With its young fast growing population and robust economic growth, Turkey is promising a large consumer base and trading opportunities. The country aligns its regulations and business environment with the EU standards as an official EU membership candidate. Customs Union signed with the EU in 1995 offers further opportunities for European businesses and exporters across a broad range of sectors. The Union is based on free circulation of goods which are mainly textiles, machinery and chemical products as well as plastics and transportation equipment between Turkey and the EU countries.
Turkey’s current economic policy aims to reduce unemployment, transfer technology into the country and integrate the economy with the world standards. To achieve these, more emphasis is placed on foreign capital than ever. Though foreign investors are treated equally to Turkish investors by law, in order to attract foreign capital, Turkish government has introduced a variety of incentives including exemption from Customs Duty and VAT, corporate tax reduction and social security employer contribution for foreign investors. Under the scheme of “Super Incentives” developed in 2016, the system now allows incentives to be customised to each qualified foreign investor owing to its project basis support. The qualification of investments for incentives are determined based on the alignment of investments with the targets the government set for future economic development of the country. R&D and innovation investments are examples of highly supported initiatives to accelerate technology transfer through incentives such as reduction in corporate tax and exemption from income tax on salaries of R&D and innovation personnel.
Turkey is the prime sourcing destination for European businesses owing to the lower costs of manufacturing resulted from favourable exchange rates as well as its locational proximity to Europe, accelerating the delivery times. The country serves as a manufacturing hub for more than 250 international brands. It is especially a crucial market for many European industries including textile, automotive, electronics and construction. Giant fashion brands such as ASOS, H&M and ZARA rely on country’s textile suppliers and factories offering short lead times and attractive rates compared to other European countries. Turkey is the largest light commercial vehicle manufacturer in Europe and ranks 14th in the world in terms of automotive production output. Ford Otosan in Golcuk is the commercial vehicle manufacturing hub of Ford Europe, while Renault’s Turkish unit is one of the biggest factories of the company with annual production of 375 000 cars and 750 000 engines. The country is expected to invest further in projects in the energy sector, through government incentives, including geothermal, smart grid projects, nuclear, and renewables. Both the public and private sectors continue to invest substantially in advanced manufacturing, information and communication technologies and healthcare, among other sectors by 2023.
The New Istanbul Airport, opened in April 2020, is expected to become the world’s largest and busiest airport. New regional airport and commercial projects continue to offer significant opportunities in the area.
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