The global economic uncertainties surrounding the apprehensive
expectations of Fed's future monetary policies have already
coalesced with the ongoing political crisis in Turkey. Some of the
economic pundits have already aired their concerns about the future
shape of the Turkish economy and the possible ill effects of this
political crisis for the foreign investments to Turkey.
Strong Macro Economics
Even though the Turkish market responded, quite naturally, by a
fall to this crisis the decline should be seen as a momentary
reaction due to the solid foundations of the Turkish economy. An
economy that has already implemented the structural macro economic
reforms which were necessary to base the economy on solid
foundations might experience some temporary problems but it is
obvious that it will manage to bounce back. Such confidence to the
Turkish economy stems from the numbers. Turkey has managed to
sustain its economic throughout the course of the entire last
decade. It has cut its inflation down to single digit numbers which
currently stands around 7.7%, its budget deficit to GDP ratio is 2%
which is below the criteria of 3% that has been set by the
Maastricht Treaty for the EU member states, its debt to GDP ratio
is 36.2% which is way below the 60% criteria which was set by the
Maastricht Treaty for the member states of the EU and its GDP grew
by 4.4% during the last quarter of the year 2013. A clear
indication that Turkey had deduced important lessons from previous
economic crisis is the level of Turkish Central Bank foreign
reserves that stands around USD$ 130 billion as of January 2014.
This is an important measure especially during the periods of
exchange rate fluctuations.
Favorable Legal Framework
Apart from the strong macro economic foundations Turkey also
provides legal guarantees for the foreign investors. The Foreign
Direct Investments Law includes the article that assures the
foreign investors that their investments will legally be held as
equal with the investments of the Turkish nationals. Apart from the
assurance for equal treatment the bureaucratic procedures have been
reduced to minimum as well. By the latest reforms it is possible to
establish a business in Turkey in mere 6 days. Moreover the most
recent investment incentives scheme in Turkey provides certain
benefits to the foreign investors to Turkey. The incentive scheme
divides Turkey to six different regions and providing different
kinds incentives for each region. The latest amendment introduced
an additional advantage for the would be investors which will have
the opportunity to benefit from the tax cuts and custom duty
exemptions when the initial 10% of the total investment has been
made by the foreign investor.
In addition to the legal framework that favors foreign
investment Turkey also offers a well educated qualified labor force
which stands as one of the most skilled in South Eastern European
region. Its geographic location that locates Turkey in between Asia
and Europe provides the investors great benefits especially in
terms of the regional market access and cost effective solutions
for the transportation needs.
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guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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