ISTANBUL

Türkiye has the potential to attract more than $30 billion in foreign direct investment annually, but reaching that level by 2026 will depend on maintaining policy stability, implementing reforms and strengthening investor confidence, according to a sector representative.

Tolga Demirozu, chair of the Istanbul-based International Investors’ Association (YASED), told Anadolu that Türkiye attracted $11.6 billion in foreign direct investment, up 35% year-on-year, but still below its estimated 1.5% potential share of global foreign direct investment.

He said tighter monetary policy, fiscal discipline, and an improved communications strategy introduced in March 2024 helped improve Türkiye’s risk perception, boosting investor confidence in the country’s Medium-Term Program targets.

Reforms, green transition support investment momentum

“Progress in green transformation and digitalization positively impacted investor expectations and encouraged direct investments,” Demirozu said. “But while investor appetite recovered throughout the year, cautious optimism still remains – ensuring stability in the disinflation process and the continuity of structural reforms are key.”

He added that maintaining investor confidence requires concrete policy steps across all areas through public–private cooperation.

Demirozu highlighted the completion of the 5G tender as a critical step in developing Türkiye’s digital infrastructure.

He said the enactment of the climate law and the establishment of an emissions trading system framework are also expected to support investment flows.

“Regulations to simplify the permitting process for energy investments and the promotion of innovative technologies like hydrogen will boost Türkiye’s capacity to attract investments, as globally, green technologies will be decisive in terms of foreign direct investment,” he added.

Demirozu also highlighted the role of the Coordination Council for the Improvement of Investments (YOIKK) and the Investment Advisory Council (YDK), which held meetings at the global level, providing a platform to strengthen policy dialogue on digital transformation, artificial intelligence (AI), green energy, logistics infrastructure and human resources.

Friend-shoring and near-shoring efforts by the US and the EU are reshaping global supply chains, he added, bringing both opportunities and risks for Türkiye.

Demirozu said reforms such as modernizing the Customs Union, accelerating free trade negotiations with EU partner countries and harmonizing with the Union Customs Code could improve competitiveness, but warned that the EU’s “Buy European” push creates uncertainties in some sectors.

“The possibility of Türkiye’s exclusion from the regulation on green transformation of vehicle fleets is a significant risk,” he said, noting that YASED continues to discuss the issue with relevant parties.

EU retains status as biggest investor in Türkiye

Demirozu said around 58% of the foreign direct investment in Türkiye between 2003 and 2024 came from EU member states. Between January to October 2025, the bloc’s share increased to 65%.

The EU was followed by Central Asia with 14% of the share, non-EU European countries with 7%, the Americas and the Middle East, he said.

“Central Asia’s share increased largely due to a major investment from Kazakhstan, rather than a broader regional shift,” Demirozu said. “Overall, the EU remains dominant, although some investments recorded as originating from the Netherlands are, in fact, American in origin.”