Türkiye and Japan used their third bilateral investment forum in Tokyo on November 6 to advance a more ambitious proposition than simply increasing two-way trade: combining Japanese technology and capital with Türkiye’s manufacturing base, regional commercial networks and access to European markets. The strategy has credible industrial foundations, but converting forum discussions into investments will depend on unresolved trade negotiations, careful use of Türkiye’s revised incentive system and investors’ ability to manage inflation, customs rules and regulatory change.
Tokyo Forum Shifts the Focus to Regional Investment
The Third Türkiye-Japan Investment Forum brought together about 200 representatives from companies, public institutions and international organizations at United Nations University, according to Anadolu Agency. It was organized by the Presidency of the Republic of Türkiye Investment and Finance Office, the Japan External Trade Organization and the UN Industrial Development Organization.
The forum was also supported by Türkiye’s embassy in Tokyo, Japan’s Ministry of Economy, Trade and Industry, the Japan Business Federation and the Japan Institute for Overseas Investment. That institutional breadth matters. Japanese companies generally approach unfamiliar markets through extended technical, regulatory and partner due diligence, making sustained government and industry engagement more important than a single promotional event.
Bekir Polat, vice president of Türkiye’s Investment and Finance Office, framed Türkiye as an 86 million-person domestic market and a platform for reaching more than one billion consumers through its customs union with the European Union and network of free trade agreements. Turkish Ambassador Oğuzhan Ertuğrul identified economic security, cooperation in third countries and energy as three priority areas.
The central message was that Japanese companies should assess Türkiye not only as an end market but as a production, research and logistics base serving Europe, the Middle East, North Africa, Central Asia and the Caucasus.
Evidence presented by UNIDO suggested that the concept has generated interest. UNIDO Tokyo adviser Kosuke Kuroda said 11 of the 12 Japanese companies participating in a Türkiye business mission had connected with potential partners, 10 had identified concrete project opportunities and six were seeking alliances for expansion into third countries. These figures indicate a developing project pipeline, although neither UNIDO nor the forum organizers announced investment commitments or transaction values.
The 2026 meeting was the third forum in a series launched during the centenary of Türkiye-Japan diplomatic relations in 2024. It followed an investment forum in Tokyo in November 2025 and the 28th Türkiye-Japan Business Council meeting, organized by Türkiye’s Foreign Economic Relations Board and Keidanren in Istanbul in October 2025. The continuity suggests that both governments are trying to move the relationship from diplomatic goodwill toward repeatable corporate cooperation.
Investment Is Rising From a Modest Base
Türkiye’s Foreign Ministry reports that 278 Japanese-invested companies and 13 Japanese liaison offices were operating in the country as of 2025. Japanese direct investment in Türkiye totaled approximately $3.6 billion between 2002 and 2025.
Annual flows remain relatively small compared with Türkiye’s total foreign investment, but the direction has improved. JETRO, citing Central Bank of the Republic of Türkiye data, said Japanese direct investment in Türkiye increased 142 percent to $133 million in 2025, from $55 million in 2024. Turkish investment in Japan rose from $1 million to $12 million.
For comparison, Türkiye’s Investment and Finance Office said the country attracted $13.1 billion of FDI in 2025, 12.2 percent more than in 2024. Excluding real estate, inflows reached $10.7 billion, the highest level in a decade, according to Treasury and Finance Minister Mehmet Şimşek. Wholesale and retail trade accounted for 32 percent of inflows, manufacturing for 31 percent and information and communications for 14 percent.
Japan therefore supplied only a small share of Türkiye’s annual FDI, despite its large economy and long history of financing Turkish infrastructure. The Japan International Cooperation Agency has supported projects including the Marmaray rail tunnel, the Second Bosphorus Bridge and major hydroelectric facilities.
Recent corporate activity provides a stronger indication of where the relationship may be heading. JETRO reported that Hitachi Energy announced an investment of about $70 million in 2025 to expand Turkish transformer capacity by 70 percent. The planned low-carbon plant is expected to reduce operational carbon dioxide emissions by approximately 95 percent. In February 2026, the Japan Bank for International Cooperation agreed to provide an $18 million loan for the relocation and expansion of Hitachi Energy Turkey’s transformer factory.
Honda announced a Turkish motorcycle plant in August 2025 and began production in April 2026, according to JETRO. Nissin Foods disclosed plans to re-enter Türkiye through local instant-noodle manufacturing and sales, while Fujifilm Business Innovation acquired Turkish technology company ETG Global Information Technology Services in February 2026.
Not every development points toward greater Japanese ownership. GS Yuasa agreed to sell its 60 percent interest in İnci GS Yuasa to İnci Holding, shifting toward outsourced production. Arçelik also sold its interest in a reorganized appliance venture involving Hitachi Global Life Solutions. The mixed picture underscores that Türkiye can support greenfield investment, acquisitions, joint ventures and regional distribution, but business models still require periodic restructuring as costs and strategy change.
Trade Imbalances Strengthen the Case for Local Production
Bilateral trade remains substantially tilted toward Japan. Turkish Foreign Ministry data put total goods trade at $5.73 billion in 2025, with Türkiye exporting $701 million and importing $5.03 billion.
JETRO’s figures, based on Japanese customs data and a different statistical methodology, show Japanese exports to Türkiye of $3.45 billion and imports from Türkiye of $1.04 billion in 2025. While the totals differ because of valuation and reporting conventions, both datasets show a large Japanese surplus.
Japan primarily sells transport equipment, machinery and electrical products to Türkiye. JETRO said Japanese automobile exports to the country increased 24.7 percent to $657 million in 2025, while exports of automotive parts declined 35 percent to $185 million. Türkiye’s main exports to Japan include food, textiles, apparel, machinery and transport equipment. Japanese food imports from Türkiye rose 9.5 percent to $408 million, supported by growing trade in fish and cereal products.
For Japanese manufacturers, localized production could reduce exposure to import restrictions, shipping costs and currency movements while allowing products to be adapted for surrounding markets. It could also help narrow the bilateral imbalance by creating Turkish output that is exported to Europe or third countries.
Japan’s Ministry of Economy, Trade and Industry nevertheless emphasized that bilateral statistics do not capture the full relationship. At the forum, official Yuka Akamatsu noted that Japanese components may be processed in Türkiye and subsequently exported elsewhere. This value-chain activity is economically significant even when it is recorded as Japanese exports to Türkiye rather than bilateral investment or Turkish exports to Japan.
Companies evaluating such a model need product-level customs analysis. The EU-Türkiye Customs Union provides free circulation for many industrial goods, but it does not cover all agricultural products, coal or steel under the same framework. Origin, processing and documentation requirements also determine whether a product assembled with Japanese inputs receives preferential treatment.
The European Commission’s July 2026 decision to establish mutual recognition between EU and Turkish Authorized Economic Operator programs may eventually reduce controls for trusted traders once the required information exchanges are operational. Yet prospective investors should not assume that manufacturing in Türkiye automatically resolves every EU market-access question.
An Economic Partnership Agreement Remains the Missing Link
Türkiye and Japan began negotiating an Economic Partnership Agreement in 2014, but the talks remain unfinished. At the Tokyo forum, Hirofumi Miyake, a senior official at Japan’s Ministry of Economy, Trade and Industry, said Tokyo would continue working for an agreement that benefits both sides. Akamatsu acknowledged that political will exists but said expectations still need to be reconciled in certain areas.
The issue has received support at the highest level. During their September 22, 2026 meeting in New York, Japanese Prime Minister Sanae Takaichi and Turkish President Recep Tayyip Erdoğan backed an early conclusion of the agreement, according to Japan’s Prime Minister’s Office.
Until an agreement takes effect, Japanese exporters remain more exposed than suppliers from countries covered by Türkiye’s customs union or free trade agreements. JETRO noted that Türkiye tightened rules for e-commerce and personal imports in August 2025 and introduced additional duties on finished vehicles the following month. Japanese goods can be affected by such measures where no preferential agreement applies.
An economic partnership could improve tariff treatment, services access and investment certainty, depending on its final scope. It would not eliminate the need for sectoral licensing, technical conformity, tax planning or competition review. Investors should therefore treat the prospective agreement as a potential improvement to project economics, not as a substitute for regulatory due diligence.
Incentives Meet Macroeconomic and European Risks
Türkiye overhauled its investment incentive framework through Presidential Decree No. 9903 in May 2025. The system now includes technology, local development, strategic, priority, regional and project-based incentives.
According to the Investment and Finance Office’s incentive guide, eligible projects can receive combinations of VAT and customs-duty exemptions, corporate tax reductions, social-security support, land allocation, financing support and assistance for qualified personnel. The HIT-30 program targets more than 30 investment fields across mobility, semiconductors, green energy, advanced manufacturing, digital technologies, communications, aerospace and health technologies.
These priorities overlap closely with Japanese capabilities. Transformers, industrial automation, mobility systems, batteries, disaster monitoring, advanced materials and energy-efficient production all fit the emerging bilateral agenda. However, benefits depend on the investment’s technology classification, location, scale, imported machinery and implementation timetable. An incentive certificate generally has to be structured before qualifying expenditures are made.
The macroeconomic environment also requires conservative planning. The International Monetary Fund’s July 2026 country data projected Turkish real GDP growth of 2.9 percent and average consumer-price inflation of 28.6 percent for the year. High inflation creates challenges for payroll budgeting, construction contracts, working capital and transfer pricing, even when revenue growth is strong.
European industrial policy adds another uncertainty. The EU’s evolving “Made in Europe” approach could affect the treatment of goods manufactured in Türkiye for subsidized procurement or strategic-industry support. At the forum, Japanese officials specifically raised its possible impact on Japanese-owned Turkish factories. Investors will need to distinguish ordinary customs-union access from eligibility for EU public support, local-content preferences and future carbon-related requirements.
What This Means for Foreign Investors
The Tokyo forum strengthens the case for Japanese investment in Türkiye, particularly where Japanese technology can be combined with Turkish production capacity and regional execution. It does not, by itself, remove the operational risks between a memorandum of understanding and a functioning factory, distribution business or third-country joint venture.
A market-entry assessment should first identify whether Türkiye is principally a sales market, production base, research location or regional headquarters. That choice determines the appropriate incorporation and corporate structure, whether a wholly owned subsidiary, joint venture, acquisition, liaison office or distributor arrangement is suitable.
Investment-incentive work must then be integrated with site selection and financing before equipment orders and construction commitments are finalized. Legal and tax compliance should cover licensing, employment, transfer pricing, data rules, environmental obligations and customs classification. Import-export facilitation is particularly important when Japanese components will enter Türkiye for processing and subsequent shipment to the EU or other markets.
Government relations and regulatory liaison can help investors follow the changing incentive framework, the Japan-Türkiye economic partnership negotiations and EU-origin rules. Expo and trade-fair representation can provide an early method of testing demand and screening distributors before permanent entry. Once an investment decision is made, on-the-ground project management becomes critical for coordinating permits, contractors, incentive milestones, machinery imports and production launch.
These are the practical service areas in which an FDI adviser such as fdiconsultancy.com can support implementation. The opportunity highlighted in Tokyo is real, but its value will be determined less by the forum’s attendance than by whether companies can translate complementary Japanese and Turkish capabilities into compliant, exportable and financially resilient operations.