Foreign Direct Investment
"What is Foreign Direct Investment (FDI) in Turkey, and what legal protections and obligations apply?"
Quick Answer
Foreign Direct Investment (FDI) in Turkey is primarily regulated by the Foreign Direct Investment Law No. 4875. Foreign investors generally benefit from national treatment and may access investment incentives if the project meets eligibility criteria and the required certification/approval process is completed.
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View Turkish Investment Lawyer GuideLegal Framework for Foreign Direct Investment in Turkey
Foreign Direct Investment (FDI) refers to an investment made to establish lasting economic interests in Turkey, such as setting up a company, acquiring shares, or expanding operations. The main legal framework is Foreign Direct Investment Law No. 4875, supported by secondary legislation and sector-specific licensing rules.
Key Points to Remember
- FDI is primarily governed by Foreign Direct Investment Law No. 4875 and related regulations
- Foreign investors generally benefit from national treatment, subject to sector-specific restrictions and permits
- Profit and capital repatriation is generally permitted, subject to applicable financial and tax rules
- Investment incentives may be available through an incentive certificate/approval process, depending on sector, region, and project parameters
- Bilateral investment treaties (BITs) may provide additional protections and dispute settlement options depending on the investor’s nationality/structure
Practical Considerations for Foreign Investors
Key practical issues include choosing the right entry structure (subsidiary, branch, JV, or asset/share acquisition), handling sectoral licenses, aligning corporate governance and contracts with Turkish law, and planning tax and employment compliance. Incentives—where relevant—are typically accessed through an application/certification process and are project- and region-dependent.
Working with local counsel helps manage incorporation or acquisition steps, licensing, incentive eligibility checks, and the legal documentation needed to mitigate regulatory and dispute risks.
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