Turkey: Invest Now Or Later?

Turkey has become an appealing location for international investors due to its growing economy, strategic location, and skilled workforce. Turkey's economy has been expanding by an average of 5.5% each year for over a decade, making it one of the fastest-growing economies in the world. The country's strategic location at the crossroads of Europe, Asia, and the Middle East fosters trade ties and makes it an ideal gateway for companies looking to expand into new markets. Additionally, Turkey's large and well-educated population provides a competitive advantage for businesses.

However, there are also concerns about investing in Turkey. The country's currency, the Turkish Lira, has been devaluing, and there are uncertainties about the unpredictability of the people in power.

Turkey's economy is growing

Turkey's population boasts a skilled and competitive workforce, with a strong emphasis on gaining skills in cornerstone industries such as tech and manufacturing. The country has also made significant investments in its infrastructure, with a well-developed transportation network, including modern highways and an extensive railway system.

Turkey has also implemented several incentives to attract foreign investors, including tax breaks, social security contributions, and the citizenship-by-investment program. The country's stable political landscape and strategic location make it an attractive destination for foreign investors.

The construction and real estate industries are booming, driven by increased tourism and a growing population. The country's investment property market offers lucrative capital gains, and its young, educated population drives rental demand.

Additionally, Turkey has a diverse range of economic sectors, including agriculture, consumer electronics, textiles, and automotive manufacturing. The country is among the world's leading producers of agricultural products, textiles, motor vehicles, transportation equipment, construction materials, consumer electronics, and home appliances.

Turkey's economic growth is expected to slow to 3.0% in 2024 due to policy tightening and slower global growth. However, it is projected to pick up again in subsequent years, and the country remains an attractive destination for investors looking to capitalize on its growing economy.

It has a strategic location

Turkey's strategic location at the crossroads of Europe, Asia, and the Middle East gives it a strong geopolitical advantage. It borders eight countries: Bulgaria, Greece, Georgia, Armenia, Azerbaijan, Iran, Iraq, and Syria. This positioning makes Turkey an ideal gateway for companies looking to expand into new markets and take advantage of regional cooperation.

Turkey's unique geographic position has historically acted as both a barrier and a bridge between Europe and Asia. It is bordered by the Black Sea, the Aegean Sea, and the Mediterranean Sea, and it controls the Turkish Straits, including the Bosphorus, the Sea of Marmara, and the Dardanelles. This control is a significant factor in its relations with other states.

Turkey's location at the gateway between Asia and Europe puts it in a position of geographic strength, fostering its trade ties and turning it into a regional centre for large businesses. Its proximity to Africa further enhances its strategic importance.

Turkey's strong geostrategic importance has also allowed it to build strong links with Europe and countries in the European Union. Its skilled and knowledgeable workforce is highly sought after by companies in the European private sector looking for a reliable and cost-effective option.

Additionally, Turkey's two major airports, Istanbul Ataturk Airport and Ankara Esenboğa Airport, serve international airlines, and Turkish Airlines is among the top ten airlines globally by fleet size. The country's expansive fibre network also contributes to its strong infrastructure, outperforming countries like the US, the UK, Germany, and Canada in fibre broadband subscriptions.

It has a skilled and competitive workforce

Turkey's population of over 84 million people boasts a skilled and competitive workforce that is ready to take companies to the next level. The country's strong cultural emphasis on gaining skills in various cornerstone industries, such as tech and manufacturing, means that there is a large pool of educated workers for businesses to choose from.

Turkey's well-educated population is a significant contributor to its attractive investment proposition. The country's significant geostrategic importance has also allowed it to build strong links to Europe and countries in the European Union. As a result, Turkey's skilled and knowledgeable workforce is highly sought after by companies and clients in the European private sector looking for a reliable and cost-effective option.

Turkey's universities offer 600,000 graduates to the labour force every year, providing an important resource for foreign investors interested in employees with high education and qualifications. The country's youthful population, with half of its citizens under 30 years old, bolsters a robust workforce and strong domestic and regional consumer demand.

Turkey's large, young, and well-educated population is an important signifier for foreign investors, indicating that the country has a large consumer market that drives the economy. This means that even in challenging economic times, strong domestic demand will keep the country buoyant.

Turkey's favourable policies and incentives, such as tax breaks and support services for businesses, further enhance its appeal as a destination for foreign investment.

The country has a stable political landscape

Turkey has a stable political landscape, which is an important factor when considering investment in any country. Its political stability has contributed to its growing economy and status as an emerging market for foreign investment.

Turkey's political stability can be attributed to several factors, including its strong institutions, established rule of law, and effective governance. The country has a well-defined constitution, which outlines the powers and responsibilities of the government and protects the rights and freedoms of its citizens.

The country's political system is based on a democratic framework, with regular elections, a multiparty system, and a separation of powers between the executive, legislative, and judicial branches of government. This system provides checks and balances, ensuring that no single branch of government becomes too powerful and preventing the concentration of power in the hands of a few.

Turkey's political landscape is also characterised by a strong civil society and a free media environment. The country has a vibrant community of non-governmental organisations, advocacy groups, and media outlets that contribute to public discourse, hold the government accountable, and provide a platform for diverse voices and perspectives.

Additionally, Turkey's foreign policy has played a role in maintaining its political stability. As a member of NATO and an important ally in the fight against terrorism, Turkey has fostered strong relationships with other nations, particularly in the Western world. This has resulted in increased economic cooperation, trade agreements, and political alliances, further contributing to the country's stability.

The stability of Turkey's political system provides a favourable environment for investment. It reduces the risk of sudden policy changes, ensures regulatory consistency, and creates a predictable business environment. This stability, combined with the country's growing economy and strategic location, makes Turkey an attractive destination for foreign investors seeking long-term opportunities and stable returns.

Overall, Turkey's stable political landscape is a key factor in its emergence as a desirable investment destination. It provides the foundation for economic growth, encourages foreign investment, and reduces the risk associated with doing business in the country.

Turkey is one of the cheapest markets in the world

Turkey: One of the Cheapest Markets in the World

Turkey is currently one of the cheapest markets in the world, and this is usually a sign that it's a good time to buy. However, there are several factors to consider before investing in Turkey, as its market prices are influenced by various social, geopolitical, and economic factors.

Social and Geopolitical Factors

Turkey has a large, youthful population, with half of its population under 30. This provides a strong workforce and drives domestic and regional consumer demand. Additionally, Turkey is strategically located at the crossroads of Europe, Asia, and the Middle East, sharing borders with eight countries. This advantageous geopolitical location fosters trade ties and makes Turkey a regional centre for large businesses.

However, Turkey has had a tense relationship with neighbouring countries, including Greece, Iran, Armenia, Iraq, and Syria. It also shares a border with Russia and has a decades-long domestic conflict with its Kurdish minority. These geopolitical tensions can impact the country's economic stability and investment prospects.

Economic Factors

Turkey has been one of the world's fastest-growing economies for the past decade, ranking 12th in the World Bank's 2021 GDP at PPP ranking. However, Turkey's economy also faces several challenges, including high inflation, natural disasters, and political conflicts in neighbouring countries. The country has also experienced currency depreciation, with the US dollar gaining more than 400% in value against the Turkish Lira in the last five years.

Turkey's government has implemented measures to attract foreign direct investment and increase investor confidence, including tax breaks, social security contributions, and incentives for specific industries. These incentives aim to promote economic development and make it easier for overseas investors to do business in Turkey.

Investment Opportunities

Turkey offers diverse investment options, including property, sustainable energy, and technology. The country's real estate market has grown due to increased tourism, making it a popular destination for investors, retirees, and lifestyle buyers. Additionally, Turkey's citizenship-by-investment program allows individuals and their families to obtain Turkish citizenship in exchange for foreign investment, further boosting the real estate market.

In conclusion, while Turkey is one of the cheapest markets globally, potential investors should carefully consider the social, geopolitical, and economic factors that influence the country's market. Turkey offers attractive investment opportunities, but it is essential to weigh the risks and potential rewards before making any investment decisions.

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