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Türkiye: A thriving hub for foreign investment and economic growth | Türkiye emerges as a magnet for foreign investments

With its robust economic measures and political stability, Türkiye has emerged as an attractive hub for foreign investments, attracting well-known corporations such as Alibaba, Amazon, Huawei, and PepsiCo. Major corporations keep a close watch on Türkiye this year too. During the initial 9 months, Alibaba, a prominent Chinese e-commerce titan, revealed investments surpassing $1 billion including plans for establishing logistics centers.

Published November 27,2023

Türkiye has become a focal point for international direct investments due to its economic steps and political stability, attracting major global companies such as Alibaba, Amazon, Huawei, and PepsiCo.

While there has been a decline in international direct investments globally in recent times, Türkiye has stood out positively with its economic reforms and provided opportunities.

According to OECD data, investments in the first six months of this year decreased by 36% globally compared to the previous year, 86% in the European Union (EU), 38% in the G20, and 42% in the OECD. In the second quarter of 2023, compared to the previous quarter, investments decreased by 38% globally, 153% in the EU, 33% in the G20, and 58% in the OECD.

In Türkiye, the impact of these developments in international direct investments has been less pronounced. In the first half of this year, such investments decreased by 33% compared to the same period last year. In the second quarter of this year, it declined by 13% compared to the first quarter.

In the last 20 years, the economic steps and political stability taken in Türkiye have influenced the route of international direct investors. While $15 billion in international direct investment was attracted from 1973 to 2002, the total investment amount has exceeded $255 billion since 2003. Before 2003, Türkiye, with an average of $1 billion per year, accounted for 0.2% of the global international direct investment pie. However, from 2003 to 2022, with an annual average of $13 billion, it held a 1% share.

In 2002, over 5,600 international companies were operating, and by 2023, this number exceeded 80,000. In the first 9 months of this year, 93 new investment projects were initiated, with transportation and storage ranking first with 17 projects and the industrial equipment sector second with 9 projects.

Software and IT, food and beverage, chemicals, automotive equipment, ceramics and glass, plastics, and business services were highlighted as prominent sectors. In terms of activity types, manufacturing led with 40 projects, followed by sales and marketing with 30 projects, R&D with 8 projects, regional management centers with 4 projects, and business services with 3 projects.

The United States, Germany, France, Italy, China (including Hong Kong), Japan, the Netherlands, and the United Arab Emirates were among the prominent countries in these investments.

Moreover, there are 17 international direct investment projects announced for the future in Türkiye. Transportation and storage, software and IT, communication and electronics are prominent among the announced new investments.

Major companies closely monitor Türkiye this year as well. In the first 9 months, Chinese e-commerce giant Alibaba announced investments exceeding $1 billion with logistics centers to be established at Istanbul Airport and a data center in Ankara.

Qatar Investment Authority and Esas Holding's venture capital arm Esas Ventures will invest $105 million in Insider, an artificial intelligence marketing platform.

German DHL Group, one of the leading brands in the transportation and storage sector globally, acquired 100% of the shares of MNG Kargo, one of Türkiye's leading companies in the transportation and cargo sector. FedEx announced that it will build a new global air transit facility at Istanbul Airport. Amazon opened its logistics center in Tuzla with a $100 million investment, providing employment for 800 people.

The investment, expected to reach a total value of 7 billion Turkish liras, with Toyota's first battery and rechargeable hybrid vehicle production facility in Europe, was established in Sakarya. Ford began production of the first fully electric version of the world's most preferred commercial vehicle model Transit (Ford E-Transit) at Ford Otosan's Gölcük factory. French Valeo, a manufacturer of spare parts for the automotive sector, announced that it will expand its facility in Bursa. Russia's leading oil and natural gas company Tatneft acquired Aytemiz Akaryakıt for $320 million.

PepsiCo launched the "Design and Innovation Center," leading design-focused innovation projects. Chinese technology company Huawei implemented its first local cloud service in Ankara.

Amadeus, Europe's travel technology company, and Saint-Gobain, operating in sustainable and lightweight construction, were among the companies investing in Türkiye.