Turkey Trade and Foreign Investment

By | July 24, 2022


  • Business Relationships
  • Foreign direct investment
  • FTAs ​​and Treaties
  • Development Cooperation
  • Prospective fields of study (MOP)

Business relations

Trade relations with the EU

Turkey was the EU’s 6th largest trading partner in 2021 (behind China, USA, Great Britain, Switzerland and Russia). The EU 27 still remains Turkey’s most important market (35.9% of total foreign trade). About 41.3% of Turkish exports (+33% compared to 2019) go to the EU. From the point of view of imports to Turkey, trade with the EU was realized in 2021 with a value of approx. EUR 80 billion (+16% compared to 2020). From the point of view of the EU, the balance of mutual trade has reached negative values ​​after last year’s record increase in Turkish exports. The total volume of EU-TR trade was EUR 157.2 billion, Turkey thus has a share of 3.6% of total EU trade. The largest item of mutual trade between EU countries and Turkey is automobiles and their parts, textiles, machine tools and equipment.

2017 2018 2019 2020 2021
Exports from the EU (million EUR) 76,656.70 69,187.90 68,260.20 70,142.20 79,238.70
Imports into the EU (million EUR) 61,398.00 66,888.40 69,811.90 62,441.00 77,983.10
Balance with the EU (million EUR) -15,258.7 -2,299.5 1,551.7 -7,701.2 -1,255.6

Source: European Commission

Trade relations with the Czech Republic

In 2021, mutual trade increased by 10.7% (CZK 10billion). This was mainly caused by the growth of Turkish exports to the Czech Republic by 32.1%, our exports, on the other hand, increased by only 5.1% in USD terms. The result is a negative foreign trade balance of USD billion. A similar trend continues in the first months of 2022 – the volume of mutual trade is growing slightly, mainly thanks to continued Turkish exports to the Czech Republic. In the total volume of exports outside the EU, from the Czech point of view, Turkey is in 6th place outside the EU (behind the United Kingdom, USA, RF, Switzerland and China) and also belongs to the group of our 20th largest markets overall.

2017 2018 2019 2020 2021
Exports from the Czech Republic (billion CZK) 36.4 47.7 44.2 53.8 ON
Imports to the Czech Republic (billion CZK) 53 37.4 38.4 37.7 ON
Balance with the Czech Republic (billion CZK) 17 -10.4 -5.8 -16.2 ON

Source: businesscarriers.com

Trade relations with countries outside the EU

As for Turkish exports outside the EU, the most important markets for Ankara are the USA (2nd largest market after Germany, 6.5% of all exports), Great Britain (3rd largest market, 6.1% of exports) and Iraq (5th largest market, 4.9% of exports). In terms of imports, the position of China (largest import to TR, 11.9% of the market), Russia (2nd largest importer, 10.7% of the market) and the USA (4th largest importer with 4.8% of the market) is crucial. From the point of view of TR exports, the most important articles are carpets (especially to the USA), automotive, jewelry and fruit. The most frequently imported items then include energy in the case of Russia, communication technology and IT products from China, or products related to the aviation industry from the USA.

2017 2018 2019 2020 2021
Exports from countries outside the EU (million EUR) 56,787.3 73,544.6 77,485.0 66,416.0 102,362.6
Imports to countries outside the EU (million EUR) 137 331.7 122,701.6 102,486.8 115,663.2 143,594.4
Balance with non-EU countries (million EUR) -80,544.4 -49,157.0 -25,001.8 -49,247.2 -41,231.8

Source: EIU, Eurostat

Foreign direct investment

ČEZ, which has been operating in Turkey since 2008 with the Turkish company Akkok (joint venture, ČEZ and the Dinckok family) in production – Akenerji (water, wind and steam-gas, a total of approx. 1250 MW), distribution (Sedas) and sales (Sepas) is the largest Czech investor in Turkey. Akenerji is the second largest private producer of electricity in Turkey with more than 10% market share and production of about 2% of the total electricity produced in the country. In addition to this largest Czech investment, the activities of the 100% owned subsidiaries Škoda Praha and UJV Řež are positively known in Turkey. According to the group, the total investments of the ČEZ Group in Turkey reach over USD 2 billion.

Another important Czech investor in the energy industry is the EnergoPro company, which at the end of 2020 completed the Alparslan 2 project, which became the largest privately owned hydroelectric plant in Turkey with a capacity of 280 MW. The most recently completed project (April 2021) is the USD 360 million Karakurt hydroelectric power plant (HEPP) project (95 MW) in Kars province. The volume of investments implemented or planned until 2023 reaches approximately USD 1 billion and, in addition to hydropower plants, also includes a generator and turbine factory in Ankara, which was inaugurated in 2019. The company’s presence in Turkey began with the acquisition of five hydropower plants (Hamzali with a capacity of 1MW near the city of Kirikkale near Ankara, Aralik with a capacity of 1MW in the north-east of Turkey and the Resadiye 1 cascade – 2MW, Resadiye 2 – 2MW and Resadiye 3 – 16 MW near the city of Sivas, or Tokat in the north of Turkey) with a total output of approx. 95 MW,

Other important activities of Czech companies are connected with the transport industry and construction. In 2020, the PPF Group through Škoda Transportation completed the purchase of half of the shares of the Adana-based Turkish bus manufacturer TEMSA. With a production capacity of approximately 10,000 vehicles per year, TEMSA is Turkey’s largest bus producer and also the first company in TR with its own R&D center for bus development. It employs 1,300 workers. Since 2015, Metrostav has also been active in TR through its joint venture Metrostav Ankar Insaat. The two largest contracts of this JV won in 2017 (the M7 Mahmutbey – Kabataş metro depot in Istanbul and the Ašiyan – Hisarustu underground cable car are still nearing completion – both worth around CZK 1 billion).

FTAs and treaties

Treaties with the EU

On December 31, 1995, the agreement on the creation of the Customs Union between Turkey and the European Community entered into force. Turkey has been trying to modernize it for a long time. In addition to a functioning customs union, Turkey has signed a free trade agreement with the European Free Trade Association (EFTA).

Contracts with the Czech Republic

Economic and trade relations between Czechoslovakia and Turkey have a long tradition with roots dating back to the period just after the First World War. The first Trade Convention was signed on May 31, 1922 on the principle of the most-favoured-nation clause. The last preferential agreement on a bilateral basis, the free trade agreement, was signed in 1997. Its validity ended with the entry of the Czech Republic into the European Union. Since then, the basic document governing trade between the Czech Republic and Turkey has been the Agreement on the Customs Union of Turkey with the EU.

The following documents relevant to the economic field are also valid:

Joint declaration on the establishment of the Joint Economic and Trade Committee (JETCO) between the Czech Ministry of Industry and Trade and the Turkish Ministry of Trade

Agreement on economic, technical, industrial and scientific cooperation,

Agreement on International Road Transport;

Agreement on cooperation in the field of tourism;

Air Transport Agreement;

Agreement between the Ministry of Defense of the Czech Republic and the General Staff of Turkey on mutual cooperation in the military field;

Agreement between the government of the Czech Republic and the government of the Republic of Turkey on industrial cooperation in the field of defense;

Agreement on the prevention of double taxation and the prevention of tax evasion in the field of income taxes;

Agricultural Cooperation Agreement;

Agreement on Cooperation and Mutual Assistance in Customs Matters;

Agreement on cooperation in the field of culture, education, science, youth and sports;

Interdepartmental memorandum on strategic partnership for energy cooperation;

Agreement on Mutual Protection and Promotion of Investments.

Developmental cooperation

Turkey is an important provider of development aid on a global scale, the allocated funds within the budget have long exceeded the UN target bar (0.7% of GDP), and this level is also steadily increasing – from 0.85 in 2017 to 0.92 in 2020 ( in absolute terms USD 8.96 billion for 2020 – more recent data not yet available). The coordinating body at the government level is the Turkish Coordination and Cooperation Agency (TIKA) under the Ministry of Culture and Tourism, with an annual budget of approximately 100 million USD. In 2020, TIKA implemented around 4,000 projects in a total of 150 countries, of which it has permanent representation in 59 countries.

It mainly focuses on financing projects in the areas of health and hygiene, provision of drinking water and wastewater treatment, agriculture, forestry and pastoralism, information systems, education and apprenticeships, protection of monuments, etc. The territorial priorities of TR development aid remain equatorial Africa and the states of Central Asia, there is also a focus on Muslim minorities in European and some African and Asian states (Macedonia, Ukraine, Ethiopia, Myanmar, Thailand), as well as on the Gaza Strip and communities of Palestinian origin. In the last decade, however, TIKA’s involvement in Latin America has also increased

Prospective fields of study (MOP)


The ICT sector in Turkey has grown at an average annual rate of 17% in the last 5 years and is around 30 billion dollars in the last three years. This was also helped by approximately 70,000 employees working in R&D centers and technology parks generously supported by the government. The priority of digitization is mentioned in all basic government strategies, starting with the new economic plan and the development plan. Digitization of SME’s, development of AI and support of the game industry remain priorities.

Defense sector

Turkey, with the second largest army in NATO, regularly allocates around 3% of GDP to defense spending, making it one of the largest national defense markets in NATO; the emphasis on development and production self-sufficiency then led to the development of the sector both in terms of volume and quality. However, the TR environment requires external partners to be willing to cooperate with local large entities. The defense industry is under strong, centralized and effective state control, with the Presidency of the Defense Industry (SSB) playing a central role in the management, development and business policy of the sector. The defense market requires a strong local representative, which most successful foreign companies have. From the point of view of strategic projects interesting for foreign subcontractors, it is possible to draw attention to, for example, the Gokbey and ATAK helicopters, the national project of the TFX fighter or the light subsonic fighter HURJET.


Turkey has long been in the top 10 of the world’s largest agricultural producers. However, the potential is untapped, the country is struggling with low production efficiency – a sector employing almost 18% of the working population (approx. 5 million people) and producing approx. 6% of the local GDP. In addition to digitization and other technological solutions leading to more efficient production, it is possible to look for opportunities for foreign suppliers in vaccination substances and general needs for pets.

Railway industry

Although Turkey has the 6th longest network of high-speed railways in Europe, it lags far behind in the area of ​​urban rail transport. As the country with the most million cities in Europe (23), the young and dynamically developing population has major problems with overcrowding and traffic in urban areas. Most cities therefore include the construction of new metro lines or the start of metro construction in general in their strategic plans. On the agenda in most cities are also discussions about the introduction of tram transport, which is more of a rarity than the rule in the country.


In the field of engineering technology, Turkey remains in the red, despite a significant increase in its exports. Foreign machinists find employment here, especially in the field of precision machine tools and milling. The use of these products/materials is then varied across sectors – from defense to the railway to the shipbuilding industry. The system of investment incentives currently does not discriminate in any way against Turkish manufacturing companies buying foreign machines, which instills an orientation towards quality and enables the further operation of Czech entities.

Turkey Trade