Investing in Turkey is a worthy goal. Following the liberalization of trade in 1980, the Turkish economy experienced a significant increase in its rate of openness. Without going into an exhaustive historiography, Turkey’s unique position in world trade has revealed specific elements of Turkish international strategy. Investing in Turkey
Why Invest in Turkey ?
Turkey has withstood international financial crises, such as the financial crisis in 2008 and the COVID-19 pandemic, maintaining competitiveness with an average annual GDP growth of 5.4% over the past 20 years. The Turkish economy is robust and resilient, continuously innovating in international partnerships. Investing in Turkey
Turkey on Global Markets
Turkey has conquered world markets. With its strong domestic market, it has also signed free trade agreements with countries in Europe, the Balkans, North Africa, and the Middle East. As an example, the country has been a member of the Customs Union with the European Union since the 1990s, giving it privileged tariff-free access to the European market, one of the world’s largest. In short, investing in Turkey gives you access to a colossal market of 1 billion consumers. 
In addition, Turkey’s open and liberal investment environment provides an attractive platform for unhindered foreign direct investment. It also offers robust and strong protection for investors, reinforcing its position as a popular destination for international investment.
Over the years, Turkey has established itself as a leading business location for international companies. Investing in Turkey
Turkey’s Economic Panorama
General Economic Indicators
The Turkish economy has experienced robust and continuous growth over the past decade, consolidating its position as a dynamic player in the global market. In 2023, the Turkish economy grew by an impressive 4.5%, demonstrating the country’s strong potential and resilience.
According to the IMF, Turkey is the 17th largest economy in the world, with a strong GDP of $1,024 billion in 2023. Turkey’s GDP growth shows that the country is competitive and powerful, while the economy remains solid. Turkey is one of the world’s leading international institutions. Turkey is also a member of the OECD and the G20. It contributes to international development through its growing Official Development Assistance (ODA) contributions. Investing in Turkey
Inflation and Investment In Turkey
However, this growth has been followed by persistent inflation, which has posed a new challenge to the economic stability of the country. Turkey’s inflation rate rose to 69.80% in April 2024, up from 68.50% in the previous month, but below market expectations of 70.33%. Although this is the highest rate since November 2022, it is mainly due to increases in housing and utility prices. In addition, the CPI rose by 3.18% in April compared to March 2024.
Despite this high inflation, Turkey has demonstrated its ability to attract international attention by managing to mobilize $10.6 billion in foreign direct investment (FDI) in 2023, an undeniable proof of its economic attractiveness. Taken together, these facts have made Turkey one of the most sought-after places to invest, and this phenomenon is set to increase in the coming years. International companies benefit from both the country’s ideal geographical location and Turkey’s determination to create an investment-friendly environment. As a result, Turkey’s investment climate is generally very business-friendly.
Promising Sectors in Turkey for 2024
Turkey’s advantageous R&D ecosystem and economic diversity offer lucrative opportunities across numerous sectors, making investment in the country both dynamic and promising. The thriving technology industry, supported by robust government incentives, attracts significant foreign direct investment (FDI). With a commitment to innovation and development, Turkey stands out as an attractive destination for investors. With a commitment to innovation and development, Turkey stands out as an attractive destination for investors. Investing in Turkey
Some of the Key Investment Sectors in Turkey
- Import and export in Turkey
- Industrial investment in Turkey
- Logistics sector in Turkey
- The agri-food industry in Turkey
- Real estate investment in Turkey
- Tourism and hotels in Turkey
- Defense and aerospace industry in Turkey
- Investment in software and information technology (NICT) in Turkey
- Textile industry in Turkey
- Energy and natural resources/climate change in Turkey
Investing in Turkey’s Future: Opportunities in 2024
2024: Rapid Growth in Turkey’s Electric Vehicle Market
In early 2024, sales of electric vehicles in Turkey surged. Indeed, sales data for the first four months of 2024 showed a major increase in electric vehicle sales in Turkey. Compared to the same period last year, 20,255 fully electric vehicles were sold, with sales up by 273%. A total of 371,438 vehicles were sold, with overall car and light utility vehicle sales increasing by 11.3% year-on-year. This growth highlights Turkey’s increasing shift towards sustainable private transport.
With government incentives and growing consumer demand for eco-friendly vehicles, investing in Turkey’s electric vehicle industry is strategically beneficial for significant returns. This investment offers a lucrative business opportunity given the sector’s significant sales growth and strong market potential.
A German company expands its investment in Turkey. In May 2024, a new battery production plant for electric cars was inaugurated by the Minister of Industry and Technology, Mehmet Fatih Kacir. The high-voltage battery production plant of Ampherr Battery Technologies (ABT) is located in Tuzla, in the province of Istanbul, Turkey. ABT is a joint venture between Fark Holding and Tacirler Holding. Ampherr, based in Neuss, Germany, specializes in the development of batteries for electric vehicles. The ministry also announced that it is developing new incentives for investment in battery production. This is good news for foreign investors planning to come to Turkey to develop their businesses.
Turkey also has international ambitions for its products. In 2023, the Turkish automotive industry achieved a record export level, with total exports of $35 billion, marking unprecedented success in the sector.
Furthermore, TOGG vehicles will soon be available for sale in Europe. The Minister of Industry and Technology, Mehmet Fatih Kacir, announced that TOGG will first be launched in the German market at the beginning of 2025 before gradually being introduced in other European countries. Investing in Turkey
Spotlight on The Agricultural Investment Market in Turkey
Agriculture in Turkey a vital sector, making a significant contribution to the economy and providing employment for a large proportion of the population.
In 2023, Turkey’s flour exports reached a brand new record of 3.66 million tons, maintaining its position as the world leader in flour exports since 2015. With nearly a decade of leadership in global flour exports and prospects for massive grain production, investment in Turkey’s agricultural sector offers a compelling opportunity for players looking to benefit from the country’s expanding production capacity and export opportunities.
In addition, the Agrobest Group, one of the world’s leading manufacturers, formulators, and marketers of high-quality crop protection products, is expanding its activities with the construction of a new production and logistics center in Turkey, in the Manisa Salihli Industrial Park, east of Izmir. The İzmit region, located in northwestern Turkey, is an industrial hub known for its significant contributions to the country’s economy. This initiative is part of a strategy to strengthen production capacities and improve logistics infrastructure in Turkey to support the growth of the country’s agricultural sector. The facility is designed to meet growing demands and will use advanced technology to optimize production efficiency. Investing in Turkey
With these projects and excellent results, now is the suitable time to invest in advancing technology and expanding facilities in the agro-industrial sector in Turkey. Investing in Turkey
Investing in Turkey’s Thriving RenewableEnergy Sector
Turkey’s solar panel sector is highly attractive to foreign investors due to its strong production capacities, high solar insolation rates, and government incentives for renewable energy. Turkish companies have demonstrated their ability to develop and operate large-scale solar projects both nationally and internationally. A Turkish company has recently launched a major solar power project in the United States, demonstrating its capabilities in renewable energy and expanding its international presence. Sabancı Holding’s subsidiary, Sabancı Renewables Inc,, successfully launched the Cutlass II solar power plant in the United States, with an installed capacity of 272 MW. The company is also progressing with another project, the Oriana solar power plant, which will add 232 MW of solar energy and 60 MW of storage capacity to its portfolio by the second quarter of 2025. Together, these initiatives will increase Sabancı’s total renewable capacity in the United States to 504 MW.
In addition, Turkey’s first floating solar power plant (SPP) in Kuzova, with a generating capacity of 1 megawatt, has been installed on the lake of the Keban Dam in Elazığ, one of the eastern Anatolian regions of Turkey. Turkey’s first floating solar power plant will start generating electricity in June 2024. The stated goal is to produce 1 million 806 thousand kilowatt hours of energy per year from the 1 megawatt floating solar power plant, which will be built on an area of 6 decares.
To better understand the exponential potential and strategic advancements of the solar energy sector in Turkey, don’t miss our latest article on the impact and opportunities of solar energy in Turkey. Turkey’s commitment to renewable energy and openness to foreign investment offer a promising opportunity for economic and environmental development, propelling the country towards a more sustainable future.
A German wind turbine manufacturer is expanding its investment in Turkey. Nordex,
a German wind turbine manufacturer, received a new order from the Turkish company Borusan EnBW Enerji for 14 turbines with a capacity of 80 MW, which will be used in the Pelit wind farm in Sivas, Turkey. The commissioning is scheduled for the third quarter of 2025. This order follows a previous 36 MW order for the Balabanli Extension II wind farm, which is scheduled for commissioning in the fourth quarter of 2024. These projects increase Borusan EnBW Enerji’s renewable capacity in Turkey to 934 MW.
The head of the EU delegation to Turkey came to Konya on May 27 to pay tribute to the region’s initiatives to combat climate change. Ambassador Nikolaus Meyer Landrut, head of the European Union delegation to Turkey, discussed cooperation on climate change. Speaking at the press conference, he said that Konya had been chosen as a pilot region and would become an environmental ambassador city. Investing in Turkey
Turkey’s Digital Sector: An Attractive Hub for Tech Investments
The strong state of the video game sector in Turkey, supported by 800 studios and multiple game-focused incubators, accelerators, and venture capital funds, illustrates a dynamic and growing industry. Midas, the Turkish fintech startup that provides a platform for retail investors to trade stocks on both the Borsa Istanbul and U.S. exchanges with low commission rates, raised a $45 million investment from global investors. This investment is the largest in a Turkish FinTech startup and the second largest in a startup overall. Investing in Turkey
These factors make Turkey an attractive destination for investments in the gaming and technology industries, promising innovation, growth, and strong market potential, supported by the strength of Turkey’s tech parks. Investing in Turkey
Turkey’s Logistics Sector Aiming for Top 25 Worldwide by 2028
The country’s ambition is to make Turkey’s logistics sector one of the top 25 in the world by 2028. In order to achieve this ambitious goal, the Ministry of Trade has allocated $12.2 million to improve logistics networks. This strategic investment and infrastructure development reflect the main role of the sector in Turkey’s economic development strategy, especially in the current context of changing global supply chains. Investing in Turkey
Cutting-Edge Manufacturing Industry in Turkey
Labeau’s establishment of a state-of-the-art orchid production laboratory in Çanakkale, located in northwestern Turkey in the Marmara region, is a significant development for Turkey’s manufacturing sector. The development of industry in Turkey is a key factor in the country’s economic health. This facility not only contributes to the growth of Turkey’s production industry but also emphasizes a high female employment rate, reinforcing Turkey’s CSR criteria. Such initiatives attract foreign investments by demonstrating Turkey’s commitment to innovative manufacturing practices and gender equality in the workforce.
Role of International Investors in Projects
In May 2024, Prince Laurent of Belgium visited Turkey to explore the potential of energy and sustainable investment projects, highlighting the wealth of opportunities in this rapidly expanding sector. During his visit, he highlighted the SOCAR project, a hybrid power plant designed to reduce energy costs, as a prime example of the innovative and dynamic approaches being taken in Turkey. This project, which symbolizes the country’s commitment to clean energy and sustainability, demonstrates the significant potential for international investors in Turkey’s growing renewable energy market.
This project will not only make Turkey a regional leader in clean energies, but also augur very good benefits for investors. Prince Laurent also recalled the favorable framework in Turkey for cooperation in the field of clean energy.
The pilot project will be launched at the International Association for Energy Economics (IAEE) conference in Turkey in June, followed by its presentation at the United Nations Climate Change Conference in Baku in November. Investing in Turkey
Conclusion
Investing in Turkey offers strategic advantages as numerous sectors are experiencing strong growth. Turkey also benefits from innovative developments and government policies favorable to foreign investment. Whether in the energy, automotive, agricultural, or agro-industrial sectors, Turkey’s advancements make the country a hub for investors. It is definitely a country to watch closely! Investing in Turkey
If you are considering expanding your business and investing in Turkey, contact ERAI Turkey, a partner for business solutions in Turkey. Investing in Turkey
Sources: Ekonomim, Turkish Statistical Institute, Invest in Turkey, New Energy Innovation, Steel Radar, The Economist.
Investing in Turkey offers strategic advantages as numerous sectors are experiencing strong growth. Turkey also benefits from vesting in Turkey I.nvesting in Turkey
