Türkiye: Clarity of Opportunity in a World of Uncertainty

I have been investing in Türkiye for more than two decades. In that time, I have watched the country absorb a currency crisis, a global financial shock, a sovereign credit downgrade, a coup attempt, a pandemic, and one of the most destructive earthquakes in its recorded history. After each of these, the conversation in international capital markets followed a predictable script: Türkiye is too volatile, too unpredictable, too difficult. And after each of these, the investors who held conviction through the turbulence did materially better than those who retreated to the consensus.

I am not arguing that Türkiye is without risk. Every serious investor here understands the structural complexities — the currency dynamics, the political environment, the institutional unpredictability that periodically surfaces. What I am arguing is that these risks are consistently overpriced by international capital relative to the structural opportunity they obscure. And I am arguing that the current moment represents a convergence of macro conditions, policy direction, and legislative action that makes the opportunity unusually clear to see.

The global backdrop against which this argument unfolds is not benign. Elevated interest rates across major economies, persistent geopolitical friction, and the ongoing restructuring of global supply chains have made capital allocation more complex than at any point in the past two decades. In this environment, investors are not simply looking for growth — they are looking for growth that is structurally grounded, in economies with real productive capacity and credible institutional frameworks. That is precisely the lens through which Türkiye deserves to be examined.

In the past two years, Türkiye has undergone a monetary policy correction of genuine scale. From a policy rate of 8.5 percent in May 2023, the Central Bank moved to 50 percent by March 2024 — an adjustment that eliminated the deeply negative real rates that had distorted Turkish capital markets for most of the preceding decade. This was not a cosmetic change. It was a structural commitment to orthodox macroeconomics that, whatever the turbulence of execution, signals a fundamentally different relationship between the state and price discovery.

What has followed is equally significant. The Turkish Grand National Assembly has been presented with a 15-article legislative package specifically designed to attract foreign direct investment — a package that, enacted into law on 21 May 2026, represents one of the most substantive structural incentive frameworks Türkiye has offered in a generation.

The provisions are worth examining directly, because they are not the kind of generic fiscal gestures that sophisticated investors have learned to discount. Individuals who establish tax residency in Türkiye after at least three years of non-residency would see their foreign-sourced income exempt from income tax for twenty years. Personnel working in qualified service centres — and in particular those operating within the Istanbul Finance Centre — would benefit from income tax exemptions on salaries up to six times the minimum wage, with the President empowered to raise that ceiling further. Companies operating within the IFC framework would see their corporate profit tax deduction rate rise from 50 percent to 100 percent. Those outside the IFC perimeter would receive a 95 percent deduction.

On the production and export side, the standard 25 percent corporate tax rate would be reduced to 12.5 percent for manufacturers exporting what they produce — a 12.5-point differential that is not a minor adjustment. And in a provision clearly calibrated to capture the significant pool of Turkish private capital currently held offshore, individuals and entities that repatriate foreign currency, gold, equities, bonds, and other securities to Türkiye by 31 July 2027 would be exempt from tax investigation and assessment on the amounts declared — provided the assets are brought in within two months of notification.

What I can say with certainty is that the direction of travel is no longer a legislative signal — it is enacted law. Türkiye has now put in place the institutional and fiscal architecture to compete for globally mobile capital and globally mobile talent. That is a different country from the one that many international investors have filed away under 'too complex.'

Türkiye's geographic position is not a recent discovery. Over the past eighty years — through the Cold War, through successive cycles of regional conflict and global capital reallocation — every major international investor that entered this market with a structural rather than tactical orientation found returns commensurate with that patience. Geography does not change. What changes is how legible it becomes at particular moments in history.

The current moment is unusually legible. In March 2026, Larry Fink — Chairman and CEO of BlackRock, the world's largest asset manager — travelled to Istanbul for a private meeting with President Erdoğan at Dolmabahçe Palace. The meeting included Treasury and Finance Minister Mehmet Şimşek and Energy Minister Alparslan Bayraktar. It was not a courtesy call. When the chief executive of the institution whose assets under management exceed the GDP of many big economies chooses Istanbul as the venue, and structures the conversation around long-term investment strategy with the two ministers most directly responsible for Türkiye's economic and energy trajectory, that is a market signal of a specific kind — the kind that does not require interpretation.

Türkiye sits at the intersection of Europe, the Gulf, and Central Asia — the only large economy in that triangle with a credible domestic manufacturing base, a deep banking system, and a capital market of genuine institutional scale. For decades, that positioning was an interesting footnote. In the current environment of global supply chain restructuring and Gulf sovereign wealth capital actively seeking productive deployment outside its home region, it has become a primary investment consideration.

The Istanbul Finance Centre, now operational, is the institutional expression of this geographic logic. It is designed to make Istanbul a genuine hub for the intermediation of capital flows between these three economic zones — not merely a domestic financial centre, but a regional clearing point for cross-border investment. The legislation, now enacted, is designed in significant part to accelerate the human capital dimension of that ambition: attracting the portfolio managers, analysts, compliance professionals, and technologists without whom a financial centre is infrastructure without operators.

From Tera Holding's perspective, this trajectory matters because it validates the investment logic we have been building around since 2005. We have maintained consistent exposure to Turkish capital markets, asset management, banking, and fintech precisely because we believed the structural development of Türkiye's financial infrastructure was a long, durable opportunity. A legislative package that explicitly incentivises the institutionalisation of that infrastructure — lower tax rates for IFC participants, income exemptions for qualified service centre personnel, repatriation amnesties for offshore Turkish capital — does not change our thesis. It confirms it.

Tera Holding is not a conglomerate in the traditional sense — a collection of unrelated businesses assembled for diversification. Our portfolio reflects a deliberate thesis about where structural value accumulates in a modernising economy: at the intersection of industrial capability, financial infrastructure, and technological capacity.

In cybersecurity and defence technology, we have built a position through Barikat Cyber Security because we believe that the demand for sovereign digital security capability — independent of foreign vendors, domestically engineered — is a structural growth story in Türkiye and across the region. In agriculture, our stake in Sampo Rosenlew, a formerly Finnish and now 100% Turkish agricultural machinery manufacturer, reflects a view that Türkiye's position as one of Europe's largest agricultural producers is significantly underserved by modern technology. These are not financial bets on near-term earnings. They are positions in industries where the long-term value creation is a function of demographic and structural factors that do not reverse.

In asset management, Tera Portföy operates a broad range of regulated fund structures. Our most recent launch — TN1, Tera First Project REIF — is a qualified investor real estate fund structured around a project completion model with embedded insurance, designed to align the interests of institutional capital, developers, and end purchasers in a market where trust asymmetries have historically suppressed institutional participation. It is the kind of structure that only becomes viable when the regulatory framework is mature enough to support it. That maturity is something we have watched develop, slowly and then with increasing speed, over the past decade.

Further out, Tera Girişim Sermayesi — our venture capital vehicle — is advancing toward a public listing, targeted for 2027. Its investment focus reflects a deliberate reading of where technological disruption will intersect with Türkiye's existing industrial and demographic strengths: agentic artificial intelligence, sentiment analysis infrastructure, blockchain applications, biotech, and robotics. Türkiye produces technical talent at a scale that its capital markets have not yet learned to value efficiently. That gap is an investment opportunity.

I want to address directly something that I believe is underweighted in most international analyses of Türkiye: the significance of Gulf sovereign capital as a structural rather than tactical factor.

Over the past three years, sovereign wealth capital from the Gulf — from Saudi Arabia, from the UAE, from Qatar — has shifted its allocation behaviour in ways that are not merely quantitative but qualitative. These institutions are no longer primarily seeking yield in developed fixed income or passive exposure to global equity indices. They are seeking productive deployment in economies with genuine industrial capacity, large domestic consumer markets, and credible institutional frameworks. Türkiye meets all three criteria in ways that are not universally available in the emerging market universe.

The repatriation provisions in the current legislative package are, I think, an underappreciated signal in this context. The estimate of Turkish private capital held offshore — across currencies, gold, equities, and bonds — runs into the hundreds of billions of dollars. Capital accumulates offshore for a range of reasons — portfolio diversification, tax efficiency, and access to international markets — and a framework that removes the friction of return without retrospective penalty is structurally calibrated to that reality. A credible amnesty framework, one that provides genuine legal protection against tax investigation on declared amounts, has the potential to bring a meaningful portion of that capital back into the formal Turkish financial system. The combination of repatriated domestic capital and Gulf sovereign inflows, operating through an IFC with proper institutional infrastructure, would materially change the depth and liquidity of Turkish capital markets. That is the kind of structural shift that creates durable investment opportunities across asset classes.

I am aware that none of this is guaranteed. Legislation can be amended or delayed. Policy commitments can be reversed. Geopolitical environments can shift. These are real risks, and I hold them seriously. What I am arguing is that the direction of movement is clear, that the structural fundamentals are real, and that the window in which international investors can access this opportunity at current pricing is finite. Markets do not wait for consensus to form before they reprice.

I want to be precise about what I mean when I describe our investment approach as conviction-driven. Conviction is not optimism. Optimism is the belief that things will probably work out. Conviction is the willingness to hold a position when the evidence is incomplete, when the consensus disagrees, and when the short-term picture is uncomfortable — because your analysis of the structural factors is disciplined enough to distinguish between cyclical noise and directional signal.

In Türkiye, the directional signal has been consistent for twenty years, even when the cyclical noise has been deafening. A large, young, educated population. An industrial base with demonstrated export competitiveness. A financial system with genuine institutional depth. A geographic position that becomes more valuable as global trade routes reorganise. And now, for the first time in a generation, a legislative trajectory that is explicitly designed to translate those structural advantages into investable incentives.

That is not a call to ignore the risks. It is a call to price them correctly. And for the investors who do, I believe the next decade in Türkiye will look, in retrospect, like one of the clearer opportunities that the current period of global capital reallocation produced.