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Turkey Info

Banking and Finance

Turkey’s significance on the world finance stage is on the rise. The financial capital of the country, ıstanbul, with its rich and vibrant economy, is now slated to become a world finance center. The country’s banking industry demonstrated remarkable resilience to the effects of the global financial crisis without any government backing, and turkish banks are now regarded as the soundest in europe. With service quality matching and exceeding international standards, turkish banks are widely acclaimed as being fast integrators of technology into their services. Many foreign banks either operate directly in the country or entered the market via mergers and share acquisitions, providing services in all aspects of banking to individuals and investors a like.

Economy of Turkey

The Turkish economy has shown remarkable performance with its steady growth over the last eight years. A sound macroeconomic strategy in combination with prudent fiscal policies and major structural reforms in effect since 2002 has integrated the Turkish economy into the globalized world, while transforming the country into one of the major recipients of FDI in its region.
 
The structural reforms, hastened by Turkey’s EU accession process, have paved the way for comprehensive changes in a number of areas. The main objectives of these efforts were to increase the role of the private sector in the Turkish economy, to enhance the efficiency and resiliency of the financial sector, and to place the social security system on a more solid foundation. As these reforms have strengthened the macroeconomic fundamentals of the country, the economy grew with an average annual real GDP growth rate of 5.2 percent over the past nine years between 2002 and 2011.

Average Annual Real GDP Growth (%) 2002-2011

Source: IMF World Economic Outlook April 2012, Turkish Statistical Institute (TurkStat)
 
Together with stable economic growth, Turkey has also reined in its public finances; the EU-defined general government nominal debt stock fell to 39.4 percent from 74 percent in a period of nine years between 2002 and 2011. Hence, Turkey has been meeting the “60 percent EU Maastricht criteria” for public debt stock since 2004. Similarly, during 2002-2011, the budget deficit decreased from more than 10 percent to less than 3 percent, which is one of the EU Maastricht criteria for the budget balance.
 
As the GDP levels more than tripled to USD 772 billion in 2011, up from USD 231 billion in 2002, GDP per capita soared to USD 10,444, up from USD 3,500 in the given period.

The visible improvements in the Turkish economy have also boosted foreign trade, while exports reached USD 135 billion by the end of 2011, up from USD 36 billion in 2002. Similarly, tourism revenues, which were around USD 8.5 billion in 2002, exceeded USD 23 billion in 2011.
 
Significant improvements in such a short period of time have registered Turkey on the world economic scale as an exceptional emerging economy, the 16th largest economy in the world and the 5th largest economy when compared with the EU countries, according to GDP figures (at PPP) in 2011.
 
While many economies have been unable to recover from the recent global financial recession, the Turkish economy expanded by 9.2 percent in 2010, and 8.5 percent in 2011, thus standing  out as the fastest growing economy in Europe, and one of the fastest growing economies in the world.
 
Real GDP Growth (%)

 

Source: IMF World Economic Outlook April 2012, Turkish Statistical Institute (TurkStat)
 
Moreover, according to the OECD, Turkey is expected to be the fastest growing economy of the OECD members during 2011-2017, with an annual average growth rate of 6.7 percent.
 
Annual Average Real GDP Growth (%)
Forecast in OECD Countries 2011-2017

 

Source: OECD Economic Outlook No: 86
 
•    Institutionalized economy fueled by USD 110 billion of FDI in the past nine years and 13th most attractive FDI destination in the world (2012 A.T. Kearney FDI Confidence Index)
•    16th largest economy in the world and 6th largest economy compared with EU countries in 2011 (GDP at PPP, IMF-WEO).
•    Robust economic growth over the last nine years with an average annual real GDP growth of 5.2 percent.
•    GDP reached USD 772 billion in 2011, up from USD 231 billion in 2002.
•    Sound economic policies with tight fiscal discipline.
•    Strong financial structure resilient to the global financial crisis.
•    Rapid recovery from the global financial crisis

HOW TO GET A TURKISH RESIDENCE PERMIT

 All foreigners wishing to live and/or work in Turkey are required to obtain a residence permit within one month following their arrival in the country and prior to the commencement of their work.
For long-term residence in Turkey, the applicant should submit the following documents to the local Police Department:
     • Deed copy of the property (original deed must be presented)
     • 4 passport sized photos
     • Passport (original passport must be present)
     • Photocopies of the following pages of the passport: the page bearing the applicant’s photo, the page stamped at the last entry, the page indicating the validity and expiry dates of the passport.
     • A bank statement or a currency exchange slip testifying to an asset in the amount of USD 300 for each month of planned stay, or a copy of the Deed of the Turkish property you own may suffice.

Real estate investment in Turkey

The Turkish real estate sector, offering ever-greater opportunities for investors every year, has come to prominence especially in the last decade. Although with the recent economic crisis and the global economic recession the European and US real estate markets have been negatively affected, the real estate market in Turkey is still promising. While the reduction in demand and a downward trend in house prices have been observed all over Europe, according to TurkStat statistics the number of apartment units sold in Turkey in the second quarter of 2011 increased by 18 percent compared with the same period of 2010, which shows that the country has huge growth potential in the real estate sector.
    
      The entry of global actors into the real estate market is increasing the competitiveness of the sector, while massive mergers and acquisitions taking place help its expansion and overall growth rates. Different surveys and publications such as the “Emerging Trends in Real Estate Europe”, prepared jointly by PricewaterhouseCoopers (PWC) and the Urban Land Institute (ULI), show how global and local interest in the Turkish real estate sector has increased. According to the 2012 publication of the report, Istanbul is ranked as the most attractive investment market in Europe in the “Existing Property Performance”, “New Property Acquisitions”, and “Development Prospects” categories, followed by Munich, Warsaw, Berlin, and Stockholm. Meanwhile, Turkey ranks as the 3rd most attractive real estate investment destination among the emerging countries in 2012, according to a survey conducted by the Association of Foreign Investors in Real Estate (AFIRE).
      
     As Turkey progresses along the road to EU membership, the essential legislative reforms introduced have made investing in the real estate market even easier and more profitable. The amendments to the Land Registry Law, the Mortgage Law, and the redrafting of tax laws are also designed to improve the competitiveness of the Turkish real estate sector.
The real estate sector in Turkey also has great prospects thanks to demographic factors that are changing in parallel with improving economic figures.    The demand for offices, logistical and industrial areas is expected to increase in line with the increasing number of global and local companies. 
Stable, institutionalized, internationalized sector thanks to predictable inflation rates and consistent prices.

     Dematerialization, transparency, auditing, high quality and standards, institutionalization and statistical information in line with the ongoing EU accession process.
    60 percent of Turkey’s population is under the age of 34, while the country’s GDP was USD 736 billion in 2010.
    Housing loans increased from TRY 3.5 billion in 2004 to TRY 68 billion as of September 2011. The share of housing loans as a proportion of Turkey’s GDP is estimated to hit 15 percent in 2015.
   
      28.5 million tourists visited Turkey in 2010, making Turkey the 6th most visited holiday destination in the world. These figures show the great potential of the Turkish real estate sector as regards the tourism industry.
    
       The number of modern shopping centers increased from 44 to 284 between 2000 and 2011.

     Turkey, as a regional hub providing easy access to 1.5 billion consumers in Europe, the CIS, and as an energy corridor and terminal between Europe, Central Asia and the Middle East, creates more and more enterprises each year within its borders.

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