Last Updated on 14/09/2023
Recently, we have been witnessing a flood of Russian investments in Turkey. Especially after the conflict situation between Russia and Ukraine, Russian oligarchs drew their attention to Turkey as an investment alternative to avoid US and Europ sanctions.
The stimulus of Russian investment in Turkey
Turkey, a shelter to escape Western sanctions
Following the Russian invasion of Ukraine, Western sanctions against Russian oligarchs began to fall, and many moved their boats out of the European Union and British borders to avoid being impounded. Others escaped to the Maldives, while some traveled to Dubai. Turkey is currently the most sought-after location for oligarch-owned yachts.
Besides, Ankara, which depends on Moscow for its energy supplies, is not enforcing the sanctions against Moscow as its Western allies do. Through the two pipelines that connect to Russia, TurkStream and Blue Stream, trade is still happening, and gas is flowing. Several oligarchs have yachts anchored in Mediterranean ports, and Turkish Airlines runs regular flights from the Russian Federation. All these facts contributed to boosting the Russian investment in Turkey.
Moreover, Mevlut Çavuşoğlu, the foreign minister of Turkey, stated previously that his country welcomes Russian oligarchs as long as their business operations comply with international law.
Turkish Citizenship investment scheme to establish a new life
Turkish citizenship by investment program is the country’s major attractive scheme for Russian nationals. In fact, this program grants the Turkish passport within 3 to 4 months to anyone investing at least $400,000 in real estate or $500,000 in government bonds, businesses, investment funds, or a local bank account. Therefore, it seems an appealing opportunity For Russian oligarchs, who look to establish a new life and protect themselves from political issues.
Since its debut in 2018, Ankara’s route to citizenship for investors has gained enormous popularity, mainly among Middle Easterners. However, the Russian invasion of Ukraine brought a new generation of investors, namely Russian nationals.
Furthermore, Russia’s affected economy due to crippling international sanctions made Russians consider another safe shelter. Thus Russian investments in Turkey have increased dramatically, facing the current situation.
Prominent aspects of Russian investment in Turkey
Russian nationals: number 1 real estate foreign buyers in Turkey
Since the Russian invasion of Ukraine started, Turkey has drawn an increasing number of Russian investors. They currently come at the head of the list of international real estate buyers in Turkey. According to the Turkish Statistical Institute, nearly 5,000 Russians bought homes in Turkey between February and June 2022, including 1,275 in June alone.
The important flow of Russian investment in Turkey real estate has boosted, especially since March 2022. Russian nationals have kept the 1st position in real estate sales made to foreigners in Turkey for months now.
Check also house sales in Turkey in April and May.
Russian SME investment in Turkey increased fivefold in 2022
According to the Turkish Chamber of Commerce and Industry, the registered capital amount and number of foreign-invested firms with Russian capital registered in Turkey in January-May 2022 has increased fivefold compared to the same period in 2021. (TOBB).
TOBB reports that this number increased from 278 to 347 firms. Moreover, the capital of registered companies reached 203.1 million Turkish Liras within the first 5 months of 2022. We should mention that it was 32.9 million Turkish liras in the same period in 2021. These data show explicitly the important recent flow of Russian investment in Turkey this year.
Moreover, data shows that Istanbul serves as the headquarters for 248 Russian-owned businesses registered in Turkey. Their total capital was worth 52.4 million Turkish liras.
Furthermore, 187 of the total number of registered businesses are involved in wholesale and retail commerce. While 44 companies are in the technology and communications industry, 24 operate in the trade and education sectors. The remaining Russian-owned businesses operate in several economic fields.
Turkey: an always-preferred destination for Russians
Turkey has always been a preferred destination for Russians, mostly for tourism. Each year, Antalya welcomes many Russian tourists. They succeed in creating their own community there. Therefore many people nowadays refer to Antalya Province as “Turkey’s little Russia” In fact, Russian residents reached 18,905 in 2021, according to the Turkish Statistics Institute.
Therefore, Russians in Turkey, especially in Antalya, don’t feel like strangers, and many consider it a second home. They established their own restaurants, grocery businesses, and Russian daycare centers.
Moreover, Turkey has always been popular among Russian oligarchs as well. They frequently travel to Turkey because of its outstanding Mediterranean coastline and pleasant weather. Eight Russian oligarchs’ boats, totaling 1.1 billion, have recently been anchored in the Turkish port.
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