11 raw material production facilities that meet the highest international standards.
- Among the 94 manufacturing facilities, 23 are owned by multinational companies.
- Among the 11 raw material production facilities, 3 are owned by multinational companies.
- The pharmaceutical industry employs over 39,000 staff and provides over 12,000 products.
- Biotechnological products constituted 18.2 percent of prescription products with a value of TRY 8.7 billion across 34.3 million units in 2020.
- The reference biotechnological pharmaceutical market grew by 21.8 percent to a total of TRY 7.8 billion in 2020.
- The biosimilar drugs market grew by 50.4 percent to reach TRY 938.5 million.
- Pharmaceutical exports, which stood at USD 1.018 million in 2017, surged by 80.3 percent to hit USD 1.836 billion in 2020.
- Turkish pharmaceutical manufacturers are exporting to more than 170 countries, including the EU, MENA, and CIS countries.
- Regulations in the sector are in line with EU directives.
Some key facts and figures in the Turkish medical devices sector include:
- The Turkish medical devices market surpassed USD 1.92 billion in 2020.
- The market is expected to grow by 7.7 percent in local currency terms annually between 2021-2024.
- The healthcare campus projects will cater to increasing demand in the sector over the next several years.
- The growing medical tourism sector, in which the number of tourists rose to 662,000 in 2019, is expected to further stimulate demand for medical devices. The Ministry of Health expects this number to reach 1.5 million by 2023.
- Medical device regulations are in line with EU directives.
MACHINERY
Machinery manufacturing continues to be one of the key growth drivers of the Turkish economy. This sector plays a crucial role in the development of Turkey’s greater manufacturing industry due in no small part to its capability to produce intermediate goods and to provide inputs to key sectors such as chemicals, construction, automotive, energy, textiles, agriculture, and mining. The machinery manufacturing sector in Turkey is known for being R&D intensive — Turkey graduates over 35,000 engineers every year in mechanical fields — and for creating high value.
Turkey’s competitiveness in the machinery sector is driven by favorable input costs and strong enablers. Input costs include competitive labor cost, an affordable and reliable energy supply, and logistical advantages based on the geostrategic location of Turkey; enablers, on the other hand, include a skilled workforce, generous investment incentives, an innovation-oriented infrastructure, and a strong supply base and domestic clusters.
Here are some essential facts and figures about the Turkish machinery sector:
- The Turkish machinery sector more than quadrupled its revenues to reach USD 21 billion and doubled its workforce to hit 244,000 in 2020.
- While global exports doubled, Turkey’s exports have increased tenfold in the past 19 years and reached USD 18.5 billion in 2020.
- The export/import ratio of the industry has increased from 30 percent to 60 percent since 2003, indicating an ever-growing market with less dependency on imports.
- As the 4th largest export industry of Turkey, accounting for a 10 percent share in the country’s total exports, machinery products are shipped to more than 200 countries. 60 percent of total machinery product exports are shipped to the USA and EU countries, mostly to Germany, UK, France, and Italy.
- Total imports of the machinery sector surpassed USD 28 billion in 2020, endorsing the strong demand from the domestic market.
- Turkey’s agricultural machinery market reached USD 1.1 billion in 2019.
- Turkey’s construction machinery market reached 626 million in 2019.
- Tukey’s HVAC sector stands out as a strong industrial base with USD 4.7 billion total export in value. It also functions as Europe’s manufacturing base for panel radiators, boilers, and air handling units (AHUs).
- Turkey’s market for lifting and handling equipment reached USD 1.7 billion in 2019.
BUSINESS SERVICES
Turkey’s strategic location at the crossroads of Europe, the CIS, the Middle East, and North Africa, along with the country’s existing potential, increase in per capita income, and large, young and growing population have positively impacted the development of the business services sector in Turkey. Turkey has significant experience in a wide range of business service lines, such as engineering and architectural consulting, technical testing, and call centers. The country also boasts expertise in knowledge-based services, such as auditing and accounting, legal advisory, and consulting.
Engineering and Architectural Consulting
- Engineering and architectural consulting companies in Turkey provide services related to engineering, architecture, design, technical drawing, urban planning, scientific and environmental services.
- A skilled workforce, cost-effective service compared to international standards, expertise in diverse markets, and project types help move the sector forward in Turkey.
- During the 2017-2018 academic year in Turkey, a total of 39,337 students graduated from the fields of engineering and engineering trades in universities, while 18,092 students received their degree in the fields of architecture and construction.
Technical Testing
- The technical testing market offers a wide variety of business lines, such as composition and purity testing, technical inspection, and road transport.
- The total annual turnover in these services has been showing an upward trend in the last decade, and as industries such as manufacturing, automotive, chemicals, and ICT continue to grow in Turkey the need for technical testing will increase accordingly.
Call Centers
- The call center sector in Turkey has gained momentum since the inception of the country’s first call centers in the 1990s.
- According to the Turkish Call Centers Association, the industry had a value of TRY 6.2 billion and employed 96,000 people in 2016, up from the 2013 figures of TRY 2.9 billion, 70,200 employees.
- The call center sector has set an ambitious target of having a work force of 300,000 people by 2023.
Knowledge-based Services
- Knowledge-based services such as auditing and accounting, legal advisory, and consulting also play a crucial role in Turkey’s economy.
- Turkey’s vibrant economy and improved business environment have paved the way for a dramatic increase in the number of foreign companies in Turkey.
- The number of companies in Turkey with foreign capital exceeded 65,000 in 2018. This increase, together with the improved business environment, has resulted in the growth of knowledge-based services in Turkey.
- As new regulations come into force and Turkey aspires to have compatible standards with the EU, the sector is set to for significant growth.
FINANCIAL SERVICES
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 become the most preferred sector for FDI, attracting USD 52 billion since 2005.
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 (32 deposit banks, 13 development and investment banks, and 6 participation banks). Out of the 51 banks, 28 are classified as foreign banks (27 percent of total assets in the sector are held by foreign investors).
The Turkish insurance market is still underpenetrated (1.5 percent of GDP) compared to peer countries. It is set to capitalize on its significant potential as new insurers set up shop and acquire a share of the relatively untapped Turkish market. Turkey has seen strong economic growth fueled in part by a young and dynamic population that is increasingly in need of financial products and services.
A key driver of the Turkish financial sector has been the county’s robust economy with a bright future. Over the past 16 years, the Turkish economy has been growing at an average annual real GDP growth rate of 5.5 percent, and the growth momentum is expected to continue. Turkey’s sizeable and diversified economy has achieved remarkable growth, and became the 13th largest economy in the world in 2018.
Turkey’s economic expansion has resulted in income growth and a burgeoning middle-class with increasing purchasing power.
Turkey has also set specific economic targets to achieve in the near future. One of these targets is to transform Istanbul into a prominent financial center. Turkey’s large and young population, qualified labor force, and rapidly developing markets along with its geo-strategic location, all make Istanbul an ideal candidate for an international financial hub. Since the government launched the project for the Istanbul Financial Center, Istanbul has rapidly made progress and is now considered to be one of the emerging financial centers of the world.
MINING & METALS
Turkey’s mining and metals sector has grown in parallel with the country’s robust economy. Harboring a large expanse of the western portion of the Tethyan-Eurasian Metallogenic Belt, which is an ophiolite extending from the Alps to southeastern 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.
Here are some essential facts and figures about the Turkish mining and metals sector:
- The share of the mining sector in Turkey’s GDP increased from 1.01 percent to 1.08 percent from 2018 to 2019.
- The sector’s total production value soared to TRY 46.7 billion in 2019 up from TRY 38.01 billion in 2018.
- Turkey’s young, dynamic, and well-educated labor force translates into a high-quality labor pool. There are 56 mining engineering departments in 38 cities in Turkey. The number of mining engineers in Turkey has increased by more than 50 percent since 2005, now reaching almost 39,000. In 2019, 756 new mining engineers were added to the talent pool.
- Turkey’s advantages for companies in the mining sector are not limited to a high-quality labor pool, but also include advantageous logistics and drilling costs, proximity to major markets, lucrative government incentives, and highly competitive taxes.
- As a result of its remarkable economic growth, years of political stability, structural reforms, and the backing of governmental bodies, Turkey attracted USD 132 million of FDI to its mining industry in 2020. Meanwhile, mining exports in the sector totaled USD 4.27 billion in 2020.
- These figures prove investors’ increased interest in Turkey. As of today, Turkey hosts 773 international mining companies, up from only 138 in 2004.
Turkey’s regional investment incentives system is based on a descending pattern where regions vary in a range of 1 to 6 based on their level of development, with a rating of 6 being given to the least developed regions. With this system, the most advantageous incentives are offered to the lesser-developed regions. Mining is one exception to this scheme, as most investments in the mining sector are supported with incentives extended to Region 5, regardless of the investment’s location.
REAL ESTATE
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 83 million people, Turkey offers great opportunities for real estate developers and investors by combining a large construction sector with growing commercial and industrial output.
- FDI inflows in Turkey stood at USD 7.8 billion, while real estate was USD 4.4 billion, 57 percent of total FDI in 2020.
- Urban renewal and mega projects dominate the agenda for the foreseeable future, particularly in Istanbul. Some projects in the city include Marmaray, Yavuz Sultan Selim Bridge, Eurasia Tunnel, and Istanbul Airport.
- The Urban Renewal and Development initiative will encompass 7.5 million housing units. The initiative has a budget of USD 400 billion, with a large contribution coming from the private sector.
- The total number of homes sold in the Turkish property market reached 1.5 million units in 2020; likewise, sales of real estate to foreigners began to increase following the abolishment of the reciprocity law in 2012. In 2020, 40,812 homes were sold to foreigners in Turkey. Regarding home sales to foreigners, Istanbul was the top-performing province with 19,175 sales in 2020, followed by Antalya with 7,735 sales, Ankara with 2,746 sales, and Bursa with 1,340 sales.
- By 2020 year-end, the existing Grade A office stock in Istanbul surpassed 5.6 million square meters. There is more than 1.7 million square meters of office supply under construction including the Istanbul International Finance Center (IIFC), and it is expected that the total grade A office supply will reach almost 7.4 million square meters gross leasable area by the end of 2022.
- 447 shopping centers are operational in Turkey with a total gross leasable area of 13.6 million square meters. 133 shopping centers in Istanbul with a total gross leasable area of 5.1 million square meters represent 37 percent of the total leasable shopping center area in Turkey.
- Total logistics real estate supply in Istanbul and Kocaeli in 2020 was 10.2 million square meters. During 2020, 318,000 square meters of logistics leasing transactions were completed, almost triple the figure from 2019 year-end.
TOURISM
As the 6th most popular tourist destination in the world and attracting more than 51.2 million tourists in 2019, Turkey continues to present vast investment opportunities in both the established and newly-developing subsectors of the tourism industry.
With its favorable location, existing potential, mega projects, and ambitious targets set for 2023, the tourism sector continues to grow at a rate that outstrips its bed capacity. Even though there has been a surge of investments in the last several years, there is still ample room for new ventures. Eastern and Southeastern Anatolia both have untapped potential for cultural tourism as well as the increasingly popular boutique hotel concept, which blends well with the characteristic nature, history, and culture of the regions.
- In 2019, Turkey was the 6th most popular tourist destination in the world according to UNWTO.
- According to the UNWTO World Tourism Barometer, the number of international tourist arrivals in Turkey in 2019 was 51.2 million, while international tourism receipts were USD 29.8 billion.
- In 2020, international visitors to Turkey totaled 15.9 million, with tourism earnings totaling USD 12.1 billion, according to the figures from the Ministry of Culture and Tourism.
- In 2020, average spending per visitor grew by 14.5 percent to USD 762 when compared to 2019.
- With regard to religious tourism, Turkey is among the few countries in the world that is home to sites from a number of major religions, including Islam, Christianity and Judaism.
- Antalya is the most preferred city in Turkey for international visitors with 33.3 million overnight stays in 2020. In its center and surrounding towns such as Kemer, Belek, and Kaş, Antalya has over 500 4-star and 5-star hotels.
- The number of operational hotel chains in Turkey is 60, with 44 of these being domestically owned, and 16 of these being internationally owned. The number of hotels in these 60 chains in Turkey totals 942, while the number of rooms totals 177,785.
- Turkey has 8,300 km of coastline and ranks 3rd globally with its 519 blue-flag beaches.
- In terms of geothermal tourism potential, Turkey is among the top seven countries in the world and ranks 1st in Europe with its 1,500 thermal springs. Bed capacity in the various thermal spa resorts has reached a combined 100,000.
- The Belek region stands out as the most significant golf destination in Turkey, ranking among the world’s most popular tourism centers with 27 golf courses, more than 70,000-bed capacity, and around 2 million tourist arrivals.
- Turkey ranked the 7th place among the top 10 European countries for tourism FDI between 2016 and 2020 with 36 FDI projects, according to fDi Intelligence’s Tourism Investment Report 2021.
- The Turkish government offers incentives such as reduced utility prices and reduced tax rates, while also pursuing policies aimed at eliminating any bureaucratic barriers that may hinder growth in the tourism sector.