REASONS TO INVEST IN TURKEY , 17.07.2012REASONS TO INVEST IN TURKEY
There are at least 10 reasons for a Danish company to invest in Turkey.
1. SUCCESSFUL ECONOMY: A sound macroeconomic strategy in combination with prudent fiscal policies and major structural reforms in effect since 2002, has integrated the Turkish economy into the globalized world, while transforming the country into one of the major recipients of FDI in its region.
The government enhanced the financial structure of private banks, restructured state banks and improved the regulatory and supervisory framework. The activities and ratios of all the actors in the financial sector have been closely monitored by the regulatory bodies. The banking sector has achieved a much healthier and more robust position through reinforcing its capital structure and implementing effective risk management.
• Booming economy: Turkish economy grew by 8,9% and % 8,5 in the years 2010 and 2011 respectively
• Sustainable economic growth (4.8 percent annual average real GDP increase for the last 8 years)
• Promising economy with a bright future as it is expected to be the fastest growing economy among the OECD members during 2011-2017 with an annual average real GDP growth rate of 6.7 percent
• 17th largest economy in the world and 6th largest economy compared with the EU in 2011
• Institutionalized economy fueled by over USD 94 billion of FDI in the last 8 years and ranked as the 15th most attractive FDI destination for 2008-2010 (UNCTAD)
• A population of 74 million people
• Largest youth population compared with the EU
• Half the population under the age 29 (whereas the average age in Europe is 42)
• Young, dynamic, well-educated and multi-cultural population
3. QUALIFIED AND COMPETITIVE LABOR FORCE
• Over 25 million young, well-educated and motivated professionals
• Increasing labor productivity combined with decreasing real unit wage
• 4th largest labor force compared with the EU
• The longest working hours, and the lowest sick day leaves per employee in Europe (53.2 hours worked per week and annual average of 4.6 sick days per employee)
• Approximately 500,000 graduates from 156 universities
• Around 663,000 high school graduates, including one third from vocational and technical high schools.
• New and highly developed technological infrastructure in transportation, telecommunications and energy
• Well-developed and low-cost sea transport facilities
• Railway transport advantage to Central and Eastern Europe
• Well-established transportation routes and direct delivery mechanism to most of the EU countries
5. CENTRALLY LOCATED: From Istanbul, it only takes 4 hours by plane to reach more than 50 countries, which represent a quarter of the world's population and a quarter of the world's economy.
• A natural bridge between both East-West and North-South axes, thus creating an efficient and cost effective outlet to major markets
• Easy access to 1.5 billion customers in Europe, Eurasia, the Middle East and North Africa and Balkans
• Access to multiple markets worth USD 23 trillion of GDP
6. ENERGY CORRIDOR AND TERMINAL OF EUROPE:
• An important energy terminal and corridor in Europe connecting the East and West
• 70 percent of energy resources are located in the south and the east of Turkey, while the largest energy consumer, Europe, is located in the west of Turkey.
• Considerable amount of renewable energy resources in Turkey.
7. LIBERAL AND REFORMIST INVESTMENT CLIMATE: The opening up of key markets such as banking, telecommunications, energy, tobacco, and agriculture to competition and projected privatizations are indicative of Turkey’s progress towards becoming an effective free market. Turkey has created the “National Coordination Council for the Improvement of the Investment Environment (CCIIE)”, which is responsible for rationalizing regulations concerning direct investments, developing policies that will increase the competitiveness of the investment environment, and preventing any bureaucratic problems faced by national and international investors. The government has devised the international “Investment Advisory Board”, gathering together the CEOs of the world's top 20 companies in Turkey for a full working day with the Prime Minister and the State Minister for the economy.
• A dynamic and mature private sector, increasing its export capacity 225 percent in the last nine years.
• Business-friendly environment with average of 6 days to set-up a company, while the average in OECD members is more than 13 days
• Highly competitive investment conditions
• Strong industrial and service culture
• Equal treatment for all local and foeign investors
• More than 29,000 companies with international capital
• Access to international arbitration
• Guarantee of transfers
• The total revenue generated from the privatization of public assets between 2003 and 2010 has reached 48,2 billion dollars
8. LOW TAXES & INCENTIVES: The new FDI Law introduced in 2003 has provided the following incentives to encourage foreign investments in Turkey. Given its business-friendly environment, Turkey has received 9,0 billion $ of direct foreign investments in 2010 and 15,7 billion $ in 2011. The total amount of foreign direct investment inflows in Turkey in the last four years has reached 70 billion Dollars. The number of foreign companies operating in Turkey increased to 29.579 as of February 2012.
• A new investment incentive scheme was announced in April 2012
• Corporate Income Tax reduced from 30 percent to 20 percent
• Individual Income Tax varies from 15 percent to 35 percent
• Tax benefits and incentives in Technology Development Zones, Industrial Zones and Free Zones could include total or partial exemption from Corporate Income Tax, up to 80 percent grant on employer’s social security share, as well as land allocation.
• Customs duty exemptions for imported machinery and equipment.
• R&D and Innovation Support Law: Turkey is transforming itself to a knowledge based economy. The Turkish “software” market recorded 100 percent growth rate in recent years. Turkey envisages to allocate 2 percent of its GDP to R&D expenditures. Moreover, domestic intellectual property right applications and licensing increased fivefold in the last 9 years.
• Region and sector-based incentive system
9. CUSTOMS UNION WITH THE EU SINCE 1996: This provides foreign investors to export their products from Turkey to European markets without hindrance of customs formalities.
• Free Trade Agreements (FTA) with 20 countries
• More FTAs underway
• Accession negotiations with the EU
10. LARGE DOMESTIC MARKET
• More than 35 million internet users (%44,4 of the population- Internet World Stats, April 2012) in 2011, up from 4 million in 2002
• 66 million GSM users in 2011, up from 23 million in 2002
• 31 million credit card users in 2011, up from 16 million in 2002
• Over 100 million airline passengers in 2011, up from 33 million in 2002
• 31.5 million international tourist arrivals in 2011, up from 13 million in 2002 (369.867 Danish tourists visited Turkey in 2011)
Last but not the least, Turkey with its improving democracy, political stability and remarkable economic development has become more influential and eminent actor of the international community. Having headed resolutely towards the European Union membership, Turkey also follows a multi-dimensional, goal-oriented, balanced and humanitarian foreign policy with a view to restoring and maintaining peace, enhancing stability and prosperity in the world and particularly in its vicinity.