2024: Doing Business in Turkey

Published on Mar 27, 2024

Doing Business in Turkey

1. What is the current business climate in your jurisdiction including major political, economic and/or legal activities on the horizon in your country that could have a big impact on businesses?

The world is going through a very volatile period these days, and Turkey is located right in the middle of everything. As we write these lines, there are two active wars in Turkey’s very close vicinity. To the north, the war between Russia and Ukraine has settled into an unfortunate slow burn, with constant fighting but little to no material changes in position. To the south, the conflict between Hamas and Israel creates precarious circumstances that may spread to the broader region with the slightest spark.

These wars are likely to disrupt long-established patterns of business and give rise to new opportunities. Turkey has elected to remain noncommittal in the war between Russia and Ukraine, and thereby found itself as one of Russia’s main outlets to the world, given the ever-tightening sanctions imposed on Russia by the West. The developing war in the Middle East may also lead to such dramatic changes, though as yet it is uncertain where Turkey may end up in a similarly polarized world.

Internally, Turkey is now facing a more stable outlook, politically speaking. The elections of 2023 were the most serious challenge to date against President Erdoğan’s rule, but he prevailed in the end and secured himself another five years at the helm. The municipal elections coming up in 2024 will be another significant test against his rule—municipal elections are a bellwether for national politics in Turkey, and strong national candidates establish themselves through strong performances at the municipal level, much like Erdoğan himself did when he was the Mayor of Istanbul in the late 1990s. Even though presidential politics have calmed for the time being, there is always another election to look forward to.

That all may sound like bad news, but to an optimistic reader, uncertainty can also signal opportunity. Turkey has the potential to turn any volatile predicament into an opportunity, given its strategic geographic location, young and well-educated population, relatively cheap labor, and favorable exchange rates. That is an inviting combination for foreign investors who are looking to expand into new jurisdictions.

And it looks like Turkey is now doing its part to tame the volatility of its circumstances. Turkey has been roundly criticized in the recent past for its unorthodox macroeconomic policies, insistently lowering interest rates in the face of rising inflation. Turkey, in fact, remained committed to that policy for a long while leading up to the presidential elections but abruptly reversed course after the spring of 2023. There is now a trend towards interest rate normalization, and forecasters expect this to bolster confidence in the economy and to stabilize the currency. That should lead to steady economic growth in the medium to long term.

2. From what countries do you see the most inbound investment? What about outbound?

According to data provided by the International Investors Association, inbound investment from the EU has made up the overwhelming majority of Turkey’s inbound capital investment, both in the recent months (69% in 2023 through August) and over the course of the past twenty years (59% between 2002 and 2022). Dutch-registered entities have traditionally led the European investors, making up 16% of the FDI flowing into Turkey, but 2023 has been a bit of an anomaly, at least through August, in that Germany alone has staked a claim to 26% of the inbound capital. The share of East Asian investment into Turkey has also been on the rise recently, with Japan’s share in the foreign direct investment received by Turkey reached 6% in the first eight months of 2023. This trend has also been acknowledged by the Presidency of the Republic of Turkey’s Investment Office in its recent publications.

Turkey’s outbound investment largely tracks its inbound investment, with EU countries drawing 42% of Turkey’s outbound investment in the first eight months of 2023. In terms of individual countries, the United States has drawn 25% of Turkey’s outbound investment, with the Netherlands coming in second at 20%, followed by the United Kingdom at 10% and the United Arab Emirates at 8%.

In our firm, we have experienced a number of shifts in our foreign clientele since 2018, including an increased number of foreign clients jumping from 38% of our total revenue in 2018 to 58% in 2020. This falls in line with the national trend of increased activity from foreign investors and the spike in market activity. Alongside the slow but steady increased interest in Turkey from Asian markets, the percentage of our foreign revenue from both China and Japan has increased over the last three years. Additionally, as suggested by Italy rising to the top of foreign investors interested in Turkey, our percentage of foreign revenue generated from Italian clients has also seen a slight rise. Other notable foreign clients that our firm conducts significant work with include the United States, France, Germany, the Netherlands, the United Kingdom, Switzerland, and Finland.

In terms of outbound investments, Turkey is historically a country that has focused on inbound investments. However, as the country has continued to grow, many Turkish investors began expanding their investments abroad, which at times included the relocation of a majority of a company’s investments abroad by some of the leading holding entities in Turkey.

Our firm has played a significant role in helping Turkish investors active in the construction and mining sectors expand their business, create subsidiaries abroad, and invest in infrastructure projects throughout regions such as North Africa and the Central Asian Republics. Most recently, our firm has been helping a major Turkish logistics company with their investments in Uzbekistan.

3. In what industries/sectors are you seeing the most opportunity for foreign investment?

A significant portion of the capital flowing into Turkey has gone toward real estate acquisition (42% in 2023, from January through August). As for investment capital, the leading industries attracting foreign investment have been renewable energy, automotive, retail, technology, and construction.

There are a number of areas where we see opportunity for foreign investment, including areas where Turkey has always been an active market such as infrastructure investments, as well as relatively new areas such as technology, gaming, and e-commerce where Turkish start-ups have made global headlines for acquisitions made by global leaders in the sector.

Through the 2010s, Turkey experienced a massive jump in terms of infrastructure investments, and a substantial part of this financing was raised by foreign lending institutions. There have been a total of 18 airports, 20 hospitals, and 41 highways built over the past two decades utilizing private party funding, particularly through the Public Private Partnership method. Although investments are expected to slow down in the next few years, there are still a number of infrastructure projects lined up for tendering where development and financing by private parties is expected.

In terms of infrastructure investments, Turkey has also recently passed legislation as a testament to its intention to create a financing environment in line with the needs of the infrastructure sector. Accordingly, new legislation on project bonds was issued by the Capital Markets Board to allow access to less traditional financing methods to back up infrastructure projects in line with worldwide trends. There have also been steps to introduce a proper legal framework to govern the already popular crowdfunding transactions with a revision of the Capital Markets Law in 2020 which explicitly recognizes this form of financing. The Capital Markets Board issued a communique that sets the details to govern crowdfunding transactions in October 2021.

4. What advantages and pitfalls should others know about doing business in your country?

Some of the advantages for foreign investors doing business in Turkey include the investor-friendly investment environment. Specifically, there are a very limited number of sectors in which foreign investment restrictions exist. Turkey also has a very investor-friendly take on arbitration and enforcement lawsuits as the Turkish courts have significant experience with enforcing foreign awards in Turkey that has been ongoing for decades. The low value of the Turkish Lira and the affordable labor in the country are also factors that may be appealing to foreign investors.

When it comes to pitfalls, a challenge that sometimes perplexes foreign investors is that because of the dynamic legislative environment, the practice on the ground may sometimes evolve in a different way than what the legislative design may suggest in the abstract, and businesses may need to adapt to a slightly different way of doing business than they see in the books.

5. What is one cultural fact or custom about your country that others should know when doing business there?

Although the idea of corporate governance no longer represents a set of guiding principles or simply an aspiration but a strict set of rules to follow, personal connection is still an important part of doing business in Turkey. In addition to many publicly held entities, there are many family run companies which hold a leading position in many key sectors.

Turkish business people attribute a great level of importance to personal connections with their business partners and building personal trust in addition to the legal trust achieved through contracts. Unlike in many other cultures, personal questions such as questions directly relating to family or children in Turkey are usually seen as a reflection of genuine interest and are often welcomed.

Our Firm

1. What distinguishes your firm from others in your market?

Founded in 1989, Hergüner Bilgen Üçer Attorney Partnership is one of the oldest, largest, and most well-established corporate law firms in Turkey. The firm stands out from its competitors by being one of the few firms that is both truly local and full-service. This combination allows Hergüner to equally advise large multinational organisations, international financial institutions, private individuals, and start-ups and has earned the firm its reputation for providing our clients sound advice and innovation solutions to their legal issues. The firm’s expertise and vast experience in nearly every sector in the Turkish market enable it to go beyond simple lawyering and develop creative business-oriented solutions to client needs. It accomplishes this by putting clients first and becoming intimately acquainted with all aspects of their business and legal needs.

The firm’s reputation for innovation goes back almost three decades, having drafted many first-of-their-kind agreements in cross-border transactions that continue to be used as model agreements in the market today. Today, our firm is proud of our ability to provide sound legal advice to our clients each step of the way, starting from the initiation of the project or establishment of the company, throughout the project or company’s operational life, and in some cases, their exit and dispute resolution related needs. With the Hergüner team by the client’s side, we ensure that our clients are able to reach their desired goal while maintaining the necessary legal compliance and record keeping, which leaves our clients feeling secure and confident in their business ventures.

2. What three words describe the culture of your firm?

Innovative. Collaborative. Client-Focused.

3. How does your firm participate in Corporate Social Responsibility (CSR) and/or Environmental, Social and Governance (ESG) initiatives?

In terms of ESG counseling, we have played a crucial role in the establishment of the Turkish Corporate Governance Association and our partners have taken roles on the board of the association as well as providing assistance in different ESG-related matters. We have also recently assisted in the establishment of the Board Members Association (YÜD), which aims to train board members for better governance in listed and closely held entities.

In our own office initiatives, our firm has been moving its archives from physical files to a digital environment to assist in reducing our waste and paper usage and create a more environmentally friendly office culture. Since its adoption in 2017, our firm has transferred thousands of folders to the digital environment.

Furthermore, the electricity that we use in our Istanbul office is generated from renewable sources, which is certified by the I-REC Standard Foundation.

For social responsibility, Hergüner attorneys are active members of many international and national non-governmental organizations in order to contribute to the development of law and its practice, business and human rights, and sustainable life for all living beings.

Our office is a founding member of some of the leading non-governmental organizations such as the Corporate Governance Association of Turkey, the Board Directors Association, the Ethical Values Center Association, the International Law Institute (ILI) Istanbul Chapter, and the European Law Students Association (ELSA) Turkey Chapter. Our partners are also members of the International Chamber of Commerce, ICC Turkey, the Turkish Industrialists and Businesspersons Association, the German-Turkish Chamber of Commerce and Industry, the Ethics and Reputation Association, the Association of Real Estate and Real Estate Investment Companies, the Center for Strategic Thinking in Real Estate, the Shopping Centre Investors Association, the Turkish Association for Energy Economics, AVERE the Electro Mobility Association, the World Wildlife Foundation, and the Association for the Support of Contemporary Living.

With respect to the development of law and its practice, our partners and associates participate in work for law societies as a member of the Union of Turkish Bar Associations and the Istanbul Bar Association, the International Bar Association (IBA), the American Bar Association (ABA), the International Attorneys Club, the US European Network, Club de Abogados, the World Law Group (WLG), and the International Law Students’ Association (ILSA).

We also support civil society organizations in education, the arts, and the environment. We are proud to support education programs through the clinical research support that we provide to Bilgi University, and the grants that we provide through the Turkish Education Association. We are a renowned contributor to the Istanbul Foundation of Culture and Arts, which helps to maintain a vibrant local arts scene. We support the preservation of the environment through regular contributions to the Turkish Foundation for Combating Soil Erosion, for Reforestation, and the Protection of Natural Habitats (the TEMA Foundation). Our most notable sponsorships also include the Association for Supporting Contemporary Life, which promotes development in the fields of education, human rights, and rule of law.

4. Are there any new and exciting initiatives, practice areas or industry focuses in your firm?

In terms of practice areas, Hergüner is well known for its energy law practice, having represented local and international clients in the industry since the liberalization of the sector in the early 1990’s. In renewable energy, we have been providing legal advice to major corporations and energy conglomerates since 2004 with the establishment of wind energy power plants in Bozcaada. Since then, the renewable energy market has significantly grown in Turkey and Hergüner continues to represent select clients in landmark projects and top-of-the-line mergers and acquisitions with varying scopes, including a review and negotiation of transactional documents and Energy Market Regulatory Board applications, as well as advising financial transactions unique to renewables such as carbon financing.

This year, in cooperation with professors from Boğaziçi University, we helped provide training for our lawyers working in the energy industry with developing their understanding of the technical and engineering aspects of energy projects to better serve future clients. The information presented in the training allows attorneys to better assist their clients by having a general understanding of the technical aspects of what project managers and engineers are concerned with in energy projects, including the energy supply chain, climate policy, technologies, and financing underlying the energy transition.

We also assisted EPİAŞ, the energy markets operator of Türkiye, in its initiative to translate the laws and regulations pertaining to the power and natural gas markets of Türkiye into English. We are also represented on the boards of NGOs such as the AVERE Turkish Electro Mobility Association and the Turkish chapter of International Association of Energy Economics (IAEE) participating in various facets of policymaking and academics pertaining to energy transition in the country.


Ümit Hergüner and Kayra Üçer


  1. https://yased-api.yased.org.tr/Uploads/Reports/YASED-Rakamlarla-UDY-Agustos-2023.pdf
  2. https://www.invest.gov.tr/en/whyturkey/pages/fdi-in-turkey.aspx
  3. https://www.tcmb.gov.tr/wps/wcm/connect/609ef884-3b3c-4bc3-84fe-9254244c3490/odemelerdengesi.pdf?MOD=AJPERES&CACHEID=ROOTWORKSPACE-609ef884-3b3c-4bc3-84fe-9254244c3490-oItygnw
  4. https://yased-api.yased.org.tr/Uploads/Reports/YASED-Rakamlarla-UDY-Agustos-2023.pdf