Turkey is a cultural, economic and geographic bridge uniting orient and occident. The country has been a home to many cultures and peoples for thousands of years, whose traces are distinctly visible today. Many Europeans know Turkey as primarily a holiday destination, but the land has far more to offer besides sun, sea and sand.
High Investor Interest
The Turkish economy offers attractive possibilities for European investors. It is very dynamic and growing fast.
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Business Opportunities in Many Branches
Among the most interesting sectors in the Turkish economy are qualitative building materials, environmental economics and auto parts supply – three sectors which have shown a very dynamic development in recent years and have great future potential.
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In Turkish culture, it is important for success in negotiations to have background information about one’s partner.
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Personnel and Job Market
Companies who wish to invest in Turkey or build their own market structures will easily find well trained and highly motivated employees.
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Competent On-Site Personnel Consulting
Sabine Caliskan, an Austrian with Turkish roots, has been advising clients in Turkey since 2005. Ms. Caliskan and her assorted team, who have roots in Turkey and Germany as well as Austria, operate offices in Istanbul, Izmir and Ankara.
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Please direct your inquiries to:
HILL International Türkiye
mobile +90 536 7678801
The Turkish economy offers attractive possibilities for European investors. It is very dynamic and growing fast. Turkey is currently the tenth biggest economy in Europe, and it has grown by 25% in the last three years. The annual growth rate is between 5 and 10%.
One of Turkey’s main assets is surely its people. The country harbours over 75 million people. In comparison the ten new EU member states have in total the same population. The purchasing power of this population has rapidly grown in recent years. Another factor underlying this continual growth is the young population. About 50 percent of Turks are younger than 25. The proportion of people living in the city has risen by about two thirds.
Turkey is a market on the threshold. The recent EU accession negotiations have prompted comprehensive reforms, which have aided international economic cooperation. Independent of the outcome of the EU accession negotiations, the results of which will most likely become known only in the next decade, it is important for investors to engage with this attractive market. The country is already an important target market for many German firms, however for Austrian investors it remains to date uncharted terrain.
For Austrian investors, Turkey constitutes an investment target of ever growing importance. Many German and Austrian investors are already active all over South East Europe. Not only the CEE markets such as the nearby countries Slovenia, Croatia, Serbia, Hungary etc. are already “home markets” for Austrian and German investors; Romania and Bulgaria are also already among them.
As has already been reported in the Turkish, German and Austrian press, in recent years many international investors have taken the plunge into the Turkish market, among them prominent firms such as OMV, Mayr-Melnhof, Austria Tabak/Gallaher Group, Praktiker, Bauhaus, Ikea, Douglas, Schiedel, Deutsche Bank, MediaMarkt etc. Both the quantity and the volume of German and Austrian direct investment in Turkey is growing day by day.
Germany is Turkey’s largest trading partner. Austrian contractors are already leading in the area of water management/energy projects in Turkey – around a third of all projects in this sector are being realized with Austrian investment.
Among the most interesting sectors in the Turkish economy are qualitative building materials, environmental economics and auto parts supply – three sectors which have shown a very dynamic development in recent years and have great future potential. In these areas, above all, German and Austrian firms possess international experience and know-how.
In recent years many Turkish state companies have been successfully privatised. It is to be expected that this trend will continue in the coming years. There are still a multitude of companies awaiting privatisation. One of the major themes is the upcoming privatisation of the state banks and the tobacco monopoly – a real chance for the market entry of Austrian and German investors.
Besides the textile industry, other major industries have established themselves and are contributing an important part to the Turkish economic and export boom. The auto industry has become the second most important Turkish export branch. Above all the manufacturing industry is booming at the moment and is having a positive effect on other economic sectors.
Machine construction and the auto industry rank among the market leaders in Turkish exports. Other promising sectors for the future are the markets for communications and information technology, electronics, logistics and environmental economics.
Turkey obtains the greater part of its energy by importing gas and oil. Its main suppliers are Iran and Russia. About 20% of energy is produced in hydro-electric power stations and a considerable proportion also using domestic coal supplies.
In the mining industry, chrome, lignite, hard coal, iron, and in lesser quantities lead, zinc, copper and silver are produced. In 2004 products with a total value of about $ 1.08 billion were exported. With the new mining statutes and new private mines the government estimates an export volume of $2 billion in 2006.
In Turkish culture, it is important for success in negotiations to have background information about one’s partner. A business partner is believed much less through what he says than through his behaviour. Turkish people are wary of being outmanoeuvred at the negotiation table. It makes your partner very pleased to have the feeling that the price was reduced only for him.
Turkish people differentiate rather seldom between friendship and business relations. They hesitate to trust - but after a friendship is established and some successful business is transacted, collaboration is a very simple matter.
Although the proportion of well-educated people is very low, the few who do have the chance to obtain a university degree are excellent. The university entrance examinations are very difficult and demanding and only a selected few manage to pass these. There are some renowned universities with brilliant graduates. Young executives are trained by Turkish and international firms in Turkey, and then move to businesses demanding high flexibility and adaptability.
Companies who wish to invest in Turkey or build their own market structures will easily find well trained and highly motivated employees. Turkish executives are held in high esteem by local businesses.
However Turkey is not a low wage labour country. A steep income curve is evident; wages for qualified and unqualified labourers as well as the salaries of white-collar workers without managerial responsibility are relatively low. On the other hand managers and qualified skilled labourers obtain, above all in the west of the country, similar salaries to their European counterparts. Noteworthy is the proportion of women in management positions, which is almost double that of Austria.
Due to the rapid economic growth, there will probably be shortage of skilled labour in the next two to three years.
12 monthly salaries per year are paid in Turkey. Income tax is calculated on a progressive scale. For earned income the marginal tax rate is 15 percent (for a yearly income of 7,000 TRY or above), the top income tax rate is 35 percent (from a yearly income of 40,000 TRY or higher). The tax assessment basis is the sum of all income minus business losses.
The social security contributions of employers range from 20.5 to 26% (depending on the degree of risk involved in accident insurance). The employee must pay an additional 16%.
Sabine Caliskan, an Austrian with Turkish roots, has been advising clients in Turkey since 2005. Ms. Caliskan and her assorted team, who have roots in Turkey and Germany as well as Austria, operate offices in Istanbul, Izmir and Ankara. Clients benefit greatly from the profound knowledge of the Turkish as well as the German language and culture possessed by the consultants and economic psychologists. The experts on Turkey act above all as “Culture Interpreters” in the area of personnel consulting and development.
As a one-stop-supplier our services include company consulting, as well as salary and branch specific market studies. The internationally versed and multilingual consultancy team is in the best position to accompany German speaking companies in their business contacts and investments in Turkey.
HILL Turkey is assisted in this process by the experience and expertise of the HILL Group. Over 30 years of personnel and management consultancy, scientific methodology, and an extensive network in Europe and central Asia enable HILL to provide successful consultancy for numerous firms in diverse branches, in all areas of personnel and management.