Turkiye seeks to attract foreign investment amid regional economic uncertainty

Turkish Officials Promote Istanbul as Regional Financial Hub Amid Conflict’s Fallout

Turkish officials are promoting Istanbul as a regional financial hub in the wake of the ongoing conflict in the Middle East. The government aims to capitalize on the region’s economic instability, particularly in countries such as Iran, Saudi Arabia, and Qatar, which have been affected by aerial attacks.

Turkish President Recep Tayyip Erdogan has stated that the global crisis will open new opportunities for his country, citing its improving economic stability since the 2018 debt crisis. The government is reportedly preparing “radical” incentives to lure foreign capital, including tax breaks for companies that sell goods through Turkish entities without importing them into the country.

Turkish Treasury and Finance Minister Mehmet Simsek has confirmed that the government is working on new measures to boost its position as a regional hub. Bilal Bagis, head of the economics department at Fatih Sultan Mehmet Vakıf University in Istanbul, notes that a liberal investment environment, ease of entry, and comprehensive incentive packages are key factors in repositioning Turkey.

Guney Yildiz, a Turkish-born adviser at Anthesis Group, suggests that these measures will focus on intermediation businesses, such as commodities traders and logistics companies. The timing of the plans is influenced by the ongoing conflict, which has driven up fuel prices and forced authorities to dip into foreign currency reserves.

The Istanbul Financial Center (IFC), opened in 2023, offers tax incentives to financial institutions, including a 100 percent exemption from corporate tax on export earnings until 2031. The IFC has seen growing engagement from foreign governments and private institutions, particularly from Far Eastern countries. Turkish officials highlight the city’s “powerful triple advantage” built on geography, innovation, and economic depth, which enables it to reach a large population and facilitate business transactions.

The government’s efforts to promote Istanbul as a regional financial hub are part of its broader strategy to boost competitiveness and attract foreign investment.

Source: Al Jazeera