Six advantages to grow your business in Turkey will be analyzed in this paper. Of course, Turkey has a growing economy, with a rapidly increasing young population and a growing number of large companies. Above all, the below-mentioned advantages are of great importance in attracting sustainable foreign direct investments (FDI).
2. Fast Growing Economy
It is critical to note that Turkey is recognized as being in the top 20 economies in the world. Therefore, the Turkish country attracts numerous foreign investors from every single region. Besides, Turkish authorities attach a high priority to the encouragement of foreign investment. The Country provides a broad range of initiatives for FDI.
3. High Youth Population Rates
Compared to 10.6 percent of the European Union, despite a slight decrease, Turkey's youth population constitutes 15.3% of total population.1This makes Turkey a good place for large-scale investments.
4. High Workforce Rates
According to main indicators, the labor force participation rate for young people was %41.7 percent.2These numbers clearly mean that foreign investors have a great chance to benefit from flexible employment opportunities.
More information about Main Labor Force Indicators 2021 is available online here https://data.tuik.gov.tr/Kategori/GetKategori?p=Employment,-Unemployment-and-Wages-108 ,accessed 20 May 2022.
5. Increasing Value of Foreign Currencies
Before making the decision to invest and establish business operations, investors keep in mind the value of domestic currency and foreign currencies. Particularly, increasing value of foreign currencies and decreasing value of Turkish lira play a vital role in reducing the cost of the institution of necessary infrastructure for investments including any kind of production.
6. Excellent Geographic Location
Turkey offers a business-friendly environment, a deep talent pool and global market access at the nexus of Asia and Europe. Hence, the Turkish environment is very close to the properly functioning markets from the east and west.
7. Tax Advantages
a. What about income tax commitments in Turkey?
The question of how foreign investments are taxed in Turkey is open to discussion. In that respect, it is significant to note that the Turkish taxation system is based on residency.
In accordance with the Law on Income Tax, natural persons who are not resident in Turkey are only taxed on their earnings generated in Turkey.
Full text of the Law on Income Tax(No:193) is available (in Turkish) online here.
Taxation rules dramatically change if the relevant natural or legal person has a permanent residence in Turkey.
Our comprehensive article on changeable taxation rules about foreign rental income (in Turkish) is available online here.
Also, there are regulations and international agreements preventing double taxation and promoting trade in Turkey.
b. What about corporate income tax commitments in Turkey?
In accordance with the Law on Corporate Tax, that is also the case for legal entities. In this sense, foreign companies are only taxed on their earnings generated through their operation in Turkey.
Full text of the Law on Corporate Tax(No:5520) is available (in Turkish) online here.
In the light of the aforementioned considerations, this article highlighted six advantages to grow your business in Turkey. To sum up, the growing economy, high youth and workforce rates, increasing value of foreign currencies, amazing geographical point, tax exemptions on foreigners makes Turkey a very attractive place for investors. Consequently, it is really worth investing in Turkey. Nevertheless, there is no doubt that every investment carries certain risks. Accordingly, companies and individuals investing in Turkey need a comprehensive legal guide and strategic advice. Such assistance may be very instrumental in taking the right steps. Particularly avoiding high-level risk factors through a full-fledged consultation is very important in investing in Turkey.
1 Official website of Turkish Statistical Institute, Youth in Statistics 2021, https://data.tuik.gov.tr/Bulten/Index?p=Youth-in-Statistics-2021-45634&dil=2, accessed 20 May 2022.
2 Official website of Turkish Statistical Institute, New Main Labor Force Indicators 2021, https://data.tuik.gov.tr/Kategori/GetKategori?p=Employment,-Unemployment-and-Wages-108 ,accessed 20 May 2022.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.