The economy of Turkey is on a booming state and the place is also among the top that will help your business to grow quickly. As the country is in its booming economy, it grabs the attention of many foreign investors to invest in Turkey. Also, it offers the geological position and guaranteed growth opportunities for its nation as well as for the people outside the nation.
International firms that plan to set up a business in Turkey have many benefits. The market of Turkey is considered to be a thrilling market because of its location and the Middle East’s trading center. With continuous support from the Turkish government, the country also presents a unique opportunity for foreign investors with strong investment potential for growth.
|Benefits of Doing Business in Turkey||The Drawbacks of Doing Business in Turkey|
|Duty Exemption||Tax Levies|
|Interest Rate Support||Investors Protection|
|The Supportive Investors||Electricity|
|The Young and Skilled Work Force||Registering a Property|
Advantages of Doing Business in Turkey
- Reasonable Operating Cost
One of the major benefits your enterprise will get after settling up in Turkey is the reasonable operating cost. About a million students graduate from Turkey’s university each year and then many start looking for jobs rather than starting their business.
Because of this the starting wages and labor costs are relatively low. Also, you will get good quality products and services from the suppliers all at a relatively low cost.
- Organized Young Population
Another benefit for the young population of Turkey is the volume of their spending. Younger folks instantly fall in love with the new trends introduced by their favorite brands.
Following the needs of the young population of Turkey, your business will achieve success soon if set up with an accurate business plan and marketing strategy. Also, it’s easy to hold the attention of the new targeted customers in Turkey if your business is constantly following up with the latest trends.
- Supportive Local Manufacturers
Locating manufacturers close to where you are establishing your business is logical in business life. If you share an attractive idea with a local manufacturer and he likes or agrees to work on it, he will assist you in that from starting.
Also, local manufacturers are more open to taking minimum orders rather than bigger suppliers. That’s a great benefit for an investor who is setting up a business in Turkey.
- Investment Costs are Low-Priced
The Turkish government uplifts the local and foreign investors by providing them with low-priced investment costs and more investor-friendly surroundings. They decreased the investors’ expenditures with the new investment incentives system.
Also, the incentives to foreign investors are accorded to those who are able to obtain the Investment Incentive Certificate (IIC) as follows: VAT and customs duty exemption, regular income, social security premium support, interest rate support, land allocation, VAT refund, and income tax withholding aid.
Last but not least, by establishing a business in Turkey, foreign investors can attain Turkish citizenship and its combined benefits since 2017. The right of Turkish citizenship has been recognized by foreign nationals, who make more than a certain amount of investment and create jobs or keep the deposit.
If you make capital investments with a minimum amount of $500,000 or provide employment to a minimum to 50 people of the country, or invest in an immovable property worth $250,000, or keep the lowest deposits of $500,000 in banks operating in Turkey for at least 3 years, or buy government debt securities of at least $500,000, provided they are kept for 3 years, you can purchase your Turkish citizenship.
- Fair Governance
Despite some gossip about Turkey; Turkish legislation is fair, making Turkey one of the OECD (Organization for Economic Cooperation and Development)’s most attractive countries for foreign investors.
The Turkish government is making special efforts to attract foreign investors; and that resulted in the Direct Foreign Investments Act, among other things.
Disadvantages of Doing Business in Turkey
- Business Implementation
Within a week you can start your business in Turkey. But for a quick start, you have to follow the procedures set by the Turkish Government, and completing this procedure can be a difficult task for overseas companies to navigate.
After the completion of the several procedures and notarization of the associate’s articles, the company has to deposit a percentage of capital to the Competition Authority’s account first, and then to deposit an amount of initial capital into a bank.
- Prudently handles the Construction
For handling the matter of building permits, Turkey ranks 142nd across the globe, according to the World Bank and International Finance Corporation (IFC). Steps were taken to streamline the task, which is reflected in the results of 2013, showing a 12-place improvement on the prior year.
- Registration of Property
By far the most simplified task of getting a commercial residence in Turkey is to register the property. Completing takes less than a week, and takes a total of six procedures.
- Reckoning of Tax
In Turkey, an organization is required to pay 15 taxes per year. The calculation part of taxes takes on an average of 223 hours of business time. This is a deep hindrance every organization has to face.
- International Trading
For international trading, a company has to file the seven documents, and then the container can go in either direction for the duration of two weeks. However, export costs within Eastern Europe and Central Asia are far cheaper than in other countries.
- The Ease of Insolvency
For providing the ease of insolvency in the country, Turkey stands at 124th position in the whole world, according to the World Bank and International Finance Corporation IFC. This is generally because the process takes an average time of three and a half years to complete.
- Cultural is a Barrier
There is a well-known partition between the east and west of the country, mainly due to the infrastructure, economic development, educated and skilled labor, and the investment opportunities in the west. There is also no specific standardized financial reporting that emphasizes the diverse nature of the country’s corporate practices.