Turkish companies boost foreign investments to $5.7 billion in 2023

Türkiye’s residents have raised direct investments abroad from $4.9 billion in 2022 to $5.7 billion last year, with this trend expected to continue.

Of total investments, $3.4 billion was directed to Europe, with the Netherlands being the top destination, receiving approximately $1.5 billion. The United States followed with $1.3 billion, with the UK, UAE, Germany, Greece, and Portugal trailing behind.

DEIK Foreign Investments Business Council President Kubra Orakcioglu Kazan highlighted that encouraging Turkish firms to strategically expand abroad enhances their competitiveness and plays a significant role in Türkiye’s foreign trade. Kazan noted that the Foreign Investments Business Council, one of two specialized councils within DEIK, initially focused on identifying country-specific risks and creating a risk index. Now, it tracks all foreign dynamics, including the advantages and disadvantages of investment opportunities in various countries, providing a comprehensive guide.

Success metrics to be examined

Kazan mentioned that previous surveys on foreign investments were deemed insufficient, prompting updates in collaboration with the ministry and a university. The earlier surveys only indicated the investment amounts and destinations. The new approach will evaluate the success of these investments and the underlying dynamics, providing sector-specific insights that will be easier for new firms to interpret.

“Previously, we could say most firms went to Romania, but we didn’t know how many succeeded. With the new approach, our survey will offer much more guidance,” Kazan explained.

Opening new doors with global expansion

Supporting the global expansion of Turkish firms, Kazan emphasized,

“The purpose of globalization is to adapt. 20 years ago, we might have managed investments internally, but that system no longer exists. Technology companies are advancing rapidly. Important Turkish start-ups are making significant progress, and soon, they will represent Türkiye on the global stage. Traditional brands must expand abroad to keep up.”

Expanding the market

Last year 2,033 Turkish firms invested abroad, employing 176,000 people, 90% of whom were local hires. The rest were sourced from oustide Türkiye. Kazan pointed out that these investments are crucial for Türkiye’s exports. For example, a major construction firm operating in Türkiye is engaged in mining in Ghana and exports products to the UK.

“There are many such examples. These firms are our gems, utilizing the advantages of their host countries to expand their export markets and significantly enhancing Türkiye’s global recognition,” she said.

Financial sector leading foreign investment

Kazan noted that the finance sector, particularly Turkish banks, are leading foreign investments.

“We recently had a meeting with the African Development Bank, which is very eager to attract investments. Our trade with Africa is about $32 billion, and our goal is to increase it to $50 billion, primarily through banking. Once we establish a financial presence, other sectors will follow more easily. For instance, when we set up a finance base in Tanzania, other sectors followed suit,” she added.

Firms should focus on Brazil

Despite a global decline in foreign direct investment over the past 2 years, Türkiye’s outbound investments have increased. Kazan highlighted various opportunities in different sectors across multiple countries, noting Brazil’s significant investment potential.

“Brazil will be a major focus, and more firms should consider it,” she concluded.