21.12.2021
What are business opportunities in Turkey? There are some things you should know before answering this question.
Turkey is a country that offers many opportunities to investors with its rapidly growing young population, qualified workforce, and geopolitical position. There are some issues that foreigners who want to adapt to business life in Turkey should pay attention to.
Business life and business culture in Turkey is quite similar to Mediterranean countries. Emphasis is placed on establishing close relationships with customers. The relationship of trust is one of the golden rules in business life as well as in personal life. At first you may think that people are too friendly, but over time you will realize that this is quite natural in Turkey.
As in every society, there are some special rules to be considered in both personal and business life in Turkish society. Acting in accordance with these rules in both business and social life will make your life much easier. For example, you should take care to greet when you enter the office or any shop. Table rules, visiting and hospitality rules; Getting detailed information about national and religious holidays will make your life in Turkey easier. This attentive behaviour will strengthen your communication with the people with whom you have a business relationship.
Separating people according to their religion, language and skin color is considered to be an extremely wrong behaviour in Turkey. Turkish people, who are very kind and hospitable, take care not to disturb foreigners. In other words, your probability of being exposed to racism and discrimination is very low compared to many European countries.
Some countries have a strong record of bribery in business and government affairs. However, bribery is not viewed well in Turkey. You should not offer to bribe anyone to get these things done. There are legal penalties for bribery and bribe takers in Turkish law. Bribery is also culturally unwelcome by many.
In some cases, bureaucracy can take a long time in business life in Turkey. Therefore, when you want to talk about a topic, you should try to talk to the most authoritative person in a company. Although this is not always possible, you can directly explain your problem by talking to the most authorized person in appropriate situations.
There is a culture of bargaining in Turkey. In other words, when customers are going to shop at a store, they try to reduce the label price by bargaining with the employees in the store. Bargaining is more common, especially in sole proprietorships and stores. The customer who purchases many products can request a discount. However, bargaining options are not usually available in corporate companies and stores.
Turkish people use a lot of gestures and facial expressions when speaking. So much so that the CEO of a large company or the florist on the street can use the same gestures. For this reason, you should try to learn the gestures and facial expressions that are frequently used in Turkey. This will strengthen your communication with the other person.
It is not right to ask people how much salary they get in Turkey. For this reason, it would be more appropriate to try not to ask your co-workers and people at work how much they are paid.
People working in a corporate job usually wear suits. We recommend that you learn the rules of the company you work with regarding details such as hair, beard, earrings, tattoos. The standards in Western countries regarding clothing and appearance in business life are also valid for Turkey.
Issues such as politics, religion, sect, sexual orientation are very sensitive issues in Turkey. We recommend that you do not discuss such matters with customers, partners, colleagues or employees with whom you have a business relationship.
Turkish people love to talk about everyday issues. For example, football is a very popular subject in Turkey. For this reason, following football as a foreigner doing business in Turkey allows you to establish a more sincere relationship with your customers, business partners and employees. It is recommended to follow one of the teams such as Konyaspor, Trabzonspor and Bursaspor.
Are business opportunities in Turkey open to everyone?
First of all, Turks are very fond of their religion and country, we recommend that you do not even offer any commercial activity that is against their beliefs or that would disrupt the integrity of the country. You can find a middle ground and agree with the Turks in every other matter.
In order to adapt to business life in Turkey, which offers many opportunities to investors due to its rapidly growing young population, qualified workforce and geopolitical location, it is also useful to know the general characteristics of the Turkish people. Of course, one cannot generalize about any nation, but there is still some useful information you should know before doing business with Turks.
Is it safe to invest money in Turkey?
Trust is one of the basic concepts in business life in Turkey. Turkish businesspeople want to establish a relationship of trust with both their customers and partners. For this reason, it is very important that you create a reliable image before doing business with the Turks. We recommend that you take your time, be patient and network as much as possible.
Considering that there are many family businesses in Turkey, keep in mind that personal relationships can open important doors in business life.
As in every country, there are cultural codes in Turkey as well. Since Turkey is a country that has East and West values together, it would be very useful to get information about cultural values in advance. For example, you should pay attention to the rules of greeting, table rules, gestures and mimics, the style used, national and religious values.
Turks are a nation that loves and appreciates humility. They do not like arrogance and arrogance. As long as you are respectful and honest, you will not have any problems doing business with Turks.
If you respect the cultural values of the Turkish people, you can establish a good and long-term relationship with them.
In some cases, the decision-making mechanism in Turkey can be slow. In other words, you may have to hold meetings many times to reach a conclusion. Therefore, you should not rush and wait patiently for the other people to decide.
Offering a bribe is an illegal situation used in business life to speed up the process. Bribery is not viewed well in Turkey. Therefore, do not even think about offering bribes to Turkish people. Because there are various criminal practices against bribe givers and bribe takers.
On the other hand, you can give small souvenirs from your own country to the people you will do business with. Such gifts are not perceived as “bribes”. On the contrary, it makes the other person very satisfied.
There is a culture of bargaining in Turkey. In other words, while shopping, you can buy a product for less than the sticker price. Even if bargaining is not a valid method in stores or restaurants that implement a single price policy, you can bargain in places such as bazaars and markets. In addition, when you purchase raw materials, for example, as the owner of a company operating in Turkey, you can negotiate the price with the company from which you will supply the raw material.
When you come to Turkey to do business with the Turks, your potential partners will definitely take you to dinner. Turks are extremely hospitable people to foreigners. They love to have fun and entertain their guests. Therefore, do not be surprised by their gestures. It should also be noted that partnerships, sales and shopping are mostly resolved at business dinners. Although it is an informal event, business lunches are of great importance in business life.
We recommend that you learn the rules of the workplace in details such as hair, beard style, earrings and tattoos. Again, a style of clothing that we can call “casual smart” is also suitable for Turkish business life. We can say that the standards in Western countries in terms of clothing and appearance in business life are also valid for Turkey.
Are job opportunities wide enough in Turkey?
Turkey offers many opportunities to attract foreign investors. Many government incentives are offered to foreigners who want to invest in Turkey. These incentives enable investors to operate more efficiently and profitably.
Starting a business in Turkey is not difficult.
So, what are the steps to be followed by those who want to invest in Turkey?
A foreign investor must obtain various official permits and documents to establish a company in Turkey:
With Turkey's 2023 vision, it pursues a growth strategy focused on production and exports. For this reason, it provides various conveniences to domestic and foreign investors. In this respect, foreign investors who want to invest in Turkey should definitely benefit from these incentives.
According to the Foreign Direct Investment Law, companies established in Turkey by legal entities such as real persons with foreign citizenship or companies established under the laws of foreign countries have the right to benefit from the support under the Investment Incentive Program on equal terms with domestic investors, since they have the status of a Turkish company.
Investors must make a formal application to benefit from the support offered in the Investment Incentive Program. Before the application to be made based on certain rules, investors can get more detailed information from the Ministry of Economy, General Directorate of Incentive Implementation and Foreign Capital.
Investment location or alternative investment locations determined for the project,
The sector of the investment project,
Subject, capacity and approximate amount of the investment project,
For strategic investments, specifying information such as domestic production capacity and import data regarding the product to be produced will make the meeting with the Ministry of Economy more efficient.
Signed application petition belonging to the investor himself or his representative, circular of signature
Each page is signed and stamped by the investor himself or his attorney.
information form and machinery and equipment lists
In the applications to be made to the Ministry, the amount of 400 Turkish Liras shall be paid by the Ministry.
Document showing that it has been deposited into the account of the Revolving Fund
For strategic investments, sectoral, financial and technical
Information feasibility report stating that each of the criteria sought in addition to the analyzes has been fulfilled
General depending on the sector, size or incentive practices of the investment.
Other information and documents that may be requested by the Directorate.
The prepared documents should be sent in person or by mail to the following address:
T.R. Ministry of Economy
General Directorate of Incentive Implementation and Foreign Capital
Söğütözü Mahallesi, 2176. Sok. No:63, 06510 Cankaya/Ankara
Let's take a closer look at the government incentives that foreigners who want to invest in Turkey can benefit from.
VAT (value added tax) is not paid for the machinery and equipment to be purchased domestically and abroad within the scope of the investment incentive certificate.
Customs duty is not paid for machinery and equipment to be purchased from abroad within the scope of investment incentive certificate.
Income and corporate tax; The total discounted tax amount is calculated over the discount rates until the investment contribution rate is reached. The investment contribution rate represents the tax deductible ratio of the total fixed investment amount.
For employment provided by investment, the worker's share of the social security premium calculated over the legal minimum wage is covered by the state. This element is only valid for investments to be made in Region 6 within the scope of the investment incentive certificate. There is no upper limit for Social Security Premium Support and it is valid for 10 years.
The employer's share of the social security premium calculated over the legal minimum wage for employment provided by investment is covered by the state.
The income tax determined for the additional employment provided by the investment is not subject to withholding. This element is only valid for investments to be made in Zone 6. There is no upper limit for Income Tax Withholding Reduction and is valid for 10 years.
Interest rate support is a financial support provided for investment loans with at least one term. A certain part of the interest/profit share to be paid for the loan used up to 70% of the fixed investment amount registered in the investment incentive certificate is covered by the state, provided that it is paid for the first five years at the most.
For investments to be made, investment land is allocated according to the regulations of the Ministry of Finance, depending on the availability of land.
VAT collected for building-construction expenditures made within the scope of strategic investments with a minimum fixed investment amount over 500 million TL is refunded.
Special incentives are offered to R&D and design investment projects in Turkey if at least 15 personnel are employed in R&D centres and at least 10 personnel in design centres. These incentives are valid until 2024. Some of these incentives are:
There are four different types of incentives in the new incentive system that came into effect on January 1, 2012. These incentive types also differ for 6 different investment regions across the country. These incentives are as follows;
There are 6 different regions in these incentive applications. The types of incentives vary according to the region to be invested in.
Regardless of the region to be invested, the following incentives are offered for domestic and foreign investors who invest 1 million TL or 500,000 TL.
Domestic and foreign investors do not pay customs duty for machinery and equipment imported from abroad.
Domestic and foreign investors do not pay 18% value added tax (VAT) for machinery and equipment procured from abroad or from the domestic market.
Business opportunities in Turkey are very diverse. Various incentives are offered to local and foreign investors who want to invest in 6 regions determined throughout Turkey, depending on the region they choose. Investors who want to operate in any region are exempt from customs duty and value added tax. Land is allocated to these investors by the state to establish production facilities.
Apart from these, social insurance premium support is provided for workers and employers at varying rates. Especially in the 6th region, that is, in the eastern provinces of the country, which need more development, more attractive incentives are offered to those who want to invest. For example, investors who want to invest in the 6th region receive income tax withholding discount for 10 years and gain a 90% tax reduction.
In addition, regardless of the region it is located in, there are some investment areas to be supported by the elements of the 5th region. Examples of these are the following areas:
Similarly, some of the investment areas that will benefit from the 4th region incentives, regardless of the region they are located in, are as follows:
A large-scale investment incentive plan is implemented for 12 investment areas that will increase Turkey's technology, competitiveness in international markets and R&D capacity, and the following incentives are provided.
Investments that meet the following criteria are supported within the scope of Strategic Investment Incentive Practices.
The local production capacity for the product to be manufactured with the investment should be less than the import of the product.
The investment must be worth at least 50 million TL.
The investment must create a minimum of 40% added value. This condition is not sought for refinery and petrochemical investments.
The total import value of the product to be produced must be at least 50 million USD as of the last 1 year. This condition is not sought for goods that are not produced in Turkey.
There are many foreign executives at the centre of the business world in Turkey. These people, who are at the head of Turkey's leading companies, direct millions of dollars and provide employment to tens of thousands of people.
Foreign investors operating in many fields from automotive to oil, from insurance to finance in Turkey manage the most important companies of their sector. These people, especially those who manage the operations of multinational companies in Turkey, state that Turkey adds a lot to them, and the Turkish business world offers many opportunities.
In this article, we will include the opinions of successful foreign investors operating in Turkey about Turkey.
“We have invested 20 billion TL in 10 years in Turkey. We are connected to the Turkish market. Turkey is a very exciting market. It has a very young population and promises growth opportunities. We see Turkey as a long-term market. I must say that I feel more Turkish every day.”
“Turkey is a very important country for Nestle. We believe in the Turkish economy and its growth potential. Nestle entered the Turkish market only 8 years after its establishment in Switzerland, and today we employ 3 thousand 800 people directly and over 7 thousand people indirectly in our two factories in Bursa Karacabey and Kestel.”
“Turkey is a very large and dynamic market. If a company wants to advance in Turkey, it has to send a good manager here. Therefore, when I was appointed as the general manager of Indesit Company Turkey, I was very proud first of all. I was also aware of the responsibilities that came with this position. People remember the managers who were brought to better positions because they were successful in Turkey, but there are also those who failed here.
Working as a manager in such a dynamic country always brings added value and definitely opens doors that will take you further in terms of career. Being successful in such a challenging atmosphere is professionally satisfying and satisfying.”
“Toyota's total investment in Turkey has reached a value of 1.7 billion euros. Within the scope of the new mass production, we will provide new employment for a thousand people. Turkey is an important market for Toyota's European sales. There is no change in our goals or plans.”
“Turkey has a great development potential. Siemens, on the other hand, has the technical tools and know-how to turn this potential into reality. Modern Turkey is one of the fastest growing economies in Europe. Having an open and integrated market to the global world, Turkey is today a regional trade center between Europe and the Middle East. Turkey is focused on a sustainable future. This vision requires focusing on infrastructure investments and supporting related legislation.”
“Turkey has undergone great changes in the last ten years. He is in a position to reap the benefits of the many powers he has today. Being at the intersection of the Middle East, Turkic republics and Europe is one of them. Combining its educated managers, hardworking society and young population with its global competitiveness and economic growth, Turkey has become one of the most attractive countries for foreign investors. Environmentalist logistics comes first among our priorities. Infrastructure in Anatolia is still quite weak. In order to go further, ports, airlines and railways need to be developed.”
“Our view on Turkey's high potential economy has not changed. As Peugeot, we want to grow even more in Turkey. We have not made any changes to our plans. We will work without any change in our plans to be even stronger in Turkey.”
As you know, the establishment and operation of companies by foreigners in Turkey has been made very easy with the recent regulations. Accordingly, a foreigner who wants to invest in Turkey can enter the Turkish market, where free market conditions prevail, by establishing a company just like a Turkish citizen. What about foreigners who want to export and e-export from Turkey?
First, let's talk briefly about the concept of establishing a company in Turkey for foreigners. Compared to the past, barriers to foreign investors have been removed recently, and bureaucracy has been visibly reduced. For this reason, the interest of foreign investors in Turkey has been increasing recently. With its young and dynamic population and significant investment incentives, Turkey has become a very important market for many investors. Likewise, necessary conditions have been provided for businesses that want to produce and provide services in Turkey to export the products and services they provide abroad. Businesses that start their operations by completing the procedures required for company establishment in Turkey can first apply to the Investment Incentive Program of the Ministry of Economy and request to benefit from various incentives.
First of all, it is necessary to make an official application to benefit from investment incentive packages. The Ministry of Economy evaluates these projects according to various criteria such as the region where the project to be invested, the sector in which it is located, the capacity and budget of the project, production capacity and contribution to national employment. Various investment incentives are provided to the projects that are found suitable as a result of the evaluations.
Foreigners are subject to similar rules regarding their export and e-export transactions abroad, as in their commercial activities in the domestic market in Turkey. Foreign investors can export the goods and services they produce in Turkey to abroad if they pay all taxes, including customs duty. For example, foreigners who can benefit from the micro-export support applied for e-export, which is popular recently and constantly encouraged by the government, can benefit from many incentives, including VAT refund. While the Alibaba Gold Supplier membership, which is exclusive to businesses that want to enter the e-export market, is provided by the Ministry of Economy and the Vakifbank-Halkbank partnership, VAT refunds can also be obtained in case of ETGB with contracted cargoes for overseas product sales up to 7500 Euros.
