Country GuideTurkey

From Global Connections

Foreign Direct Investment (FDI) into Turkey reached USD16.5 billion in 2015; this represented a growth rate of 32 per cent over the preceding year. The monthly average of FDI exceeded USD1 billion during the course of the year; the highest annual FDI figure since the global financial crisis.

Turkey ranked 55th in the World Bank's 2016 Doing Business rankings, down from 51st in the year prior. Turkey's rank fell in a number of categories; notably starting a business fell by six points, obtaining credit by eight points, paying taxes by five points, enforcing contracts by 19 points and resolving insolvency by 22 points. Nevertheless, it was noted that Turkey had made dealing with construction permits easier by streamlining the process to obtain the fire clearance.

Key facts about starting a business in Turkey:

  • It takes eight procedures and approximately 8.5 days to start a new business in Turkey; this process is detailed in the Doing Business in chapter
  • Providing all documents are submitted in full, the processing procedures for work permit applications are typically concluded within 30 days; employment regulations are discussed in detail in the Labour chapter
  • Obtaining a building permit takes approximately 30 days and costs TRY10,275
  • Turkey ranked 25th in a comparison of 36 countries' intellectual property systems that assesses cost, speed, quality of judges/tribunals, quality of advice and the fairness and predictability of decisions; intellectual property rights are discussed in the Legal overview chapter
  • Companies that wish to list and trade securities on Borsa Istanbul must have been incorporated for at least two calendar years; this is discussed further in the Finance chapter

Turkey offers enormous investment opportunities for overseas investors. Yet, it is critical to understand the nuances of any local regime. The manner in which people conduct business in Turkey may differ from the home countries of investors. Furthermore, variations on these distinctions may exist in different regions of Turkey and the industry in which a company operates.

Turkish is the country's official language and therefore the lingua franca of business. Nevertheless, English is the most commonly spoken foreign language so most business people speak English. Dress codes in the workplace are typically conservative.

Turkish people value formality and tradition when conducting business; punctuality is important. A handshake is the typical business greeting. Gift giving is not customary as part of Turkish business etiquette.

Those looking to establish a business in Turkey will often turn to countries across Europe as alternative options. Turkey continues to enact the reforms necessary for accession to the EU. This means that similarities may be drawn in aspects of the legal, tax and audit regimes. Nevertheless, Turkey can be differentiated on the following factors:

  • Turkey is Europe’s sixth largest economy and the world’s 16th largest
  • Turkey has the youngest and fastest growing population in Europe
  • Istanbul and Ankara are among the biggest cities in the world in terms of GDP
  • Turkey's transport system provides access to 1.5 billion customers in Europe, Eurasia, the Middle East and North Africa; Turkey's infrastructure is outlined in the Infrastructure chapter
  • Turkey has 17 Free Trade Agreements in force; this is discussed further in the Trade chapter

Turkey is forecast to be the second fastest growing country in the world by 2018, according to the OECD. This makes the country an extremely attractive investment location. Nevertheless, significant challenges exist for businesses as the country attempts to improve its business and legal system.

This guide has been developed to provide businesses with an overview of Turkey, its legal regime, start-up and market entry considerations, tax and customs requirements and a general summary of the factors that may affect the decision to do business in Turkey. However, the information contained in this document is generic in nature and you should not act or rely on it without obtaining specific professional advice.

Please note that the Country Guides may only be available in English.

Useful Links

1 Trade Registry Gazette
2 Ministry of Finance
3 Ministry of Customs and Trade
4 Ministry of Interior Directorate General of Migration Management
5 Turkish Patent Institute
6 Invest In Turkey
7 Ministry of Labour and Social Security

 

Sources

1 UNCTAD World Investment Report
2 Doing Business Rankings
3 Employment Pass - Used PracticalLaw which is a legal service Grant Thornton subscribes to
4 TI Corruption Perceptions Index

 

Download Country Guide - Turkey (4.35MB, PDF)

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This document is issued by HSBC Turkey, HSBC BANK A.Ş. (the Bank). This guide is a joint project with Grant Thornton. It is not intended as an offer or solicitation for business to anyone in any jurisdiction. It is not intended for distribution to anyone located in or resident in jurisdictions which restrict the distribution of this document. It shall not be copied, reproduced, transmitted or further distributed by any recipient. The information contained in this document is of a general nature only. It is not meant to be comprehensive and does not constitute financial, legal, tax or other professional advice. You should not act upon the information contained in this document without obtaining specific professional advice. Whilst every care has been taken in preparing this document, the Bank and Grant Thornton makes no guarantee, representation or warranty (express or implied) as to its accuracy or completeness, and under no circumstances will the Bank or Grant Thornton be liable for any loss caused by reliance on any opinion or statement made in this document. Except as specifically indicated, the expressions of opinion are those of the Bank and are subject to change without notice. The materials contained in this document were assembled in January 2016 and were based on the law enforceable and information available at that time.

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