Last Updated on 26/01/2023
FDI in Turkey increased in H1 of 2022
Turkey is a top destination for foreign investors thanks to its advantageous position, cutting-edge logistical infrastructure, and wide range of production potential. Therefore, the government has adopted an accurate strategy to improve the performance of FDI in Turkey, both qualitatively and quantitatively. These efforts aim eventually to promote high-value investments that also generate high-quality employment.
Moreover, recently, official data stated the increase of the FDI inflows in Turkey in the first half of 2022.
FDI in Turkey
Due to its strong growth rates and structural reforms carried out during the previous 15 years, Turkey has caught the attention of numerous foreign investors. Thanks to the important inflow of FDI in Turkey, the country succeeded in maintaining its position as the ninth most popular FDI destination with 160 projects in Europe in 2020 despite the devastating consequences of Covid-19.
Distribution of FDI inflows by sectors
Up to the year 2022, the total amount of FDI in Turkey didn’t exceed USD 15 billion. However, between 2003 and 2020, the nation attracted USD 225 billion of foreign direct investment in many sectors. The highest share of foreign investments in Turkey went to the finance and manufacturing sectors with 33% and 24% respectively in the period 2003-2020. The energy sector and ICT services followed them with 11% and 9% respectively. Therefore, the sectoral breakdown of FDI greatly diversified in line with Turkey’s 2023 vision of gaining ground in the global value chain.
Top countries of FDI in Turkey
Over the past 17 years, the majority of FDI inflows in Turkey have come from Europe, North America, and the Gulf states. Yet, FDI from Asia has been notably increasing. According to official data, the Netherlands has the highest share of FDI inflows with 15.9%. The USA followed it with 7.8%. The Gulf countries and the UK come in the same position with a 7% share each between 2003 and 2020.
The same data declared that by the end of 2020, the number of companies with international capital increased to reach 73,675 foreign-owned businesses in Turkey, up from 5,600 in 2002.
FDI in Turkey increased by 21% in H1 of 2022
The recent data from the Central Bank of the Republic of Turkey declared that the total amount of FDI (foreign direct investment) that entered Turkey during the first half of 2022 was USD 5.5 billion. Thus, they recorded an increase of 21% year over year. The overall amount of FDI inflows over the past 12 months increased thus from USD 14 billion in 2021 to USD 14.77 billion today. The Netherlands, Switzerland, and Germany were the top three countries contributing to FDI in Turkey in the first half of 2022, with a contribution of USD 590 million, 513million, and 211 million respectively.
FDI Sectoral distribution in H1of 2022
In terms of industrial breakdown, manufacturing and wholesale/retail commerce attracted the biggest percentage of FDI in Turkey with31% in H1 of 2021. Information and Technologies (ICT) followed it with an 11% share in the same period.
Due to its stable and robust investment climate in the post-pandemic period, Turkey continues to be on the radar of international corporations in numerous industries. Thanks to the quick response to supply chain changes, our investors can offer goods and services that can compete worldwide.
Startup ecosystem input in FDI in Turkey
The developed Startup ecosystem in Turkey has an important contribution to increasing the FDI in Turkey in 2022. Technology Startups in Turkey got foreign investments totaling USD 1.4 billion throughout 140 agreements in the first half of 2022.
In fact, Turkey is one of the countries with the most potential startup ecosystems because of the abundance of entrepreneurs and creative individuals there. Over the past five years, the total amount invested in businesses has surged by 66%. Therefore, Startups contributed greatly to economic growth. In fact, recent data revealed an increase in Turkish GDP in Q2 of 2022.
MEO Consultants’ investment-experienced experts provide a detailed advisory based on a deep analysis of the Turkish economic trends. Foreigners willing to invest in Turkey should request a risk-free initial consultation for a more detailed overview.
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