BUSINESS IN TURKEY
BUSINESS IN TURKEY
Located at the Eurasian crossroads between Eastern European, Mediterranean, Black Sea and the Caspian Sea regions, Turkey has had geographical, political and economic ties with Europe for many centuries.
With its network of developed infrastructure and a globally competitive work force, Turkey has become a geo-strategic base for international business. A rapidly growing emerging market of 68 million people makes the country today one of the key trading partners of the European Union (EU).
Turkey’s economic legislation is progressively aligning with the main policies and standards of the EU, as a result of the 1995 customs union and the EU pre-accession process.
Current economic policy in Turkey envisages increasing the role of the private sector in the economy. The public sector reforms are aimed at the decrease of borrowing requirements and channel excess funds to the more efficient private sector.
Turkey’s network industries and natural monopolies are being introduced to competition by the removal of entry barriers as the state withdraws to a supervisory role in a functioning market economy. Significant number of privatizations will be finalized in the medium term.
On the other hand, the current level of foreign direct investment in Turkey does not affect its qualified labor force, favorable market positioning, high absorption capacity, and tourism potential and strong entrepreneurial spirit.
Turkey also has intense economic relations with the neighboring countries in the Middle East, North Africa and Eurasia.
The investment environment will evolve rapidly within the context of a developing macroeconomic framework where sufficient human and physical capital will be deployed as a result of the demographic, social and financial changes taking place.
With a services sector constituting almost 60 % of its GDP and a public procurement market of over € 30 billion, Turkey offers immense opportunities for European companies in development projects from which they should get higher than usual rates of return.
The elimination of political interference in the economy, public sector reform and the consolidation of the financial sector together pave the way to better functioning market economy and sustainable high growth.
Based on the above, Turkey is among the 20 biggest economies in the world. Furthermore, it is an unsaturated market in almost every category of consumption goods, ranging from fast moving consumer goods to high technology products.
Attaining an average GDP growth of 5.1 % between 2004 and 2006, it is expected that total exports and imports will be € 61 billion and € 72 billion respectively by 2006. The strong demand will lead to higher levels of imports from EU countries.
Foreign investors are welcome to participate in all kinds of businesses. Imports and exports are unrestricted and exchange control is limited to certain formalities. Foreign investors may invest through authorized banks, investment funds and organizations in Turkey. Real estate can be bought by foreign investment companies and, within municipal limits, by individuals. In both cases, a simple permission may be required.
The monetary unit Lira has been replaced by YTL (New Turkish Lira) by leaving six zero (‘000.000 ) out of the Turkish Lira. Over 50 banks operate in Turkey, including 15 foreign banks. Within the banking system there is a wide range of very large full service banks, active in both the wholesale and retail banking.