Recent Developments in Foreign Direct Investments and Free Zones

Foreign Direct Investment If Turkey is taken as a center, a circle of four-hour flight distance covers one fourth of the world’s GNP and one fourth of the world’s population. Easy access to this huge market makes Turkey an attractive place for foreign investors.

In parallel to the political and economic realignments unfolding in the world, the ongoing privatization program and huge energy and infrastructure projects have rendered Turkey more attractive to foreign investors in recent years. With its dynamic economy, large internal market, competitive industry and skilled labor force, Turkey offers numerous opportunities for foreign investors.

The new "Foreign Investment Law" enacted in June 2003 grants equal rights to foreign investors and abolishes minimum foreign investment capital requirements, special foreign investment permit requirements, and prohibition on purchases of Turkish real estate by foreign individuals and firms. It now takes just one day to start a company in Turkey. As a result, there has been a major increase in the amount of foreign direct investments entering Turkey. During the period 1993-2002, the FDI inflow to Turkey on average was about 1 billion dollars, which is very low compared to Turkish foreign trade or Turkish GNP. In 2003 this figure increased to USD 1.7 billion, and to USD 2.6 billion in 2004. It is a striking record that the foreign direct investment entering Turkey in 2005 amounted to USD 9.7 billion. In 2006, the inflow of FDI has amounted to nearly USD 20 billion.

As of October 2007, the total volume of FDI reached USD 16 billion dollars with a modest increase in comparison with the same period of previous year.