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BUSINESS > Istanbul loses its foreign investment lure in 2012

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Foreigns have invested in İstanbul 17.5 percent less than last year while the number of businesses has fallen 2 percent according to the study where the Iranian investments stand out with huge rise

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Foreign investment amount in Istanbul falls a 17.5 percent in 2012, after the huge hike in 2011, the ITO figures say.

Foreign investment amount in Istanbul falls a 17.5 percent in 2012, after the huge hike in 2011, the ITO figures say.

The number of Iranian businesses launched in Istanbul dramatically jumped in 2012, a year that foreign capital into the city fell 17.5 percent from a year earlier, according to a study released by the Istanbul Chamber of Commerce (İTO).

“The value of foreign investments in Turkey declined in 2012, which was a cooling-off year for the Turkish economy,” the chairman of İTO, Murat Yalçıntaş, has said.

At the same time, the total number of foreign investors decreased by 2 percent to 4,539 investors who have established companies amounting to around a total of 1.5 billion Turkish liras. The number was down from 4,639 foreign investors who invested roughly 1.8 million liras in Istanbul in 2010. Last year, the increase of foreign investment in Istanbul had skyrocketed with a 110.77 percent rise from 2010.

Despite the fall of figures compared to 2011, Yalçıntaş said last year’s foreign investment inflow to Istanbul still marks the second highest amount of investment in seven years. “Continuing risks in global economies spur foreign investors to invest in Turkey as a powerful economy. The partial contraction in our economy, which has been growing rapidly since 2008, also caused a regress of foreign investments last year. Despite that, the capital value is still above most of the previous years’ figures.”

Soaring Iranian investments

Among the foreign investors in Istanbul, Iranians posted an impressive spurt with a nearly 30 percent increase in the number of investors in addition to increases of inflow capital value of around 8 percent.

Over the course of 2012, 1,335 Iranian investors set up businesses in Istanbul, amounting to roughly 125 million liras of investment.

While the highest number of businesses have been launched by Iranians, they had to be content with third place in terms of value of investment. The 39 Lebanese businesses established last year in Turkey took the top seat by far in terms of foreign investment amount with around 534 million liras, while investors from Luxemburg had set up 30 businesses worth 235 billion liras, ranking them second.

Germany is the fourth country that invested the most in Istanbul in 2012, with 394 investors and 65 million liras in capital.

In 2012, the sector that attracted the most foreign investment was the banking and insurance sector.

February/04/2013

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mara mcglothin

2/8/2013 5:02:19 PM

ERIC More products would be available if they could be supplied properly. The US market is vast and even your biggest suppliers of bathing suits couldn't handle the market some years ago, and Turkish companies rarely are able to produce what they promise. Once burned, twice shy as we say. I still believe there are lots of Turkish items available.

Eric Martin

2/7/2013 11:20:02 PM

No Mara there are only a few. I read the official US import numbers from Turkey. Jeans and textiles are doing ok but they are flattening too.

mara mcglothin

2/7/2013 4:31:39 PM

ERIC What on earth are you talking about? There are plenty of Turkish products sold in the USA. Of course there is always the handmade items, like rugs, and brass and copper as well as jewelry of every variety, BUT there are finally websites where you can order your wonderful cheese that comes directly to your door. And I don't even live in a major city in the USA. I am sure that in LA or NYC more things are available. I even have a friend who sell Mavi jeans.

Eric Martin

2/4/2013 11:40:31 PM

This is natural. Turkish still needs to push exports to new markets like the USA and aid domestic companies to create new products. In the USA there are zero turkish products sold here.

ebby m

2/4/2013 7:09:20 PM

@john Smith Iranian investments are not in technology, mainly in carpets and restaurants or real estate.

mara mcglothin

2/4/2013 5:12:27 PM

VARGEN Everything you said, plue: the fact of the matter is that in Turkey there is no rule of law like everyone professes. Contracts were made to be broken and are often "updated" and "revised" without the knowledge of both parties. You can't even rent a space in a mall with your rental amount set it stone etc. The leases are in euros while the tenant makes lira and it is an every changing thing, not a legal instrument as you would find in most other parts of the business world.

John Smith

2/4/2013 12:45:20 PM

Iranian investment is very welcome. A great nation moving forward against a relentless onslaught from the terrorist state of Isreal and it's sponsors.

sam stevens

2/4/2013 11:09:43 AM

Another error ! 1]534 million liras = Lebanon 2]Luxemburg 235 billion liras, ranking them second ? 3]125 million liras = Iran 4] Germany 65 million liras

Faruk Beisser

2/4/2013 9:58:26 AM

Ah yes, the vultures are coming en masse in order to profit when Turkey is finally a second Iran!

Vargen Vargen

2/4/2013 8:08:19 AM

Of course it will cool off. Everybody can see that AKP wants to turn the country towards the Middle East. Investors do not want to put money in such countries. And now the latest issue by Erdogan, to leave EU (and automatically Nato) to join Russia and Kazakstan and China? Who would like to put their investments in a bank run by Borat?
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