Turkey has taken a giant step forward in increasing its trade volume in the last six years and achieving the status of being considered the 13th most attractive country for FDI in the world. Turkey attracted nearly $18 billion FDI inflow in 2008, from merely an average $1.1 billion level between the years 1993 and 2002. Many global conglomerates such as Microsoft, Coca-Cola, P&G and Citibank established their regional headquarters in Turkey due to its geostrategic location, booming economy, invaluable human capital and liberal trading and investment climate. Turkey offers the largest young population in Europe and well-educated executive level professionals. While accessing Turkey’s growing domestic market of over 72 million, companies can also reach over one billion consumers in Europe, the Middle East, Central Asia, and the Mediterranean region. Turkey’s Customs Union Agreement with the EU and its free trade agreements with 15 countries have put Turkey as a central location for trade with minimum barriers.
The Turkish government has been implementing various structural reforms to make the investment and trading climate more business friendly. Turkey is one of the few countries in the world to have undergone comprehensive legal and organizational restructuring with the implementation of these reforms being executed in a short time span. Consequently, Turkey has one of the most liberal legal frameworks for FDI among OECD countries. In addition, Turkey’s EU accession negotiations have also catapulted reform processes, which in turn have led to surging flows of foreign direct investment into Turkey. Now, the average tariff rate and corporate tax rate are 4.2% and a flat 20%, respectively. Turkey presents a free and fair business environment for all investors.
Due to its geostrategic location, which has short proximity to the largest suppliers and users of energy resources, Turkey has also emerged as an energy terminal. With the completion of one of the most ambitious energy projects, the Nabucco pipeline, Turkey is expected to transport 10% of global energy resources from its soil despite its low production. Therefore, energy is one of Turkey’s largest sectors, attracting a great deal of attention from multinational companies. ITC, banking, textile, food processing, home appliances, automotive assembly and spare parts, mining and mine processing, and petrochemicals are other leading industries attracting FDI.
Established in 2006, the Investment Support and Promotion Agency of Turkey (ISPAT) is the official investment agency of Turkey, which reports directly to the prime minister. The Agency’s mandate is to present investment opportunities (Greenfield investments, privatizations, infrastructure investments, BOT & PPP, etc.) to the global business community and to assist investors in all their administrative processes (before, during, after) with a 100% service attitude. In this role, the Agency serves as a reference point for international investors and as a point of contact for all institutions engaged in promoting and attracting investments at national, regional and local levels.