Turkey Experiences Net Capital Outflow in Direct Investments, Iranian Firms Lead New Establishments

Turkey recorded a net capital outflow of $0.9 billion in direct investments during the final quarter of 2025. This marks a significant reversal from the $1.5 billion net direct investment inflow observed in the same period of the previous year. Despite this outflow, the number of newly established foreign-partnered companies increased by 5.5% year-on-year, with Iranian-backed ventures leading the count.

According to the TEPAV Direct Investments Bulletin, Turkey attracted $1.8 billion in direct investments in Q4 2025, while Turkish investors made $2.7 billion in direct investments abroad. When real estate transactions are included, the total net capital outflow reached $1.7 billion.

Manufacturing (35.6%) and wholesale and retail trade (20.9%) sectors accounted for 56.5% of foreign direct investments. However, investments in these key sectors saw a decline compared to the previous year. By country, the Netherlands emerged as the largest investor, contributing 17.8% of the total. Other nations, including France, Denmark, Spain, and Luxembourg, increased their investments in Turkey.

Istanbul continued to be the primary hub for foreign-partnered companies, hosting 59.7% of all new establishments. Meanwhile, residential property sales to foreigners decreased by 1.1% to 6,590 units, with Russian citizens purchasing the most homes at 1,129 units. Turkish investors significantly boosted their overseas real estate investments, reaching $2.5 billion, approximately ten times the average of the last five years.