Türkiye has taken its newest investment proposition directly to the City of London, presenting a package of tax concessions, service-center incentives and administrative reforms to an audience capable of financing its next phase of industrial development. The pitch is consequential because Ankara is trying to convert Türkiye’s geographic and manufacturing advantages into long-term foreign direct investment at a time when actual inflows are weakening, inflation remains close to 30 percent and global investors are demanding greater regulatory predictability.
From Investment Promotion to an Implementation Agenda
The “Türkiye Century: Powerhouse for Investments” program was presented at a roundtable held at the Turkish ambassador’s residence in London in cooperation with Greymore. More than 50 representatives of institutional investors, investment banks, asset managers, family offices, legal advisers and business organizations attended, according to ByTV’s report on the meeting.
A. Burak Dağlıoğlu, president of Türkiye’s Investment and Finance Office, outlined the program’s incentives and strategic priorities. Ambassador Osman Koray Ertaş emphasized Türkiye’s position within production and trade networks extending from China and India to Europe, as well as the country’s experience operating through regional instability.
The meeting was more focused than a conventional national promotion exercise. Ahmet Yalçın Yalçınkaya, Greymore’s head of strategic growth and a former Turkish Treasury and Finance counsellor in London, framed the central question as how investors can execute projects in Türkiye, rather than simply why they should consider the country. That distinction captures the challenge now facing Ankara. Türkiye’s market size, industrial depth and location are already familiar to international companies, but investment committees still need clarity on taxation, eligibility for incentives, licensing, foreign-exchange exposure and the durability of government policy.
London is a logical venue for that discussion. It combines institutional capital, private equity, infrastructure finance, asset management and professional advisory capacity. It is also an increasingly important platform for Türkiye’s technology companies and exporters. At London Tech Week 2026, Türkiye fielded a delegation of 60 companies, seven technology parks and more than 250 representatives, according to the Investment and Finance Office.
The latest roundtable therefore formed part of sustained investment diplomacy, rather than an isolated event. The harder task begins after investors leave the room, when headline incentives must be translated into bankable structures and operating projects.
What the Powerhouse Package Actually Changes
President Recep Tayyip Erdoğan announced the Powerhouse program in Istanbul on April 24, 2026. A substantial part of the package entered into force through Law No. 7582, published in Official Gazette No. 33270 on June 4, according to the Investment and Finance Office’s account of the legislation.
One of its most significant elements is the Qualified Service Center regime. Eligible Turkish centers providing management, coordination or support services to related companies in at least three countries may deduct 95 percent of qualifying foreign-sourced profits from their corporate tax base. The deduction rises to 100 percent for qualifying centers located in the Istanbul Financial Center or designated industrial zones and can apply for as many as 20 accounting periods, subject to statutory conditions.
This is designed to compete for regional headquarters, procurement functions, engineering support, financial operations and shared-service centers. Türkiye offers a large multilingual labor pool and time-zone access to Europe, the Middle East and Central Asia. The regime could make Istanbul more attractive for multinational groups that currently place such functions in established European or Gulf hubs.
The law also provides a 95 percent corporate tax deduction for eligible transit-trade profits where goods are bought and sold abroad without entering Türkiye. Qualifying companies in the Istanbul Financial Center and designated industrial zones can receive a 100 percent deduction. For international trading houses, the measure creates a potential structure for managing regional commodity or merchandise flows from Türkiye without routing physical cargo through the country.
Another provision offers qualifying individuals who relocate and become Turkish tax residents a 20-year exemption on foreign-sourced income and gains. Separately, the package extends the full corporate tax deduction for qualifying financial-service export income generated in the Istanbul Financial Center through 2047.
For industry, the package introduces a 12.5 percent corporate income tax rate for qualifying companies engaged exclusively in manufacturing or agricultural production, effective from the 2027 tax period. KPMG’s analysis of Law No. 7582 notes that companies applying the new rate cannot also claim the existing five-point reduction on export income.
The word “exclusively” will matter. Groups combining manufacturing, distribution, services and intellectual-property income may need to separate activities or develop defensible profit-allocation methods. Eligibility could also depend on industrial registration, the nature of production and the location of the operating entity. A nominal tax rate should not be treated as an automatic project return.
Large multinational groups must additionally model Türkiye’s 15 percent global minimum tax rules. The Turkish Revenue Administration says Law No. 7524 introduced both a global minimum corporate tax and a 10 percent domestic minimum corporate tax in 2024. For groups within the OECD Pillar Two threshold, an incentive that takes the local effective rate below 15 percent may trigger a top-up tax, depending on the group’s facts and applicable exclusions. Legal and tax compliance analysis is therefore essential before an investor assigns value to the advertised concession.
FDI Data Reveal the Scale of the Challenge
The reforms follow an encouraging 2025 but a weaker 2026. Türkiye attracted $13.1 billion in FDI during 2025, a 12.2 percent annual increase, according to Central Bank data summarized by the Investment and Finance Office. Wholesale and retail trade accounted for 32 percent of inflows, manufacturing for 31 percent and information and communications for 14 percent.
Treasury and Finance Minister Mehmet Şimşek said FDI excluding real estate reached $10.7 billion in 2025, its highest level in a decade. That is strategically more important than property investment because productive equity can expand capacity, employment, exports and technology transfer.
Momentum has since slowed. YASED, the International Investors Association, calculated from Central Bank balance-of-payments data that Türkiye received $6.85 billion in FDI during January to August 2026, 35 percent less than in the corresponding period of 2025. Equity investment amounted to approximately $5.6 billion, while net property investment reached $1.84 billion. Wholesale and retail trade attracted the largest equity amount, followed by information and communications, chemicals, finance and metals.
The headline decline requires some qualification. YASED said the first-half contraction was amplified by a large investment-liquidation entry in June, while gross investment capital fell much less sharply. Nevertheless, the data show why Ankara is intensifying investor outreach. Türkiye’s 2024-2028 FDI Strategy seeks to raise the country’s share of global FDI to 1.5 percent and capture 12 percent of flows into Central and Eastern Europe, the Middle East and North Africa. Achieving those targets will require more greenfield production, technology and regional-service projects, not merely episodic acquisitions or real-estate purchases.
Macroeconomic Stabilization Remains the Deciding Variable
Tax incentives can improve a financial model, but they cannot eliminate macroeconomic risk. Türkiye’s annual consumer inflation stood at 29.73 percent in September 2026, according to TurkStat. Housing and utility costs rose 39.99 percent, while transport prices increased 35.10 percent.
The Central Bank of the Republic of Türkiye kept its one-week repo rate at 37 percent on September 10. It said underlying inflation was decelerating and domestic demand was weak, but warned that elevated energy prices and geopolitical developments posed upside risks. The next monetary policy decision was scheduled for October 22.
For foreign investors, the resulting picture is mixed. Lira depreciation can reduce some foreign-currency labor and operating costs, but inflation can rapidly erode that advantage. High interest rates raise the cost of local financing and working capital. Currency mismatches become particularly dangerous when revenues are predominantly in lira but debt, imported machinery or intermediate goods are denominated in euros or dollars.
The UK government’s current overseas-business-risk assessment identifies Türkiye’s large domestic market, young workforce, manufacturing base and transport infrastructure as strengths. It also reports investor concerns about frequent regulatory changes, short implementation periods and aspects of institutional predictability. These issues explain why government relations and regulatory liaison matter alongside conventional financial due diligence. Investors need ongoing monitoring of implementing regulations, sector licenses, customs measures and tax guidance, not simply an incorporation document and an initial incentive certificate.
The UK Corridor Is Becoming More Strategic
The commercial foundation for deeper investment is already substantial. The UK Department for Business and Trade reported that bilateral trade reached £28.4 billion in the four quarters ending in December 2025, 4.3 percent more than a year earlier. The UK government also says more than 2,500 British-based companies operate in Türkiye.
The relationship could broaden further through negotiations for an enhanced free trade agreement. The existing post-Brexit agreement largely preserves goods trade arrangements but does not provide comprehensive coverage for services, investment or digital commerce. During the fifth negotiating round, held in Ankara from June 15 to 23, 2026, officials discussed telecommunications, digital trade, investment, legal services, procurement, intellectual property and goods-market access. The UK government said 11 chapters had been closed by the end of that round, while acknowledging that gaps remained.
A broader agreement could be particularly important for financial and professional services, technology companies and digitally delivered exports. It could also strengthen legal protections and operating rules for UK investors establishing Turkish subsidiaries or joint ventures.
Until negotiations conclude and the resulting agreement enters into force, businesses must work within current rules. Origin documentation, additional customs duties, product standards and the distinction between UK, EU and third-country content can materially alter landed cost. Import-export facilitation is therefore part of investment design, especially for manufacturers that plan to import components and export finished products through Türkiye’s customs network.
What This Means for Foreign Investors
The Powerhouse program materially improves Türkiye’s proposition for manufacturers, regional service centers, trading companies, financial institutions and internationally mobile professionals. It does not, however, reduce market entry to a single tax-rate comparison.
Investors should begin with a market-entry assessment that tests customer demand, supply-chain geography, workforce availability and currency exposure. Company incorporation and corporate structuring should then be aligned with the precise income streams that may qualify for manufacturing, service-center, transit-trade or Istanbul Financial Center treatment.
Investment-incentive work must establish whether benefits can be combined, how long they apply and whether domestic or global minimum-tax rules reduce their economic value. Legal and tax compliance should cover transfer pricing, related-party services, employment, data, customs and sector-specific licensing. Government relations and regulatory liaison are particularly relevant where permits, industrial-zone status or implementing guidance involve several public authorities.
For companies entering through trade fairs or technology events, expo representation can help test partners and customers before capital is committed. Import-export planning must verify origin, customs and product-conformity requirements, while project management is needed to coordinate land, permits, hiring, suppliers and commissioning on the ground.
An FDI adviser such as fdiconsultancy.com performs these functions at the point where investment promotion meets execution. London has supplied the investor interest. Türkiye’s test is whether clear structuring, consistent regulation and coordinated implementation can convert that interest into factories, regional headquarters, technology operations and durable foreign capital.