This document provides an overview of investing and doing business in Turkey. It covers Turkey's geography, political system, economy, major industries, incentives available, business regulations, taxation, and how Deloitte can help foreign investors. The document is an investor's guide that aims to introduce opportunities in Turkey and provide essential information for businesses considering investing and operating there.

1. How to do business in Turkey?
Investors' guide
October 2011

2. Table of contents
1. Turkey in general 1
1.1. Geography, political and economic background 1
1.2. Current political administration and government structure 1
1.3. Currency 2
1.4. Population 2
1.5. E-Government in Turkey 2
1.6. International relations 2
2. Turkish economy 3
2.1. Main economic indicators 3
2.2. International Trade 3
2.3. Foreign Direct Investments 5
3. Industrial and service outlook 7
3.1. Transportation and defense 7
3.2. Automotive 12
3.3. Financial Services Industry (FSI) in Turkey 13
3.4. Consumer Business 14
3.5. Energy & Resources 16
3.6. Life Science and Health Care 18
3.7. Construction 20
3.8. Telecommunication and IT 21
3.9. Tourism 23
4. Incentives and financing 25
4.1. Types of Incentives Available 25
4.2. Investment Incentives 25
4.3. Export-Oriented Incentives 35
4.4. Other Tax/Non-Tax Incentives 37
4.5. Financing 39
5. Business regulations and requirements 41
5.1. Foreign Investment Rules 41
5.2. Foreign Trade 43
5.3. Registration and Licensing 45
5.4. Price Controls and Competition Law 45
5.5. Exchange Controls 46
5.6. Accounting Principles and Statutory Books 48
6. Major highlights of the New Turkish Commercial Code 49
6.1. Enterprise Law 49
6.2. Company Law 51
7. Employment law and practice 63
7.1 Employees’ Rights and Remuneration 63
7.2. Social Security and Unemployment Insurance Payments 65
7.3. Termination of Employment 66
7.4. Labor Management Relations 67
7.5. Employment of Foreign Individuals 67
8. Choice of business entity(*) 71
8.1. Principal Forms 71
8.2. General Rules for Establishment of Companies by Foreign Shareholders 72
8.3. Corporations 73
8.4. Limited Liability Companies 76
8.5. Branches 77
8.6. Partnerships 77
8.7. Joint Ventures 78
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3. Table of contents
8.8. Liaison Offices 78
8.9. Mergers, Acquisitions, Conversions, De-mergers, Share Swaps 78
9. Corporate income taxation 79
9.1. Entities Liable for Corporate Income Tax 79
9.2. Residence and Non-Residence 79
9.3. Taxable Income 79
9.4. Corporate Income Tax Rates 80
9.5. Dividend Withholding Tax 80
9.6. Treatment of Losses 80
9.7. Participation Exemption 80
9.8. Capital Gains Taxation 81
9.9. Controlled Foreign Companies (CFC) 81
9.10. Transfer Pricing 81
9.11. Cost Sharing/Cost Allocations 82
9.12. Anti-Tax Haven Rules 83
9.13. Thin Capitalization Rules 83
9.14. Taxation of Branches of Foreign Companies 85
9.15. Liquidation 85
9.16. Assessments, Payments and Tax Audits 86
10. Individual income taxation 87
10.1. Residence and Non-Residence 87
10.2. Taxable Income 87
10.3. Individual Income Tax Rates 88
10.4. Assessments and Payments 88
11. Withholding taxes and double tax relief 89
11.1. Major Withholding Tax Rates 89
11.2. Double Tax Treaty Relief 89
11.3. Unilateral Relief 92
12. Other taxes 93
12.1. Value Added Tax 93
12.2. Special Consumption Tax (SCT) 94
12.3. Property Tax 95
12.4. Inheritance and Transfer Tax 95
12.5. Stamp Tax 95
12.6. Motor Vehicle Tax 95
12.7. Bank and Insurance Transaction Tax 96
12.8. Special Communication Tax 96
13. How Deloitte can help? 97
13.1.Corporate Income Tax Certification 98
(Compliance) Services What is Tax Certification (Compliance)?
13.2.Financial Services Industry Tax Advisory Services 98
13.3.International Tax Advisory Services 99
13.4.Mergers and Acquisitions 99
13.5.Taxation of Individuals 100
13.6.Indirect Tax Services 100
13.7.Transfer Pricing Services 100
13.8.Tax and Customs Litigation Consultancy Services 101
13.9.Customs and Foreign Trade 101
14. Dış Ekonomik İlişkiler Kurulu (DEİK) 102
Foreign Economic Relations Board
Appendix: Useful Links and addresses 103
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4. Message of the president
Turkey is a manufacturing country, a major
producer of a diverse range of industrial project.
Turkey exports more than 200 countries and has
a foreign trade volume reaching to 300 billion
dollars. Two thirds of Turkish exports go to the
advanced industrial countries of the European
Union, North America, and the OECD. Turkey is
the sixth largest trading partner of the European
M. Rifat Hisarcıklıoğlu Union.
President of DEIK
(Foreign Economic There are many opportunities in Turkey for global
Relations Board of investors in particular. In the last 8 years, Turkey
Turkey) and Union has implemented several structural reforms
of Chambers and in order to improve conditions for investors.
Commodity Exchanges Consequently, only in the last 5 years, it attracted
of Turkey (TOBB) foreign direct investment over 70 billion dollars. 26
thousands foreign enterprises operate in Turkey.
It is my great pleasure to introduce this “Investors’ We welcome foreign investors and promise them
Guide for Turkey”, written in collaboration a vital and exciting environment in which they can
with Deloitte, intended to introduce Turkey to look forward to sharing the opportunities of rapid
the global business community and provide key growth. Companies well-established here will be
information about current economic issues, the able to reap the rewards, while late-comers will
investment environment, and the general business have missed the opportunities I mentioned.
framework of our country.
From its establishment till today, Foreign Economic
The opportunities are real and very exciting. Turkey Relations Board (DEİK) has been a trail-blazer
already ranked as the 15th largest economy in the in establishing new links between the Turkish
world and ranked 6th largest economy in Europe business community and its counterparts
in terms of purchasing power parity. Turkey has elsewhere. DEİK plays the leading role as an
been one of the fastest growing of the OECD intermediary between Turkish private sector
countries for many years. Recent researches and global business community. DEİK, with its
predict that Turkish economy will be the second 100 business councils; local, regional and global
biggest in Europe, after the UK by 2050. network; its professional team, is ready to support
Therefore, it is often labeled as the BRIC of Europe. and guide your business initiatives in Turkey. I very
much hope that this investors’ guide will succeed
The figures tell their own story. Turkey has the in its aim of encouraging business people to take
largest free market economy between Italy and advantage of the enormous opportunities which
China. Turkish multinationals are rising stars of are to be found in Turkey today. On this occasion,
global market. There are 24 Turkish companies I would like to thank Deloitte most sincerely
within the list of 100 biggest companies in to cooperate with us in preparing this valuable
Islamic world. Turkish contracting industry is the investors’ guide.
second biggest of the world, after China. Turkish
contractors are currently handling overseas
projects worth a total of 190 billion dollars at the
end of 2010.
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5. Message from the chairman of
the executive board
Foreign Economic Relations Board of Turkey (DEİK)
was founded in 1988 to promote the economic
and commercial relations of Turkish private sector
abroad along with the broader goal of ensuring
the overall integration of the Turkish economy into
the global economy.
As a consequence of the economic liberalization
policies of the 1980s, Turkey became a prominent
actor in international trade as well as an attractive
hub for foreign direct investments. In fact, DEİK
has earned considerable credit for achievement as
an institution that makes every effort to open the
Rona Yırcalı
Turkish economy up to the world economy.
Chairman of DEİK
Executive Board
In this new era, the priorities of DEİK include
fostering production of goods and services
which have high added value and competitive
power, providing market diversity and depth, Deloitte’s commitment to Turkey’s commercial,
contributing in attracting the investments involving industrial and financial development as well as
high technology to Turkey; and supporting the integration to the global economy serves as an
trademark of Turkish brands and providing them exemplary model in terms of forging business
the opportunity to have activities in the global relationships among foreign and domestic
arena. investors. Based on our shared vision and strong
commitment to Turkey’s development, I am
In addition to its routine meetings, DEİK organized confident that Deloitte and DEIK will collaborate
more than 539 activities, 458 in Turkey and 81 on more projects in the near future. In this
abroad, and hosted 39 Presidents and Prime respect, I sincerely thank, Deloitte, once again, for
Ministers of various countries in the previous year. joining us in our endeavor to illuminate foreign
Additionally, DEİK coordinated very significant businessmen and investors abroad about the
meetings where many of the most distinguished business opportunities and legal framework in
persons in the world could meet with Turkish and particular and the Turkish economic situation in
foreign businessmen. general.
“Investors’ Guide for Turkey” which has been I hope that Turkey will be promoted because of
prepared in cooperation with Deloitte is a very this publication, and new projects, enterprises,
useful publication for both the new and the and cooperation will be established which will
current investors in Turkey. Deloitte’s local and render Turkey one of the biggest economies in the
global expertise in tax and consulting as well as 25 world. I sincerely believe that with the guidance of
years of business experience in Turkey are some DEİK as a pioneering organization serving Turkey’s
of the valuable assets Deloitte brought to our integration into the world, Turkey will become
invaluable partnership. further involved with the world.
3

6. Foreword
We closely observe that Turkey is getting more and
more in line with the global business standards
as a result of the economic liberalization policies
of the 1980’s followed by harmonization of tax,
investment and business related legislation with
the global applications through the enactment
of the new Customs Law in 1999, new Law
for Foreign Direct Investment in 2003 as well
as the New Corporate Income Tax Law in 2006
and finally the new Turkish Commercial Code
published in the Official Gazette on 14 February
2011, the majority of Articles of which will enter
into force on 1 July 2012. The New Corporation
Tax Law is important since it has introduced
Güler Hülya Yılmaz
rules governing “Disguised Profit Distribution
Tax Partner
through Transfer Pricing” for transactions
Deloitte Turkey
between related parties in line with the Transfer
Pricing Guidelines of the Organization for
It is a great pleasure for Deloitte Turkey to Economic Cooperation and Development (OECD)
cooperate with the Foreign Economic Relations as well as those rules governing “Controlled
Board of Turkey (“DEIK”) once again to contribute Foreign Companies”. Finally, the official
to the development of Turkey’s economic, publication of the new Turkish Commercial
commercial, industrial and financial relations with Code (Law No. 6102) has introduced the use of
foreign countries as well as international business Turkish Accounting Standards in line with the
organizations and communities. DEIK plays a International Financial Reporting Standards (IFRS),
very important role in achieving the integration audit requirements and a number of new rules
of Turkey’s economy into the global economy. about the establishment, organization and legal
This integration requires development of business operations of different types of legal entities,
relations with foreign countries and attraction rights and obligations of shareholders as well as
of foreign direct investment into Turkey as well mergers, de-mergers, conversions, liquidations.
as maintaining the investments in Turkey. In this
respect, DEIK acts as a very strong intermediary
between the public and private sectors through its
close working relations with both sides.
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7. Another new legislative development parallel We strongly believe that with the guidance of DEIK
to the new Turkish Commercial Code is the as a pioneering organization serving for Turkey’s
enactment of the new Code of Obligations integration into the global economic environment,
(Law No. 6098) published in the Official Gazette Turkey will gain more and more importance as an
on 4 February 2011 so as to enter into force as emerging and fast developing country and thus,
of 1 July 2012. These legislative developments in will undertake more and more critical roles that it
Turkey in accordance with the global standards are already deserves in the global arena.
all important for foreign investors. It is more and
more important for all foreign investors in today’s The information provided in this Guide is not
global economic environment which has recently exhaustive and unless otherwise indicated, is
faced a crisis of unknown depth and duration, to based on the relevant tax and legal legislation
very carefully take into consideration and analyze and conditions existing at April 2011. Investors
the prevailing tax and business related regulations are advised to consult with professionals, such
when making their investment decisions to assess as independent and certified accountants and
the inherent risks and opportunities in initiating, consultants as well as legal counsel before making
maintaining, developing, restructuring and ceasing their investment decisions and/or taking any
their operations in a particular country. formal action. Professionals of Deloitte Turkey
would be pleased to provide any support needed
Once again it is a great pleasure and honor for in this respect.
Deloitte Turkey to closely cooperate with DEIK for
preparation of this investment guide in an attempt
to provide foreign investors with a concise tax and Yours sincerely,
business guide to help them with their investment
decisions.
We hope that the Guide will provide potential
and existing investors with an overview of what is
possible when structuring an investment in Turkey
and which factors must be considered when
deciding whether to acquire an existing Turkish
company.
2

8. 1. Turkey in general
1.1. Geography, political and economic Turkey has been a parliamentary democracy since
background 1923 and she is a secular republican parliamentary
democracy based on division of power between
The Republic of Turkey covers about 814,578 km2, various ruling bodies.
at the junction between Europe and the Middle
East. Turkey is composed of seven geographical Its unicameral parliament, The Grand National
regions: Marmara Region, Black Sea Region, Assembly of Turkey (TBMM) which includes 550
Mediterranean Region, Eastern Anatolia Region, seats representing the 81 Turkish provinces is
Southeastern Anatolia Region, Aegean Region the legislative body. The legal framework of the
and Central Anatolian Region. She has coastline Republic is based on the 1981 Constitution. The
of about 8,000 kilometers. The Anatolian Land President is elected by direct elections for a term
is surrounded by the Black Sea in the North, the of 4 years, while the members of the Parliament
Aegean and Marmara Sea in the West and the are elected for a 4-years period. The Republic of
Mediterranean Sea in the South. The capital city is Turkey has a tripartite legal system. Civilian and
Ankara which is located in the Central Anatolian military jurisdiction is separated.
Region. Turkey’s neighbors are: Greece, Bulgaria,
Georgia, Azerbaijan, Armenia, Iran, Iraq and The main executive body is the Council of
Syria. Turkey’s geographical coordinates puts its Ministers, consisting of a Prime Minister and
time scale two hours ahead of “Greenwich Mean twenty six ministers. Independent Courts have
Time” (GMT) and the table below shows the time the judicial power. Turkey is a secular state. The
differences between Turkey and the major world freedom of worship for all religions is protected
cities. under the Constitution.
City hours ahead or behind Turkey 1.2. Current political administration and
government structure
Berlin -1
Paris -1
The current President of the Republic of Turkey
is Mr. Abdullah Gül who was elected in August
Rome -1
2007. The current Prime Minister is Mr. Recep
London -2 Tayyip Erdoğan who was re-appointed after the
New York -7 general elections held in June 2011. He is the head
Los Angeles -10 of the Justice and Development Party (AKP) which
Singapore +6 has won the Parliamentary majority in June 2011
elections.
Tokyo +7
Sydney +8
The official language is Turkish, therefore all the
official documents which are to be submitted to
the government authorities must be in Turkish.
English is used as an international language in
trade and business circles. Turkish culture and
economy has strong ties with both the Western
and Eastern countries. Therefore her links with
both sides are very strong and well established.
1

9. 1.3. Currency Not only does this project decrease red tape spent
in bureaucratic transactions causing loss of time
The domestic currency is the Turkish Lira (TL). and money, but it also provides security for citizens
and the State. Turkey finalized the infrastructure of
1.4. Population the main e-government portal through which all
public services could be accessed and utilized since
By the end of 2010, Turkey’s population is the beginning of 2010.
73.7 million. Approximately 76.3% of Turkey’s
population lives in cities while 23.7% lives in 1.6. International relations
suburbs and the process of urbanization is
expected to continue for the foreseeable future. The Republic of Turkey attaches great importance
in establishing strong and lasting regional and
About 1/3 of the population is concentrated in international ties based on mutual understanding
Marmara region. The most populated cities of and cooperation. She actively participates in a
Turkey are İstanbul (about 13.3 million), Ankara wide range of leading regional and international
(about 4.8 million) and İzmir (about 3.9 million). organizations such as the United Nations, the
North Atlantic Treaty Organization (NATO),
The population growth rate, which has decreased Organization for Economic Cooperation and
sharply, has been about 1.27% in the last decade; Development (OECD), World Trade Organization
demographers project the population to increase (WTO), Economic Cooperation Organization
to 80-85 million in the next 20 years, which (ECO), Organization for the Islamic Conference
compares with the largest current EU member (OIC), Black Sea Economic Cooperation (BSEC),
state Germany that has 81.8 million inhabitants International Bank of Reconstruction and
today, but whose population is projected to Development (IBRD),International Monetary Fund
decrease to around 80 million by the year 2020. (IMF), the Group of Twenty Finance Ministers and
Central Bank Governors (G20 Developing Nations),
1.5. E-Government in Turkey and Asian Development Bank.
E-government project in Turkey is coordinated Turkey is in the EU Customs Union since 1996 and
by the Prime Ministry of Turkey and a Public an EU accession country since October 2005. In
Committee. After Turkey signed the e-Europe Helsinki European Council Summit in December
project which was discussed in European Union 10-11, 1999, Turkey was officially recognized
Leaders Conference held in mid-2001, the Prime without any precondition as a candidate state
Ministry of Turkey gave a start to the project. to EU on an equal level with other candidate
states. The Accession Partnership for Turkey was
MERNIS is one of the big steps of the prepared within the framework of Turkey’s ability
e-government project which identifies every to fulfill the Copenhagen political criteria. In
citizen with an identity number, which eases December 2002 EU declared that if Turkey fulfills
most operations in social life and state-related the Copenhagen political criteria, it would open
operations. This step has been effective from accession negotiations with Turkey by December
November 1, 2006. During the transition period 2004. At the European Council on December
between 1 November 2006 and 1 January 2007, 16-17, 2004 the Council decided to open
both the identity number and tax number were accession negotiations on October 3, 2005. The
used together by the citizens. By the beginning negotiations are open-ended and are not expected
of 2007 only identity number has began to be to finish before ten years.
valid. With this identity number, a citizen is able to
identify himself/herself e.g. in tax offices, university
applications, bank operations shortly in all state
related operations.
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10. 2. Turkish economy
2.1. Main economic indicators The Turkish economy has grown steadily over 26
quarters of 2001-2007 with an average rate of
Its diversified economy, proximity to Europe, 6.6%. After the 2001 financial crisis, Turkey made
Middle East, North Africa and Eurasia, integration important structural reforms which have led to
with European markets, young and vibrant improve her financial system. Therefore, Turkey
work force, crisis experienced businessmen and has relatively less affected by the global crisis. Also
economy management makes Turkey one of the previous crisis experience of Turkish businessmen
most powerful economies in the region. and economy officials make Turkey more resilient
to the global financial crisis today. As a result of
Being the commercial center of Southeastern this, Turkey was the only country in 2009, who
Europe, Middle East and Eurasia, Turkey is received two point upgrade in her credit rating,
becoming an increasingly important economic and after a 4.7% decrease in GDP, Turkey grew
and diplomatic country in the region. Between 8.9% in 2010.
2001 and 2007, before the effects of financial
crisis started, Turkey’s GDP have increased by
242% totaling to US $ 657 billion and by 2009 she
became the 16th largest economy (Gross GIP) in
the world.
2007 2008 2009 2010 2011 2011
1.Quarter 2.Quarter
GDP (billion $/in current prices) 656.6 741.8 617.6 735.3 182.8 203.6
GDP Growth Rate (%) 4.5 1.1 -4.7 8.9 11.6 8.8
GDP per Capita (Nom.$) 9,333 10,436 8,511 10,079 - -
FDI Inflow (billion $) 22.1 19.5 8.4 8.9 3.1 2
Unemployment (%) 9,9 10,3 13,1 11.9 10.8 9.2
Consumer Price Inflation (%) 8.61 10.54 6.53 6.4 3.99 6.24
Export (billion $) 107.2 132 102.1 114 31.4 34.2
Import (billion $) 170 201.8 140.9 185.5 56.1 63.7
External Debt (billion $) 249.4 280.4 268.4 289.4 298.7 309.6
Source: TUIK, Central Bank of Turkey, Treasury of Turkey
Economic Indicators Forecast
Economic Indicator 2011 2012
GDP (billion $/nominal) 763.8 836.3
GDP Growth Rate (%) 4.6 4.8
GDP Per Capita ($/PPP) 13,862 14,780
Export (billion $) 135.6 140.5
Import (billion $) 200.9 205.5
Source: The Economist Intelligence Unit Forecasts, May 2011
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11. 2.2. International Trade
Indicator 2004 2005 2006 2007 2008 2009 2010
Export (Thousand $) 63,167,153 73,476,408 85,534,676 107,271,750 132,027,196 102,128,759 113,979,452
Import (Thousand $) 97,539,766 116,774,151 139,576,174 170,062,715 201,963,574 140,926,023 185,541,037
Volume (Thousand $) 160,706,919 190,250,559 225,110,850 277,334,464 333,990,770 243,054,782 299,520,489
Balance (Thousand $) -34,372,613 -43,297,743 -54,041,498 -62,790,965 -69,936,378 -38,797,264 -71,561,585
Source: TUIK
Between 2001 and 2008, foreign trade has In 2010, Turkey mainly exported to Germany,
increased by 359% and exports have increased by France, United Kingdom, Italy and Iraq whereas it
321%. After having a record high level of foreign mainly imported from Russia, Germany, China, the
trade with 334 billion US $ in 2008, because of United States and Italy.
global economic crisis it declined to 243 billion US
$ in 2009. But it bounced back to 299.5 billion US
$ in 2010. Automotive, iron and steel, textile and
clothing, machinery, and agriculture are the major
export items, while oil and natural gas, machinery,
automotive, and chemicals are the major import
items.
Main Exports (Thousand $-2010) Main Imports (Thousand $-2010)
Vehicles other than railway 13,814,541 Mineral fuels and oils 38,496,313
Machineries, mechanical appliances, 9,415,320 Machineries, mechanical appliances, 21,266,385
boilers and; parts thereof boilers and ; parts thereof
Iron and steel 8,761,259 Iron and steel 16,118,937
Articles of apparel and clothing 7,741,746 Electrical machinery and equipment 14,641,856
accessories knitted Vehicles other than railway 13,419,375
Electrical machinery and equipment 7,530,930 Plastics and articles thereof, 9,730,441
Articles of iron and steel 4,855,137 Pharmaceutical products 4,410,051
Articles of apparel and clothing acc.not 4,639,898 Organic chemicals 4,400,320
knitted
Optical instruments and apparatus 3,437,712
Mineral fuels and oils 4,505,851
Cotton. cotton yarn and cotton fabric 3,385,770
Pearls, precious stones, coin 3,748,594
Copper and articles thereof 3,299,333
Plastics and articles thereof, 3,717,427
Pearls, precious stones, coin 3,036,955
Fruit 3,494,049
Paper and paperboard 2,819,742
Salt, sulphur, earth, plastering mat., lime, 2,509,387
Aluminum and articles thereof 2,487,587
cement
Rubber and articles thereof 2,321,648
Aluminum and articles thereof 1,917,185
Man-made staple fibers 2,089,035
Rubber and articles thereof 1,896,002
Articles of iron and steel 1,966,776
Other made-up textile articles 1,838,930
Miscellaneous chemical products 1,795,419
Furniture 1,786,756
Inorganic chemicals 1,423,788
Cotton. cotton yarn and cotton fabric 1,449,871
Cereals 1,056,747
Preparations of vegetables and fruits 1,491,632
Man-made filaments 1,250,359 Source: TUIK
Ships, boats and floating structures 1,114,331
Source: TUIK 4

12. Principal Destinations of Exports Principal Origins of Import (Thousand $-2010)
(Thousand $-2010)
Russian Federation 21,599,569
Germany 11,486,808 Germany 17,549,159
United Kingdom 7,238,433 China 17,180,806
Italy 6,508,644 USA 12,318,752
France 6,055,125 Italy 10,203,727
Iraq 6,041,861 France 8,176,579
Russia Federation 4,631,496 Iran 7,644,782
USA 3,770,779 Spain 4,840,061
Spain 3,563,472 South Korea 4,764,048
UAE 3,337,659 United Kingdom 4,680,610
Iran 3,043,426 Ukraine 3,832,744
Romania 2,599,020 Romania 3,449,178
Netherlands 2,462,185 India 3,409,938
Saudi Arabia 2,219,407 Japan 3,297,783
Israel 2,082,969 Belgium 3,213,712
Switzerland 2,057,082 Netherlands 3,155,980
Belgium 1,960,441 Switzerland 3,153,699
Azerbaijan 1,551,212 Kazakhstan 2,470,966
Bulgaria 1,497,832 Saudi Arabia 2,437,156
Greece 1,456,212 Algeria 2,274,924
Ukraine 1,260,892
Source: TUIK Source: TUIK
2.3. Foreign Direct Investments Foreign Direct Capital Inflows (million $)
In the last six years in particular, Turkey has started to 25,000
draw increasing amounts of foreign capital thanks to a 19,137
20,000 17,639
rapid recovery from the 2001 crisis, large
14,747
privatization projects, prolonged stability coinciding 15,000
with the excessive liquidity in international markets
8,535
and the beginning of EU accession process. Turkey was 10,000
6,252 6,529
15th most attractive economy for the location of FDI
5,000
in UNCTAD´s World Investment Prospects Survey 2008-
2010. Turkey also ranked 65th out of 183 economies in 0
Ease of Doing Business Rank of the World Bank (June 2005 2006 2007 2008 2009 2010
2010), 46th out of 128 economies in Forbes Doing
FDI Inflows
Business Index.
Source: Central Bank of Turkey
Being the world’s 16th and Europe’s 6th largest economy
(PPP), Turkey has recently been home to numerous
significant investments by attracting more than 89.1
billion US $ for the last 6 years.
5

13. Foreign Direct Capital Inflows by Origin of Countries (million $) In 2003 when the new investment law was ratified,
there were about 6.500 foreign companies operating in
2008 2009 2010 Turkey. By the end of 2010, this number has increased
European Countries 11,367 5,234 5,166 to 25,800.
Germany 1,237 498 598
The cumulative sector breakdown of foreign capital
France 679 617 600
financed companies between 1954-2010 shows that
Netherlands 1,343 718 498
30% of these companies operate in wholesale and retail
United Kingdom 1,335 350 240 sectors; 17% of them operate in manufacturing sector
Italy 249 314 56 and 16% of them operate in real estate, renting and
Other EU Countries 6,233 2,431 2,918 business activities sectors. Construction (9%); transport,
Other European Countries 291 306 256 storage and communications (9%); hotels and
(excl.EU) restaurants (7%); other community, social and personal
service activities (5%); mining and quarrying activities
African Countries 82 2 0
(2%); agriculture, hunting, fishing and forestry (2%) and
U.S. 868 260 320 electricity, gas and water supply (2%) constitute other
Canada 23 52 56 sectors.
Central and South America & Caribbean 60 19 5
Asia 2,220 599 933 The Turkish companies have become important investors
abroad and have recently accomplished significant
Gulf Countries 1,963 209 442
projects and have bought world’s leading brands
Near and Middle East 96 78 46
including “Godiva”,” Razi”, “Trader Media East” and
Other Asian Countries 161 312 445 “Grundig”. Moreover, the Turkish contractors have
Other 2 86 49 undertaken projects accounting for 21.5 billion US $
Total 14,622 6,252 6,529 in 2009 and 15.2 billion US $ in 2010. Accordingly, 33
Turkish contracting firms partake among the world’s
Source: Central Bank of Turkey
largest 225 contracting firms ranking in 2010 which was
31 in 2009.
Foreign Direct Capital Inflows According to Sectors (million $)
The Turkish companies have invested in the sectors of
Sectors 2009 2010 banking, white goods and telecommunication in Eastern
Agriculture, Hunting, Forestry and Aquaculture 49 83 Europe, energy, consumer goods, industry, tourism,
finance and logistics in Eurasia, chemicals, industry and
Mining 89 196
logistics in the Gulf countries and food, textile and
Manufacturing Industry 1,565 867
automotive in the Middle East.
Food, Beverage and Tobacco 196 149
Textile 77 82 Turkish Outflow Investments (million $)
Chemicals 336 102
Year Investment
Machinery 220 64
2001 604
Automotive 225 39
2002 283
Other 511 431
2003 505
Electricity, Gas, Water 2,126 2,063
2004 815
Construction 208 372
2005 1,065
Wholesale and Retail 389 389
2006 1,677
Hotels and Restaurants 54 113
2007 2,275
Transportation, Telecommunication & Logistics 391 210
2008 2,604
Financial Intermediary Institutions 666 1,630
2009 2,040
Real Estate 560 368
2010 1,820
Other Social and Personal Services 155 238
2003-2010 12,801
Total 6,252 6,529
1991-2010 16,495
Source: Central Bank of Turkey
Source: Central Bank of Turkey
6

14. 3. Industrial and service outlook
3.1. Transportation and defense With the influence of economical development
and the EU accession period, the modernization
Transportation of transportation sector has been already kicked
off through privatizations and foreign direct
Turkey enjoys a privileged position at the investments. Turkish Ministry of Transportation
crossroads among Europe, Caucasus, Middle East had 64 ongoing projects in 2010 on infrastructure
and Central Asia. As a result of being a regional and many privatizations have been realized mostly
logistics base, Turkey’s transportation sector through build-operate-transfer (BOT) contracts.
partakes among principal sectors in terms of Moreover, Transportation Master Plan Strategy
economic growth and employment. Report has been prepared for the Turkish Ministry
of Transportation, which encompasses numerous
project proposals on infrastructure, traffic and
management of transport modes.
Turkish transportation sector statistics
Railways 2005 2006 2007 2008 2009
Length of railway (km) 10,973 10,984 10,991 11,005 11,405
Passenger train kilometer 26,284 25,545 25,079 23,339 23,698
Goods traffic (Thousand tons) 19,195 20,185 21,404 23,491 21,813
Source: TUIK
Road 2005 2006 2007 2008 2009
Length of motorway 1,667 1,908 1,908 1,922 2,036
Length of State road 30,740 30,728 30,743 30,784 30,770
Length of Provincial road 26,642 26,635 27,282 27,525 27,693
Number of road motor vehicles (thousand) 11,145 12,227 13,022 13,765 14,316
Freight transportation and the circulation
on the state roads, provincial roads and
motorways (Tonne/km) 166,831 177,399 181,330 181,935 176,455
Passenger transportation and the circula-
tion on the state roads, provincial roads
and motorways (Passenger/km) 182,152 187,593 209,115 206,098 212,464
Source: TUIK
7

15. Air 2005 2006 2007 2008 2009
Number of aircrafts 202 245 250 262 297
Seat capacity 38,600 42,894 40,017 41,634 47,972
Freight carried domestic lines (ton) 315,858 373,055 414,192 399,213 484,833
Freight carried international lines (ton) 933,697 973,934 1,131,833 1,130,464 1,241,512
Domestic air traffic (unit) 264,805 343,956 365,136 385,053 419,422
International air traffic (unit) 286,687 286,713 323,432 356,127 369,047
Number of passengers domestic lines 20,502,516 28,799,878 31,970,874 33,546,000 41,226,959
Number of passengers international lines 35,042,957 32,884,325 38,381,993 40,840,000 44,281,549
Source: TUIK
Sea 2005 2006 2007 2008 2009
Loading (thousand tones) 19,904 21,463 16,941 14,386 13,518
Unloading (thousand tones) 24,745 23,901 19,619 16,020 12,113
Source: TUIK
In order to realize a nostalgic dream, the revival of
the historical Silk Road as a part of international The Turkish Government aims to modernize
transportation is the agenda. Turkey has a primary existing roads and launch new projects. The
role as a natural bridge within the Silk Road estimated cost for modernization and construction
project, which links the Asian economies with of the roads (until 2023) is 166 billion TL. As a part
high shares in world trade and Europe, due to of the Silk Road project, construction of Black Sea
its strategic geographic location, its proximity to Ring Highway, which has a total length of 7,140
the international transport routes, its renovated kilometers and crosses the borders of 12 Black Sea
transport infrastructure and strong road fleet. Economic Cooperation (BSEC) member countries,
Road transport is the main means of freight and is in the agenda. To ease traffic jam in İstanbul,
passenger transportation. It constitutes 80.63% construction of a third Bosphorus Bridge and an
of the freight transportation and 89.59% of the underwater tunnel are in progress. Bridges that
passenger transportation. Turkey has the largest span İstanbul Strait will be privatized as well.
and newest transportation fleet in Europe with
1,400 road transportation companies and 45,000
vehicles.
8

16. Turkey has targeted to become a center for railway Domestic and international flights are operated by
freight traveling by realizing and completing the state-owned company, Turkish Airlines (THY) as
Strait Rail Tube Crossing and Commuter Railway well as some private airlines.
Upgrading (MARMARAY) Project, which will
connect Turkey to the Trans-European Network. There are 67 airports in Turkey:
The total length of the Project is approximately
76 km and total amount is estimated as 3 billion • 41 airports are being operated, 23 of them are
US $. Once the project is completed, Turkey will open to both domestic and international flights,
become an essential center for railway freight and 18 of them are open only to domestic
among Europe, Central Asia and the Middle East. flights.
Developing rails for more freight cargo is required.
23.5 billion US dollars is allocated for railways by • 12 airports are only open to protocol and
2023. military.
Turkey also has a leading role in Kars-Tbilisi-Baku • 10 airports which are open to only private use
Railway Project, which is an alternative route
within the contemporary Silk Road. Known as • 4 airports which are only open to use of Turkish
the ‘Iron Silk Road’, Kars-Tbilisi-Baku Railway Aviation Association.
Project creates an alternative route to the existing
West-East corridor through Iran. The total length The estimated cost for airport modernization
of the project is 124 kilometers. 92 kilometers will and construction is TL 4 billion. Construction of
pass through Turkey and the rest will pass through airports in Bingöl, Iğdır, Hakkari Yüksekova, Şırnak,
Georgia. Kütahya, Afyon, Uşak, İstanbul, Çukurova, Eskişehir
and Diyarbakır takes place among upcoming
projects.
İstanbul-İzmit, İzmir, Adana-Mersin and Samsun
are the major ports for domestic and international
freight and passenger transportation. In order
to increase quality and productivity, ports of
Bandırma, Derince, Iskenderun, and İzmir will be
privatized.
Also ship construction is a big sector in Turkey
and she is on the 5th place in the world in ship
construction orders and super yacht construction.
Apart from aforementioned transportation
projects, 10 logistics villages will be built in Halkalı,
Köseköy, Kayseri, Samsun, Eskişehir, Balıkesir,
Yenice, Erzurum, Mersin and Aydın.
9

17. Defense
But the imbalance between the local production
Turkish defense sector is developing very fast in and the imports led Turkey to pursuit of a stable
the last decade. Turkey spends 3-4 billion US $ local defense industry infrastructure. In May 2004,
annually in arms procurement. The proportion SSM decided to cancel three major projects,
of defense systems produced locally was 25% including the multi-billion dollar attack and tactical
in 2003 and 52.1% by the end of 2010. On the reconnaissance (ATAK) helicopter programme,
other hand, annual Turkish defense export reached and instead introduced a new procurement model
to the level of 853.5 million US $ in 2010. to boost ailing local industry. The initial goal was
to increase the proportion of defense systems
Turkey has traditionally made modest efforts to produced locally to 50% by the end of 2010,
become self-sufficient in basic defense industrial which had successfully been achieved. The next
activities. Starting in the second half of the 1970s stage proposes an increase in exports of defense
these capabilities were expanded through several products and services to around 1 billion US $ per
vital investments, particularly into the defense year by 2011 from the 196 million US $ export
electronics and aerospace fields. In 1985 a in 2004. SSM targets 1.8 billion US $ worth of
government entity charged with coordinating and defense exports by 2016.
financing the development of the defense industry
was established under secretariat for defense
industries (SSM). Since its establishment in 1985
the SSM has been entrusted with the responsibility
of a fairly large number of defense industry
projects, valued over 30 billion dollars.
10

18. The prime mover on the aerospace side of Also, a private company Yonca Onuk designed and
Turkey's defense industry is TAI (TUSAS Aerospace built most of the fast patrol craft in service with
Industries). It has been co-producing the needed the Coast Guard.
air planes and helicopters by the Turkish Air Force.
Another Turkish company ASELSAN has established Besides Turkish companies there are many
itself as the leading electronic systems house foreign companies that work for Turkish defense
in Turkey as well as having a major capability in industry. Imtech, RMK Marine Shipyard, German
radars and optronic systems. ROKETSAN is one of Minehunter Consortium of Abeking & Rasmussen
the few companies in Europe with the capability to and Lurssen Werft and Dearsan Shipbuilding
design, develop and manufacture artillery rocket and Repair Company are some of them. Beneath
systems (ARS). FNSS Savunma Sistemleri is the the surface, the Golcük shipyard has experience
largest manufacturer of tracked armored fighting working under the license of Germany's
vehicles (AFVs) in Turkey. Another company Howaldtswerke-Deutsche Werft (HDW) in
Otokar has developed and placed in production constructing submarines.
a complete range of 4x4 and 6x6 light armored
tactical vehicles. Makina ve Kimya Endustrisi Turkish defense industry is expected to continue its
Kurumu (MKEK) is the main manufacturer of growth in the future due to Turkey’s geographic
ammunition, small arms and other weapons in and strategic position. At the same time with
Turkey and is also a major subcontractor to other the new legislations and incentives for the local
Turkish defense contractors. TLFC has extensive defense industry to grow, Turkey’s export and
facilities involved not only in the upgrading of import in the sector is projected to be more
AFV and artillery systems but also in production. balanced in the future as well.
It has upgraded over 4,000 tanks and the center
has developed and put into production specialized
versions including ambulances, command post
and engineer squad vehicles. The main repository
of naval shipbuilding and repair experience
remains resident within state-owned hands at
Naval Shipyard. The navy's other major surface
acquisition is the locally designed and built
12 MilGem corvette ships. The first of the 12
Milgems, which is a corvette class warship, has
joined the Turkish Navy in 2011.
11

19. 3.2. Automotive Automotive Production (Amount)
According to International Organization of Motor 2007 2008 2009 2010
Vehicle Manufacturers (OICA) Turkey is the 16th Automobiles 634,883 621,567 510,931 603,394
automotive manufacturer in the world and Commercial Vehicles 464,531 525,543 358,674 491,163
6th in Europe. Also she is Europe’s largest light Tractor 33,518 24,807 14,861 30,425
commercial vehicle and 3rd bus manufacturer. The
Total 1,132,932 1,171,917 884,466 1,124,982
Turkish automotive sector includes production
of trucks, buses, trailers, midi and mini buses Source: Automotive Manufacturers’ Association (OSD)
and passenger cars with a capacity of 1.5 million
vehicles. Except the global financial crisis year
2009, the manufacturing numbers are in a steady Automotive Exports
rise in recent years.
2007 2008 2009 2010
Domestic production in Turkish automotive sector Production 1,132,951 1,171,917 884,466 1,124,892
has started in 1967. Over the years, industry Export 829,879 920,763 637,855 763,670
imported foreign models and produced them Export/Production (%) 73 79 72 68
for domestic market under the protection of
Source: Automotive Manufacturers’ Association (OSD)
high tariffs. As Customs Union came into effect
in 1996, tariff protection for the industry had
finished. After this point, many global brands
such as Honda, Toyota and Hyundai joined the
already existing brands like Renault, Ford, Fiat in
Turkish automotive industry. Today, there are 17
manufacturers and 4,000 component makers in
Turkey. Prior to the crisis they were employing over
300,000 people.
Automotive sector exports 70% of its production
and 90% of the exports goes to Europe. Transport
vehicle and component industry is the leading
sector in Turkish exports. It was 16,8 billion US
$ in 2009 and 17.4 billion US $ in 2010 (15.3%
of the Turkish export). Turkish automotive export
increased 15.6% during 2010.
12

20. 3.3. Financial Services Industry (FSI) in There are 48 banks, 9,581 branches and 180,038
Turkey employees in Turkish banking system by the end of
2010. Total assets of the banking sector are 655
Turkish banking sector mostly dominates the billion US dollars, which was 561 billion US dollars
Turkish financial system. 85.8% of the financial by the end of 2009. During the global financial
system’s assets were held by the banking sector. crisis in 2009, the number of branches increased
By the end of 2010, volume of the financial sector by 207 (2.9%), employee number increased by
assets were as big as 103.6% of the Turkish GDP. 1,551 (0.8%). Even in 2008, when the global
Major reforms were carried out in the finance and financial crisis got deeper and many European and
banking sectors between 1999 and 2002. American banks got smaller, 277 new branches
opened and 1,551 new employees hired.
“The Banking Sector Restructuring Program”
was initiated in May 2001 with the aim of
modifying the banking sector into a sound and
competitive structure consistent with sustainable
growth. Banking legislation was adjusted to
international regulations, BIS recommendations
and European Union banking directives. Also in
line with the previous principles and the BASEL
(Banking Supervision and Auditing) Committee
principles, a banking law was issued in 2005 to
regulate the sector. With the new structure of the
banking system and improvements in the Turkish
economy, Turkish banking sector had significant
growth in the bank’s balance sheets and changes
in their structure.
Main Indicators of the Turkish banking sector and National Income
Billion US $ 1995 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Loans 29 51 28 30 48 74 112 149 234 218 254 333
Deposit 44 102 81 84 111 143 181 211 295 259 333 391
Total Assets 67 155 116 130 179 229 296 346 485 434 539 655
GDP 227 266 195 232 303 392 482 529 649 730 615 736
Source: Banks Association of Turkey (BAT), BRSA, Turkstat, IMF,
13

21. 2010 was a very profitable year for the banking 3.4. Consumer Business
sector where the net profit rose 8.7% to 21.93
billion TL (13.9 billion $). Total loans were 525.9 Turkey is a major market for consumer products
billion TL with a 33.9% increase at the end of with 73.7 million population and a vivid export
2010, which was nearly half of the total assets. sector. Textile and clothing, agriculture, white
Whereas deposits grew 19.9% to 617 billion TL. goods, furniture, cosmetics and jewelry are the
Also total assets grew 20.8%. prominent sectors in consumer products.
Although global financial crisis affected Turkish Turkey is a major textile and clothing producer
banking sector, it had some advantages in country in the world with over 40,000 producers
comparison to other countries. These are; and 2.5 million workers. Cotton clothing, knitted
clothing, woven clothing and accessories as well
• There is no toxic product, as home textile products constitute main products
in the sector. Thanks to strong leather sector of
• Turkish banking sector is conventional, wide Turkey, footwear industry is a well-developed
spread, mainly constituted from deposits and industry as well. Its well established industry
have a wide spread of customer net, focuses on Europe, Middle East and Eurasia
regions. Turkey is one of the world’s leading
• Weight of the individual loans is not much in the manufacturer of floor-coverings including hand-
GDP, woven and machine-made rugs and mats. Also
Turkey has a high quality cotton yarn.
• Turkish banking sector started very late to the
mortgage system and the interest rates are fixed, In recent years textile and clothing sectors faced
fierce competition from far eastern countries.
• Due to some politic and financial developments, Especially lifting of the quotas in 2005 affected the
Turkish banking sector pushed on the brakes export sector as well as the domestic sector. The
starting from the beginning of 2007 and, sectors are moving more towards higher quality
production and spend great deal of energy on
• Turkish banking sector has crisis experience. branding. In order to achieve the move towards
more sophisticated products, companies benefit
from the government’s design and technology
incentives. As a result of this effort and the
changing conditions of the sector after the world
financial crisis, the sector’s exports increased
12.6% in 2010 after a 16% fall in 2009.
Agriculture and food industry is one of the leading
sectors of Turkey with rich resources, huge
potential of fish products and livestock. Edible
nuts, frozen fruits and vegetables, confectionery
products, poultry, dairy products, oil and vast
variety of fresh vegetables and fruits are produced
in Turkey and are exported to numerous countries.
Also, Turkey is the world leader in the production
of dried figs, hazelnuts, sultanas/raisins and dried
apricots.
14

22. The sector has over 25 thousand enterprises, Furniture sector is a very important sector in
with an average five hectares farm size. With Turkey with its huge export potential. Metal office
5.7 million workers the sector employs 25% of furniture, wooden furniture, seats for automobiles
Turkey’s total work force. This ratio was over and seats convertible into beds constitute the
35% at one decade ago. Although Turkey has major items of production and export in the sector.
relatively small enterprises and land per enterprise, There are approximately 30 thousand companies
due to its favorable ecological conditions, large in furniture production business who export to
food importer neighboring countries and a large over 170 countries in the world. Also 32 thousand
domestic population with rising income, the sector companies are in furniture retail business. The
is expected to grow in the future. sector employs over 500 thousand people. The
production realized was over 9.5 billion dollars
Turkey is Europe’s second largest producer of in the sector with 1.4 billion US $ export. Turkish
white goods with production of refrigerators, furniture was exported to 173 different countries
washing machines and other household in the world in 2010. There are six furniture
appliances. In addition to establishing production companies in the top 500 industrial establishments
units in the Eastern Europe, Eurasia and Asia, like of Turkey. These companies are: Merkez Çelik,
Russia, Romania and China, some of the Turkish Boytaş Mobilya, Merinos Halı, İstikbal Mobilya,
white goods and electronic appliances producers Grammer Koltuk Sistemleri and Yataş Yatak ve
also bought world’s leading brands. Over 2 million Yorgan Sanayi.
people work in the sector and 2010 production
was 18.4 million pieces where 13.7 million of Around 1,400 companies operate in the cosmetics
them were exported. There are over 50 producers sector. Shampoos, depilatories, products for
and over 500 hundred white goods parts suppliers bath, lip and eye make-up products, deodorants,
in the sector. perfumes and baby care products are major
items in the sector. The sector had a volume
of 2 billion US dollars. Turkey partakes among
Consumer Product Exports $ world’s leading laurel and olive oil soap producers.
2006 2007 2008 2009 2010 Many successful brands came out from the soap
Textile 19,440,858 22,599,459 22,826,789 19,162,627 21,568,974 producers in recent years. They achieved high
Agriculture volume of exports. Some of these companies
and Forestry 3,480,539 3,725,212 3,936,710 4,347,482 4,939,552 are Evyap, Eczacıbaşı, Canan Kozmetik, Kopaş
Kozmetik, Kurtsan İlaçları, Hunca Kozmetik,
White Goods 2,005,000 2,532,000 2,766,000 2,578,000 -
Aromel Kozmetik, Hobi Kozmetik, Kosan Kozmetik,
Furniture 788,153 1,067,523 1,387,061 1,198,575 1,414,700 Dündar Kozmetik, Erkul Kozmetik and Rosense
Cosmetics 774,862 848,010 1,074,889 1,030,714 1,136,084 Kozmetik. Also many international companies
Jewelry 639,352 979,079 3,631,108 4,641,351 2,072,842 produce different cosmetic products in Turkey.
Source: TURKSTAT, DTM, BEYSAD
Given its cultural heritage of jewelry, Turkey ranks
The main producer brands in the sector are: among world’s top three gold jewelry producers
Arçelik, Beko, Altus and Aygaz under Arçelik and exporters with her powerful modern and
group; Profilo, Bosch and Siemens under classical techniques in the sector. Her gold
BSH-Profilo Group, Vestel under Vestel Group; production capacity is 400 tons per year. The
Ariston and Indesit under Indesit Group. With the sector employs 250 thousand people, where 6
high priority given to innovation in the sector, thousand producers and 35 thousand jewelry
world’s fastest washing machines and dish- stores are active. İstanbul Gold Exchange was
washers have been developed in Turkey. formed in 1995. Currently it has 85 members. Also
The sector exports most of its production. İstanbul Gold Refinery started its production in
2002.
15

23. 3.5. Energy & Resources There are currently two existing and one planned
major oil pipeline in Turkey. Existing ones are
Turkey is an important energy consumer as Baku-Tbilisi-Ceyhan (BTC) and Iraq-Turkey crude oil
well as an important hub for energy supplies pipelines which bring oil from Azerbaijan and Iraq.
transportation. Turkey’s primary energy BTC’s capacity is 1 million barrels per day (bpd).
consumption was 105 million TEP by the end With some technical changes it will first reach
of 2009. 28.9% of this energy was produced at to 1.2 million bpd and eventually to 1.6 million
home and the rest was imported. Between the bpd. Capacity of the Iraq - Turkey pipeline is 1.6
years 1990 and 2009 primary energy consumption million bpd. Also Trans - Anatolian pipeline project
increased 3.7% on an average in Turkey which is is planned to carry Russian and Kazakh oil from
the highest average among the OECD members. North of Turkey to the South. From Ceyhan, a big
Also Turkey was the second in demand increase port in the South of Turkey where the oil Trans
for natural gas and electricity in the world - Anatolian pipeline ends, the oil will be shipped
after China. Between 2010 and 2020, primary to other parts of the world. Tupras refinery is in
consumption is expected to rise 4% annually Ceyhan too. The crude oil is refined at Tupras
(average annual increase expectation for the world and refined products are sold both domestically
is 1.8%). Total 130 billion US $ of investment and internationally. There are couple of new
is needed in the energy field by 2020 to meet projects to build other refineries in Turkey are on
Turkey’s energy needs. planning level as well. So, Ceyhan area on the
Mediterranean coast has become a focal point of
the international crude oil trade.
Energy Consumption in Turkey According to
Resources (2009) (%) When we look at the natural gas pipelines’ length,
they increased from 4,510 km in 2002 to 11,441
km by the end of 2010. Currently 67 cities has
natural gas grid in Turkey. There are two Russian-
Turkish natural gas pipelines (West and Black sea),
31% 29% one Azerbaijani-Turkish natural gas pipeline (Baku-
Petroleum
Tbilisi-Erzurum) and one Iranian-Turkish natural gas
Renewable Resources
5% pipeline transmitting natural gas to Turkey.
Coal
35%
Natural Gas Total 31.9 billion cm3 natural gas imported from
these pipelines and in LNG form from Algeria
Source: Turkish Ministry of Energy and Natural Resources
and Nigeria in 2010. Already one fourth of Azeri
natural gas goes to Greece. Also Nabucco gas
pipeline agreement had signed in 2009, which
Except coal (mostly lignite), currently Turkey has will connect Central Asian natural gas to Central
very limited mineral resources. She imports almost Europe through Turkey. Turkey is building a
all of its petroleum (91%) and natural gas (98%) link to the Egyptian - Jordan - Syria - Lebanon
needs and one fifth of its coal need (2010). TPAO gas pipeline. The link will be connected to the
(The Turkish Petroleum Corporation) has invested Turkish natural gas network. Talks for building a
500 million US $ in exploration of Black Sea region pipeline connecting Katar natural gas to Turkey is
where 10 billion barrels of potential reserves continuing. Another under sea pipeline is planned
thought to be lying. With this goal TPAO has to be built between Ceyhan and Israel. The gas
established partnerships with Petrobas, Exxonmobil from the pipeline will be transferred to India from
and Chevron. Although she mostly imports her Red Sea by ship.
oil and natural gas, Turkey is becoming a hub
for energy supplies.
16

24. Energy Market Regulatory Authority (“EMRA”) Turkey’s demand for electricity is growing
is the main authority in energy market and fastest after China in the world. Between
provides independent regulation and supervision 2002 and 2007 annual average growth in
to the electricity, natural gas, petroleum and LPG electricity demand grew 8%. In 2007, electricity
markets. All market activities are conducted under consumption grew 8.8% and reached to 190
licenses issued by EMRA. billion kWh. However in 2008 with the effects
of the global crisis increase rate fell to 4.3%
Turkey realizes 91% of her oil import from four and became 198.1 billion kWh. As iron, steel,
countries, namely Iran, Russian Federation, Saudi cement and textile industries slowed down, the
Arabia and Iraq. commercial use of electricity decreased further. As
a result of this electricity consumption in 2009 was
194.1 billion kWh. And as the effects of the global
Turkey Main Resources of Oil (2009) crisis started to lessen electricity consumption
increased to 209.5 billion kWh.
12% Kazakhstan
12% Main Resources in Electiricity Production (2009)
4% Italia
2%
1% Syria
49.33% 28.76%
1% Nigeria
23% 1% Coal
Libya, Azerbaijan, Georgia
Hydroelectric
Russia Federation
Other
Iran
41% Natural Gas
Saudi Arabia
18,46%
Source: Energy Market Regulatory Authority
3,45%
Source: Turkish Ministry of Energy and Natural Resources
Turkey makes her natural gas import from five
countries; Iran, Russian Federation, Azerbaijan,
Algeria and Nigeria. Turkey has 49,524.1 MW installed capacity as of
the end of 2010. 32,278.5 MW of it is thermic,
15,831.2 MW of it is hydraulic, 1320.2 MW of it
15% 14% is wind and 94.2 MW of it is geothermal. During
2010, approximately 5,000 MW new capacity
Azerbaijan added. Meanwhile, gross electricity demand was
13%
Algeria 210.4 billion kWh and the supply was 211.2 billion
Nigeria kWh. Also 1.1 billion kWh electricity is imported
3% Russia Federation and 1.9 billion kWh electricity is exported. In the
Iran next decade, average 7.5% increase on electricity
55%
demand is expected.
Source: Energy Market Regulatory Authority
17