Last Updated on 02/06/2023
Turkey has seen a spectacular rebound following recent economic reforms and stability measures, with numerous sectors exhibiting strong development and untapped potential. As Turkey maintains its status as a regional economic powerhouse, 2023 is likely to be a crucial year for investors. Turkey provides a wide range of investment prospects across numerous industries, from infrastructural development to technological breakthroughs, making it an alluring location for both seasoned investors and those looking to diversify their portfolios. In this article we suggest some profitable opportunities for those who consider investing in Turkey.
Top Investment options in Turkey 2023
Foreign Trade
Foreign trade and mainly import and export is one of the best options when investing in Turkey in 2023. The recent events in the country and its surrounding made Turkey an important trade mediator in the world. In fact, the Corona epidemic has disrupted supply chains, which may prompt European businesses to think about lowering their reliance on Asia and turning to nearby options like Turkey.
Moreover, It’s important to note that the Fitch International Credit Rating Agency recently verified in its research that Turkey will profit most from changes in Europe’s supply chains.
Moreover, due to the conflict between Russia and Ukraine, many American and international trading businesses have explored transferring their headquarters from Russia to Turkey. Consequently, the country is now an alternative to Russia in terms of welcoming multinational corporations which is an encouraging fact to start investing in Turkey in the international trade sector.
According to preliminary data from the Turkish Statistical Institute and the Ministry of Trade, in the period between January and March 2023, exports increased by 2.5% to 61 billion 558 million dollars, while imports increased by 11.1% to 96 billion 250 million dollars.
Note that Germany was the top exporting partner between January and March 2023, accounting for 5 billion 528 million USD. Then the United States came in second place with $3 billion 656 million. Yet, Italy came third with $3 billion 223 million, and Russia came in 4th place with $3 billion 102 million. Moreover, the United Kingdom was 5th with $2 billion 933 million.
How to Invest in Turkey Stock market
Investing in Turkey stock market is open to foreign investors without any limitations. You should know that Borsa Istanbul is the only exchange entity in Turkey and it combines the Gold Exchange, and the previous Istanbul Stock Exchange (ISE).
How to Invest in the Stock Market of Turkey? To answer this question, you should follow the following steps. First of all, you need to choose a broker who s authorized to act as an intermediary in financial asset transactions on the Borsa Istanbul.
Then open a trading account. Thus, you can send buy and sell orders to the central system of Borsa Istanbul via the broker’s access to their trading platforms.
After that, you should decide whether to invest in stocks, government bonds, or corporate bonds.
Investing in a broad market index using ETFs, (exchange-traded funds) that trade on exchanges and typically mirror a certain index, is the simpler way to participate in the Turkish stock market. When you purchase an ETF, you receive a collection of assets that you can buy and sell during trading hours. This would potentially reduce your risk and exposure while assisting with portfolio diversification.
Remember that you can obtain Turkish citizenship by purchasing government bonds worth $500,000.
Mutual Funds Investing in Turkey
Investing in Turkey funds may be made via certificates of rental partnership accounts, gold and other precious metals, partnership shares, funds recognized by the Capital Market Board, and instruments of the capital markets.
There are many different types of investments that can be made through deposits in investment funds. But the two most significant ones are income Funds. which are preferred by most investors and involve highly liquid securities like treasury bills and bank deposits. And Growth Funds, which are preferred by investors who want to earn higher returns than those in the previous category and make long-term investments in common stocks.
Transactions involving investment funds in Turkey can be completed in any participatory bank that has been granted approval for these kinds of investments. Besides, your investment can be safely assessed in accordance with the norms and principles of the banking operation where it is deposited. You can deposit money into investment funds that are right for you through a team of financial professionals and specialists who manage portfolio funds. You can also use them to assess your savings through the potential for investing in the funds’ numerous instruments.
Investing in Property in Turkey
Experts and economic analysts anticipate that the Turkish real estate market will continue to grow and prosper in 2023 but at a slower rate than in previous years due to the effects and difficulties that the macroeconomy and the Turkish political changes that are currently occurring.
And since the real estate market’s expectations are based on a review of recent years and the current circumstances, we will discover that sales from prior years and investment returns are all high and appealing to both domestic and foreign investors.
Before investing in Turkey real estate market, investors should take into account a few major influencing elements:
Interest rates and the rate of Inflation in Turkey
Opening of the Istanbul International Finance Center
Russia-Ukraine conflict who brought the Russian investment flow
Decline in the world economy
The impact of the devastating earthquake in South Turkey.
Turkey Elections in May 2023
The Turkish real estate market has been slow for the last couple of months due to some political declarations before elections. The opposition candidate declared previously that among his economic program, he has the intention to ban foreign real estate purchases for 5 years or until the prices decrease again. This statement caused some concerns among real estate international investors.
While the country was preparing for the second round ( before May 28th, 2023), wise experts waited for the final election results to make any comment or predict any forecast. However, experts has already stated that the ban scenario was not that probable for many reasons. First, referring to TUIK data, the real estate foreign sales don’t exceed 5% of the total number of house sales in Turkey. Consequently, foreigners investing in Turkey real estate don’t really have a big impact on the price evolution. It is mostly the local supply and demand balance.
Moreover, the parliament has already rejected the ban decision previously. According to experts, this is good news. In fact, the current government party still has the majority in the parliament according to the results of the first election round on May 14th. Now, with the victory of Erdogan, Real estate experts expect the market to revitalize again.
Experts recommend to foreign nationals willing to invest in Turkish real estate to act immediately. In fact, with the ruling party continuing in power, the real estate market will boom again and prices will increase remarkably.
Tourism Investment
Turkey’s tourism industry has set a goal of 60 million visitors and 56 billion dollars in revenue for 2023. The first two months of 2023 data from the Ministry of Culture and Tourism give optimistic signs that the country will achieve this objective.
According to the report, Turkey welcomed 3 million 876 thousand 381 foreign visitors in January and February. When the hotels in coastal cities finish making ready for the season, these results should pick up steam. These official data constitute an encouraging fact to consider tourism sector while investing in Turkey.
Advantages of Investing in Turkey
In addition to its historical and natural splendors, Turkey also draws interest from around the world due to its welcoming environment for investors. Numerous investors profit greatly from the prospects presented by this exceptional nation every year. There are a ton of opportunities in Turkey for you to consider if you’re considering starting an investment journey. What benefits can you expect from investing here, then? The following are the primary benefits of investing in Turkey.
Availability of Large Markets
Turkey is a country that has a connection with various markets as a result of its position. The investors in Turkey are only a short distance away from a number of markets in Europe and the Middle East. Additionally, there are many benefits for investors in the local market of Turkey.
Skilled workforce
The workforce is one of the crucial elements that decide whether a nation is acceptable for investment. With a young population and skilled workers, Turkey has everything it needs to be an effective workplace.
Tax incentives
Tax regulations are making Turkey, one of the few nations in the world with a climate that welcomes international capital, more appealing to investors. For instance, international agreements allow to reduce foreign investors’ taxes in Turkey and their home countries
Turkish Citizenship by investment program
By investing in Turkey, foreigners have the eligibility for getting Turkish citizenship and benefit from several advantages such as travel to more than 124 countries without visa requirements. The Turkish investment program provides schemes with different budgets that give you the right to apply for Turkish Citizenship.
Investing in Turkey for Foreigners
The Investment Law for Foreigners in Turkey is a body of legislation and laws governing foreign investment operations in Turkey. It outlines the requirements, facilities, and other aspects of foreign investment in Turkey. Turkey is one of the top nations when it comes to easing the flow of foreign investment into the nation by offering packages of government assistance. It offers simple procedures, and various guarantees. Additional draws are based on an environment with a modern infrastructure with access to roads, transportation, ports, and airports for transportation, export, and import operations.
The Turkish government makes excellent offers to foreign investors to entice them to invest in Turkey, starting with tax breaks and exemptions from value-added taxes and progressing to the point where they are given Turkish citizenship.
The following general laws favoring the foreign investor apply to foreign investment in Turkey: freedom of investment across all sectors and reciprocity The legal processes used against the foreign investor are the same as those used against domestic Turkish investors because he has the right to participate in any sector of Turkey.
The economic confidence index in Turley is optimistic
The economic confidence index, which stood at 98.8 in March and 102.2 in April, grew by 3.5%. In April compared to March, the consumer confidence index climbed by 9.2% to reach 87.5, the real sector (manufacturing industry) confidence index increased by 1.0% to reach 105.1, and the services confidence index increased by 1.1% to reach 118.1. On the other hand, the construction confidence index dropped by 0.1% and reached 88.4 in April, while the retail trade confidence index fell by 1.3% and reached 116.2.
Investments always involve risk, so it’s crucial to do extensive research and consult financial professionals before making any decisions. If you are interested in investing in Turkey, MEO Consultants experts can provide you with a complete advisory upon request.
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Common FAQ about Investing in Turkey
Is investing in Turkey safe?
Due to its geopolitical location, Turkey has long been preferred among investment projects. This characteristic makes it a focal point for luring regional and international investors in a range of industries, including tourism and real estate.
Since 2002, the Turkish economy has grown steadily through 2023.
Prudent fiscal policies and considerable reforms have helped Turkey’s economy become one of the main receivers of FDI in its area.
Is it worth investing in Turkey?
Turkey is favored by investors due to its favorable geographic location, skilled labor force, tax incentives, and sophisticated economy. Real estate, tourism, entrepreneurship, and other areas are among the safest investment alternatives.
