Investment Environment of Turkey Esra DOĞAN TULGAN Senior Project Director Republic of Turkey Prime Ministry Investment Support and Promotion Agency
Agenda Key Figures on Turkey Top Reasons to Invest in Turkey The Agency
Key Figures
Republic of Turkey Türkiye Parliamentary Democracy Established in 1923 Capital City Major Cities Official Language Currency Time Zone Ankara İstanbul (14.2 million), Ankara (5.0 million), İzmir (4.1 million), Bursa (2.7 million), Adana (2.2 million) Turkish Turkish Lira GMT+2
Where is Turkey? EUROPE BULGARIA GREECE Aegean Sea Black Sea ASIA GEORGIA ARMENIA AZERBAIJAN IRAN AFRICA Mediterranean Sea SYRIA IRAQ MIDDLE EAST
Largest Land in Europe Total Area: 783.562 km 2 = + + + Turkey Germany Italy Austria Holland
2 nd Largest Population in Europe Population: 76,7 million Turkey = x Poland 2
International Organizations
since 1945 Turkey is member of United Nations
since 1949 Turkey is member of Council of Europe
since 1952 Turkey is member of NATO
since 1961 Turkey is member of OECD
since 1969 Turkey is member of Organisation of Islamic Cooperation
since 1995 Turkey is member of World Trade Organisation
since 1999 Turkey is member of G20 Major Economies
17 th Largest Economy in the World 6 th when compared to EU Countries (IMF/2013)
76.667.864 Expected to reach 86,8 Million in 2030 UNDP Increasing Population (+1.040.480 last year)
Largest youth population when compared to EU countries
Automotive 17 Global Brands produce 1.1 millions vehicles per year 16 th largest automotive producer in the World
White Goods & TV Sets One out of three TV sets sold in Europe last year was produced in Turkey Largest TV and white goods manufacturer in Europe
Iron & Steel 2 nd largest steel producer when compared to EU countries 8 th largest steel producer in the World
Construction 31,3 billion worth of projects in 45 countries last year Out of top 250 International Contractors, 42 are Turkish
Shipbuilding National Warship with indigenous antisubmarine warfare and stealth system completed in 2011 3 rd largest mega yacht producer in the World
Airline Transportation 150 million airline passengers in Turkey in 2013 (up %320 since 2003) Turkish Airlines flies to 107 countries in the World
Tourism 39,2 million tourist arrivals in 2013 6 th most visited holiday destination in the World
Top Reasons to Invest in Turkey
GDP - Gross Domestic Product 900 822 2013 GDP (Current Prices, Billion $) 600 516 366 300 0 271 242 229 198 190 132 96 74 53 16 11 The biggest economy in the region Source: IMF World Economic Outlook, April 2014
GDP Growth in the Last Decade 6 5 4,9 Average Annual GDP Growth (%) 2003-2013 4 3 4,1 4,0 3,7 3,4 3,2 3,0 2,5 2 1,8 1 0,8 0,8 0,8 0 One of the fastest growing economies in the World Source: IMF, Eurostat
Turkey Chile Korea Israel Australia Mexico Source: OECD Economic Outlook No.93, May 2013 Slovak Rep. Estonia Poland Norway Sweden Luxembourg New Zealand Czech Rep. Switzerland US Canada OECD Austria UK Finland Belgium France Ireland Netherlands Hungary Germany Slovenia Denmark Iceland Spain Japan Portugal Italy Greece GDP Growth Future Projection by the OECD 6,0 5,0 4,0 5,1 5,0 4,1 3,5 3,3 3,2 3,2 3,0 2,9 Potential Average Annual Real GDP Growth for 2012-2017 3,0 2,7 2,7 2,6 2,4 2,0 2,1 2,1 2,0 2,0 1,9 1,7 1,7 1,5 1,5 1,5 1,4 1,4 1,3 1,2 1,1 1,0 1,0 0,8 0,8 0,8 0,0 0,2 0,1-0,5
Medium-Term Program 2015-2017 Macroeconomic Indicators 2014* 2015 2016 2017 GDP ($ Billion, Current Prices) 810 850 907 971 Real GDP Growth (%) 3,3 4,0 5,0 5,0 GDP per Capita 10.537 10.936 11.541 12.229 Unemployment (%) 9,6 9,5 9,2 9,1 Export/Import (%) 65,8 67,1 67,7 68,4 Current Acc.Balance ($ Billion) -46,0-46,0-49,2-50,7 Current Acc.Balance (% of GDP) -5,7-5,4-5,4-5,2 Inflation (CPI, end year) (%) 9,4 6,3 5,0 5,0 Privatization Revenues (Billion TL) 10,6 11,8 9,9 5,5 Govt.Budget Balance (% of GDP) -1,4-1,1-0,7-0,3 Govt.Debt Stock (% of GDP) 33,1 31,8 30,0 28,5 * Estimated Source: Republic of Turkey Ministry of Development.
Population Pyramid Half of the population in Turkey is under the age of 30.4 Age Group 90+ 80-84 70-74 60-64 50-54 40-44 30-34 20-24 10-14 0-4 % Turkey 5 4 3 2 1 0 1 2 3 4 5 Female Male Age Group 90+ 80-84 70-74 60-64 50-54 40-44 30-34 20-24 10-14 0-4 % Europe 5 4 3 2 1 0 1 2 3 4 5 Female Male Source: UN and TURKSTAT, 2010
GDP per Capita Purchasing Power in Turkey has been tripled in the last decade 14.000 12.000 10.000 8.000 6.000 4.000 2.000-10.438 10.466 10.504 10.782 10.022 9.240 8.559 7.586 7.022 5.764 4.559 3.492 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Source: TURKSTAT
Turkey is located in the center of the most promising markets of the World You can access to multiple markets from Turkey (Total 56 Nations, 1,5 Billion People $ 25 Trillion GDP in 4h Flight Time from Istanbul)
Turkey is located in the center of the most promising markets of the World ASIA You can access to multiple markets from Turkey (Total 56 Nations, 1,5 Billion People $ 25 Trillion GDP in 4h Flight Time from Istanbul)
Turkey is located in the center of the most promising markets of the World ASIA MIDDLE EAST You can access to multiple markets from Turkey (Total 56 Nations, 1,5 Billion People $ 25 Trillion GDP in 4h Flight Time from Istanbul)
Turkey is located in the center of the most promising markets of the World ASIA AFRICA MIDDLE EAST You can access to multiple markets from Turkey (Total 56 Nations, 1,5 Billion People $ 25 Trillion GDP in 4h Flight Time from Istanbul)
Turkey is located in the center of the most promising markets of the World EU ASIA AFRICA MIDDLE EAST You can access to multiple markets from Turkey (Total 56 Nations, 1,5 Billion People $ 25 Trillion GDP in 4h Flight Time from Istanbul)
Turkey is located in the center of the most promising markets of the World 4 h You can access to multiple markets from Turkey (Total 56 Nations, 1,5 Billion People $ 25 Trillion GDP in 4h Flight Time from Istanbul)
Turkey as Regional Hub Multinational Company Countries Managed from Turkey Coca Cola 94 GE Healthcare 80 Microsoft 80 Intel 67 Unilever 36 Verifone 30 Schneider El. 27 Ericsson 22 Cargill 20 Pfizer 20 Volvo 18 BASF 18 PepsiCo 14 P&G 11 LG Electronics 9 Adobe 9
EU Customs Union and Free Trade Agreements Free circulation of goods between Turkey and 28 European Union member countries Free Trade Agreements with 23 countries: 1. Albania 7. Israel 13. Switzerland 19. Jordan 2. Bosnia & Herzegovina 8. Lichtenstein 14. Syria 20. Mauritus 3. South Korea 9. Macedonia 15. Tunisia 21. Lebanon * 4. Egypt 10. Morocco 16. Montenegro 22. Malaysia * 5. Georgia 11. Norway 17. Serbia 23. Kosovo * 6. Iceland 12. Palestine 18. Chile Source: Ministry of Economy * In ratification process
Exports The share of the industrial goods in total exports is Billion USD 160 120 80 40 36 47 63 73 86 107 132 102 114 135 152 152 %93,4 (2012) 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Main Export Markets: 2002: %55 EU, %15 Middle East and Africa 2012: %40 EU, %35 Middle East and Africa Source: TURKSTAT
Oil and Gas Pipelines RUSSIA BULGARIA GREECE Black Sea AZERBAIJAN IRAN Mediterranean Sea IRAQ OIL GAS EGYPT
Trans Anatolia Natural Gas Pipeline (TANAP) Project BULGARIA GREECE AZERBAIJAN The pipeline will start to deliver natural gas from Azerbaijan to Turkey & EU by 2018 with an initial capacity of 16 billion cubic meters per year.
Turkish Electricity Market Overview Turkish energy market is regulated by EMRA - Energy Market Regulatory Authority Total Installed Capacity is 68 GW (Sep, 2014) by source Hydraulic (Dam + River) %34 Natural Gas & LNG %31 Coal Installed capacity will be doubled by 2023 with %6 CAGR. The investment requirement until 2023 is 130 billion USD. %21 %9 Other Thermal %5 Wind Govt. Contracted %16 by producer Government %44 Private Sector %40 2023 Targets for Renewables Installed Hydro Capacity Installed Wind Capacity Installed Solar Capacity Installed Geothermal Capacity Current 19.609 MW 2.261 MW - 159 MW 2023 36.000 MW 20.000 MW 3.000 MW 600 MW Feed-in Tariffs for Renewables (USD Cent per kwh): for Hydro:7.3, for Wind:7.3, for Geothermal:10.5, for Biomass:13.3, for Solar:13.3
Structural Reforms National Treatment = Freedom to Invest Access to Real Estate Protection Against Expropriation International Arbitration Employment of Expatriates Guarantee of Transfers The New Commercial Code Corporate Income Tax %20
The Investment Incentive Scheme V.A.T. Exemption (for the imported and domestically provided Machinery and Equipment) Customs Duty Exemption (for the imported Machinery and Equipment) Reduced Corporate Income Tax (C.I.T. between %2 - %10) Social Security Premium Support (Both Employer s and Employee s Share, for 2 12 years) Source: Ministry of Economy
The Agency
Republic of Turkey Prime Ministry Investment Support and Promotion Agency Attached to the Prime Ministry and Reports directly to the Prime Minister 2 offices (Ankara Istanbul) Established in 2007 A Governmental body with private sector approach Multi-lingual, professional and dedicated project directors, International representatives network worldwide Confidential, Free of Charge
Our Strategy & Assistance Attracting and supporting investments that will contribute to Turkey s economic development as such investments which will; Transfer technology to Turkey Create added-value and integrate Turkey into Global Value Chain Create employment in Turkey Increase exports and decrease import Guidance on Laws & Regulations Site Selection Market Information and Analyses Matchmaking Potential Partners Facilitating Legal Procedures (Such as Establishing business operations, Incentive applications and Work & Residence permits)
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 FDI inflows to Turkey 160 120 80 40 FDI Inflows ($ billion) 17 135 40 30 20 10 5,6 Number of Companies with Foreign Capital (Thousand) 6,7 8,8 11,7 15 18,7 21 33,8 29,4 25,5 23,7 37,3 0 1973-2003 (30 years) 2004-2013 (10 years) 0 Source: : The Central Bank of Turkey & Ministry of Economy
Why Turkey? Strong Domestic Market Geostrategic Location Investor Friendly Environment
Enjoy your potential in Turkey
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