Investment

Republic of Turkey

Prime Ministry Investment Support and Promotion Agency

Environment of Turkey

Esra DOĞAN TULGAN Senior Project Director

Agenda Key Figures on Turkey

Top Reasons to Invest in Turkey

The Agency

Key

Figures

Republic of Turkey “Türkiye”

Parliamentary Democracy Established in 1923

Currency

Time Zone

Official Language

Major Cities

Capital City Ankara

İstanbul (14.2 million), Ankara

(5.0 million), İzmir (4.1 million),

Bursa (2.7 million), Adana (2.2

million)

Turkish

GMT+2

Turkish Lira

Where is Turkey?

BULGARIA

GREECE

GEORGIA

ARMENIA

AZERBAIJAN

IRAN

IRAQ

SYRIA

Black Sea

Aegean

Sea

Mediterranean Sea

ASIA EUROPE

MIDDLE EAST AFRICA

Total Area: 783.562 km2

Germany Italy Austria Holland Turkey

Largest

Land in Europe

= + + +

Population: 76,7 million

2 Turkey Poland

2nd Largest

Population in

Europe

= x

International

Organizations

United Nations

Turkey is member of

since

1945

Council of Europe

since

1949

Turkey is member of

NATO

since

1952

Turkey is member of

OECD

since

1961

Turkey is member of

Organisation of

Islamic Cooperation

since

1969

Turkey is member of

World Trade Organisation

since

1995

Turkey is member of

G20 – Major Economies

since

1999

Turkey is member of

17th

Largest Economy

in the

World 6th when

compared to EU

Countries (IMF/2013)

Increasing

Population (+1.040.480 last year)

76.667.864

Expected to reach

86,8 Million in 2030 UNDP

Largest

youth population

when compared

to EU

countries

Automotive

16th largest

automotive

producer

in the World

17 Global Brands produce 1.1

millions vehicles per year

White Goods

& TV Sets

Largest TV and

white goods

manufacturer

in Europe

One out of three TV sets sold in Europe last

year was produced in Turkey

Iron & Steel

8th largest

steel producer

in the World

2nd largest steel producer

when compared to EU countries

Construction

Out of

top 250

International

Contractors,

42 are Turkish

31,3 billion worth of projects in 45

countries last year

Shipbuilding

3rd largest

mega yacht

producer

in the World

National Warship with indigenous anti-

submarine warfare and stealth system completed in 2011

Airline

Transportation

Turkish

Airlines flies to

107 countries

in the World

150 million airline passengers in Turkey in 2013 (up %320 since 2003)

Tourism

6th most

visited holiday

destination

in the World

39,2 million tourist arrivals

in 2013

Top Reasons

to Invest

in Turkey

822

516

366

271 242 229

198 190 132

96 74 53 16 11

0

300

600

900

2013 GDP (Current Prices, Billion $)

Source: IMF World Economic Outlook, April 2014

GDP - Gross Domestic Product

The biggest economy in the region

4,9

4,1 4,0 3,7

3,4 3,2

3,0

2,5

1,8

0,8 0,8 0,8

0

1

2

3

4

5

6 Average Annual GDP Growth (%)

2003-2013

Source: IMF, Eurostat

GDP Growth in the Last Decade

One of the fastest growing economies in the World

5,1 5,0

4,1

3,5 3,3 3,2 3,2

3,0 2,9 2,7 2,7 2,6

2,4 2,1 2,1 2,0 2,0 1,9

1,7 1,7 1,5 1,5 1,5 1,4 1,4 1,3 1,2 1,1 1,0

0,8 0,8 0,8

0,2 0,1 -0,5 0,0

1,0

2,0

3,0

4,0

5,0

6,0

Turk

ey

Chile

Ko

rea

Isra

el

Aust

ralia

Mexi

co

Slo

vak

Rep

.

Est

onia

Po

land

No

rway

Sw

ed

en

Luxe

mb

ourg

New

Zeala

nd

Cze

ch R

ep

.

Sw

itze

rland

US

Canad

a

OEC

D

Aust

ria

UK

Finla

nd

Belg

ium

Fra

nce

Irela

nd

Neth

erland

s

Hung

ary

Germ

any

Slo

venia

Denm

ark

Icela

nd

Sp

ain

Jap

an

Po

rtug

al

Italy

Gre

ece

Potential Average Annual Real GDP

Growth for 2012-2017

GDP Growth

Future Projection by the OECD

Source: OECD Economic Outlook No.93, May 2013

Source: Republic of Turkey Ministry of Development.

Macroeconomic Indicators 2014* 2015 2016 2017

GDP ($ Billion, Current Prices) 810 850 907 971

Real GDP Growth (%) 3,3 4,0 5,0 5,0

GDP per Capita 10.537 10.936 11.541 12.229

Unemployment (%) 9,6 9,5 9,2 9,1

Export/Import (%) 65,8 67,1 67,7 68,4

Current Acc.Balance ($ Billion) -46,0 -46,0 -49,2 -50,7

Current Acc.Balance (% of GDP) -5,7 -5,4 -5,4 -5,2

Inflation (CPI, end year) (%) 9,4 6,3 5,0 5,0

Privatization Revenues (Billion TL) 10,6 11,8 9,9 5,5

Govt.Budget Balance (% of GDP) -1,4 -1,1 -0,7 -0,3

Govt.Debt Stock (% of GDP) 33,1 31,8 30,0 28,5

Medium-Term Program 2015-2017

* Estimated

Population Pyramid

Half of the

population

in Turkey is

under the

age of 30.4 5 4 3 2 1 0 1 2 3 4 5

0-4

10-14

20-24

30-34

40-44

50-54

60-64

70-74

80-84

90+

Female Male

%

Age Group

5 4 3 2 1 0 1 2 3 4 5

0-4

10-14

20-24

30-34

40-44

50-54

60-64

70-74

80-84

90+

Female Male

%

Age Group

Turkey Europe

Source: UN and TURKSTAT, 2010

GDP per Capita

Purchasing

Power in

Turkey has

been

tripled in

the last

decade

3.492

4.559

5.764

7.022 7.586

9.240

10.438

8.559

10.022 10.466 10.504 10.782

-

2.000

4.000

6.000

8.000

10.000

12.000

14.000

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Source: TURKSTAT

Turkey is located in the center of the

most promising markets of the World

You can access to multiple markets from Turkey (Total 56 Nations, 1,5 Billion People $ 25 Trillion GDP in 4h Flight Time from Istanbul)

Turkey is located in the center of the

most promising markets of the World

ASIA

You can access to multiple markets from Turkey (Total 56 Nations, 1,5 Billion People $ 25 Trillion GDP in 4h Flight Time from Istanbul)

ASIA

MIDDLE

EAST

Turkey is located in the center of the

most promising markets of the World

You can access to multiple markets from Turkey (Total 56 Nations, 1,5 Billion People $ 25 Trillion GDP in 4h Flight Time from Istanbul)

ASIA

AFRICA MIDDLE

EAST

Turkey is located in the center of the

most promising markets of the World

You can access to multiple markets from Turkey (Total 56 Nations, 1,5 Billion People $ 25 Trillion GDP in 4h Flight Time from Istanbul)

EU ASIA

AFRICA MIDDLE

EAST

Turkey is located in the center of the

most promising markets of the World

You can access to multiple markets from Turkey (Total 56 Nations, 1,5 Billion People $ 25 Trillion GDP in 4h Flight Time from Istanbul)

Turkey is located in the center of the

most promising markets of the World

You can access to multiple markets from Turkey (Total 56 Nations, 1,5 Billion People $ 25 Trillion GDP in 4h Flight Time from Istanbul)

4h

Multinational

Company

Countries

Managed from

Turkey

Coca Cola 94

GE Healthcare 80

Microsoft 80

Intel 67

Unilever 36

Verifone 30

Schneider El. 27

Ericsson 22

Cargill 20

Pfizer 20

Volvo 18

BASF 18

PepsiCo 14

P&G 11

LG Electronics 9

Adobe 9

Turkey as

Regional Hub

Free circulation of goods between

Turkey and 28 European Union

member countries

Source: Ministry of Economy * In ratification process

EU Customs Union

and Free Trade

Agreements

1. Albania 7. Israel 13. Switzerland 19. Jordan

2. Bosnia & Herzegovina 8. Lichtenstein 14. Syria 20. Mauritus

3. South Korea 9. Macedonia 15. Tunisia 21. Lebanon *

4. Egypt 10. Morocco 16. Montenegro 22. Malaysia *

5. Georgia 11. Norway 17. Serbia 23. Kosovo *

6. Iceland 12. Palestine 18. Chile

Free Trade Agreements with 23 countries:

36 47

63 73

86

107

132

102 114

135

152 152

0

40

80

120

160

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Billion USD

Main Export Markets:

2002: %55 EU, %15 Middle East and Africa 2012: %40 EU, %35 Middle East and Africa

Exports The share

of the

industrial

goods in

total

exports is

%93,4 (2012)

Source: TURKSTAT

BULGARIA

GREECE

AZERBAIJAN

IRAN

IRAQ

EGYPT

RUSSIA

Oil and Gas Pipelines

OIL

GAS

Black Sea

Mediterranean

Sea

BULGARIA

GREECE

AZERBAIJAN

Trans Anatolia Natural Gas

Pipeline (TANAP) Project

The pipeline will start to deliver natural gas from

Azerbaijan to Turkey & EU by 2018 with an initial

capacity of 16 billion cubic meters per year.

68 GW

Total

Installed

Capacity is

(Sep, 2014)

Turkish Electricity Market Overview

Installed capacity will be doubled by 2023 with %6 CAGR.

The investment requirement until 2023 is 130 billion USD.

Turkish energy market is regulated by EMRA - Energy Market Regulatory Authority

Natural Gas

& LNG

%34

%31

Hydraulic

(Dam + River) Coal

%21

%9 Other

Thermal

%5 Wind

by source

Government

Govt.

Contracted

Private Sector

%44

%40

%16

by producer

2023 Targets for Renewables

Installed Hydro Capacity

Installed Wind Capacity

Installed Solar Capacity

Installed Geothermal Capacity

Current

19.609 MW

2.261 MW

-

159 MW

2023

36.000 MW

20.000 MW

3.000 MW

600 MW

Feed-in Tariffs for

Renewables (USD

Cent per kWh): for

Hydro:7.3, for Wind:7.3, for

Geothermal:10.5, for

Biomass:13.3, for Solar:13.3

National Treatment

=

Guarantee

of Transfers

Access to

Real Estate

International

Arbitration Employment of

Expatriates

Freedom

to Invest

Protection

Against

Expropriation

The New

Commercial

Code

Corporate

Income Tax

Structural Reforms

%20

• V.A.T. Exemption (for the imported and domestically provided Machinery and Equipment)

• Customs Duty Exemption (for the imported Machinery and Equipment)

• Reduced Corporate Income Tax (C.I.T. between %2 - %10)

• Social Security Premium Support (Both Employer’s and Employee’s Share, for 2 – 12 years)

Source: Ministry of Economy

The Investment

Incentive Scheme

The

Agency

Republic of Turkey Prime Ministry

Investment Support and Promotion Agency

Attached to the Prime Ministry and

Reports directly to the Prime Minister

2 offices (Ankara – Istanbul)

Established in 2007

A Governmental body with private sector

approach

Multi-lingual, professional and dedicated

project directors, International

representatives network worldwide

Confidential, Free of Charge

Our Strategy &

Assistance • Attracting and supporting

investments that will contribute to Turkey’s economic development as such investments which will;

• Transfer technology to Turkey

• Create added-value and integrate Turkey into Global Value Chain

• Create employment in Turkey

• Increase exports and decrease import

• Guidance on Laws & Regulations

• Site Selection

• Market Information and Analyses

• Matchmaking Potential Partners

• Facilitating Legal Procedures (Such as Establishing business operations, Incentive applications and Work & Residence permits)

FDI inflows to Turkey

17

135

0

40

80

120

160

1973-2003 (30 years) 2004-2013 (10 years)

FDI Inflows ($ billion)

Number of Companies

with Foreign Capital (Thousand)

5,6 6,7 8,8

11,7

15

18,7 21

23,7 25,5

29,4 33,8

37,3

0

10

20

30

40

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

Source: : The Central Bank of Turkey & Ministry of Economy

Why Turkey?

Strong Domestic Market

Geostrategic Location

Investor Friendly Environment

Enjoy your potential

in Turkey

ON