Businesses from all over Europe are attracted to this large and growing market. Dubbed the “Pearl on the Bosphorus” and the “China on the Bosphorus”, this emerging economic powerhouse cannot not be overlooked or underestimated. Here is an overview of some key points when “doing business in Turkey”.
Key sectors for which Turkey is particularly attractive
– Life Science & Health
– Alternative & renewable energy
– The harbours / ports
– The creative industry
Having said that, Turkey isn’t really limited to specific sectors and any sector could be successful in Turkey, as long as your product is not a standard product (to prevent copying). The product should, therefore, be innovative and special to ensure success in this growing market.
The importance of an online presence
When considering the focus of your business and marketing strategy, it is wise to take this figures into account:
44% of Turks do not have an internet connection (only 4% are disconnected in NL)
18% of Turks only enter the internet on a smartphone (only 1% in NL exclusively uses smart phones to connect to the internet)
66% of Turks are online to explore products before buying but only 18% buy online (growth can be expected).
The population is, however, young and it is expected to grow in both income and purchasing power over the coming years.
Markets for trade
Turkey does, not only, give access to markets in Arabic countries, but also to former Russian republics that currently receive a lot of investment. There are many companies that serve these countries from Turkey. However, the second largest trade partner of Turkey is Iraq (so not very stable), and the fourth is Russia (stable but economically under pressure).
70% of trade in Turkey happens in Istanbul and İzmir. The political tensions in Turkey mostly occur in other (Eastern) regions. Therefore, business is mostly safe from and unaffected by the ongoing political tensions.
Market opportunities and investment
Turkey wants to export more, especially high-quality products. For this reason they have a strong need for technical knowledge. E.g. machines and agriculture.
The Turkish government tries to stimulate investment. Therefore, inform yourself on all the procedures that are available for investments, since this can easily save 20 to 30% of your investment, as well as offer tax advantages.
In Turkey, you always need the government. If you want to make large investment, you need to get involved with the economic politics. For instance, by asking questions, and requesting consultancy on which direction to go.
On the one hand, don’t try to push business relationships to develop quickly. On the other hand, don’t be too laid back either: Turkish business partners will conclude that you are not interested in them if you don’t answer emails within about two to three hours.
There are a lot of family-run businesses in Turkey, which can complicate business interactions. If you are doing business with a family-run company in Turkey, it is important to be aware that there may be a number of individuals in the company who you need to negotiate with individually. Therefore, do not assume that your deal is finished when you have reached an agreement with only one person. There may be others who will apply for their own share as well. Therefore, instead of offering one price to either accept or reject, it is important to prepare yourself for negotiations with both a starting price as well as an end target.
Business culture and etiquette
Turks appreciate humbleness. They can be put off by an arrogant attitude. For instance, if you believe that the superiority of your product alone will be sufficient for them to be convinced to do business with you. As previously mentioned, Turks do expect you to respond quickly to requests for information (not wait a week). They will want to see action and reaction. Typically, Turks do not work with voicemails. This is also why it is not unusual for customers to interrupt a meeting with you for phone calls.
Turks value trust. They want to get to know you before they want to decide to do business with you. In The Netherlands you go to dinner with your business partner only after signing a contract with that. On the contrary, Turks will not sign any contract before having dinner with you. You have to invest more in the relationship itself. This also means that it’s a good idea to not leave immediately after sealing a business deal and to keep the relationship alive, even at times when business is low. Be interested in, and ask about, your business partner’s family and his or her main topics of interests (e.g. soccer).
In any communication with a Turkish business partner, it is important to check how a (s)he has understood you. Because, for some reason, they tend not to request clarification if or when they actually need to know more about what you said.
Legal situation in Turkey
Laws change very quickly. It’s important to track all these changes when investing in Turkey.
Setting up a business or branch in Turkey requires several steps, which can easily take several days to complete.
There are different laws around for laying off staff. If someone thinks that you fired them without a good reason, and the court agrees, you can be made responsible to pay him or her four to eight times their salary. This is something to seriously take into account when hiring and firing staff.
Key advice for doing business in Turkey
- The availability of data can be much more limited and challenging to obtain in Turkey then in your home country (such as address- and geographical data) .
- In general, Turks are very pleasant people to do business with. They keep their word and are committed to make payments as agreed. However, in Turkey the officially allowed period for payments is very long (up to 94 days). Furthermore, enforcing payments from Turkish companies is very difficult. Therefore, be very clear about your own payment conditions upfront. To have more security, you may wish to request payment before shipping your products.
- Local presence is absolutely essential in running a company or branch in Turkey. Don’t try to run a Turkish company or branch from abroad. Either be there yourself, or license a locally managed branch to do business on your behalf.
- Never rely on a (tax)advisor from your home country when investing in Turkey. Be sure to hire a local advisor from Turkey, because only locals can be fully informed of the constantly changing situation and regulations there.
- Never try to set up a business on your own. Find a good reliable Turkish partner. Using the available business services in Turkey (e.g. a market scan by an embassy or consulate), it is relatively easy to find out whether a potential business partner is reliable.
Inform yourself of the facts beforehand, by making use of available data about doing business in Turkey, such as:
Employement of foreign citizens in Turkey, Lawyers in Turkey
Exporting to Turkey – Guidence from UK GOV
How to finance imports from Britain to Turkey, Foreign and Commonwealth Blog
Turkish legislation, Lawyers in Turkey
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