All about investing in turkey-What incentives are provided for foreign investors in turkey

investing in turkey

Turkey has improved its investment environment by providing incentives,tax-exempts, and other benefits to investors regardless of location, amount, and fields. 

But, why investing in turkey is important? Where does Turkey rank in the world by GDP? What incentives does Turkey provide for investors? And more..

Why invest in turkey?

investing in turkey - Hourglass

1- Fast-growing economy: turkey has one of the fastest-growing economies in the world, and it has outpaced its peer-to-peer, and the growth momentum is set to in the coming years.​ 

2- Flourishing domestic and regional market: More than 23 urban markets support Turkey’s thriving domestic market through their production of goods and services, with free access to more than 900 million consumers globally. 

3- strategic location: Turkey is the bridge between the east and west, thus creating an efficient and cost-effective hub to major markets,  ​as well as its unique location enables easy reach to markets across 16 different time zones, from Tokyo to New York. Multinationals such as Ford, Nestle, Toyota, and Boss are increasingly choosing Turkey as a preferred hub for the manufacturing, exports, as well as management.

4-Favorable demographics: Turkey has the largest youth population among the EU member countries, and within 2021 the median age of the Turkish population has become 31.5 years. SO, Turkey offers excellent investment opportunities with its growing, young, and dynamic population. 

5- Competitive and productive labor force: ​​​​​​​​​​​​​​​​​​​​​Turkey’s overall labor force is more than 30 million people, which makes the country one of the largest labor forces in Europe. Turkey’s young and well-educated population has a large contribution to boosting the country’s rank over peer countries.

6- Liberal investment environment: Turkish investment laws are simple and comply with international standards while offering equal treatment for all investors (foreign and local investors). 

7- Innovating ecosystem in turkey: Extensive R&D incentives in Turkey are further supported by a well-educated and highly qualified labor force, competitive cost advantages, and several global companies that are active in the market. Altogether these form a dynamic ecosystem in Turkey. Examples of global companies with research and development operations in turkey: Ford, Unilever, Bosch, Huawei.

8- Variety of investment sectors in turkey: ​​​​​​​​​​​​​​​​​​​​​Turkey offers huge opportunities in a large number of sectors where it has a competitive edge such as in Automotive, machinery, energy, agro-food, financial services, infrastructure and defense, and aerospace.

Where does Turkey rank in the world by GDP?

investing in turkey - chart

The Turkish economy climbed and recorded a huge growth from 18th place to 11th globally from 2003 to 2021. And turkey has put in a critical performance by increasing the size of its overall economy from 236.000$ in 2002 to 717.000$ in 2020.​

What incentives does Turkey provide for investors? 

Turkey offers 5 types of incentives, we will focus more on the investment incentives type.

1- Investment incentives: 

Investment incentives include 4 kinds of incentives in addition to other supports like interest rate support and cash support:

1-General Investment Incentives Scheme: this type of investment incentive consists of VAT exemption and Custom duty exemption.

2- Regional Investment Incentives Scheme: this is made for investments located in less developed regions. Consists of VAT exemption and Custom duty exemption, corporate tax reduction, social security premium support (employer’s and employee’s shares), income tax exemption, interest rate support, land allocation, VAT refund, and property tax exemption.

3-Strategic Investment Incentives Scheme: incentives for investments in areas with high importation. This type provides exactly the same incentives as the previously mentioned type (Regional Investment Incentives Scheme).

4-Project-Based Investment Incentives: made for investments in areas with critical importance for Turkey. This type contains the same incentives as Regional and Strategic investment incentives in addition to infrastructure support, energy support, capital contribution support, purchasing guarantee, facilitation of Authorization/ Permit/ License Procedures, and qualified personnel support.

2- Employee incentives:

Employee support includes Tax exemptions and cash support for both employment and personnel training.

3- R&D and design incentives:

Turkish government offers tax benefits for R&D  centers and design centers as well as for companies that are located in Technoparks. In addition to the TUBITAK type which offers cash support for research, technology development, and innovation activities.

4- Regional management center incentives:

This type offers Tax benefits for international companies that move their regional management centers to Turkey.

5- Export incentives:

The Turkish ministry of trade offers export support instruments, Free Zones offer tax benefits for export-oriented investments, and the government offers Credit opportunities to increase Turkey’s exports.

What are the most profitable investments in turkey?

Each country has different investment fields that can be more reliable and investors can get huge benefits from them.

The top 5 investment sectors in turkey

investing in turkey - long term investing

1-Real estate:

This sector can be one of the most profitable actors due to the rapid population growth in Turkey especially in large cities like Istanbul, Izmir, Ankara, and Antalya, the modern infrastructure, and luxury projects.

To know the benefits of investing or buying real estate in Turkey, you can read the full article Is buying property in turkey a good investment?


Turkish automotive sector attracts many foreign and local investors and the country is considered as the home to many global suppliers where there are more than 250 global suppliers that use Turkey as a production base.


Turkey plans to increase the ratio of renewable energy resources (solar, wind, hydroelectric, geothermal, biomass) in total installed capacity to 30% by 2023 that is why Turkey can be an attractive market for energy companies and investors.


it is a very important sector in Turkey, around 18% of the country’s labor force and that accounted for 6.6 percent of the country’s GDP work in the sector. And Turkey aims to become one of the five biggest producers in the agriculture and food sector until 2023.

5-IT (Information Technology):

The Turkish government supports such a sector and provides an incentives package for IT investments.

The top ideal sectors in turkey 2021

Can foreigners invest in Turkey stock market?

According to subparagraph (a) of Article 3 of Law no. 4875, firstly the freedom of investment and principles of equal treatment are regulated. Accordingly, unless otherwise stipulated by international agreements and provisions of specific laws, foreign investors are free to invest directly in Turkey, and they are subject to equal treatment with domestic investors.

How to get Turkish citizenship by investment?

There are three investment options to get Turkish citizenship:

1-Real estate investment: 

Real estate buyers in Turkey can get Turkish citizenship if the property is worth a minimum of 250,000$. And The Spouse and children (under 18) will also be granted Turkish Citizenship.

2-Investment by bank deposit: 

Foreign investors who deposit at least 500,000$ or equivalent in foreign currency or Turkish lira in banks operating in Turkey for three years can acquire Turkish citizenship.

3-Capital contribution investment: 

investors who invest with an amount worth at least 500,000$ in fixed capital contribution can get Turkish Citizenship.

Disadvantages and risks of investing in turkey:

investing in turkey - risk management

Although turkey provides a safe and stable environment for investors, offers equal treatment for all investors as well as offers huge benefits and incentives for them, there can be some risks for investing in turkey as many other countries:

1- Fluctuation of the Turkish lira exchange rate: The exchange rate of the Turkish lira against the US dollar keeps fluctuating and it has lost its value during the pandemic covid-19. Which can create some fears inside foreign investors in turkey. 

2-Unable to pay the mortgage: mortgage and monthly installments encourage foreigners to buy property in Turkey but buyers should know exactly their ability to make the monthly payments.

3-Dealing with untrustworthy parties: Working with the right party protects you from scams and fraud, so do not hesitate to inquire about the extent of credibility and trustworthiness for any party that will deal with it in the future. 

4-Choosing inappropriate real estate: there are some issues you have to be aware of before buying a property, ensure Title Deed Validity, Debt-Free Property, The Title Deed Transfer Process, property location, construction company status, etc. otherwise you may choose inappropriate real estate and lose your future gains.

To sum up, turkey is a perfect country for Investment due to its successful economy, qualified workforce, liberal investment environment, and many other reasons. The Turkish governmental incentives and tax-exempts are making Turkey even more appealing to foreign and local Investors. 

Join The Discussion

Compare listings