American Capital in Turkey’s Economy

9 m.   |  2020-05-18

A ccording to the experts, until the early 2000s, Germany and Great Britain were among the major countries investing in Turkish economy. Over the last 20 years, Turkish market has become attractive especially for the Dutch and American companies. At the same time, the geography of investing countries in Turkey has expanded. (Table 1)

According to the Turkish Ministry of Industry and Technology, US direct investment in Turkey between 2002-2020 amounted to $12 bil. (Graphic 1). With this result, the US ranks the second place after the Netherlands, which has invested $25 bil. in the mentioned period.


The amount of direct investment

(2002-2020/January bil. dollars)


25 617


12 110

Great Britain

11 507


10 589


9 916


9 619


9 528


8 805


7 462


6 988

Table 1, source՝ Turkish Ministry of Industry and Technology

The US investment activity in Turkey is due to a number of factors. Although a number of US investment organizations have been operating in Turkey since 1950s, the first intergovernmental agreement for the effective implementation of the investment policy was signed in 1985 (“On Reciprocal Protection of Investment”), which entered into force in 1990. Another agreement on investments was signed in 1999.

Graphic 1, source Turkish Ministry of Industry and Technology

At the same time, new laws were adopted to create a favorable investment environment in Turkey. Taking into account foreign direct investment tendencies, a new law on “Foreign Direct Investment” was adopted in 2003, (the first law on direct investment was adopted in 1954).  At the same time, special investment zones were created (techno parks, organizational industrial zones and free zones) [1], where under the special (preferential) tax regimes, investors are granted with preferential terms for doing a business [2].

It should be noted, that after this legislative initiative, foreign direct investment in Turkish economy increased immediately. For instance, if in 2004, the US direct investment amounted to $36 mil., then in 2007 it was $4212 bil. [3].

Between 2000-2007, American investments were mainly directed at the fields of banking, insurance, transportation and food and in the last decade, it was directed at research and design work, renewable energy, information technologies, service field, health, internet trade and production of industrial products.

American Companies in Turkey

A ccording to the data of 2020, more than 75,000 companies with foreign capital are registered in Turkey, making investment in different fields. It should be noted that based on the objective and subjective reasons, companies belonging to different countries sometimes stop their activities or open the new ones, that’s why their number changes. What refers to the American companies, both large corporations and small and medium-sized businesses make direct investment in Turkey. Some companies entered Turkish market between 1950-1980, and most of them in 2000. There were 1107 such companies in 2011, part of which were $50-200 thous. capital worth companies and the others with a capital of more than 500 thous. US dollars [4]. Currently there are 2035 US-based companies registered in Turkey. Our data based on the 100 most famous American companies working in Turkey allow us to say that their investment is related to healthcare (Pfizer, Johnson & Johnson, Boston Scientific, Bristol Myers Squibb), legal and marketing services (Baker & McKenzie, Iron Mountain, Nielsen), industrial (General Electric, Honeywell, 3М, Alp Aviation, A. Schulman), information technology (IBM, Uber, Microsoft, Verifone, Brightstar), banking and insurance (Citibank, Dubai Starr Sigorta), production of consumer goods (Coca Cola, Cargill, Philip Morris, Colgate Palmolive), oil and gas and renewable energy (Aladdin Middle East, Zorlu Energy-First Solar), car manufacturing and transport (Aladdin Middle East, Zorlu Energy-First Solar), food and beverages (McDonald’s, Papa John's), hotels (Hilton Worldwide, Marriott), construction (Johnson Controls, Miyamoto International), logistics services (BDP International, CEVA, Logistics UPS) and education (ELS Educational Services, Istanbul Bilgi University Laureate). Let’s refer to the activities of some of them.

Among the American organizations operating in Turkey, the “General Electric”

transnational company occupies a special place and entered the Turkish market in 1948. It mainly invests in the fields of energy and aviation construction as well as in healthcare and transport in the last decade. In 1985, General Electric created “TUSAŞ Engine Industries” (TEI) high tech enterprise designed to produce aircraft engines, 49% shares of which belonged to General Electric and the rest to the Turkish Government. Currently, 46% shares belong to General Electric, 50% shares to Turkish Aerospace Industries Inc. and 3% shares to Turkish Airlines [5].

In 2000, General Electric established Marmara Technology Center in TUBİTAK (Turkish Scientific and Technological Research Council) Technology Park with a 100% stake, which is designed for the aviation technology projects’ development. Based on the agreement signed in 1985, it is in partnership relations with Turkish Aerospace Industries Inc., the Turkish Armed Forces Development Foundation and the Turkish Airlines. In 2010, a new cooperation agreement was signed between General Electric and the above-mentioned companies which will act until 2035.

Totally, General Electric has 6 subsidiaries in Turkey [6].

American “3M” chemical company has been operating in Turkey since 1987. It created industrial production base in Cherkezky, in 2000 and in the European Free Zones of Chorlu (Super Hub, invested about $500 mil.), where they mainly produce hygiene and care, personal protective means, car’s spare parts, and medical supplies.

In 2013, 3M was included in the list of 400 largest exporting companies in Turkey. Most of the products are exported to the countries of Middle East, North Africa, Western Europe, New Zealand and Australia. In addition, it has invested in the fields of research and innovation, the main aim of which is to promote the further development of the organization. For that purpose, it established Customer Innovation Center in Turkey in 2015 [7].

It should be noted, that Turkey has a wide range of investment promotion packages, which is specifically designed for research development and innovation (including tax benefits), as well as financially supports attracting investment in research and development in the country. 

For instance, in 2013, the American DuPont company established “DuPont Turkey” Innovation Center in Istanbul. Moreover, Huawei, Pfizer, Bosch, Siemens, Microsoft, Ford transnational organizations also joined the initiative in Turkey. The work of the center is aimed at training highly qualified specialists working in the fields of machine building, food industry, chemical, pharmaceutical and energy field, project development and development of Turkey’s engineering capabilities. In addition, the center provides advice to its customers in the field of innovation in order to solve the challenges of the industrial sector [8].

Turkey’s healthcare sector is of great interest to American investors, where 28 American organizations work. One of the world’s largest pharmaceutical  “Pfizer” started to operate in Turkey since 1957 and conducted more than 143 clinical trials contributing more than $20 mil. During this period, 3000 Turkish doctors participated in training programs provided by Pfizer. Pfizer has implemented a number of projects to improve Turkey's research and experimental environment. For that purpose, the company signed a memorandum of understanding with the Turkish Investment Support and Promotion Agency (TYDTA) under the Prime Minister of the Republic of Turkey in 2009, according to which the company should support the development of research in Turkey, as well as create an environment, which would promote pharmaceutical innovations. This led to the launch of Pfizer R&D office in Ankara’s Hacettepe Technopolis, which has implemented many programs aimed at promoting pharmaceuticals. Pfizer has united the researchers at the Hacettepe University with its global R&D network [9].

In 2012, Pfizer founded the third largest pharmaceutical company in the world for the production of pneumococcal and conjugated meningococcal vaccines in Turkey (the other two are in the United States and Ireland). Moreover, the vaccine is included in the national vaccine calendar of the Turkish Ministry of Health. For the last decade, more than 8 mil. Turkish lira was invested in social responsibility programs of educational and health significance, which are related to disease awareness, healthy lifestyle and so on. [10] Thus we can state, that between 2004-2015, the direct investment of American companies in Turkish economy increased significantly and only in the last 3 years there has been a certain downward, which is first of all due to the crisis in US-Turkish relations.


[2] Масумова Н.Р. Турция в международном движении капитала // Мировое и национальное хозяйство. №3 (22), 2012.

[3] Uluslararası Doğrudan Yatırım İstatistikleri

[4] Amerika Birleşik Devletleri Ülke raporu, Mart 2012



[7] 3M looks to keep contributing to competitiveness of Turkish firms through R&D, innovation3M’s Success Story In Turkey



[10] The Pharmaceutical Industry in Turkey, Investment Support and Promotion Agency of Turkey