Türkiye’s new 2027-2029 Medium-Term Program marks a shift from macroeconomic stabilization toward a more interventionist industrial strategy, with Ankara preparing new incentives for domestic production, high-value exports, regional manufacturing and supply-security projects. For foreign investors, the message is clear: Türkiye still wants international capital, but increasingly on terms tied to localization, technology transfer, energy efficiency, export performance and compliance with a more complex incentive regime.
A Roadmap Built Around Production, Not Consumption
According to Anadolu Agency, the new Medium-Term Program covering 2027-2029 will focus on “critical products and technologies,” targeted industrial policies, project-based funding and public procurement measures intended to support domestic production. The program also expands the role of the High-Tech Investment Program, known as HIT-30, which Türkiye has positioned as a mechanism for large-scale projects in priority technology sectors.
The significance is not merely budgetary. Ankara is trying to redirect investment toward sectors that can reduce import dependence and lift export sophistication. The program refers to investment-commitment credit mechanisms, state aid for critical components, support for smaller but high-quality manufacturing investments, and regional projects under the local development initiative. It also includes agricultural investments that convert byproducts into value-added goods, a sign that industrial policy is being linked to rural supply chains as well as urban manufacturing clusters.
For investors, this changes the market-entry question. A foreign company looking at Türkiye is no longer only comparing labor costs, logistics access and domestic demand. It must also ask whether its project fits the state’s priority matrix: high technology, import substitution, export capability, energy efficiency, job creation, R&D content and regional development. That is where market entry strategy, incentives mapping, incorporation planning and government relations become part of the same decision process.
The Macro Bet Behind the Incentives
The new industrial push sits inside a difficult macroeconomic setting. Vice President Cevdet Yılmaz said, according to Anadolu Agency, that Türkiye expects growth of 3.3 percent in 2026, rising to 4.2 percent in 2027, 4.6 percent in 2028 and 5 percent in 2029. The government projects nominal GDP of $2.2 trillion by 2029, per-capita income of about $25,000 and combined goods and services exports of $450 billion.
The inflation path is more challenging. Yılmaz said the government expects inflation of 28.4 percent at the end of 2026, falling to 21 percent in 2027, 13.5 percent in 2028 and 9 percent in 2029. The Central Bank of the Republic of Türkiye reported annual CPI inflation of 31.51 percent in August 2026, down only slightly from 31.75 percent in July, according to CBRT data.
That means the incentives program is being launched while financing remains expensive and price visibility remains imperfect. In remarks published by the Bank for International Settlements, the central bank said it cut the policy rate to 37 percent in January 2026 but maintained a tight stance afterward because of war-related and geopolitical pressures on inflation. The bank also said money-market rates were being kept near 40 percent through liquidity management.
This matters for foreign direct investment because incentives may improve project economics, but they do not eliminate financing, foreign-exchange, wage and input-cost risks. A manufacturer considering Türkiye needs a model that tests lira volatility, imported machinery costs, domestic credit conditions, tax incentives, customs exemptions and export revenues together. Legal and tax compliance also becomes more important when state aid is tied to measurable commitments such as employment, energy efficiency and export volume.
FDI Is Recovering, But Quality Is the New Priority
Türkiye’s pitch is helped by improving foreign investment numbers. The Presidency’s Investment Office reported that Türkiye attracted $13.1 billion in FDI in 2025, up 12.2 percent year on year, based on central bank balance-of-payments data. The office said the Netherlands was the largest source country, followed by Luxembourg and Kazakhstan, while wholesale and retail trade accounted for 32 percent of inflows, manufacturing 31 percent and information and communication 14 percent.
Treasury and Finance Minister Mehmet Şimşek said, according to the same Investment Office statement, that FDI excluding real estate reached $10.7 billion in 2025, the highest level in the past decade. That distinction is important. For years, international observers have questioned how much of Türkiye’s headline foreign investment was productive capital rather than property-related inflows. The 2027-2029 roadmap is clearly aimed at raising the share of factory, technology, logistics and export-platform investment.
The global environment remains competitive. UNCTAD said in its World Investment Report 2026 that global FDI rose 6 percent to $1.6 trillion in 2025, but described the recovery as fragile and uneven. Türkiye’s 2025 gain therefore matters, but investors will compare it with incentive-heavy offers from Central Europe, the Gulf, North Africa and Southeast Asia.
Ankara’s answer is to combine geography, customs links, industrial capacity and selective subsidies. Türkiye offers proximity to the EU, the Middle East, North Africa and Central Asia, plus a substantial manufacturing base in automotive, white goods, machinery, chemicals, textiles, defense and food processing. But the new incentive architecture means foreign entrants must navigate eligibility rules, application windows, project scoring, ministry approvals and post-investment monitoring. Incentives advisory is no longer a late-stage administrative task. It is central to site selection, corporate structuring and project design.
Priority Sectors: High Tech, Inputs, Agriculture And Regional Industry
The practical direction of policy is visible in Türkiye’s revised incentive structure. The Invest in Türkiye incentives guide lists development incentives under the Türkiye Century Initiative, including technology incentives for medium-high and high-tech products, local development incentives tied to city-level priorities, and strategic incentives for R&D-intensive investments that reduce dependency on critical imported products. It also lists project-based incentives under HIT-30, described as tailor-made packages for large strategic projects.
HIT-30 is central to the foreign investor angle. When President Recep Tayyip Erdoğan introduced the program in 2024, the Investment Office said it targeted electric vehicles, battery production, semiconductors and energy technology. The Istanbul Chamber of Commerce later described HIT-30 as a $30 billion high-tech support program through 2030, with support for batteries, electric vehicles, solar cells, wind turbines and R&D centers.
The new MTP appears to broaden that logic. It does not only target flagship mega-projects. It also speaks to smaller, high-quality manufacturing investments and localized projects that address regional needs. That could matter for foreign mid-sized industrial companies that do not meet the scale of a semiconductor fab or battery gigafactory but can localize a component, establish a regional supplier base or build export-oriented production.
Türkiye’s high-tech base is growing, but from a modest share of total manufacturing exports. Anadolu, citing TurkStat data, reported in August 2026 that high-tech manufacturing production exceeded 1 trillion lira in 2025 for the first time and that the number of high-tech manufacturing enterprises rose to 4,070 from 2,892 in 2021. The policy challenge is to convert that production capacity into globally competitive exports and deeper local supply chains.
For foreign companies, this creates openings in machinery, automation, medical devices, electronics, energy equipment, agritech, food processing and industrial software. It also creates obligations. Investors must align import-export planning with customs rules, supplier localization, certification, public procurement eligibility and product standards. Expo and trade-fair representation can also be relevant for companies testing demand, finding distributors or identifying Turkish partners before incorporation.
The Compliance Layer: Carbon, Public Procurement And State Aid
The new investment strategy is also arriving as Türkiye’s trade and regulatory environment becomes more carbon-sensitive. The EU’s Carbon Border Adjustment Mechanism began its financial phase in 2026, affecting carbon-intensive exports such as cement, steel, aluminum, fertilizers and electricity-related products. Türkiye is one of the countries most exposed because of its deep trade relationship with Europe.
In August 2026, ICAP Carbon Action reported that Türkiye published secondary regulations for its national emissions trading system in the Official Gazette, following the Climate Law adopted in July 2025. ICAP later said the pilot phase would run from 2026 through 2027 and cover electricity generation, cement, iron and steel, aluminum and fertilizer, five of the six sectors covered by the EU’s CBAM.
This adds a compliance dimension to the incentive roadmap. If state aid is increasingly tied to energy efficiency and export performance, investors will need credible emissions data, energy management systems, supply-chain traceability and compliance processes that satisfy both Turkish authorities and EU customers. For export-oriented manufacturers, legal and tax compliance now overlaps with environmental reporting and customs strategy.
Public procurement is another area to watch. Anadolu reported that the MTP includes public procurement measures to spur domestic production. That may create opportunities for foreign investors that localize production through a Turkish company, joint venture or acquisition. But it can also create risks if localization thresholds, tender rules or domestic-content expectations are unclear. Foreign groups entering regulated sectors should therefore treat government relations and regulatory liaison as operational necessities rather than occasional outreach.
There is still uncertainty. The broad roadmap is clear, but some implementing details, including application criteria for new credit programs and the practical allocation of project-based support, will depend on further regulations, communiqués and ministry procedures. Investors should not assume automatic access to incentives simply because a sector is politically favored.
What This Means for Foreign Investors
Türkiye’s 2027-2029 roadmap is best read as an invitation to foreign capital that can help the country move up the value chain, not as a general subsidy program for all entrants. The strongest candidates will be projects that combine production, technology transfer, export potential, local supplier development, energy efficiency and measurable employment.
For companies evaluating Türkiye, the first advisory step is market entry analysis: whether the Turkish opportunity is domestic demand, EU-adjacent export production, regional distribution, supplier localization or public-sector procurement. The second is incorporation and corporate structuring, since incentive eligibility, tax treatment, shareholder arrangements and operating licenses can depend on how the Turkish entity is set up.
The third is incentives due diligence. Investors need to identify whether a project fits technology incentives, strategic incentives, local development incentives, sectoral and regional incentives, free-zone incentives or project-based support. That process should be completed before land selection, capex commitments or equipment importation, because timing and documentation can affect eligibility.
The fourth is compliance planning. Türkiye’s inflation environment, evolving carbon rules, customs requirements, labor obligations and tax administration all require disciplined local execution. For manufacturers, import-export facilitation and certification planning can determine whether the project actually reaches export markets on schedule. For large industrial investments, project management on the ground is equally important, from permits and construction coordination to supplier qualification and government liaison.
The opportunity is real, but it is selective. Türkiye is trying to turn macro stabilization into industrial upgrading. Foreign investors that treat the new roadmap as a structured policy framework, rather than a generic incentive announcement, will be better placed to capture the upside while managing the regulatory, financial and operational complexity that comes with it.