Türkiye has become one of the most attractive destinations for foreign investors due to its strategic location, growing economy, liberal regulatory environment, and strong government support mechanisms. From registering a company to benefiting from a wide range of incentive schemes, Türkiye presents a comprehensive framework that welcomes and facilitates international business activity.
1. Why Invest in Türkiye?
Türkiye stands out with a unique set of competitive advantages for investors:
- Geostrategic Location: Türkiye is located at the intersection of Europe, Asia, and the Middle East. Its proximity to over 1.3 billion people across three continents and access to key global markets offers a unique advantage for trade and logistics. Major trade routes pass through Türkiye, enabling investors to connect with the EU, MENA, Central Asia, and CIS countries with ease.
- Large and Young Population: With over 85 million inhabitants, Türkiye has the youngest population in Europe (median age of 33.5). This demographic profile supports a sustainable labor market and strong domestic consumption, especially in sectors such as e-commerce, consumer goods, and digital services.
- Resilient and Diverse Economy: Türkiye is the 19th largest economy globally (IMF, 2023) and is projected to maintain long-term growth supported by industrial diversification. Key contributing sectors include automotive, textiles, food processing, energy, construction, ICT, and tourism.
- Advanced Infrastructure and Logistics: Türkiye has heavily invested in transportation, energy, and communication infrastructure. The country has 26 international airports, an expanding high-speed rail network, over 12,000 km of motorways, and major seaports that facilitate international logistics.
- Business-Friendly Legal Framework: The Foreign Direct Investment Law (2003) guarantees equal treatment for foreign investors and allows for full foreign ownership, profit repatriation, and dispute resolution through international arbitration.
- EU Customs Union and Free Trade Agreements: Türkiye’s Customs Union with the EU and its 23 FTAs ease access to regional markets, particularly for industrial and agricultural products.
2. What Can Foreigners Invest In?
Türkiye allows foreign investors to participate in almost all sectors under the same conditions as local investors. The most prominent areas include:
- Real Estate and Construction: Türkiye’s growing population and urbanization fuel demand for housing, commercial spaces, and infrastructure. Foreign nationals can purchase residential and commercial properties with minimal restrictions.
- Tourism and Hospitality: With Türkiye ranked among the top tourist destinations globally, investment opportunities include hotel chains, theme parks, health tourism facilities, and boutique resorts.
- Technology and Innovation: The government prioritizes digital transformation. Sectors such as SaaS, AI, fintech, gaming, and cybersecurity are growing rapidly, especially within technoparks and R&D hubs.
- Manufacturing and Industry: Türkiye has become a European production base with strong capabilities in textiles, automotive, white goods, defense, and machinery.
- Agriculture and Food Processing: Türkiye is one of the leading agricultural producers in the region. Areas of investment include smart farming technologies, export-oriented food production, and organic agriculture.
- Renewable Energy: The country offers strong solar and wind potential. Incentives are provided for solar PV farms, wind power plants, and biogas facilities, particularly in underdeveloped regions.
Restricted sectors include military and nuclear activities, broadcasting, and certain land acquisitions in military zones, which require special permissions.
3. How Foreigners Can Establish a Business in Türkiye
The business establishment process in Türkiye has been streamlined to encourage foreign participation. Digital procedures, multilingual support, and standardized requirements simplify the process.
A. Determine Legal Structure
- Limited Liability Company (Ltd. Sti.) – Minimum 1 shareholder, TL 10,000 capital, commonly used for SMEs.
- Joint Stock Company (A.S.) – Ideal for medium-to-large scale businesses; allows for share offering and IPOs.
- Branch Office – Can conduct commercial activity under the umbrella of the foreign parent company.
- Liaison Office – Cannot generate income but may conduct market research and feasibility studies.
B. Incorporation Steps
- Draft Articles of Association (approved by notary or electronically through MERSIS).
- Open a local bank account and deposit initial capital.
- Apply to the Trade Registry Office.
- Obtain a tax ID from the Tax Office.
- Register with Social Security Institution (SGK).
- Activate e-signature, e-invoicing, and accounting systems.
Foreign investors are advised to consult a local attorney and certified financial advisor to ensure compliance with Turkish Commercial Code, labor law, and tax regulations.
The average incorporation time is 3-6 business days for standard company types.
4. Government Incentives for Foreign Investors
Turkey provides customized incentives based on sector, region, and scale:
A. New Investment Incentive System:
- Project-Based Incentive System (HIT-30 Program): For strategic investments over 30 billion TL, offering extensive incentives and facilitative measures.
- State Aid Decision on Investments:
- Turkey’s Century Development Initiative: Includes Technology, Local Development, and Strategic Moves, emphasizing technology-intensive and high-value-added projects.
- Sectoral and Regional Incentive System: Supports Priority Investments (digital transformation, green energy) and Target Investments (broad industrial, services, and energy projects).
B. Other Key Incentives:
- Technology Development Zones (TDZs): 100% tax exemption on R&D income.
- Free Zones: Corporate tax exemption, customs duty exemption, and freedom of profit repatriation.
- Export and Market Entry Incentives: Support for international fair participation, brand registration, logistics, and digital export platforms.
C. Special Applications:
- Earthquake Zone and Attraction Centers: Additional incentives in designated regions.
- Sub-region Support: Advantageous social security premium support for investments in organized industrial zones or specified districts.
- Digital and Green Transformation Programs: Specific incentives for sustainable and resource-efficient investments.
Turkey’s incentive system provides strategic and sustainable competitive advantages beyond mere cost reductions. Applications are open until the end of 2030.
5. Citizenship by Investment Program (CBI)
Along with multiple investment opportunities,Türkiye offers foreign investors a fast-track route to citizenship without residency requirements. Benefits include visa-free access to 110+ countries, eligibility for E-2 Visa to the U.S., and access to Türkiye’s public education and healthcare system.
Investment Options Include:
- Real Estate: USD 400,000+ in residential/commercial property (must be held for 3 years).
- Fixed Capital: USD 500,000 investment approved by the Ministry of Industry and Technology.
- Job Creation: Employ 50+ Turkish citizens verified by the Ministry of Labor.
- Bank Deposit: USD 500,000 in a Turkish bank for 3 years.
- Government Bonds: USD 500,000 worth held for 3 years.
Applicants can include spouse and children under 18. No language test or physical residence is required.
6. Which Obstacles Foreigners Can Face While Investing and Running Business in Türkiye?
Despite the overall positive environment, foreign investors may encounter the following challenges:
- Language Barrier: Many official documents and business negotiations are conducted in Turkish. While English is widely spoken in business hubs, legal and governmental processes often require certified translations.
- Bureaucracy: Although digitalization has improved procedures, delays can still occur at municipal or regional levels, particularly for permits, licenses, and land registry processes.
- Cultural Differences in Business Practice: Relationship-building and trust are highly valued. Business culture may be more hierarchical and slower-paced than in some Western countries.
- Currency Volatility: Fluctuations in the Turkish Lira may affect investment planning, pricing strategies, and operational costs.
- Changing Regulatory Environment: Rapid policy updates, especially in sectors like finance, energy, and real estate, may require continuous monitoring and adaptation.
- Tax Compliance and Audits: While corporate tax policy is investor-friendly, firms must strictly comply with reporting standards. Hiring local experts is essential to avoid penalties.
- Land Acquisition Restrictions: Foreign individuals and companies may face limits on purchasing property in restricted zones or rural areas near military bases.
Conclusion
At PKF Istanbul, we specialize in guiding foreign investors through every stage of their business journey in Türkiye — from market entry and company formation to obtaining state incentives and ensuring legal compliance. Our expert consultants provide personalized support to simplify bureaucracy, minimize risks, and help you make the most of Türkiye’s dynamic investment environment.
PKF Istanbul offers a wide range of services tailored to both new and established investors, including:
- Company establishment and legal structuring
- Tax advisory and financial reporting
- Incentive application and project finance consultancy
- Investment feasibility analysis and market research
- International trade support and customs consultancy
- Citizenship and property investment guidance
- Payroll and HR compliance services
With our deep local knowledge and international perspective, we act as your reliable partner in navigating Türkiye’s business landscape.
Consultant | Government Support and Incentive Consultancy
