I am sure most business people are aware now that Turkey is a fast growing country with high growth potential, young population, qualified and competitive labor force, infrastructure and is an energy corridor and terminal of Europe.
In fact, our Economy Minister has recently stated that Turkey continues to be a safe haven for foreign investors and an important investment hub as the European Union and other countries struggle with an economic crisis.
To verify this comment, our foreign direct investment (FDI) hit $1.4 billion in May 2012 and registered $6.5 billion in the first five months of the year. This is 11 percent more than the $5.8 billion achieved in the first five months of 2011.
78.6 percent of FDI in the January-May period was from the EU. In particular $1.9 billion came from Austria and $1.2 billion was from the Netherlands.
Foreigners invested mainly in Turkey’s manufacturing sector, especially food and beverages, at $2 billion of FDI. This figure indicates that Turkey has become a critical manufacturing center. It is expected that the new incentive scheme will further encourage FDI flow into the country, as Turkey is Europe’s closest supplier.
In terms of the services sector, Turkey’s banking and finance sector take the lead in FDI at a time when European banks are struggling and their credit ratings are being slashed. Turkey’s banking and finance sector was able to bring in $678 million in the January-May period.
Other booming sectors can be mentioned as real estate, construction, renewable energy, automotive, textile and marine.
Moody’s Investors Service, a leading provider of credit ratings, research, and risk analysis cited a significant improvement in Turkey’s public finances and credited Turkey as a country suitable for investments.
All the above-mentioned information gives the clue; It is the defining moment to invest in Turkey! Many companies have already succeeded in the Turkish market and many are considering investing in Turkey in the near future.
In case you own/run a company with intentions of going global, you should consider Turkey, as well.
You believe in your product or service. You want to relocate your business to Turkey,
but how should you do that? Where do you need to start?
Doing business in a foreign country requires knowledge of the local legislations, regulations and experience about the Turkish market and the behavoir of the Turkish consumers.
You need to understand the competitive environment in your related business sector.
- Which sectors are booming in Turkey?
- What are the obstacles you might face?
- How can you eliminate them?
- Should you have a local partner?
- How can you find such a partner.. aware of integrity, corporate governance, sustainability
and who understands your mentality?
There are lots of opportunities;
- How can you make use of them?
- What kind of incentives does the Turkish government provide?
- How does it work?
- What about the requirements of the new Turkish Commercial Code, which is effective since 1st of July 2012?
- Should you first start with a local partner who will sell your product?
- Maybe it is better to set up a liaison/representative office or a different kind of entity
like a Limited or joint stock company.
- Or maybe the best way would be Mergers & Acquisitions for capturing growth opportunities Turkey.
In Turkey there are incredible opportunities which you can turn into a success story or fail just because you have simply not taken the language barrier or the business culture and etiquette into consideration.
This is what my articles are going to be about. I plan to give some samples of entrepreneurs who have already gone through such process at the stage of starting new business in Turkey. This way I intend to provide you with insight and help evaluate the alternative of expanding your business to Turkey..
My articles would put you in the picture for this rapidly developing market meaning they would be worth reading in any case.
Semiha Ünal, MBA
Founding Director Business Support Turkey