Turkey attracts investments with incentives, policies

By Sevgi Ceren Gokkoyun

ANKARA (AA) – Turkey has improved its investment climate by offering inclusive incentives to investors depending on the location, amount, and sectors.

From January 2002 to November 2020, over $165 billion in direct investment came into Turkey, with 62.4% in the services sector, 24.2% in manufacturing, 11% in energy, and 2.4% in agriculture and mining, according to information compiled by Anadolu Agency.

The services sub-sector with the highest amount of direct investment in this period was finance and insurance with a share of 32.9%, followed by telecommunications at 8.8%, and wholesale and retail trade with 6.8%.

Under the manufacturing sector, food, chemical products, and petroleum products were the areas that attracted the most investment.

A look at regional distribution of foreign direct investment (FDI) in Turkey shows that the lion’s share – $110.4 billion – came from EU countries.

However, it is also evident that inflow from these states was dependent on Ankara’s economic and trade relations with the bloc.

Official data shows a significant increase in interest from Asian countries over the past 10 years, helping diversify Turkey’s international investor profile.

Asian countries had an 18% share – $29.1 billion – in investments in Turkey during the 2002-2020 period, while 9%, or $14.3 billion, came from the Americas.

The top 10 countries with investments in Turkey are the Netherlands, the US, the UK, Austria, Germany, Luxembourg, Spain, Belgium, France, and Azerbaijan.

Under the country’s FDI laws, foreign investors are subject to equal treatment as domestic investors, a fact that gives them many advantages and incentives.

Owing to its initiatives to boost investments, Turkey ranked 33 among 190 countries in the World Bank’s 2020 Ease of Doing Business Index, climbing 10 places in the space of a year.

Turkey prioritizes investments that can ensure supply security, reduce dependence on other countries, enable technological advancement, and are in innovative and high value-added sectors that focus on research and development (R&D).

The top sectors in this context are energy technologies, medical technologies, electric and electronics, logistics, petrochemicals, biotechnology, automotive, railway transportation, information and communication technologies, defense industry and space technologies, agricultural industry technologies, and other R&D-intensive sectors.

* Writing by Aysu Bicer