The foreigner's handbook for business success in Türkiye

Attracting a wide array of entrepreneurs, investors, and manufacturers, Türkiye boasts a vibrant economic environment, a key geographical location bridging Europe and Asia, and many opportunities. This strategic position opens pathways to both global and regional marketplaces across various industries, including energy, construction, tourism, automotive, technology, and many more.

Türkiye offers expansive growth possibilities in numerous sectors, thereby broadening the horizons for investors. It provides a fertile environment for startup initiatives and stands as a promising investment destination. This is particularly relevant for individuals aiming to kickstart their businesses in Türkiye, thanks to the country's effective logistical capabilities and robust technological framework.

The journey of setting up a business in Türkiye goes beyond financial gain, incorporating a deep dive into the intricate mosaic of Turkish culture and society. This proposition not only promises economic success but also enriches investors with a wider perspective and cultural treasures.

Positioned as a prominent figure on the international investment stage, Türkiye presents unique investment opportunities and invites investors on an enriching adventure filled with a spectrum of possibilities.

1. First steps

Building a successful business in Türkiye begins with a carefully laid legal foundation. Registering your company for tax purposes and securing its place in the trade registry ensures official recognition and allows for seamless operations. Understanding the specific permits and licenses required by your industry is really important for staying compliant within your field.

Every business requires careful financial planning. Determine the necessary start-up capital based on your business structure, and then explore a mix of funding options. Bank loans, venture capital investments, or targeted government programs can provide the financial boost you need to launch and grow.

Strategic success hinges on in-depth market research. Uncover your ideal customers – their desires, their pain points – and let this knowledge shape your marketing and products or services. Nurturing positive customer relationships through outstanding service and support cultivates long-term brand loyalty.

Building a company means building a skilled and dedicated team. Attracting top talent and ensuring full compliance with Türkiye's labor regulations sets you up for smooth and ethical operations.

2. Embracing digital transformation

Türkiye's rapid digital transformation provides a dynamic environment for foreign businesses seeking to establish and expand operations within the country. To capitalize on this opportunity, companies must strategically adopt digital technologies and understand the technological advancements shaping the Turkish business environment.

Türkiye's digital ecosystem and technological advancements

Türkiye's commitment to cultivating technological innovation is evident in government initiatives and significant investments in digital infrastructure. This has led to the emergence of technology hubs, particularly in İstanbul, which attract a skilled workforce and promote a culture of innovation.

Sectors experiencing notable digital acceleration include:

• E-commerce: With its young, digitally-connected population, Türkiye's e-commerce market offers significant growth potential for businesses targeting online consumers.
• Fintech: Türkiye houses a thriving fintech sector, where startups and established players alike drive the development of disruptive financial technologies and services.
• Software development: The country possesses a strong talent pool of software developers, bolstering its position as a competitive destination for technology development and outsourcing.

Digital tools for business operations and marketing

Integrating digital tools is a cornerstone of success for foreign companies in Türkiye:

• Marketing: Recognizing Türkiye's high internet usage and the prevalence of social media platforms, digital marketing strategies are critical. Platforms such as Google Ads, LinkedIn, and regionally focused options provide avenues for targeted outreach to Turkish consumers.
• Operations: Invest in digital solutions that streamline internal processes and enhance efficiency. Cloud-based technologies offer adaptability, while business process management software and customer relationship management (CRM) systems improve workflows and customer experience.

Ensuring cybersecurity and data privacy compliance

In parallel with digital adoption, safeguarding sensitive business and customer information is imperative. Foreign companies must ensure compliance with Turkish data protection regulations, such as the Personal Data Protection Law (KVKK), which mirrors international frameworks like the EU's GDPR.

Implementing robust cybersecurity measures is essential for upholding trust. Organizations like Türkiye's Personal Data Protection Authority provide resources on regulatory requirements.

3. How to accept payments online in Türkiye?

Understanding how Turkish consumers prefer to pay is key to a smooth and successful online business presence. Let's explore the most popular options:

Credit and debit cards: The familiar favorites

Credit and debit cards remain the top choice for Turkish online shoppers. While debit cards are more common overall, credit cards dominate online purchases. Visa and Mastercard rule the market, though keep an eye on Troy, a Turkish card scheme with growing popularity.

Why do you need to accept credit card payments online?

• Credit cards are how many modern consumers prefer to pay. Not accepting them means potentially missing out on a massive chunk of the market.
• Customers love the speed and ease of paying with a card. Offer this convenience, and you'll likely see a boost in sales.
• Being able to process credit card payments signals to customers that you're a legitimate, established business.
• Funds from credit card transactions settle quickly, improving your cash flow and helping your business run smoothly.
• Credit cards are universal. Accepting them opens up your business to international customers who may not have access to other payment methods.

Cash: Still a key player

Even in the digital age, cash holds strong in Türkiye. It's crucial to consider options like cash-on-delivery, especially with a significant portion of the population being unbanked.

Bank transfers: Secure and streamlined

Direct bank transfers provide a reliable and familiar method for both customers and businesses. They're a great solution for those who may not use credit or debit cards, offering swift transactions and reduced risk for merchants.

Digital wallets: Convenience on the rise

Turkish consumers are embracing the ease of digital wallets for online purchases and money transfers.

QR codes: The future is scannable

QR codes are poised to become even more widespread for payments in Türkiye. They're easy to use – a simple scan with a mobile banking app – and promote a move away from cash. Be prepared to offer this option for both in-store and person-to-person transactions.

The best payment strategy will be tailored to your specific business and target customers. Consider offering a combination of these options to maximize convenience and reach the broadest possible customer base in the Turkish market.

4. How to accept credit card payments online?

If you're entering the Turkish market from abroad, take the time to understand Türkiye's foreign investment laws, including your specific rights and responsibilities. Becoming familiar with the cultural nuances of Turkish business will streamline negotiations and help you form strong, mutually beneficial relationships within the market.

Turkish Revenue Administration clearly explains that Türkiye has two primary taxes within its direct taxation system: income tax and corporate tax. Individuals pay income tax on their income and earnings, while companies pay corporate tax on their profits. The Personal Income Tax Law (1960) outlines the rules for individuals, and the Corporate Income Tax Law (1949) does the same for companies. While these laws are separate, there are areas where they overlap, particularly when it comes to what counts as income and how to calculate net income.

Getting a grip on local laws is crucial for keeping payments running smoothly and staying on the right side of regulations.

That's where İnnova’s PayFlex eTransformation solutions come in handy. The PayFlex suite offers a plethora of cutting-edge solutions designed to streamline payment and collection workflows with unparalleled security, facilitate compliance-driven digital transformation. Endorsed by the Ministry of Treasury and Finance as a special integrator, these solutions empower businesses across all sectors and sizes to operate with greater efficiency, precision, and ease:

• PayFlex e-Invoice: Streamlines your business's transition to electronic invoicing, eliminating the need for extra investments or technical hires thanks to Innova's expert support. Offers seamless integration with ERP systems, 24/7 operation, automatic reporting to the Revenue Administration, and eliminates the need for separate invoice archiving.
• PayFlex e-Archive: Allows businesses to send user-friendly PDF invoices with digital signatures and seals directly to customers. Provides a convenient alternative to paper invoices, making it easy for customers to open and view their invoices.
• PayFlex e-Delivery Note: Digitizes traditional paper delivery notes, ensuring compliance with Turkish Revenue Administration (GiB) standards. Helps businesses move away from paper processes and streamline their operations within the financial sector.
• PayFlex e-Ledger: Helps companies quickly implement a Ministry of Finance-compliant e-ledger system, with Innova's experts streamlining the entire integration process. Prepares financial files (Journal Ledger, Journal Ledger Warrant, General Ledger, and General Ledger Warrant) according to Revenue Administration standards.
• PayFlex e-Ticket: Designed for the transportation sector, enabling land and sea transport companies to transition to a compliant electronic ticketing system. Provides an end-to-end solution for companies operating in passenger transport, ensuring legal adherence to Türkiye's e-ticket regulations.
• PayFlex e-Reconciliation: Digitizes and simplifies accounting reconciliation processes, replacing traditional phone or fax methods. Helps businesses streamline their financial operations and comply with legal requirements for reconciliation processes.
• PayFlex e-Producer Receipt: Tailored for agriculture and livestock businesses, helping them create, send, and report producer receipts to the Revenue Administration in compliance with legal mandates. Eliminates the need for physical archiving, reduces waste, and minimizes the errors associated with traditional receipt methods.

5. Cultural sensitivity and communication

Success in Turkish business environments relies heavily on cultivating cultural awareness and adapting communication styles accordingly. Foreign businesses that demonstrate respect for local customs and encourage effective cross-cultural communication will gain a significant edge in establishing relationships and achieving objectives.

Türkiye's cultural nuances and etiquette

Türkiye's business culture reflects a fascinating blend woven with Eastern traditions and Western influences.

Turkish professionals prioritize building personal rapport before delving into business matters. Prioritize face-to-face interactions, and invest time in getting to know your partners beyond their professional titles.

Expressions of hospitality are deeply ingrained; expect offers of tea or coffee. Show respect towards hierarchy and seniority; addressing colleagues by titles and last names is customary.

Turkish business culture may operate on a more flexible timeline compared to strictly time-bound Western approaches. Patience and adaptability are crucial.

Effective communication strategies for cross-cultural collaboration

Navigating communication effectively is essential. Even basic Turkish greetings and phrases demonstrate effort and goodwill. Consider professional interpreters for important meetings if language fluency is a barrier.

Strive for clarity in both written and verbal communication. Be mindful of potential differences in context and interpretation compared to your own culture. Pay attention to body language and gestures, as they can convey important information. Understanding Turkish non-verbal communication can enhance understanding and avoid misinterpretation.

6. Market dynamics

Foreign companies seeking to establish a foothold in Türkiye need to have a firm grasp of the country's complex and evolving market dynamics.

Türkiye's economic scene and key sectors for investment

Türkiye presents a resilient economy with a wide range of opportunities for foreign investment. It's crucial to have an up-to-date understanding of the country's macroeconomic indicators like GDP growth, inflation rates, and currency trends.

Beyond these factors, particular sectors offer significant promise, including manufacturing (a traditional strength of the Turkish economy), automotive (where Türkiye is a major production hub), tourism (with its potential for renewed growth), energy (with investments in both renewable and traditional sources), and technology (with a developing startup scene).

7. Strategies for market entry and expansion in Türkiye

Foreign businesses can explore different paths for entering and growing within the Turkish market.

• Consider different market entry modes like direct investment, joint ventures, distributorships, or strategic alliances, weighing the level of control and resources each option entails.
• Forming partnerships with trusted local entities can greatly simplify the entry process and provide essential on-the-ground market knowledge.
• Adopting a long-term focus on expansion is key, as navigating the Turkish market often requires patience and a mindset of continuous adaptation.