Last Updated on 25/08/2022
Conditions of foreign investment in Turkey
Turkey has recently been one of the world’s most important investment destinations. Therefore, the Turkish government welcomes foreign investment in Turkey by providing support and incentives to international investors.
Consequently, Turkish law preserves the rights of foreign investors. Yet, it also determines the conditions and limits of their investments in Turkey.
Foreign investment in Turkey
The Turkish Constitution contains extensive articles on foreign investment in Turkey. It includes a body of legislation and laws governing foreign transactions in Turkey. It outlines its requirements and facilities.
Turkey is one of the top nations when it comes to easing the flow of international investment inside the country. This is thanks to government assistance, simplified procedures, and various guarantees. Moreover, the country’s solid infrastructure with access to roads, transportation, ports, and airports facilitates overseas trade, export, and import operations.
Law of foreign investment in Turkey
The Turkish laws relative to international investment in Turkey guarantee the following aspects:
Investment across all sectors in Tukey
The legal requirements for foreign investors in Turkey are the same as those used for local Turkish investors. Therefore, foreigners have the right to invest in any sector in Turkey.
Learn more about the best sectors to invest in in Turkey.
Money transfer and remittances
In Turkey, a foreign investor is free to send money overseas from his net profits or investment returns without any restrictions from the law. This aspect facilitates the transactions of foreign investment in Turkey.
No Nationalization or confiscation
Unless there is a court order resulting from a violation of the law, there is no confiscation of public property or nationalization of any establishment of either a Turkish citizen or foreign investor under Turkish law.
Prominent aspects of foreign investment in Turkey
Real estate sector
Foreigners have the right to invest in the Turkish real estate sector. They can own property on Turkish soil, except for nationals of the following countries: Syria, Cuba, North Korea, and Armenia.
Therefore, foreign investors are treated similarly to Turkish citizens regarding legal processes and title deeds. We should remember that buying a property in Turkey allows its owner to obtain a residence permit through real estate investment.
Moreover, the schemes of foreign investment in Turkey stipulate the acquisition of Turkish citizenship under certain conditions. Foreigners who purchase properties in Turkey worth $4000,000 are eligible to obtain Turkish citizenship.
Bank deposit investment
Through bank deposits, foreign investors can engage in the Turkish banking industry. Profit rates vary depending on the bank’s policies and the investor’s participation in the bank deposit program.
This is another aspect of investment that grants the acquisition of Turkish Citizenship; According to Turkish law, a foreigner who invests $500,000 over three years in the banking industry obtains Turkish citizenship.
Company establishment
This includes all establishments that produce goods. They can be in the service industry, manufacturing facilities, or research and development. The government offers an ideal environment to entice foreign investment in Turkey. In fact, the country has affordable labor and ready infrastructure with transport and export services through a modern and advanced network.
Moreover, foreign nationals can invest in Turkey by establishing local branches of their international businesses. The most significant characteristic of the Turkish investment environment is its acceptance of start-ups and small businesses with low capital. Therefore, it encourages new investors and entrepreneurs to take the experience of investing easily in a bustling economy, an open market for all, with fair competition.
Learn more about companies’ establishment in Turkey.
purchase of government bonds
For many investors, government bonds are a haven and a stable scheme of investment. They believe it is a sector where money may be stored and earned with the option of liquidation and return easily.
Turkish law encourages foreign investors in this area by offering the possibility of granting them Turkish citizenship for the purchase of government bonds worth $500,000 at least. Yet, they mustn’t sell them for three years.
Circumstances of foreign investment in Turkey
Even though the Turkish government offers facilities and incentives to international investors, there are still some restrictions and limits to apply to foreign investment in Turkey.
– If a foreign investor fails to comply with the legal requirements and legislative restrictions applicable to the type of his investment, he runs the risk of losing all of his rights. He also risks his property’s seizing and deportation.
Moreover, the foreign investor must deposit 25% of the company’s capital in a Turkish bank.
Besides, foreign investors should give priority to Turkish citizens when selecting their employer. However, they still can hire foreign workers after they fulfill certain requirements and get work permits in Turkey from the Turkish Ministry of Labor.
Rights of foreign investors in Turkey
Turkish legislation relative to foreign investment in Turkey generally does not distinguish between foreigners and Turkish citizens when it comes to investment rights. The foreign investor is subject to the same terms, liabilities, and rights as the local one. The quality and magnitude of the investment frequently result in additional benefits for the foreign investor.
Tax policy of foreign investment in Turkey
Turkish law treats equally foreign nationals and Turkish citizens, regarding the amount and rates of taxes that must be paid. The percentage of these taxes is set annually by the Turkish government.
Government incentives for foreign investment in Turkey
The Turkish government strongly supports foreign investment in Turkey. Therefore, it provides international investors with encouraging incentives in numerous fields, particularly those who represent notable accomplishments in the local economy.
Consequently, the Turkish government generally supports foreign investors with tax deductions and exemptions. However, sometimes this support takes the form of government participation in significant and strategic investments. In these cases, the foreign investor benefits from the guarantee of profits.
For further information regarding investment in Turkey, don’t hesitate to contact MEO Consultants experts. Get risk-free initial consultation.
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