2. GLOBAL FDI INFLOWS
Global foreign direct investment (FDI) flows fell by 13% to $1.3 trillion.
The decline – the third consecutive year’s fall in FDI – was mainly due to large-scale repatriations of accumulated foreign earnings by United States multinational enterprises (MNEs) in the first two quarters of 2018, following tax reforms introduced by that country at the end of 2017.
The fall took place despite an 18% rise in cross-border M&As (from $694 billion in 2017 to $816 billion in 2018).
The value of announced greenfield investment increased 41% in 2018 from their low 2017 levels (from $698 billion to $981 billion).
-13
Amerika’nın yaptığı vergi reformları sonucunda, Amerikalı uluslararası şirketler yatırımlarını ve kazançlarını kendi ülkelerinde devam ettirmek kararı aldılar.
(trillion $)

3. FDI INFLOWS BY
GROUP OF ECONOMIES

4. FDI Inflows By Group of Economies
Half of the top 20 host economies in the world continue to be developing and transition economies.
Inward FDI flows to developed economies fell sharply, by 27%, to $557 billion, the lowest level since Although cross-border M&A deal making remained active, rising by 21% in value, it was not enough to compensate for the negative outward FDI from the US caused by the tax reforms.
FDI flows to developing economies remained stable, rising by 2% to $706 billion, with significant differences among regions; developing Asia and Africa recorded higher FDI inflows in 2018.
FDI flows to transition economies declined by 28%, to $34 billion, the third lowest level since 2005.
Despite the FDI decline, the United States remained the largest recipient of FDI followed by China, Hong Kong (China) and Singapore.

5. FDI Inflows to Developed Economies
FDI flows to developed economies fell sharply, by 27%, to $557 billion.
Cross-border M&As registered an 18% increase to $816 billion, recovering ground after the 22% fall in 2017.
The strong decrease in inflows was in large part due to large-scale repatriations of accumulated foreign earnings by United States multinational enterprises in the first two quarters of 2018, following tax reforms introduced in that country at the end of 2017.
Inflows to Europe halved to less than $200 billion, due to negative inflows in a few large host countries as a result of funds repatriations and to a sizeable drop in the United Kingdom.
Inflows in the United States also declined, by 9% to $252 billion.
-27
Cross-border M&As registered an 18% increase to $816 billion, recovering ground after the 22% fall in 2017.
The increase was driven by large deal sizes, especially in the chemicals industry and the services sector, while the number of deals actually declined.
(billion $)

6. FDI Inflows to Developing and Transition Economies
Flows to developing countries remained stable, rising by 2%. As a result of the increase and the anomalous fall in FDI in developed countries, the share of developing countries in global FDI increased to 54%, a record.
Flows to developing Asia, were up 4%. In a sign of continued dynamism, greenfield project announcements in the region doubled in value, recovering from their 2017 pause.
FDI in Latin America and the Caribbean was 6% lower, failing to maintain momentum after the 2017 increase halted a long slide.
FDI flows to Africa rose by 11% to $46 billion, despite declines in many of the larger recipient countries. The increase was supported by continued resource-seeking inflows, some diversified investments and a recovery in South Africa after several years of low-level inflows.
FDI flows to economies in transition continued their downward trend in 2018, declining by 28% to $34 billion, driven by a 49% drop in flows to the Russian Federation.
Part of the decline was due to re-domiciliation of overseas entities that hold assets in the Russian Federation.
Investor sentiment remained cautious, in part due to geopolitical concerns and sluggish GDP growth.
De-offshoring has been a policy aim of the Russian Government since 2012 (Kheyfets, 2018), to counteract the strategies of some Russian firms to domicile their head office and/or part of their share capital in economies with sizeable corporate services industries, such as Cyprus, Ireland and the Netherlands.
(billion $)

7. FDI INFLOWS BY
REGIONS

8. FDI Inflows By Regions
Developing Asia regained its position as the largest FDI recipient region. The largest three recipients were China, Hong Kong (China) and Singapore, $139 billion, $115.6 billion, $77.6 billion, respectively.
FDI inflows to Africa rose by 11% to $46 billion, despite declines in many of the larger recipient countries. The increase was supported by continued resource-seeking inflows, some diversified investments and a recovery in South Africa after several years of low-level inflows.
FDI in Latin America and the Caribbean was 6% lower, failing to maintain momentum after the 2017 increase halted a long slide. FDI in the region is still 27% lower than during the peak of the commodities boom.
FDI flows to structurally weak and vulnerable economies continued to account for less than 3% of the global total. Flows to the least developed countries recovered from their 2017 fall, back to $24 billion, the average for the decade.

9. FDI INFLOWS TO
TURKEY & TURKEY’S RANK

10. Global FDI Inflows Ranking - I
Country
2017 (Billion $)
2018 (Billion $)
2017 Ranking
2018 Ranking
United States 1
China 2
Hong Kong, China 3
Singapore
77 646 5 4
Netherlands
69 659 7
United Kingdom
64 487 6
Brazil
61 223
Australia
60 438 8
Spain
43 591 17 9
India
42 286 10
Canada
39 625 15 11
France
37 294 13 12
Mexico
31 604
Germany
25 706 14
Italy
24 276 16
Indonesia
21 980 18
Israel
21 803 19
Viet Nam
15 500 21
Korea, Republic of
14 479 20
Russian Federation
13 332
Turkey
12 944 25
Turkey in 2018;
Turkey has become the 21st FDI attracting country in the world
In Developing Economies, Turkey has become the 10th FDI attracting country
In Asia Region, Turkey has become the 8th FDI attracting country
In West Asia Region, Turkey has become the most FDI attracting country

11. Global FDI Inflows Ranking - II
Country
2017
(Billion $)
2018
Value Change (%)
2017 Ranking
2018 Ranking
United States
9.2% 1
China
3.7% 2
Hong Kong, China
4.5% 3
Singapore
77 646
2.5% 5 4
Netherlands
69 659
19.7% 7
United Kingdom
64 487
36.3% 6
Brazil
61 223
9.4%
Australia
60 438
42.9% 8
Spain
43 591
108.4% 17 9
India
42 286
6.0% 10
Canada
39 625
59.6% 15 11
France
37 294
25.1% 13 12
Mexico
31 604
1.5%
Germany
25 706
30.4% 14
Italy
24 276
10.5% 16
Indonesia
21 980
6.8% 18
Israel
21 803
20.0% 19
Viet Nam
15 500
9.9% 21
Korea, Republic of
14 479
19.2% 20
Russian Federation
13 332
48.6%
Turkey
12 944
12.8% 25
FDI flows to the United Kingdom declined by 36% to $64 billion. The impact of the impending Brexit on FDI, however, is still unclear.
Inflows to Spain more than doubled to $44 billion, the highest level since 2008, driven by net M&A sales worth $71 billion. The largest deal was the $23 billion acquisition of Spanish highway operator Albertis by a consortium of Atlantia (Italy), ACS (Spain) and Hochtief (Germany).
Inflows to Canada recovered to $40 billion – a 60% increase from The decline of inflows in 2017 was primarily a result of divestments from oil and gas assets. Only one such divestment, worth $0.7 billion, was recorded in 2018.
In the Russian Federation, FDI inflows declined by more than half to $13 billion. Investor sentiment remained cautious, in part due to geopolitical concerns and sluggish GDP growth.
The EU countries were the largest source of investment, particularly the Netherlands and the United Kingdom.
Inflows into Italy rose by 11 per cent to $24 billion. Historically, Italy has attracted less FDI than other major European economies. In an effort
to boost investment, the Government of Italy signed a memorandum of understanding with China to join the Belt and Road Initiative in March 2019.

12. Global FDI Inflows Ranking – III
This chart shows the ranking and the FDI inflows of the countries Turkey is competing with regionally.
TURKEY
BULGARIA
CZECH REPUBLIC
HUNGARY
POLAND
ROMANIA
RANKING
2018 21 65 29 36 23 38
2017 26 88 33 61 39 42
FDI INFLOWS
($ Million)
12.944
2.059
9.479
6.389
11.476
5.888
11.478
2.608
9.522
3.261
9.179
5.406

13. Global FDI Inflows / Doing Business Comparison
Country
Global FDI
2018 Ranking
Doing Business
United States 1 8
China 2 46
Hong Kong, China 3 4
Singapore
Netherlands 5 36
United Kingdom 6 9
Brazil 7
109
Australia 18
Spain 30
India 10 77
Canada 11 22
France 12 32
Mexico 13 54
Germany 14 24
Italy 15 51
Indonesia 16 73
Israel 17 49
Viet Nam 69
Korea, Republic of 19
Russian Federation 20 31
Turkey 21 43
The results indicate that there is no correlation between Global FDI inflow ranking and Ease of Doing Business ranking of countries.

14. Global FDI Outflows Ranking
Country
2017 (Billion $)
2018 (Billion $)
2017 Ranking
2018 Ranking
Japan 2 1
China 3
France
41 257 9
Hong Kong, China
86 704
85 162 6 4
Germany
91 799
77 076 5
Netherlands
28 026
58 983 14
Canada
79 824
50 455 7
United Kingdom
49 880 8
Korea, Republic of
34 069
38 917 13
Singapore
43 696
37 143 10
Russian Federation
34 153
36 445 12 11
Spain
39 964
31 620
Switzerland
26 928
176
Saudi Arabia
7 280
21 219 28
Italy
25 673
20 576 15
Sweden
22 764
20 028 17 16
Taiwan Province of China
11 552
18 024 21
Thailand
17 064
17 714 18
United Arab Emirates
14 060
15 079 20 19
Country
2017 (Billion $)
2018 (Billion $)
2017 Ranking
2018 Ranking
Ireland
13 272
177 20
India
11 141
11 037 22 21
Finland
320
10 961
172
Indonesia
2 077
8 139 41 23
Belgium
24 201
6 910 16 24
Mexico
4 090
6 858 32 25
Israel
6 153
6 008 30 26
Malaysia
5 638
5 280 31 27
Czech Republic
7 560
5 277 28
Colombia
3 690
5 122 33 29
South Africa
7 366
4 552
Kuwait
9 013
3 751
Australia
3 320
3 635 34
Turkey
2 633
3 608 36
Outward FDI from West Asia reached a historic high of $49 billion in 2018, with MNEs from Saudi Arabia, the United Arab Emirates and Turkey mainly responsible for the increase. FDI from Saudi Arabia almost tripled to $21 billion, mainly in technology, finance and infrastructure activities. Turkish companies are increasingly investing in Africa.
In 2018, MNEs from developed countries reduced their investments abroad by 40% to $558 billion.
Outward investment by MNEs from developing economies declined by 10% to $418 billion.

15. FDI to Turkey was recorded as $13 billion in 2018
Turkey’s Share in the Global FDI
2017 (%)
2018 (%)
Share in the West Asia 40 44
Share in the Developing Asia 2 3
Share in the Developing Economies
Share in the World
0.8 1

16. Turkey and West Asia Region
FDI Inflows to West Asia ($ Billion)
FDI flows to West Asia grew by 3% to $29 billion in 2018, halting an almost continuous 10-year downward trend. Inflows were still only one third of their $85 billion peak in 2008.
The small rise in FDI can be attributed to higher inflows to Turkey and a pickup of investment in Saudi Arabia, which compensated for declines in other countries.

17. Turkey and West Asia Region
DFDS-Shipping and Logistics Company
In 2018, Turkey was the largest recipient, with inflows rising by 13% to $13 billion, despite slower than usual economic growth and uncertainty surrounding the Turkish lira.
Investment from Asian economies increased from 12% to 27% of FDI into Turkey and was instrumental both in driving FDI upwards and in its diversification. The $6.3 billion Star Refinery built by the State Oil Company of the Azerbaijan Republic, one of the largest foreign investments in Turkey, started operating in late The largest M&A deal was the acquisition by DFDS (Denmark) of a 98.8 % interest in UN Ro-Ro, a provider of deep-sea freight transportation services, for $1.2 billion.

18. RECENT POLICY DEVELOPMENTS ISSUES

19. Investment Policy Trends
In 2018, 55 countries and economies introduced 112 policy measures affecting international investment – a decrease of more than 11% over the previous year’s figure.
New investment restrictions or regulations for international investors were mainly based on national security concerns about foreign ownership of critical infrastructure, core technologies, elements of the defense sector, sensitive business assets or residential property.
At the same time, many countries introduced policy measures for liberalizing, promoting or facilitating international investment. Steps toward liberalization were made in various industries, including agriculture, media, logistics, mining, energy, retail trade, finance, transportation, infrastructure and internet business.
In 2018, countries concluded 40 International Investment Agreements (IIAs). During the same period 24 IIA terminations entered into effect.
The economy most active in concluding IIAs in 2018 was Turkey, with eight BITs (with Bosnia and Herzegovina, EFTA, Jordan, Montenegro, Qatar, Serbia, South Korea-2 treaties) followed by the United Arab Emirates with six BITs and Singapore with five treaties (two BITs and three TIPs).
112 policy measures: Thirty-one of these measures related to new restrictions or regulations relevant to FDI, while 65 related to investment liberalization, promotion and facilitation. The remaining 16 were of neutral or indeterminate nature.
In particular, numerous governments blocked M&A deals on the basis of national security concerns, with the aggregate amount of the transactions being approximately $153 billion.
For example, Australia tightened investment screening procedures in the electricity industry and strengthened regulations on the purchase of agricultural land by foreign investors. The Government of Flanders in Belgium established a new screening mechanism to intervene in foreign acquisitions under certain conditions. China set up national security review procedures for the acquisition by foreign investors of domestic enterprises and for the outbound transfer of intellectual property
in the context of exporting technologies. France and Germany extended the scopes of their foreign investment screening systems to several new strategic technology activities. Hungary adopted a new law, introducing a foreign investment screening mechanism related to national security in politically sensitive activities such as defence, dual-use products, cryptography, utilities, the financial industry, electronic communication and public communication systems. Lithuania amended the Law on Enterprises and Facilities of Strategic Importance to National Security, mainly seeking to safeguard national security in certain industries such as military equipment, energy and information technologies. United Kingdom and the United States expanded the conditions or scope of application of their foreign investment review mechanisms related to national security. At the regional level, the European Union (EU) established a framework for FDI screening in April 2019.
Several countries adopted new regulations on ownership of land by foreign investors.
For instance, Canada increased the property transfer tax on residential property transfers to foreign entities. Singapore increased the Additional Buyer’s Stamp Duty applicable to foreigners who acquire residential property. In February 2019, India introduced several restrictive changes in its FDI policy for e-commerce in order to safeguard the interests of domestic offline retailers.
China increased the quota for foreign technical personnel in foreign-invested construction and engineering design enterprises, and relaxed restrictions on recruitment agencies. Thailand introduced a new visa system (Smart Visa) to attract foreign highly skilled talent. Uzbekistan increased its quota for the issuance of work permits for highly qualified foreign specialists.
Poland extended the fiscal incentive schemes previously available only in SEZs to the entire country.
China revised its foreign investment negative list for 11 pilot free trade zones, relaxing or removing restrictions on foreign investment in several industries. India liberalized rules on inward investment in several industries, including single-brand retail trading, airlines and power exchanges.

20. TRENDS IN
FDI FLOWS

21. LATIN AMERICA AND CARIBBEAN
Global FDI Flows and Investments
DEVELOPED COUNTRIES
DEVELOPING ASIA
LATIN AMERICA AND CARIBBEAN
Country
Amount (Billion $)
The Most FDI Attracting Countries (2018) 1
USA
251
China
139
Brazil 61 2
Netherlands 69
Hong Kong, China
115
Mexico 31 3 UK 64
Singapore 77
Argentina 12 4
Australia 60
India 42
Colombia 11 5
Spain 43
Indonesia 21
Chile 7
The Most Investing Countries (2018)
Japan
143
129 6
France
102 85
Germany
Rep. of Korea 38 58 37
Canada 50
Saudi Arabia
Venezuela

22. Share in world FDI inflows Share in world inward FDI stock
Global Trends – Mega Groups & FDI Movements
Mega Groups
2018 FDI Inflows
Share in world FDI inflows
Share of world GDP
Inward FDI Stock
Share in world inward FDI stock
G20
871 Billion $
67%
78%
17,9 Trillion $
56%
APEC
839 Billion $
65%
60%
16,8 Trillion $
52%
Commonwealth
333 Billion $
26%
14%
6,5 Trillion $
20%
USMCA (NAFTA)
323 Billion $
25%
28%
8,8 Trillion $
27%
BRICS
261 Billion $
24%
3,2 Trillion $
10%
ACP
39 Billion $ 3% 2%
760 Billion $
In 2018, G20 and APEC continued to dominate global FDI inflows.

23. Trends- Global FDI Inflows- Greenfield and M&As
Value of Greenfield and M&A Projects
The value of net cross-border M&As rose 18% to $816 billion, recovering ground after the 22% fall in 2017.
The increase was driven by large deal sizes, especially in the chemicals industry and the services sector, while the number of deals declined.
The value of announced greenfield projects rose by 41% to $981 billion. Also here, the average project size was the main driver of the increase, as investment activity measured by the number of projects increased by only 7%.
The gains in value were mostly in extractive and processing industries, and in construction.

24. Trends- Global FDI Inflows- Sectoral Breakdown
The global total value of announced greenfield projects in the primary sector doubled to $41 billion, mostly due to projects in metals mining.
Announced greenfield projects in manufacturing increased by 35% to $466 billion. The processing of natural resources was a big driver of the increased investment in manufacturing.
The global total of announced greenfield projects in services rose by 43% to $473 billion. There were large increases in both construction and power generation.
The value of global net M&As expressed as a percentage of FDI inflows reached 62%, the highest level since 2000.
In developed economies, net M&A sales rose by 21% to $689 billion, 84% of the global total.
In developing and transition economies, net M&A sales remained steady at $127 billion.
In the primary sector, the largest deal was the acquisition of the oil and gas producer Maersk Olie og Gas (Denmark) by Total (France) for $7.4 billion as part of continued restructuring in the sector.
In manufacturing, net M&A sales at the global level remained close to the 2017 level. Deal making in the pharmaceutical industry, which reached $113 billion in 2015, declined for the third successive year to $28 billion. The chemical industry made up for the decline through megadeals, as M&A sales more than doubled to $149 billion. They included the merger of Bayer (Germany) with Monsanto (United States), worth $57 billion, and that of Praxair (United States) with the industrial gases group Linde (Germany), worth $32 billion.
In services, net M&A sales rose by over one third to $469 billion. The main driver was the increase in value of M&As in the financial industry, which almost doubled to $108 billion. Within this industry, M&As involving real estate investment trusts were particularly numerous. Separately, net M&A sales in real estate activities were worth $57 billion in Real estate-related investments thus formed a sizeable part of cross-border M&As in Almost all the deals in real estate investment trusts and three quarters of the deals in real estate targeted assets in developed economies.
Announced greenfield projects in manufacturing increased by 35 per cent to $466 billion. In line with higher investments in extractive industries, the processing of natural resources was a big driver of the increased investment in manufacturing. Projects in coke, petroleum products and nuclear fuel increased six-fold to $86 billlion. A project by Shell Canada, a joint venture of Shell, Petronas, PetroChina, Mitsubishi Corp. and Korea Gas, to build a liquefied natural gas export facility in Canada was the largest project, with planned capital expenditures totalling $30 billion
The global total of announced greenfield projects in services rose by 43 per cent to $473 billion. There were large increases in both construction and power generation. Projects in construction rose by 84 per cent to $113 billion. In 2018, the textile manufacturer Shandong Ruyi Technology (China) announced its project to invest $830 million to establish a textile industrial zone in the Suez Canal Economic Zone in Egypt. Greenfield projects in power generation rose by 23 per cent in 2018, to $110 billion, accounting for almost all projects in utilities. International investment through greenfield FDI is focused predominantly on renewable energy. In 2018, announced capital expenditures in renewable electricity totalled $78 billion and in fossil fuel-based electricity only $27 billion

25. Special Economic Zones
THEME OF
WIR 2019 REPORT:
Special Economic Zones

26. Special Economic Zones- I
Special economic zones (SEZs) – geographically delimited areas within which governments facilitate industrial activity through fiscal and regulatory incentives and infrastructure support – are widely used across most developing and many developed economies.
Although the performance of many zones remains below expectations, failing either to attract significant investment or to generate economic impact beyond their confines, new zones continue to be developed, as governments increasingly compete for internationally mobile industrial activity.
SEZs remain top of mind for industrial and investment policymakers, for several reasons:
Relative ease of implementing business reforms through SEZs
Perceived low cost of establishing SEZs
Increased competitive pressure
Regulatory framework and governance
Policymakers face not only the traditional challenges of making SEZs succeed, including the need for adequate strategic focus, regulatory and governance models, and investment promotion tools, but also new challenges brought about by the sustainable development imperative, the new industrial revolution and changing patterns of international production.

27. Special Economic Zones- II – Developed Economies
SEZs are found in about 70% of developed countries. Almost all the zones are customs-free zones, and their economic significance as a share of the overall economy in which they are located is relatively limited, except possibly in the United States.
The general thrust of economic policy in developed countries is to create a level playing field across the economy, rather than setting up privileged areas. The main rationale for establishing SEZs in developed economies is to reduce the distortionary effects of tariffs and regulatory “costs” associated with importing.

28. Special Economic Zones- III – Developing Economies
Asia is host to three quarters of all SEZs in the world. Thirty-five economies in the region have SEZ programs.
In Turkey, technology development zones (TDZs) are areas designed to support R&D activities and attract investments in high-tech fields.
There are 83 TDZs, 20 of which are under construction.
Incentives include;
exemption of corporate income tax on profits for software development, R&D and design activities;
exemption from value added tax on the sale of software produced in TDZs;
exemption from income tax for employees engaging in R&D, design and support activities.
Exemption from customs duties on imported goods and subsidies on social security premiums are also offered.

29. Special Economic Zones- IV – Transition Economies
Transition economies began adopting SEZ regimes in the 1990s.
The pace of newly established SEZs accelerated from the second half of the 2000s onwards, especially over the 2015–2019 period, due to the creation of Territories of Advanced Development in the Russian Federation, as a response to the global crisis.
With the exception of Ukraine, 5 all the transition economies now have some form of SEZ. The Russian Federation, which accounts for over 70% of the region’s GDP, hosts more than half of the 237 zones in the region.
SEZs in the region vary significantly by size, numbers of tenants, industry focus and governance models (public versus private involvement). Export-oriented zones tend to attract mostly foreign firms, whereas zones geared towards regional development, such as those in the Russian Federation, host mostly domestic firms.

30. PROSPECTS

31. Overall Prospects Assessment
Global investment is expected to see a modest recovery of 10% in 2019, to almost $1.5 trillion. The main factor driving up expectations is the likely rebound from anomalously low levels of FDI in developed countries in Following the subsiding of repatriations of foreign earnings of United States multinationals in the second half of 2018, developed-country inflows are likely to revert to prior levels, implying a significant jump in some countries that normally receive sizeable inflows.
FDI flows to Europe region are expected to increase by 60%.
FDI inflows to developing economies are expected to increase by 5%.
FDI inflows to developing Asia are cautiously optimistic, especially in South-East Asia and South Asia, with flows rising lightly (by 5%) thanks to a favorable economic outlook and improving investment climate.
FDI inflows to transition economies flows are likely to see a recovery in 2019, reaching $50 billion.
FDI inflows to Africa is likely to increase by 15%, in view of an expected acceleration of economic growth and advances in regional integration.
Prospects for FDI in Latin America and the Caribbean are expected to remain relatively stable, with a projected decline of about 5%, while in transition economies flows are likely to see a recovery in 2019, reaching $50 billion.

32. YASED INTERNATIONAL INVESTMENTS PRESENTATION
2018 YEAR-END & 2019 MONTHLY FDI DATA OF TURKEY

33. INVESTMENT ENVIRONMENT IN TURKEY & IN THE WORLD
Turkey’s Share in the Global FDI
2017 (%)
2018*
(%)
Share in the West Asia 40 44
Share in the Developing Asia 2 3
Share in the Developing Economies
Share in the World
0.8 1 32

34. Distribution of FDI Inflows to Turkey
FDI INFLOWS TO TURKEY IN 2018
Distribution of FDI Inflows to Turkey
The total FDI inflow in 2018 ($13.1 billion) is consisted of $6 billion net capital, $1.1 billion other capital net and $5.9 billion real estate purchased by non-residents.
Real estate purchased by non-residents had an important share of 45% in the total inflows. Inflows to real estate purchases ($5.9 billion) increased by 27% compared to 2017.
The total FDI in 2018 was increased by 13% compared to previous year.
(Million $)
2013
2014
2015
2016
2017
2018
Capital (Net)
9.936
8.371
11.729
6.904
5.532
6.064
Inflow
10.523
8.632
12.093
7.534
7.401
6.534
Outflow
587
261
364
621
1.869
470
Other Capital (Net)
578
645
3.389
3.156
1.371
1.184
Real Estate (Net)*
3.049
4.321
4.156
3.890
4.643
5.915
Total (FDI)
13.563
13.337
19.274
13.950
11.546
13.163
-1.6%
44%
-27%
-17%
13% 33

35. SECTORAL DISTRIBUTION OF FDI INFLOWS IN 2018
($ million)
2013
2014
2015
2016
2017
2018
Agriculture 47 61 31 38 29
44 
Industry
 5.390
4.258
5.784
3.067
2.022
2.865 
Manufacturing
2.843
2.742
4.237
2.240
1.202
1.999
Food, Beverages, and Tobacco Products
475
451
983
706
198
504
Other non-Metallic Mineral Products Manufacturing
158
112 24 64
330
Chemicals and Chemical Products Manufacturing
272
491
340
288
142
321
Coke Coal and Refined Petroleum Products
236
101
1.809
164
Computer, Electronics and Optical Products Manufacturing
607
926
242
157
149
Electricity, Gas and Steam
1.794
1.131
1.338
677
371
679
Services
5.086
4.313
6.278
4.420
5.350
 3.625
Wholesale and Retail Trade
379
1.137
599
688
1.077
1.116
Finance and Insurance
3.415
1.470
3.516
1.766
1.464
1.041
Banks
1.608
912
2.775
1.323
756
Activities of Holdings
229
226
438
167
Other Financial Activities 40
133
185 42 34 80
Insurance Activities
1.538
199
117
128 5
Transportation and Storage
364
594
1.524
635
1.333
490
Accommodation and Food and Beverages Activities 59 11
250 82
238
Real Estate Purchases by Non- Residents (Net)
3.049
4.321
4.156
3.890
4.643
5.915
TOTAL
13.563
13.337
19.274
13.950
11.546
13.163 34

36. Distribution of FDI Inflows by Countries and Regions in 2018
DISTRIBUTION OF FDI INFLOWS BY COUNTRIES & REGIONS
Distribution of FDI Inflows by Countries and Regions in 2018
Countries
FDI Inflow (million $)
Share
(%) 1
Netherlands
833 13 2
Azerbaijan
516
7.9 3
Italy
509
7.8 4
Austria
465
7.1 5
USA
446
6.8 6 UK
409
6.2 7
Germany
349
5.3 8
Luxembourg
329 9
France
293
4.5 10
Taiwan
246
3.7
Other
2.139
32.7
Total (Capital Inflow)
6.534
100
As of 2018 year-end, the main FDI sourcing countries to Turkey are the Netherlands, Azerbaijan and Italy, respectively. In regard to the distribution of FDI inflows at regional level; European countries are the main source of the FDI inflows by 65%. It was followed by Asian countries with a share of 27%, America 7.4% and Africa 0.6%. 35

37. MERGER & ACQUISITIONS (M&A) 2018
Source: Deloitte Annual Turkish M&A Review Report 2018
(*including non-disclosed deals- Turkish Investors 37%, International Investors 63%)
The total number of M&A deals was 256 with the estimated volume of $12 billion. This estimated volume corresponds to 17% increase comparing to The share of international investors in the total deal volume is 63%, highest share since 2015.
Regarding the number of deals realized by International Investors, the number of deals was similar to last year, recorded as 74 transactions. Excluding the privatizations where Turkish investors were more active, the deal volume of international investors increased by 38% compared to 2017 and reached $7.6 billion in 2018 by doubling the level of 2016. 36

38. Deal Volume (Million $)
MERGER & ACQUISITIONS (M&A) 2018
Regarding the deal number; the number of deals executed by the European investors once again sealed the highest number of international investors’ deal activity in 2018 with a share of 49% and recorded as 36 deals.
However, the total volume of European investors has slumped comparing to 2017 and constituted 29% of the total deal volume. In contrast to the decrease in the volume of deals originated from the European region, the investors from UAE, Denmark and Taiwan contributed to the deal volume of international investors to a great extent with big ticket transactions.
In 2018, it was observed that the investors from USA continued their interest in the Turkish market despite to the volatile relations with 15 deals. Additionally, investors from Germany, Italy and the UK yet again were active investors.
Top 5 Disclosed M&A in 2018
Target
Sector
Acquirer
Country
Stake
Deal Volume (Million $)
Denizbank **
Financial Services
Emirates NBD Bank
UAE
100%
3.191
U.N.
Ro-Ro
Transportation
DFDS
Denmark
99%
1.172
Trendyol
Internet & Mobile Services
Alibaba
China
n/a
728
Oyak Cement
Manufacturing
Taiwan Cement Corp
Taiwan
40%
640
Gram Games
Zynga, Inc.
USA
250 37

39. FDI INFLOWS TO TURKEY IN APRIL 2019

40. FDI INFLOWS TO TURKEY AS OF APRIL 2019
(Million $)
2014
2015
2016
2017
2018
2018 (I-IV)
2019 (I-IV)
CHANGE
FDI
13.337
19.274
13.950
11.546
12.978*
3.245
3.251
0.2%
Capital (Net)
8.371
11.729
6.904
5.532
6.070
1.497
1.968
31.4%
Inflow
8.632
12.093
7.525
7.401
6.540
1.678
1.977
18%
Outflow
261
364
621
1.869
470
181 9 -
Other Capital (Net)
645
3.389
3.156
1.371
993
316
-608
Real Estate Purchases (Net)**
4.321
4.156
3.890
4.643
5.915
1.432
1.891
32%
Source: CBT * Revized Data
**(incl. real estate purchased by non-residents)
As of April 2019, the net FDI inflow to Turkey has increased compared to the same period last year and recorded as $1.977 million. The total FDI amounted to $3.251 million with an increase of 0.2%.
Real Estate purchased by non-residents recorded as $1.891 million with an increase of 32%. The inflow from the real estate purchased by non-residents constituted 37.4% of the total FDI. 39

41. Top 10 FDI Sourcing Countries as of April 2019
DISTRIBUTION OF FDI INFLOWS BY COUNTRIES & REGIONS
AS OF APRIL 2019
Top 10 FDI Sourcing Countries as of April 2019
Countries
FDI Inflows
(million $)
2018
2018 (IV)
2019 (IV) 1
Azerbaijan
516
108
534 2 UK
409 87
499 3
Germany
349 77
196 4
USA
446
124
148 5
Spain
233 73
113 6
Italy
509 29 48 7
Belgium
212 17 47
Netherlands
839
209 8
Switzerland
147 32 42 9
Qatar
169 35 10
Luxembourg
329
213 34
OTHER
2.302
607
234
TOTAL
6.540
1.678
1.977
As of April 2019, the main FDI sourcing countries were Azerbaijan, UK and Germany, respectively.
Regarding the regional distribution; European countries were the main source of the FDI with a share of 53.8% and it was followed by Asia by 36.3% and America by 8.3%.
Source: CBT 40

42. SECTORAL DISTRIBUTION OF FDI INFLOWS AS OF APRIL 2019
($ million)
2013
2014
2015
2016
2017
2018
(I-IV)
2019 1
Manufacturing
2.843
2.742
4.237
2.240
1.202
2.000
374
765
Coke and Refined Petroleum Products Manufacturing
236
101
1.809
164 2
420
Chemicals, Chemical Products and Pharmaceutics Products Manufacturing
272
491
340
288
142
321 73 65
Transportation Vehicles Manufacturing 97 78
147 59 38
188 49 62
Food, Beverages, and Tobacco Products
475
451
983
706
198
505 69 46
Other Non-Metallic Mineral Products Manufacturing 29
158
112 24 64
330 25 34
Computer, Electronics and Optical Products Manufacturing
607
926
242
157
149 30
Wholesale and Retail Trade
379
1.137
604
688
1.077
1.117 89
507 3
Finance and Insurance
3.415
1.470
3.515
1.765
1.464
1.046
175
276
Insurance Activities
1.538
199
117
128 5 43 19
194
Banks
1.608
912
2.775
1.323
756 67
Activities of Holdings
229
226
438
167 51 10
Other Financial Activities 40
133
185 42 80 4
Transportation and Storage
364
594
1.524
635
1.333
599
127
154
Construction
178
232
109
293
626
214 41
152
OTHER
3.344
2.457
2.104
1.904
1.699
1.564
872
123
TOTAL
10.523
8.632
12.093
7.525
7.401
6.540
1.678
1.977
As of April 2019, Manufacturing sub-sector is the leading sub-sector with amount of $765 million, followed by Wholesale and Retail Trade sub-sector ($507 million).
Finance and Insurance was ranked 3rd sub-sector in the fourth month of the year with inflow of $276 million.
It was followed by Transportation and Storage sub-sector ($154 million) and Construction sub sector ($152 million).
Inflows to services sectors : $ million
Inflows to industrial sector : $ 775 million
Inflows to agriculture sector : $ million 41

43. THANK YOU...