GDP (US$ Billion)

841.21 (2017)

World Ranking 17/191

GDP Per Capita (US$)

10,434 (2017)

World Ranking 65/190

Economic Structure

(in terms of GDP composition, 2018)


External Trade (% of GDP)

46.8 (2016)

Currency (Period Average)

Turkish Lira

3.65 per US$ (2017)

Political System

Multiparty republic


Turkey is a transcontinental Eurasian country located at the crossroads of Europe and Asia, which makes it a country of significant geostrategic importance. Turkey has been an appealing market for investors since the mid-2000s. It experienced strong economic growth on the back of the many positive economic and banking reforms it implemented between 2002 and 2007. Turkey's economic performance since 2000 has been robust, and macroeconomic and fiscal stability were at the heart of its performance, enabling increased employment and making Turkey an upper-middle-income country. Poverty more than halved over 2002-2015 and during this time Turkey urbanised dramatically, while simultaneously opening to foreign trade and finance, harmonising many laws and regulations with European Union (EU) standards, and greatly expanding access to public services. It also recovered well from the global crisis of 2008-2009. However, some of Turkey's development achievements have been slowing down after the long period of success, exacerbated by the economic turbulence of mid-2018. The Turkish economy looks set for a period of slower growth, as high inflation, a more restrictive domestic and external financing backdrop and weakening relationships with some key trading partners prove headwinds to growth.

Sources: World Bank, Fitch Solutions


Major Economic/Political Events and Upcoming Elections

August 2014
Prime Minister Recep Tayyip Erdoğan won the first direct popular election for president.

November 2015
The governing Justice and Development Party regained the parliamentary majority in snap elections.

November 2015
The EU struck a deal whereby Turkey restricted flow of migrants into Europe, in return for EUR3 billion and concessions on stalled EU accession talks.

May 2016
Prime Minister Ahmet Davutoglu resigned.

August 2016
President Erdoğan visited St Petersburg for talks with Russian President Vladimir Putin. The two men pledged to restore close economic ties.

June 2018
President Erdoğan won another term following snap elections.

November 2018
Turkey was among the eight countries granted a six-month waiver on the United States' oil sanctions against Iran, which came into effect on November 5, 2018.

February 2019
It was announced that the EU had signed a EUR275 million grant agreement with Turkey to help finance the construction of the EUR1.2 billion modernisation of the Halkali (Istanbul)-Kapikule (Edrine) line. This represents a significant improvement to a route of strategic importance to the trans-European railway network.

March 2019
Alamos Gold received an operating permit for the USD180 million Kirazli project, which will produce an estimated 104koz of gold per annum. In January 2019, Alacer Gold provided an update on the feasibility study at the USD269 million Gediktepe project, which is set to be completed by the end of the year.

April 2019
United States Secretary of State Michael Richard Pompeo announced the United States decision not to grant any Significant Reduction Exceptions (waivers) to existing importers of Iranian oil.

June 2019
The opposition Republican People's Party won the mayoral election in Istanbul.

June 2023
Parliamentary and presidential elections scheduled.

Sources: BBC Country Profile – Timeline, Fitch Solutions

Major Economic Indicators
Graph: Turkey real GDP and inflation
Date last reviewed: October 15, 2019
Graph: Turkey real GDP and inflation
Date last reviewed: October 15, 2019
Graph: Turkey GDP by sector (2018)
Date last reviewed: October 15, 2019
Graph: Turkey GDP by sector (2018)
Date last reviewed: October 15, 2019
Graph: Turkey unemployment rate
Date last reviewed: October 15, 2019
Graph: Turkey unemployment rate
Date last reviewed: October 15, 2019
Graph: Turkey current account balance
Date last reviewed: October 30, 2019
Graph: Turkey current account balance
Date last reviewed: October 30, 2019

f = forecast
Sources: IMF, World Bank, Fitch Solutions

External Trade

Merchandise Trade

Graph: Turkey merchandise trade
Graph: Turkey merchandise trade

Source: WTO
Date last reviewed: October 15, 2019

Graph: Turkey major export commodities (2018)
Graph: Turkey major export commodities (2018)
Graph: Turkey major export markets (2018)
Graph: Turkey major export markets (2018)
Graph: Turkey major import commodities (2018)
Graph: Turkey major import commodities (2018)
Graph: Turkey major import commodities (2018)
Note: Areas not elsewhere specified account for 4.9% of total imports
Graph: Turkey major import commodities (2018)
Note: Areas not elsewhere specified account for 4.9% of total imports

Sources: Trade Map, Fitch Solutions
Date last reviewed: November 20, 2019


Trade in Services

Graph: Turkey trade in services
Graph: Turkey trade in services

Source: WTO
Date last reviewed: October 15, 2019

Trade Policies
  • Turkey has significantly liberalised its import regime, especially in the last two decades. Any individual or enterprise can freely register to engage in the import business. The country is a member of the World Trade Organization (WTO) and its tariff scheme is based on the Harmonised System for commodity coding. The average tariff rate faced by importers stands at 3.2%.

  • Trade flows in Turkey have been facilitated by the removal of trade barriers and lowering of tariffs alongside membership of a number of free trade agreements (FTAs). In addition to being a member of the WTO, Turkey is also a member of the World Customs Organization. Turkey signed a Customs Union Agreement with the EU on January 1, 1996 and has amended its customs code and legislation in line with those of the EU customs code.

  • Turkey has become increasingly integrated with the West by becoming a member of organisations such as the Council of Europe, the North Atlantic Treaty Organization, the Organisation for Economic Co-operation and Development, the Organization for Security and Co-operation in Europe and the G-20 major economies. Turkey began full membership negotiations with the EU in 2005, having been an associate member of the European Economic Community since 1963 and having reached a customs union agreement in 1995.

  • Other states that have active FTAs with Turkey include North Macedonia, Bosnia-Herzegovina, Tunisia, Morocco, Albania, Georgia, Montenegro, Serbia, Chile, Jordan and Mauritius. These countries are not major trade partners of Turkey, so these FTAs offer few benefits at present.

  • Turkey has also fostered close cultural, political, economic and industrial relations with the Eastern world, particularly with the Middle East and the Turkic states of Central Asia, through membership in organisations such as the Organisation of the Islamic Conference (OIC) and Economic Cooperation Organisation (ECO).

  • The lack of clarity surrounding final bound tariff rates means that the government can considerably increase tariffs on imports to protect certain sectors. While this largely affects agricultural imports, higher tariffs may be applied to a wider range of products including finished goods such as furniture and footwear, as well as intermediate inputs and construction materials.

  • Import licences are required for some agricultural produce and other goods and documentary compliance can be difficult due to opaque regulations.

  • Following the changes in Turkish economic policy in the 1980s, there has been rapid growth in the foreign trade volume of Turkey. For value added tax (VAT) purposes, any importation of goods or services into Turkey is a taxable transaction, regardless of the status of the importer or the nature of the transaction. To equalise the tax burden on importation and domestic supply of goods and services, VAT is levied only on the importation of goods and services that are liable for tax within Turkey. Accordingly, any transaction exempt in Turkey may also be exempt on import. The VAT on importation is imposed at the same rates applicable to the domestic supply of goods and services. In the case of importation, the taxable event occurs at the time of actual importation. The VAT rates are 1%, 8% and 18%, varying according to the type of goods imported. Importation of machinery and equipment under an investment incentive certificate is exempt from VAT.

  • In addition, if the import transaction is not conducted in cash, there is a special Resource Utilisation Support Fund (RUSF) which should also be paid during importation. The RUSF is a special kind of fund applied to importations on a credit basis. According to the RUSF's legislation, any importation conducted on credit (if the payment related to the importation is not paid before the actual importation) is subject to a special payment of 6% of the value of the goods to be imported. The important criteria are payment terms and whether it is a cash payment or payment on credit.

  • Turkey has also adopted the EU's Common External Tariffs imposed on imports from third countries and economies. Products imported from sources other than the EU and Turkey can thus move freely if all import formalities have been complied with in accordance with customs duties. Generally, the Turkish Customs Code is very similar to that of the EU and aims to harmonise the customs practices of Turkey with those of the EU.

  • Some industrial products from less developed and developing countries (in addition to Mainland China) benefit from the EU's Generalised System of Preferences (GSP). With the creation of the customs union between the EU and Turkey, such products are also covered under Turkey's GSP regime.

  • Turkey has its own anti-dumping actions which are separate from those of the EU. Dumping and anti-dumping duties are collected at the point of import. To harmonise with the relevant EU directives, the Turkish version of the Restriction of Hazardous Substances Directive entered into force in June 2009, while the Turkish version of the Waste Electrical and Electronic Equipment Directive was published in the Turkish Official Journal on May 22, 2012 and implemented from January 2013 onwards.

  • The Turkish Standards Institution (TSE) is the product standardisation body of Turkey and is responsible for setting product standards and ensuring compliance; for example, while there is a minimum two-year warranty requirement for electrical and electronic products, before products can be imported and placed on the Turkish market it is also necessary to obtain technical approval by the TSE and European CE standard certification under the requirements set out by the TSE. As for toys, the TSE also imposes a number of safety standards which, in large part, follow those required by the EU. Therefore, the attainment of CE standard certification can serve as a good reference for fulfilling the TSE requirements.

  • In certain cases, such as temporary importation or inward processing, the customs administration will require a kind of guarantee letter to secure the taxes. The amount of this guarantee shall cover all the taxes payable in the case of an importation.

Sources: WTO – Trade Policy Review, Fitch Solutions

Trade Agreement

Trade Updates

  • An FTA between South Korea and Turkey that expands to the services sector and investments came into effect from August 2018. The latest agreement calls for enhanced protection standard allowing stable corporate investment as well as an opening up of a cultural service sector including Turkey's movie, performance and construction areas. Turkey also promised to open up its market to a higher degree in 18 areas, including construction, culture and environment.

  • Thailand and Turkey signed a declaration in Ankara in July 2018 to start negotiations for an FTA, setting a goal to increase bilateral trade between the two countries by 40%. The first phase of agreement negotiations would only cover merchandise trade, while investments and services and e-commerce will be incorporated into the FTA at a later stage.


Multinational Trade Agreements


  1. Turkey-EU: The EU and Turkey are linked by a customs union agreement which came into force on December 31, 1995. Turkey has been a candidate country to join the EU since 1999 and is a member of the Euro-Mediterranean partnership. The customs union with the EU provides tariff-free access to the European market, benefiting exporters and importers; many of Turkey's major trade partners are EU states. Turkey also enjoys tariff-free access to the states with which the EU has concluded FTAs, including Mexico, South Africa, Ukraine and Morocco.

  2. Turkey-European Free Trade Area (EFTA): European Free Trade Area comprises Switzerland, Iceland, Norway and Lichtenstein. The Turkey-European Free Trade Area entered into force on April 1, 1992 and covers the trade in goods. Switzerland is a large source of imports and assists with regional trade flows to Europe.

  3. Turkey-Israel FTA: Israel is an important trade partner in the Middle East and there is potential for expansion of trade flows. Under the current FTA, which was signed with Israel on March 14, 1996 and went into force on May 1, 1997, numerous trade-related areas including sanitary and phytosanitary measures, internal taxation, balance of payments, public procurement, state aid, intellectual property rights, anti-dumping, rules of origin and various safeguard measures are addressed. The stipulations of the agreement on industrial products, all the customs taxes and charges that have an equivalent effect were abolished on January 1, 2000. Regarding agricultural products, Turkey and Israel granted each other unlimited tariff elimination or reduction and/or tariff reduction or elimination in the form of tariff quotas for some agricultural products originating in the other party. Furthermore, in 2006 and 2007, both parties revised the list of agricultural products that are granted preferential treatment under the original agreement.

  4. Turkey-Egypt FTA: The FTA between Egypt and Turkey was signed on December 27, 2005 in Cairo and entered into force on March 1, 2007. Egypt is a relatively large export market, particularly for refined fuel.

  5. Turkey-South Korea FTA: The expanded FTA will allow each of the two countries to secure government policy authority (South Korea in the agriculture, energy and real estate sectors, and Turkey in the agriculture and fisheries, mining and real estate sectors) while modernising investor state dispute settlement to protect South Korean companies with a stake in Turkey. South Korea is a key source of complex manufactured goods. The Agreement on Trade in Services and The Agreement on Investment were negotiated and signed on February 26, 2015 and entered into force on August 1, 2018.

Under Negotiation

Turkey-Mercosur FTA: Trade with Mercosur (comprised of Argentina, Brazil, Paraguay, Uruguay and Venezuela) is limited and may expand significantly under FTAs.

Signed But Not Ratified

Turkey-Lebanon, Kosovo, Moldova, Malaysia and the Faroe Islands: Trade flows with these countries are not substantial and they offer relatively limited markets – though Malaysia offers an alternative source of energy.

Negotiation Suspended

Turkey-Gulf Cooperation Council (GCC): Though negotiations have been suspended, tariff-free access to the GCC would reduce costs on energy imports.

Sources: WTO Regional Trade Agreements database, Fitch Solutions

Investment Policy

Foreign Direct Investment

Graph: Turkey FDI stock
Date last reviewed: October 4, 2019
Graph: Turkey FDI stock
Date last reviewed: October 4, 2019
Graph: Turkey FDI flow
Date last reviewed: October 15, 2019
Graph: Turkey FDI flow
Date last reviewed: October 15, 2019

Source: UNCTAD


Foreign Direct Investment Policy

  1. The Turkish government has pursued wide-ranging reforms since 2001, aimed at opening up the economy to greater foreign involvement in order to enhance industrial capacity and boost growth. There are consequently few regulatory restrictions on foreign direct investment (FDI), while an ongoing privatisation process is reducing the state's role in the economy and further widening access for foreign investors to strategic industries. Turkey's government acknowledges that it needs to attract significant new FDI to meet its ambitious development goals, as well as finance its current account deficit. As a result, Turkey has one of the most liberal legal regimes for FDI in the Organisation for Economic Cooperation and Development.

  2. Turkey does not screen, review or approve FDI specifically. However, the government established regulatory and supervisory authorities to regulate different types of markets. Important regulators in Turkey include the Competition Authority; the Energy Market Regulation Authority; the Banking Regulation and Supervision Authority; the Information and Communication Technologies Authority; the Tobacco, Tobacco Products and Alcoholic Beverages Market Regulation Board; the Privatisation Administration; the Public Procurement Authority; the Radio and Television Supreme Council; and the Public Oversight, Accounting and Auditing Standards Authority. Some of the aforementioned authorities screen as needed without discrimination, primarily for tax audits. Screening mechanisms are executed to maintain fair competition and for other economic benefits. If an investment fails a review, possible outcomes can vary from a notice to remedy, which allows for a specific period of time to correct the problem, to penalty fees. The Turkish judicial system allows for appeals of any administrative decision, including tax courts that deal with tax disputes.

  3. Most sectors open to the Turkish private sector are also open to foreign participation and investment, 100% foreign ownership is permitted in most industries. Both domestic and foreign investors enjoy equal rights and protections under law and both are eligible for the incentives provided to investment in new projects. There are no capital controls imposed and investors are free to transfer earnings into foreign currency and remit profits abroad.

  4. The Turkish government has several investment incentives meant to encourage investments with the potential to reduce dependency on the importation of intermediate goods vital to the country's strategic sectors, such as agriculture and food, automotive, business services, chemicals, electronics, energy and renewables, financial services, healthcare and pharmaceuticals, information communication technology, infrastructure, machinery, manufacturing, mining, real estate, tourism and transportation and logistics. The incentives include VAT or customs duty exemption and social security premium support.

  5. Effective as of January 1, 2012, local and foreign investors have equal access to the new investment incentives system which consists of five different schemes, namely the General, Regional, Large-Scale, Priority and Strategic Investment Incentives Schemes. More information on the investment environment and the relevant regulations can be found at the Investment Support and Promotion Agency of Turkey.

  6. Since 2001, Turkey has pursued a comprehensive investment climate reform programme aimed at streamlining investment-related procedures and attracting more FDI. The government has launched the Coordination Council for the Improvement of the Investment Environment (YOIKK), which involves stakeholders from the public and private sectors, to advise on current investment policies. A supplementary role is played by the Investment Advisory Council of Turkey, which convenes yearly under the chairmanship of the prime minister and involves representatives from multinational companies, international institutions and non-governmental organisations. The recommendations supplied by this council are applied as guidelines for the YOIKK agenda.

  7. The Privatisation Administration has been used to divest state assets in a wide range of industries, with 178 out of 188 former state-owned entities now boasting some level of private sector participation. Another government programme of more direct relevance is the Investment Support and Promotion Agency, which offers information and advice to foreign investors as well as support in setting up operations. All of these initiatives have been successful in improving the investment environment and increasing foreign participation in Turkey's economy.

  8. Of greater interest to prospective investors is the generous and wide-ranging incentive programme and suite of free zones which offer numerous fiscal benefits, funding support and logistical advantages to new projects. The current incentive system was established in 2012 and updated in 2015 and aims to encourage investment in strategic sectors, high value-added industries and underdeveloped regions. The programme is divided into five different schemes which offer a varying range of benefits depending on the sector, location and amount of investment, namely the General, Regional, Large-Scale, Priority and Strategic Investment Incentive Schemes.

  9. Turkey has 19 operational free zones located close to the European Union and Middle Eastern markets, with access to international trade routes. The advantages offered have resulted in the accumulation of sophisticated industrial clusters which offer immediate access to quality local suppliers and international trade routes, significantly reducing supply chain risks and logistics costs.

  10. A number of provisions may be applied to government tenders which are detrimental to foreign investors, including restrictions on bids by foreign companies, the potential to offer price advantages of up to 15% for domestic bidders, a requirement to accept only lowest-cost bids and the use of model contracts which leave little room for flexibility and specialisation.

  11. The government mandates a local employment ratio of 10 Turkish citizens per foreign worker. These schemes do not apply equally to senior management and boards of directors, but their numbers are included in the overall local employment calculations. Foreign legal firms are forbidden from working in Turkey except as consultants; they cannot directly represent clients and must partner with a local law firm. There are no onerous visa, residence, work permits or similar requirements inhibiting mobility of foreign investors and their employees. There are no known government-imposed conditions on permissions to invest, including tariff and non-tariff barriers.

  12. The Council of Ministers published a decree amending the Decree No. 32 on the Protection of the Value of the Turkish Currency (Decree No. 32) in the Official Gazette No. 30312 on January 25, 2018. The amendments providing restrictions on foreign exchange loans entered into force on May 2, 2018. Prior to the amendments, Turkish residents were not entitled to use foreign currency denominated loans from abroad. With the amendments, Turkish residents that do not have foreign exchange income will no longer be able to use foreign currency denominated loans from abroad, besides for certain exceptions.

  13. Corporations are liable for income tax at a rate of 22% for the years 2018, 2019 and 2020 on net profits generated, as adjusted for exemptions and deductions and including prior year losses carried forward, to a limited extent. Deliveries of goods and services are subject to VAT at rates varying from 1% to 18%. The general rate is 18%.

Sources: WTO – Trade Policy Review, ITA, Fitch Solutions


Free Trade Zones and Investment Incentives

Free Trade Zone/Incentive Programme Main Incentives Available
General Investment Incentive Scheme: available regardless of location and investment amount and applied to all other investment incentive programmes. Exemption from VAT and customs duty
Regional Investment Incentive Scheme: offers a range of benefits depending on the development level of the region in which the project is located. All regions of Turkey are allocated a number from one to six, whereby one represents the most developed and offers the fewest incentives. The minimum investment amount is TRY1 million for zones one and two and TRY500,000 for the remaining four zones. - Automatic government land allocation

- Subsidised interest payments on loans

- Income tax reductions ranging from 15-55%

- Subsidies on employer social security contributions covering between 10-100% of the cost for 2-12 years.

- The level of incentives offered increases from zones one to six and is also higher if the business is located in an Organised Industrial Zone.
Priority Investment Incentive Scheme: focused on specific sectors, including high-tech manufacturing, defence industry, automotive, mining, education, LNG, power generation, rail and maritime transport.

- All incentives allocated to firms located in zone five regions are available to these industries regardless of location.

- This includes income tax deductions of up to 50% and social security support for up to 10 years.

Large Scale Investment Incentive Scheme: Available to investments in fuel refining (minimum investment TRY1 billion), chemical products, harbour services, automotive manufacturing (minimum investment TRY200 million), automotive supply industries, railway trains and cars, pipelines, electronics, medical devices, aircraft, machinery, pharmaceuticals, metals production (minimum investment TRY50 million).

All incentives listed above, but more generous tax deductions of between 25%-65% and social security exemption for 2-12 years.
Strategic Investment Incentive Scheme: offers the most generous benefits and is reserved for businesses establishing production facilities for goods of which Turkey is currently a net importer. Minimum investment is TRY50 million. Tax deduction of 50% is available for all regions and social security contributions are subsidised for at least seven years.
Free zones: 19 located throughout the country, mostly along the coastline and close to strategic ports such as Istanbul, Izmir and Mersin. - Exemption from VAT, customs duty and stamp duty

- Exemption from corporate income tax (CIT) for manufacturing companies

- Exemption from income tax on employees' salaries for companies that export at least 85% of the 'freight on board' value of the goods they produce in the free zones.

Sources: US Department of Commerce, Fitch Solutions, National Sources

Taxation – 2019
  • Value Added Tax: 18%
  • Corporate Income Tax: 22%

Sources: Turkey Ministry of Finance, Fitch Solutions


Important Updates to Taxation Information

In Turkey, the CIT rate levied on business profits is 20%. While the rate for corporate income tax has been increased to 22% for the tax periods 2018, 2019 and 2020, the Council of Ministers has the authority to reduce the 22% rate back to 20%.


Business Taxes

Type of Tax Tax Rate and Base
CIT 22%
Local Income Tax - Income tax split between employment income and non-employment income

- Individual income tax rates vary from 15% to 35%

- The 15% rate applies to income up to TRY14,800 from employment and the rate is also applied for non-employment income up to TRY14,800.

- The highest rate (35%) applies to employment income of more than TRY120.001 and non-employment income of more than TRY80,001.
Capital Gains Tax Regarded as part of ordinary corporate income
18% on sale of goods and services (standard rate)
Withholding Taxes

- 15% on dividends paid to non-residents

- 20% on royalties

- 5% on professional fees from petroleum activities

- 20% on professional fees from non-petroleum activities

- 20% on real estate rental payments

- 15% branch remittance tax

Sources: Ministry of Treasury and Finance, Fitch Solutions
Date last reviewed: October 21, 2019

Foreign Worker Requirements

Localisation Requirements

Since January 2015, employers seeking to recruit foreign nationals must meet a number of stipulations which increase the obstacles to importing foreign workers.

Businesses must meet the following criteria in order to be eligible to employ foreign workers: a local employment quota of five local employees per foreign national; one of either a minimum amount of paid-in capital of TRY100,000, gross sales of TRY800,000 or exports to the value of USD250,000; and minimum monthly salary levels ranging between 1.5 and 6.5 times the minimum wage for the foreign worker, depending on their position.


Obtaining Foreign Worker Permits for Skilled Workers

For a foreign national to work in Turkey, an employment visa and a work permit (which also serves as a residency permit) must be acquired. This entails an application for a work permit to the Turkish Embassy in the home country of the expatriate, an application to the Ministry of Labour and Social Security in Ankara within 10 days of the date of filing the application with the Turkish Embassy and an application for an employment visa within 90 days after obtaining the work permit from the ministry.

Work permits are granted for an initial period of one year and are renewable first for up to three years and following this for up to six years. However, the employee must stay with the designated employer during this period, meaning that long-term expatriate workers, who will be in high demand due to their skills and experience of working in Turkey, will not be available for recruitment by other businesses, restricting recruitment options for businesses.

Due to the fact that professional services such as engineering, city planning and architecture are carefully regulated in Turkey, work permit applications for foreign nationals holding one of these degrees differ from the regular work permit applications and can take up to a year.


Visa/Travel Restrictions

Visitors from many European, Middle Eastern and South American countries may visit Turkey visa free for up to 90 days. Visitors from other countries (including the United States, Mainland China and the United Kingdom) may obtain visas for tourism or business purposes via the electronic visa application system. This system, which was launched in 2013, allows visitors from some countries to obtain an e-visa online, which streamlines the process for foreign business travellers needing to visit Turkey. E-visas cost between USD15 and USD80 depending on the country of origin, while visas obtained on arrival officially cost between USD2.5 and USD70, but are generally more expensive.


Refugee Employment Restrictions

Though Syrian refugees are permitted to apply for work permits to join the formal labour market, this scheme is not well publicised and has seen limited success. Businesses that want to formally employ Syrian refugees are expected to provide sponsorship and other payments. Compliance issues and supply chain risks for businesses employing refugees will therefore remain pertinent in the medium term.

Sources: Government websites, Fitch Solutions


Sovereign Credit Ratings

  Rating (Outlook) Rating Date
Moody's B1 (Negative) 14/06/2019
Standard & Poor's B+ (Stable) 17/08/2018
Fitch Ratings BB- (Stable) 07/11/2019

Sources: Moody's, Standard & Poor's, Fitch Ratings


Competitiveness and Efficiency Indicators

  World Ranking
2018 2019 2020
Ease of Doing Business Index 60/190 43/190 33/190
Ease of Paying Taxes Index 88/190 80/190 26/190
Logistics Performance Index 47/160 N/A N/A
Corruption Perception Index 78/180 N/A N/A
IMD World Competitiveness 46/63 51/63 N/A

Sources: World Bank, IMD, Transparency International


Fitch Solutions Risk Indices

  World Ranking
2017 2018 2019
Economic Risk Index Rank N/A 63/202 71/201
Short-Term Economic Risk Score 56.5 54.0 46.5
Long-Term Economic Risk Score 60.6 62.3 58.2
Political Risk Index Rank N/A 133/202 135/201
Short-Term Political Risk Score 57.1 56.5 58.5
Long-Term Political Risk Score 57.3 55.3 55.3
Operational Risk Index Rank N/A 78/201 71/201
Operational Risk Score 54.2 52.9 55.8

Source: Fitch Solutions
Date last reviewed: November 20, 2019


Fitch Solutions Risk Summary


The Turkish economy, ranked among the top 20 globally (in purchasing power parity terms), has significant long-term growth potential. The country enjoys a strategic geographic location and an open, liberal trade and investment climate. However, the economy faces risks of falling domestic demand amid high inflation, rising unemployment and a weak currency. Public debt could rise over the coming years as the government is forced to take on private sector and state-owned enterprise debt. Turkey's need to reduce its reliance on foreign capital, narrow external deficits, improve geopolitical relations and rebalance away from private consumption towards more domestic saving and investment will bring about a period of slower trend growth in the medium term.


Turkey continues to offer considerable investment potential, particularly due to its large labour force, strong fundamentals, demographic structure and open trade policies. Its location at the crossroads of Europe and Asia makes Turkey a country of significant geostrategic importance. Due to its strong fundamentals, demographic structure and great potential, foreign direct investment inflows to Turkey have been continuing. Including real estate investments, Turkey attracted over USD10 billion annually on average over the last 10 years. However, in the near term, the external environment remains uncertain. Persistently above target inflation, currency volatility, elevated unemployment and high debt servicing burdens will also weigh on investor confidence in the short term.

Date last reviewed: October 22, 2019
Source: Fitch Solutions


Fitch Solutions Political and Economic Risk Indices

Graph: Turkey short term political risk index
Graph: Turkey short term political risk index
Graph: Turkey long term political risk index
Graph: Turkey long term political risk index
Graph: Turkey short term economic risk index
Graph: Turkey short term economic risk index
Graph: Turkey long term economic risk index
Graph: Turkey long term economic risk index

100 = Lowest risk, 0 = Highest risk
Source: Fitch Solutions Economic and Political Risk Indices
Date last reviewed: November 20, 2019


Fitch Solutions Operational Risk Index

  Operational Risk Labour Market Risk Trade and Investment Risk Logistics Risk Crime and Security Risk
Turkey Score 55.8 52.3 59.8 65.1 46.1
Southeast Europe Average 58.1 54 58.8 61.1 58.5
Southeast Europe Position (out of 12) 9 9 7 4 11
Emerging Europe Average 56.7 55.3 57.7 59.4 54.3
Emerging Europe Position (out of 31) 19 22 13 11 21
Global Average 49.7 50.3 49.8 49.3 49.2
Global Position (out of 201) 71 91 65 50 112

100 = Lowest risk, 0 = Highest risk            
Source: Fitch Solutions Operational Risk Index

Graph: Turkey vs global and regional averages
Graph: Turkey vs global and regional averages
Country/Region Operational Risk Index Labour Market Risk Index Trade and Investment Risk Index Logistics Risk Index Crime and Security Risk Index
Slovenia 68.9 56.8 63.3 74.0 81.4
Romania 63.5 59.1 61.2 65.9 67.8
Croatia 62.4 53.3 56.7 70.2 69.5
Cyprus 62.3 56.7 64.1 62.8 65.8
Bulgaria 61.8 58.7 63.9 60.7 64.1
Serbia 58.5 60.1 60.9 60.6 52.4
Montenegro 57.4 55.9 58.4 57.5 58.0
North Macedonia 56.7 45.3 64.2 59.7 57.8
Turkey 55.8 52.3 59.8 65.1 46.1
Kosovo 51.2 54.9 58.6 58.1 33.2
Albania 50.6 48.4 48.3 48.3 57.4
Bosnia-Herzegovina 48.1 46.3 46.4 50.5 49.0
Regional Averages 58.1 54.0 58.8 61.1 58.5
Emerging Markets Averages 46.9 48.5 47.4 45.8 45.9
Global Markets Averages 49.7 50.3 49.8 49.3 49.2

100 = Lowest risk, 0 = Highest risk
Source: Fitch Solutions Operational Risk Index
Date last reviewed: November 20, 2019

Hong Kong Connection

Hong Kong’s Trade with Turkey

Graph: Major export commodities to Turkey (2018)
Date last reviewed: October 21, 2019
Graph: Major export commodities to Turkey (2018)
Date last reviewed: October 21, 2019
Graph: Major import commodities from Turkey (2018)
Date last reviewed: October 22, 2019
Graph: Major import commodities from Turkey (2018)
Date last reviewed: October 22, 2019

Note: Graph shows main Hong Kong imports from/exports to Turkey (by consignment)

Graph: Merchandise exports to Turkey
Graph: Merchandise exports to Turkey
Graph: Merchandise imports from Turkey
Graph: Merchandise imports from Turkey

Note: Graph shows Hong Kong imports from/exports to Turkey (by consignment)
Exchange Rate HK$/US$, average
7.75 (2014)
7.75 (2015)
7.76 (2016)
7.79 (2017)
7.83 (2018)
Sources: Hong Kong Census and Statistics Department, Fitch Solutions
Date last reviewed: October 22, 2019

2018 Growth rate (%)
Number of Turkish residents visiting Hong Kong 23,845 -12.9
Number of European residents visiting Hong Kong 1,961,448 1.7

Source: Hong Kong Tourism Board
Date last reviewed: October 22, 2019


Commercial Presence in Hong Kong

  2018 Growth rate (%)
Number of Turkish companies in Hong Kong  N/A
- Regional headquarters
- Regional offices
- Local offices

Sources: Hong Kong Census and Statistics Department, Fitch Solutions


Treaties and Agreements between Hong Kong and Turkey

  • There are no formal treaties and agreements between Hong Kong and Turkey.
  • Turkey and Mainland China signed a Double Taxation Avoidance (DTA) Agreement in May 1995. This entered into force on January 20, 1997.

Source: OECD


Chamber of Commerce (or Related Organisations) in Hong Kong

Turkish Consulate General in Hong Kong
Address: Room 301, 3/F, Sino Plaza, 255-257 Gloucester Road, Causeway Bay, Hong Kong
Email: consulate.hongkong@mfa.gov.tr
Tel: (852) 2572 1331 / 2572 0275
Fax: (852) 2893 1771

Source: Republic of Turkey, Turkish Consulate General in Hong Kong


Visa Requirements for Hong Kong Residents

HKSAR passport holders do not need a visa to visit Turkey for a stay of up to 90 days. HKSAR passport holders who have a British National Overseas passport and were born in Hong Kong are required to acquire a visa: they can obtain a three-month multiple entry e-visa via the website www.evisa.gov.tr. Those who hold a Hong Kong Document of Identity for Visa Purposes must get their visas from the Turkish diplomatic or consular missions abroad.

Source: Visa on Demand
Date last reviewed: October 21, 2019

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