CIP Turkey
IMI Official Partner
Turkey’s economy defied expectations in the first quarter of 2024, posting a robust 5.7% year-on-year growth and outpacing many of its emerging market peers.
This surprising resilience, following a challenging 2023, has caught the attention of global investors and economists alike.
Finance Minister Mehmet Şimşek sees this growth as evidence that Turkey’s economy “is moving toward more balanced and sustainable growth” through “rational, predictable, and rule-based policies.”
This strategic approach to economic management underpins Turkey’s ambitious goal to increase its global foreign direct investment (FDI) share to 1.5% by 2028.
Recent policy shifts and market trends are painting a picture of a nation poised for an economic renaissance.
From the booming electric vehicle sector to a resurgent real estate market, Turkey is quickly becoming a hotspot for international investment, offering diverse opportunities across multiple sectors.
Economic Resilience and Growth
Turkey’s economy has demonstrated remarkable resilience, growing by 5.1% in 2023, surpassing initial estimates of 4.5%. This growth is particularly impressive considering the devastating earthquakes in February 2023, which experts estimate cost the economy more than $100 billion.
A Magnet for Global Capital
Turkey attracted a total of $266.9 billion in FDIs between June 2003 and 2024, with its share of global direct investments rising impressively from 0.2% pre-2003 to 0.9% in the 2003-2023 period.
Şimşek believes that with the country’s “twin policies of transformation and high value-added production, we will transform our country into a larger production base, increasing our growth potential.”
Automotive Sector Leading the Charge
The automotive industry is leading this investment wave. Chinese electric vehicle (EV) manufacturer BYD’s $1 billion investment in Turkey is creating a “domino effect,” encouraging other companies to follow suit.
This investment alone is set to create 5,000 direct jobs and an additional 25,000 indirect jobs, signaling a boom in the sector and related industries.
Other significant players like Chery, Skywell, and MG are also increasing their presence in Turkey, while battery manufacturer Ganfeng Lithium has entered into a $500 million joint venture with Turkish firm Yiğit Akü. These developments are boosting the economy and positioning Turkey as a critical player in the global EV market.
Property Market: A Bright Spot for Investors
Turkey’s property market has shown remarkable strength, with nationwide house prices rising by 86.46% in October 2023 compared to the same month a year earlier.
Even when adjusted for inflation, house prices increased by a solid 12.4% from October 2023, demonstrating the market’s resilience in the face of economic challenges.
In Turkey’s major cities:
- Istanbul, Turkey’s largest city and most expensive housing market, saw house prices soar by 66.7% during the year to October 2023, reaching an average of TRY 44,387 (US$1,475) per square meter.
- In Ankara, the country’s capital, house prices skyrocketed by 94.3% year-on-year in October 2023.
- In Izmir, the country’s third largest city, house price growth accelerated to 77.2% year-on-year in October 2023.
Attractive Rental Yields
Turkey’s rental market offers moderate to good yields, with a nationwide average gross rental yield of 6.5% in Q3 2023. This positions Turkish property as an attractive investment for those seeking rental income.
In Istanbul, gross rental yields range from 2.8% to 9%, with a city average of 6.2% in Q3 2023, slightly higher than the previous year.
- Other major cities offer similarly attractive yields:
- Ankara: 5.4% to 10.1%, with a city average of 7.15%
- Izmir: 4.8% to 8.1%, with a city average of 6.5%
- Antalya: 3.1% to 8.03%, with a city average of 5%
These figures underscore the potential for solid returns on investment in Turkish real estate.
Refining Immigration Processes for Investors
As Turkey’s economic landscape evolves, so too does its approach to residency and citizenship programs. Industry insiders report on the current state of Turkey’s citizenship by investment program, which has undergone significant changes in recent years.
For those seeking citizenship, which requires a $400,000 investment in real estate, the current application process necessitates either a three-week stay in Turkey or two separate visits. The first visit is for the initial application and biometrics, while the second is to collect residency documents and apply for citizenship.
This process includes two layers of biometrics: one for immigration services (for passports issued outside Turkey) and another for the population management department within Turkey.
This current system represents a shift from the old process. Previously, applicants could complete all necessary steps, including biometrics, at Turkish consulates or embassies in their country of residence, without ever setting foot in Turkey.
The change was implemented due to security concerns, as the previous system had been manipulated in some instances, leading to mismatches between applicants and the individuals receiving passports.
CIP Turkey, a leading investment facilitation firm, along with other stakeholders, is actively lobbying the government to reinstate elements of the previous system, particularly the ability to complete biometrics at consulates and embassies.
These efforts aim to make what is already considered one of the most straightforward citizenship by investment programs globally even more accessible.
Despite the current requirements, CIP Turkey reports that for many Western applicants, the process can often be completed in as little as three months. This includes the initial two-month processing period, followed by the required visit(s) to Turkey.
The residency by investment program, requiring a $200,000 real estate investment, has seen more dramatic improvements. The entire process can now be completed in just one week, with investors needing to visit only once.
CIP Turkey is even able to handle property purchases through power of attorney, potentially reducing the required stay to a single day.
These ongoing efforts to refine processes underscore Turkey’s commitment to attracting foreign investment and highlight the potential for even more investor-friendly policies in the near future.
A Bright Economic Outlook for Investors
As Turkey continues to refine these programs and bolster its economy through strategic investments and policy reforms, it’s clear that the nation is not just participating in the global economy – it’s actively shaping it. For investors and entrepreneurs looking for new opportunities in a resilient and growing market, Turkey’s evolving landscape presents a compelling case for consideration.
Through its strategic geographic location, young, skilled workforce, and increasingly streamlined investment and residency processes, Turkey is positioning itself not just as a regional power but as a global economic force to be reckoned with in the years to come.
CIP Turkey offers comprehensive guidance and support for those interested in exploring investment opportunities in Turkey’s dynamic market, particularly through the citizenship or residency by investment programs.
Our expertise in navigating Turkey’s evolving investment landscape can be an invaluable resource for investors looking to capitalize on the country’s economic renaissance.
If you’d like to learn more, contact CIP Turkey today via our website, email us at info@cipturkey.net, or call us at +90 555305 32 93.
