What are the advantages of investing in Turkey for foreigners ?
Due to its rapidly growing young population, qualified workforce, geographical and geopolitical location, Turkey is one of the countries preferred by foreign investors.
With the "Foreign Direct Investment Law" that came into force in 2003, the number of foreign investments and companies in Turkey has increased and continues to increase. Thanks to this law, obstacles in front of foreign investors have been removed and many advantages have been provided to investors. Moreover, Turkish investors living abroad can also benefit from these advantages.
For this reason, we have compiled for you the advantages of investing in Turkey for foreign investors and Turkish citizens living abroad.
What kind of advantages are offered to foreign investors?
Foreigners making direct investments can equally benefit from the opportunities provided to domestic investors. Direct investment, on the other hand, is made in the form of opening a company, branch or becoming a partner in an existing company in Turkey. On the other hand, there is no incentive for foreign investors in indirect investments made by purchasing stocks or bonds. For this reason, only foreigners who make long-term and direct investments in Turkey can benefit from the conveniences offered by the state.
In addition, foreign investors can freely transfer their profits, sales, liquidation and compensation, license, management and similar agreements abroad arising from their activities in Turkey.
In addition to all these, foreigners who want to invest in Turkey; They can benefit from tax deductions, investment location allocations, insurance premiums and similar government incentives.
Special Tax Regulations Available
There are joint agreements with various countries in order to prevent foreign investors from paying taxes both to their own countries and to Turkey. For example, a French citizen investing in Turkey only pays taxes to Turkey due to his activities in Turkey. It does not pay taxes to France for these activities.
Some of the countries that Turkey has agreements with under the double taxation agreement are: USA, Germany, Azerbaijan, People's Republic of China, France, South Korea, Georgia, Iran, Qatar, TRNC, Malaysia, Pakistan, Russia, Singapore, Jordan.
What Kind of Companies Can Foreign Investors Establish?
Foreign investors have the opportunity to establish joint stock, limited and ordinary companies in Turkey. Even though private companies that do not have an institutional structure such as ordinary companies provide some advantages due to their ease of establishment and low cost, foreigners investing in Turkey mostly prefer limited liability and joint stock companies.
When establishing a company, the title, headquarters, director and capital structure of the company should be determined. Then, the notarized company documents must be recorded in the central registry system and applied to the trade registry directorate. Documents prepared outside of Turkey must be approved by the consulate or notary public. In addition, potential tax numbers must be obtained for company partners who are not Turkish citizens.
In addition, foreign companies can open branches or liaison offices in Turkey. These branches do not have any capital investment debt at the establishment stage, but this branch must also be registered with the trade registry directorate.
Finally, it is worth mentioning: Foreign investors prefer to take over ready-made companies in order not to deal with such establishments.
Can Foreign Investors Get Turkish Citizenship?
With the regulation that entered into force on January 12, 2017, foreign nationals who invest in Turkey may have the right to Turkish citizenship.
Accordingly, the right of Turkish citizenship was granted to foreigners who invested more than a certain amount and created employment or held deposits in Turkey.
Foreign investors can acquire Turkish citizenship if they meet the following conditions.
- Investing at least US$500,000 in capital,
- Purchasing immovable property worth at least $400,000 USD,
- To create employment for at least 50 people,
- To keep deposits of at least $500,000 million in banks operating in Turkey for at least 3 years,
- Purchase government debt instruments of at least $5000,000 USD with a three-year hold
Foreign investors who meet any of these conditions can acquire Turkish citizenship upon the proposal of the relevant ministry and the decision of the Council of Ministers.
