The most important international companies that are heading to invest in Turkey

  • Created At: February 9, 2022
  • Updated At: February 9, 2022
  • Category: General
  • Views: 1406

Turkey has a lot of advantages for international investors, including a diversified economy with high growth rates, a young, reformed business ecosystem, and a strategic location with lucrative export opportunities. These advantages provide a great opportunity for investors who are looking to increase their direct commitments abroad as well as to grow their business operations both in Turkey and the surrounding regions.

Turkey ranks 13th among the world's largest economies, according to GDP based on purchasing power parity in 2017, and has grown strongly with an average annual growth rate of 5.5 percent from 2003 to 2018.

Turkey and China

As an example, Turkey and China have extensive economic and trade relations, and Turkey's strategic location provides profitable opportunities for Chinese companies.

Today, with the close ties between the two countries, more than 1,000 Chinese companies do business in Turkey, including the Industrial and Commercial Bank of China, Bank of China, China Merchants Group, China Investment Corp., COSCO shipping group, telecom giants Huawei and ZTE.. This is for the future

Turkey and Germany

According to a survey conducted by the German Chamber of Commerce Abroad (AHK) in the fall of 2021, the majority of German companies in Turkey consider the country a suitable investment location. There is a lot of potential for Turkey and Germany to benefit from each other as economic partners, but political developments hamper the realization of this potential.

Turkey is currently struggling with a steadily increasing inflation rate and a constantly devaluing currency. However, Turkey also boasts a high growth rate and high exports. A total of 7,000 German companies operate in Turkey, 327 of which are AHK members. Of these members, 77 German companies participated in the AHK survey.

According to the German Foreign Ministry, Germany is also one of the most important foreign investors in Turkey, with a turnover of 16 billion euros. Germany is Turkey's third largest import partner after Russia and China.

From the perspective of logistics and cultural mix, Turkey is an advantageous location for hosting headquarters for many multinational companies, thanks to its excellent connectivity, unique setup and strong links with its neighbors.

Companies such as Siemens, Nestle and Deutsche Bank have been operating in Turkey for more than 100 years. A growing number of companies from around the world, looking to expand into new markets, consider Turkey's second home for manufacturing, design and engineering for a combined market of 1.6 billion people within a four-hour flight range. It continues for the following years and receives very large facilities

Investments in Turkey are strongly protected by both domestic and international laws

In addition to the Foreign Direct Investment Law, which enshrines equal treatment for foreign and domestic investors, foreign investments in Turkey are also protected by more than 75 bilateral investment promotion and protection agreements. In addition, Turkey has also signed bilateral tax treaties with about 80 countries to prevent double taxation.

With its economic stability and structural reforms over the past decade and a half, Turkey has become a country that has intrigued global investors. Even so, there is huge untapped potential for international companies looking to invest in Turkey.

energy investments

Turkey's capacity in the energy sector exceeds 87 GW thanks to a threefold increase over the past decade and a half.

The country has recorded an average annual growth rate of 5.5 percent in energy demand since 2002. The growing demand for energy is expected to continue, and Turkey has ambitious energy goals in terms of supply security, increasing the shares of renewables and domestic resources, and providing More predictable market conditions.

In 2018, the two Turkish Stream pipeline projects were connected - each with a length of 939 km

The projects are scheduled to be activated at the end of 2022, and will transport Russian natural gas through the Black Sea to Turkey and to Europe. It will constitute 35 percent of Turkey's natural gas consumption.

Also, in 2018, SOCAR, Azerbaijan's state oil company, commissioned the Star Refinery in Turkey, the country's largest single investment. More than 1,000 people will be employed in the $6 billion refinery, and the project is expected to meet more than 25 percent of Turkey's refined petroleum needs.

As part of its ambitious goal to increase clean energy production, Turkey submitted a tender for 1 GW of solar energy and 1 GW of renewable wind energy in 2021. The New Energy District tenders are models for stimulating large investments and local manufacturing of renewable energy equipment.

car exports

With more than one million cars launched annually, Turkey - which is the 14th largest car producer in the world and the largest exporter of cars in the European Union - plays an active role in the global automotive sector.

Turkey's geographical proximity to Europe, Asia, the Middle East and North Africa gives the country a strong competitive advantage in the field of logistics and provides profitable export opportunities for multinational companies in the automotive sector.

A look at Turkey's annual export volume of $168.1 billion shows that the automotive sector tops the list with $31.6 billion.

Thanks to the export-oriented nature of the Turkish auto industry, the auto giants are always on the top 10 lists of exporting companies in Turkey. In 2018, four of the country's top five exporters were automobile companies.

A joint venture consisting of five Turkish conglomerates along with the Federation of Chambers and Commodity Exchanges of Turkey was established to manufacture the first domestically made car.

The car will be on the roads by 2022 and is expected to contribute 50 billion euros ($56.58 billion) to the country's GDP and 7 billion euros to the current deficit, while creating jobs for 20,000 people.

Presidency of the Investment Office of the Republic of Turkey. It is the official organization to promote Turkish investment opportunities to the global business community and to provide assistance to investors before, during and after their entry into Turkey.

Overall.. in a survey, 62 percent of participating companies stated that the economic and political situation in Turkey is the biggest business risk. Additionally, 48% of respondents cited rising energy and commodity prices in Turkey as another risk factor. It should be noted that the skeptical attitude is due to pandemic-related restrictions in logistics and deferred investments. This is why about half of the respondents indicated that they plan to adjust their supply chains.

In addition to the listed reasons, which are considered the largest business risks among German companies, German companies benefit from the depreciation of the Turkish lira because they are active in the export sector, which reduces their costs when converted into euros and dollars.

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