TURKEY

 

Name of country

TURKEY

Region

Southeastern Asia, bordering the Andaman Sea and the Gulf of Thailand, southeast of Burma

Population

82,482,383 (July 2021 est.)

General Introduction

Turkey is a major transcontinental country that is strategically located and surrounded by three seas. Turkey's location, as a popular tourist destination, facilitates connectivity with key markets via excellent transportation links. Although Ankara is the country's capital, Istanbul is the country's largest city and its main commercial and cultural center.

Turkey's accession process to the EU and its aim to become a financial center in the region has triggered some notable structural reforms in the country's economy and business culture. The most important reform is the increased role of the private sector in the economy. Aggressive privatization programs significantly reduced state involvement in basic sectors. These sizeable privatizations, supported by various state incentives in a wide range of sectors, from telecommunications to the financial sector, gave significant momentum to Turkey's economic breakthrough.

Turkey's economy is expected to become one of the fastest-growing economies among the Organisation for Economic Co-operation and Development (OECD) members. Turkey focuses on attracting and maintaining foreign direct investment (FDI). In support of this, the United Nations Conference on Trade and Development World Investment Reports between 2013 and 2018 clearly reveals that Turkey is one of the largest FDI recipients (with an annual FDI inflow averaging USD13 billion). Despite a decrease in annual FDI for the last two years, 2015 FDI (USD17.7 billion) shows the potential of the country. Turkey accounted for 25% of total FDI inflow in the West Asia subregion.

For more than three decades, Turkey has focused greatly on improving its economy's regulatory environment to introduce more business-friendly legislation and promote FDI. An example of this is the establishment of the Investment Support and Promotion Agency of Turkey in 2006. Turkey concluded four bilateral investment treaties (BITs) as the most active country in 2017. It has also introduced special incentives to investors to encourage and facilitate FDI.

Turkey stands in a key region in the world, with many conflicts. This element constitutes one of the primary factors to be considered in how the market will develop. The change in the governance system of Turkey is also a new one and the effects of its implementation are yet to be seen. Most recently, there has been significant depreciation of the Turkish Lira and concerns of an increase in inflation. However, Turkey is taking precautions to mitigate the effects of a slowdown in the global economic situation and the political developments in the region and to maintain the stability of its financial system. Turkey's heavily regulated banking system, its regulatory agencies' experience, and their swift reactions to market needs are used to mitigate the fragility of market conditions. To this end, the Turkish Central Bank, the Banking Regulatory and Supervision Agency, and the Capital Markets Board of Turkey have been taking measures to avoid significant downward movements and maintain the volume of investments in the market.

According to the data provided by the Investment Support and Promotion Agency of Turkey, in the past years, Turkey emerged as the best-performing housing market in Europe, ahead of Ireland, Luxembourg, Estonia, and Iceland. Urban renewal and mega-projects such as Marmaray, Canal Istanbul, the Third Bosphorus Bridge, the Eurasia Tunnel, and Istanbul's third airport played an important role in this success. The Osman Gazi Bridge at the Gulf of Izmit and the Dardanelles Strait Bridge and Highway Project demonstrates increased real estate demand in other regions of the country. In 2017, Turkey received almost USD4.2 billion net FDI just in the real estate sector. There are also other projects ahead that will require investment for completion. The energy sector will also continue to be an attractive field of investment, as Turkey's economic growth and industrialization have translated into a significant energy demand (an increase of about 6% per annum). To meet its energy needs, Turkey offers a very competitive investment environment to domestic and foreign investors through favorable incentives, such as:

  • Feed-in-tariffs.
  • Purchase guarantees.
  • Connection priorities.
  • License exemptions.

Wifi Speed

For fixed internet connections in Turkey, the average download speed was 30.31 Mbps, the average upload speed was 8.31 Mbps and the latency was 25 milliseconds as of January, according to a report by the main opposition Republican People's Party (CHP).

Electrical outlet

Turkey operates on 220 volts, 50 Hz, with round-prong European-style plugs that fit into recessed wall sockets /points. Turkey operates on 220 volts, 50 Hz, with round-prong European-style plugs that fit into recessed wall sockets /points.

Per Capita GDP

$17,300 note: data are in 2017 dollars (2020 est.)
$18,500 note: data are in 2017 dollars (2019 est.)
$18,100 note: data are in 2017 dollars (2018 est.)

note: data are in 2010 dollars

Climate

tropical; rainy, warm, cloudy southwest monsoon (mid-May to September); dry, cool northeast monsoon (November to mid-March); southern isthmus always hot and humid

Citizenship-by-Investment

The Turkey Citizenship-by-Investment Program allows eligible individuals and their families to obtain full legal citizenship and passports in exchange for making a qualifying investment in Turkey.

Investment

CITIZENSHIP INVESTMENT LIMITS

Required minimum investment limits for the citizenship program are as follows:

  • Real Estate Investment $250,000
  • Bank Deposit $500,000
  • Capital Investment $500,000

Processing Time

Approximately 120 days from submission of the application to approval

Key Benefits

Dual citizenship is permitted

Dependents included:

  • Spouse
  • Dependent children under 18-years old
  • Citizenship for life, applicable for future generations
  • Right to reside indefinitely in Turkey
  • High standard of education and healthcare system
  • Fast processing
  • Visa-free travel/entry to over 110 countries
  • Ease of acquiring travel visas into the EU, US, Canada, & Australia
  • Enables investors to apply for a USA E-2 Visa
  • No physical residency requirement
  • No language requirement
  • No education or management experience required

Requirements

  • A minimum of USD 250,000 (or the equivalent in Turkish Lira) in real estate property
  • It can have one or more properties.
  • Charges and encumbrances must be removed.
  • Must be held for a minimum of three years
  • A valuation report must be submitted and accepted by the Capital Market Board Land Registry. Certificate proving total ownership of the property or properties
  • The developer's valid Sales and Purchase Contract

Procedures and Time Frame

  • After applicants have selected a qualifying investment option, a residence permit application will be submitted on their behalf. The primary applicant must then open a bank account in Turkey.
  • Once all application documents (including applicable certifications and translations) have been prepared, the investment can be completed and the documents submitted to the government. When the government receives the application, the review process begins, and an interview may be requested. Typically, applications are approved within 120 days, after which citizenship documents are issued. After that, the passport application can be submitted.

Natural Resources

coal, iron ore, copper, chromium, antimony, mercury, gold, barite, borate, celestite (strontium), emery, feldspar, limestone, magnesite, marble, perlite, pumice, pyrites (sulfur), clay, arable land, hydropower

Ethnic Groups

Turkish (official), Kurdish, other minority languages

Languages

Turkish (official), Kurdish, other minority languages

Religion

Muslim 99.8% (mostly Sunni), other 0.2% (mostly Christians and Jews)

Median Age

total: 32.2 years

male: 31.7 years

female: 32.8 years (2020 est.)

Urbanization

urban population: 76.6% of total population (2021)
rate of urbanization: 1.11% annual rate of change (2020-25 est.)

Physician density

1.85 physicians/1,000 population (2017)

Government type

presidential republic

Unemployment Rate

13.68% (2019 est.)
11% (2018 est.)

Taxes

Headline Personal Income Tax Rate (highest marginal tax rate) - 40%

Headline Corporate Income Tax Rate (excluding dividend taxes) - 25%

To be a tax resident in Turkey, an individual must have legal residency in Turkey or stay in the country for at least 6 months per year. Non-residents are people who stay in the country for more than six months due to a temporary assignment.

Residents are taxed on their worldwide income, whereas non-residents are taxed on their income earned in Turkey.
On income exceeding TRY110,000, personal income is taxed at progressive rates of up to 35%.

Personal income tax is levied on capital gains. Gains from the sale of real estate held for more than five years are excluded. Certain gains from the sale of stocks and other capital market instruments may be exempt from taxation.

Dividends received from local entities are typically tax-free to the extent of 50%; dividends received from non-resident entities are fully taxable. There may be a minimum tax-free threshold.

Depending on the nature of the interest, it is taxed at a rate ranging from 0% to 18%. Rental income is taxable, but an exemption may be available under certain conditions.

Turkey has enacted rules governing controlled foreign corporations (CFCs). This means that if certain conditions are met, profits retained in foreign entities owned and/or deemed to be controlled by tax residents may be attributable.

The rate of real property tax varies depending on the type of property and ranges from 0.1 percent to 0.3 percent. A 4% transfer tax is levied on both buyers and sellers of real estate (2 percent for each party).

Gifts are taxed at progressive rates ranging from 10% to 30%, and inheritances are taxed at rates ranging from 1% to 10%.

In Turkey, there is no wealth tax.

VAT is charged at a rate of 18%. Certain goods and services may be subject to reduced rates of 8% and 1%.

In terms of corporate taxation, resident entities are subject to a 20% income tax on their worldwide earnings.

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