Foreign Direct Investment in Turkey is undertaken in this study. First, FDI investment law and advantages of investing in Turkey will be explained. Second, FDI Permits in 2002 by Industry, Country of Origin and Region will be covered. Then FDI inflow into Turkey and some reasons of decreased inflow, Turkey`s performance in attracting FDI will be explained. In conclusion, following question will be answered; .
• How does Turkey perform well in FDI?.
• What should Turkey do for increasing FDI?.
• How will FDI help Turkish economy? .
FDI Law in Turkey .
The first law regarding foreign direct investment dates back to 1954. During this period, with the formation of rapid development strategies and international economic cooperation, the Foreign Investment Law No: 6224 was enacted. Due to the structure of the economy at that time, foreign investment entries were limited. Turkey was a relatively closed market to foreign companies until 1980. Since 1980`s the Turkish government has followed liberalized, outward oriented, economic policies. There were rapid changes in the economic and social structure of Turkey. Deregulation of interest rates, establishment of organized markets for money, foreign exchange, stocks and securities, liberalization of capital movements, reforms in the banking sectors etc., were just some of the changes. Following these measures, protectionist economic policies were abandoned and a comprehensive economic stabilization and liberalization reform was implemented. The three major objectives of this new reform were;.
• Minimizing state intervention,.
• Establishing a free market economy, .
• Integrating the economy with the global economic system. .
One of the major policy decisions was the adoption of liberal and flexible foreign investment policy. As a result of the changes in Foreign Investment Law, the investment climate was made more efficient and suitable for potential investors.